Big tech is getting in on blockchain in a big way. Microsoft has launched a cloud-based blockchain development kit powered by Azure.

“This kit extends the capabilities of our blockchain developer templates and Azure Blockchain Workbench, which incorporates Azure services for key management, off-chain identity and data, monitoring, and messaging APIs into a reference architecture that can be used to rapidly build blockchain-based applications,” Microsoft blockchain engineering lead Marc Mercuri said.

The initial release will focus on three key themes: connecting interfaces, integrating data and systems, and deploying smart contracts and blockchain networks.

Among other things, Microsoft says the development kit will provide SMS and voice interfaces for tracking and supply chain solutions, integration with Internet of Things (IoT) devices, and support for mobile clients like Android and iOS. Indeed, Microsoft calls the kit an “end-to-end” blockchain solution.

The Redmond giant pointed out that its new offering will be compatible with a number of different ledger technologies, including Ethereum and Bitcoin.

To get developers off the ground, Microsoft has also prepared a white paper on how to use the kit to deploy decentralized applications.

Big Tech hopping on the blockchain bandwagon

Microsoft is hardly the only tech giant that’s made a foray into blockchain. IBM, Google, and Amazon recently launched similar development kits for blockchain businesses.

Previously, Microsoft has showcased various blockchain pilots, including one that aimed to curb spam calls in India and another one designed to help developers get paid (launched in collaboration with accounting firm EY).

The Redmond company is also working on a blockchain-powered system to manage identities.

It’ll be interesting to see what developers will think of its new blockchain development kit – and what projects they can build with it.

*This post is credited to Thenextweb

American software corporation Microsoft will integrate its Azure Blockchain technology into stock exchange Nasdaq Inc.’s Financial Framework (NFF), according to an Oct. 30 press release.

Per the recent announcement, Microsoft will integrate its Azure blockchain service with NFF, a technology which provides software for trading infrastructure and operations outsourcing, and fulfills Nasdaq’s risk and surveillance technology offering.

Within the collaboration, the parties will reportedly develop a “ledger agnostic blockchain capability” that will allow for operability across multiple ledgers. The new product will purportedly facilitate easier buyer and seller matching, management of delivery, and payment and settlement of transactions.

Integrating Azure Blockchain will reportedly allow NFF customers to deploy various blockchains through one common interface, in addition to promoting blockchain development.

Tom Fay, Senior Vice President of Enterprise Architecture at Nasdaq, said that the partnership with Microsoft removes some of the complexities of integrating blockchain technology into existing infrastructures. He added:

“Our NFF integration with their blockchain services provides a layer of abstraction, making our offering ledger-agnostic, secure, highly scalable, and ultimately helps us continue to explore a much broader range of customer use cases for blockchain.”

Recently, Nasdaq revealed a new blockchain patent, which makes reference to “an information computer system […] provided for securely releasing time-sensitive information to recipients via a blockchain.” With the patent, the company is reportedly looking to ease releasing timely information to the media while keeping it secure and watertight from a legal standpoint.

Last month in an interview with Cointelegraph, Nasdaq’s Head of Alternative Data Bill Dague said that it is exploring adding crypto datasets to its market analytics tool. However, whether or not the exchange will launch a crypto-related product remains to be seen.

In August, Azure introduced a proof-of-authority (PoA) algorithm on its Ethereum blockchain product. A PoA algorithm is based on the principle of approved identities or validators on a blockchain, and does not require competition in completing the transactions.

The new Ethereum product on Azure is equipped with a number of features to ensure its correct functioning and security, such as an identity leasing system, Parity’s web-assembly support, Azure Monitor, and a Governance Decentralized Application (DApp).

*This post is credited to CoinTelegraph

Once just two percent of servers run on blockchain technology, Bank of America research analyst Kash Rangan predicts the market for blockchain technology will be worth $7 billion. Nine companies have been identified as likely to benefit significantly from the technology including Amazon and Microsoft. As reported by CNBC, Rangan didn’t put a time stamp on his predictions but also included technology giants Oracle, IBM, Salesforce, and VMware as others set to benefit.

“Many blockchain use cases have been identified, but full products/services have not yet been built out and are not used in production,” said Rangan.

The analyst says that Amazon Web Services (AWS) will benefit “from incremental cloud services demand from blockchain implementation, while improved supply chain tracking should make Amazon’s retail operations more efficient.” Rangan also predicts that blockchain will improve software-as-a-service (SaaS) platforms and that blockchain-as-a-service (BaaS) will emerge to the benefit of the likes of Microsoft.

Amazon – the Rumors and the Reality

As one of the largest corporations in the world and one that is known for being quick to eliminate inefficiencies, Amazon is being watched carefully for blockchain or cryptocurrency adoption. Rumors often circulate about Amazon’s ownership of certain blockchain and cryptocurrency related web domains, prompting some to believe Amazon is about to take the leap.

The reality is not known. So far, Amazon’s AWS cloud computing arm has partnered with Kaleido to offer a blockchain-based platform for clients to build their projects. Kaleido, announced in May 2018, was the first Blockchain SaaS solution on the AWS Marketplace for business.

AWS appears to be looking to partnerships to bring blockchain to its clients rather than developing technology internally. Kaleido uses Ethereum blockchain technology. Ethereum co-founder Joseph Lubin said in May,

“This is a heavy duty, full stack way of getting the company into blockchain solutions.”

Microsoft – Moving Data to Blockchain

Microsoft’s Azure cloud computing service has been using blockchain technology for around three years.

Matt Kerner, general manager of Microsoft Azure, revealed that Microsoft has been looking to underpin blockchain into many of its other platforms including Office 365 and SAP. The overall plan, according to reports, is for Microsoft users to move their data from these platforms to the cloud and then onto blockchain.

Potentially to this end, Microsoft Azure has added Microsoft Flow and Logic Apps which can connect applications into the Azure Blockchain Workbench for developers. Kerner says this is part of the evolution of Big Data.

“Blockchain empowers the next step – enabling a single, authentic data set shared across counterparties. This is already improving the way transactions happen,” Kerner told CoinDesk in September 2018. “We believe the same will be true with data analytics.”

The Bank of America analyst’s predictions are based firmly in fact. Amazon, Microsoft and other technology leaders like Facebook and IBM are all investigating and beginning to adopt blockchain into their technology stacks. This blockchain utilization can only grow as none of these leviathans can afford to be left behind.

*This post is credited to Unhashed 

The global blockchain technology market in transportation and logistics industry to grow at a CAGR of 82.86% during the period 2018-2022.

Blockchain technology is a cryptographically managed, distributed ledger system offered by vendors such as IBM, Microsoft, Oracle, SAP, and Tata Consultancy Services.

The latest trend gaining momentum in the market is the advent of blockchain as a service (BaaS) which will lead to the growth of the market, according to Global Blockchain Technology Market in Transportation and Logistics Industry 2018-2022 by ResearchAndMarkets

BaaS enables vendors to set up blockchain connected nodes on behalf of the enterprise and manage the back-end.

According to the report, one of the major drivers for this market is the growing use of blockchain technology for trucking. The growth in the number of infrastructure projects, rise in demand from the logistics sector, and increase in demand for an efficient supply chain to transport goods are factors that are boosting the demand for trucks.

Further, the report states that one of the major factors hindering the growth of this market is the high cost of implementing and maintaining blockchain technology. The initial implementation of this technology is capital intensive as the software required is developed specifically for each firm and is thus expensive.

*This post is credited to MaritimeProfessional

Companies don’t want to be left off of the blockchain bandwagon.

In a new report published by PwC on Monday, 84 percent of executives surveyed said their companies are “actively involved” with the technology.

“Everyone is talking about blockchain, and no one wants to be left behind,” according to PwC’s 2018 Global Blockchain Survey, which included 600 executives from 15 territories.

Blockchain is the technology that underlies cryptocurrencies like bitcoin. It records transactions on a public, distributed ledger and gets rid of the need for a third party in most cases. The technology is touted as faster and more secure by advocates and is being tested for everything from health records to the legal marijuana industry.

Among the PwC respondents, who were business executives with technology responsibilities, 45 percent said “trust” could be the key roadblock in blockchain’s widespread adoption.

“In reality, companies confront trust issues at nearly every turn,” PwC said. “As with any emerging technology, challenges and doubts exist around blockchain’s reliability, speed, security and scalability.”

While high profile investors like Warren Buffett and Jamie Dimon have been publicly wary of investing in cryptocurrency, they’re far more bullish on its underlying tech.

Companies including Amazon, Microsoft and Facebook are exploring use cases for the technology. Facebook announced in May it is going through a reorganization that will include a new blockchain effort. IBM, Accenture, Deloitte, JP Morgan, and HSBC are among the other corporate names with similar initiatives.

Still, respondents mentioned regulatory uncertainty, “ability to bring the network together,” compliance concerns, and intellectual property concerns as key obstacles for blockchain adoption.

Blockchain’s potential has been compared to the internet but so has its hype. In some well-publicized cases, even adding the word “blockchain” to a public company’s name can send its shares skyrocketing in a single day.

Despite the growing interest, other research from Cowen estimated it will take 5.9 years for blockchain to gain widespread adoption.

*Post is credited to CNBC

The blockchain revolution is here.

The technology long associated with Bitcoin is now being used to make businesses as varied as trade finance, videogaming, travel insurance, and diamond mining more efficient and more secure.

The blockchain revolution is also far, far down the road. If it ever comes.

Partnerships and initiatives featuring blockchain seem to be trumpeted every day. Projects that actually solve real-world problems are much rarer. The research firm Gartner surveyed 3,160 chief information officers this year and found that only 1% had put blockchain to work.

Take the Australian mining giant BHP Billiton (ticker: BHP), which announced in 2016 that it would use blockchain to track its supply chain, including the movement of rock and fluid samples. But after the company tested it in a pilot project, a BHP executive said this month that the technology “hasn’t reached the point of maturity where we think it applies to us.”

As the technology reaches what Gartner calls the “peak of inflated expectations,” executives and investors need to learn to assess the hype versus the real potential.

Businesses that aren’t already considering how to use blockchain to restructure their operations, particularly in finance and logistics, risk their software—and even their business models—becoming outdated.

“We really see this as transformative in the same way that the internet changed communication,” says Marie Wieck, general manager for blockchain at IBM (IBM), which has more than 1,500 staff members working on the technology.

Still, it’s a bit like trying to pick future winners and losers of the internet back in the early 1990s. Tomorrow’s Facebook—and its Pets.com—are not yet visible on the horizon.

What is this technology that has its proponents so excited? A blockchain is a database run by software that bundles information, protects it using cryptography, and stores it on the computers of participants. Akin to a ledger, it lets its participants interact with one another without using a central intermediary. As a result, transactions can be done faster and more cheaply.

It’s the absence of a middleman that’s the key to blockchain’s potential, contends Brian Behlendorf, the executive director of Hyperledger, an arm of the nonprofit Linux Foundation that has become a central player in blockchain development.

“Blockchain is not a technological solution to a technological problem,” he says. “It’s a technological solution to a political problem. A political problem within business. You don’t want a PayPal or an eBay or an Uber or a Facebook at the center of a lot of markets, because that gives a tremendous amount of power to those entities, greater than arguably even AT&T had when it was at the center of the phone market.”

The lack of central authority can also be an obstacle, however. Blockchains used by businesses tend to be permissioned—participants must prove who they are, and their access to information is limited based on their specific needs. Getting competitors to agree on terms can be challenging.

Today, the technology is growing largely through consortiums that allow companies to share the cost of developing software and make sure they’re building systems that will be compatible with one another. Those efforts have shown how blockchain can standardize business processes that are still largely paper-based or are using outdated technology, and how it can bridge gaps in industries where trust is a problem.

Blythe Masters, a former top JPMorgan Chase executive who is now CEO of Digital Asset Holdings, sees the inefficiencies in transactions and record-keeping as a rich opportunity for blockchain.

“Fifteen years ago, if someone had said to you we’re going to see the advent of the self-driving car on the streets before we see T+2 settlements [trades getting settled two days after they take place] and before you can walk from one doctor’s office to the next and have your health-care records precede you there, you would have been declared crazy, right?” Masters says.

“It is those kind of delays and extraordinary inefficiencies that have plagued financial services and big enterprises in other industries like health care. You’ve seen extraordinary speed of revolution in the Big Tech sector, and you haven’t seen it elsewhere in enterprise. That’s where this is going, and so what’s fascinating about this is the sheer scale of the potential for applications.”

Blockchain will generate $5 billion worth of business value in 2018, Gartner estimates. The value will grow, but it’s likely to stay modest for years, before ramping up more impressively about a decade from now, exceeding $3.1 trillion in 2030, the firm says. That’s more than Britain’s entire annual economic output today.

Some blockchain executives chuckle nervously when presented with that number. One fell silent, then joked that she was going to put it in her investor pitch deck.

Others are more willing to embrace the number.

The $3 trillion figure “does not seem crazy to me,” Masters says. Her firm won a contract to re-engineer the clearing and settlement process at the Australian Securities Exchange using blockchain. “When you think about the potential addressable market here, it doesn’t seem crazy at all.”

For investors, there are few ways to invest directly in blockchain. Some exchange-traded funds have been introduced, including Amplify Transformational Data Sharing (BLOK), Reality Shares Nasdaq NexGen Economy (BLCN), and Innovation Shares NextGen Protocol (KOIN), but they offer minimal real revenue exposure to the technology, which is currently generating little revenue.

Big companies—particularly IBM and Microsoft (MSFT)—have invested heavily in developing blockchain. Neither company breaks out its blockchain-based revenue in public financial documents, and they didn’t share the data with Barron’s. WinterGreen Research, a Massachusetts company that tracks technology trends, estimates that IBM and Microsoft together control 51% of the blockchain market, which overall generated $706 million in revenue last year.

“I believe we are furthest along,” says Wieck of IBM, which has worked with more than 500 clients.

Some of the early blockchain success stories weren’t created by tech giants, however.

AXA (CS.France), the French insurance company, is using blockchain technology to transform the flight-insurance industry. Its product, called Fizzy, allows fliers to buy insurance that immediately pays out if their flight is delayed by more than two hours, for any reason.

“Blockchain is useful because it allows me to say to the customer that you don’t have to trust the insurer on the data we are using,” Laurent Benichou, Fizzy’s founder, tells Barron’s. “Your policy is on the blockchain. AXA publicly commits to indemnify you if you are eligible. Because a smart contract is triggering the indemnity, the customer can know that we are honest with the data that we use. Potentially, for a paranoid customer who assumes we cheat, we say it’s not AXA anymore that’s a party to the transaction that will decide whether you get indemnified.”

The project, which has recorded about 11,000 transactions so far, won’t do much to change the near-term financial prospects for AXA, which reported 98.6 billion euros ($112.5 billion) in revenue last year. But Benichou expects airlines to begin offering this kind of service more widely to customers in the years ahead, and “when they do, it will be a huge market.”

What’s more, he thinks it can be used more broadly to insure against different kinds of events.

“We could do a Fizzy for weather forecasts; we could do a Fizzy for pollution. Each time we have an open data set, we are able to do a variation of Fizzy.”

Blockchain technology has also proved useful in other transactions where trust issues previously hampered the market.

In India, small businesses have been seeking a way to get their outstanding invoices from other businesses paid faster. Lenders have previously been wary of financing these transactions, in part because of the risk of double invoicing—that the businesses would receive financing from multiple banks for the same transaction.

But a company in New York, MonetaGo, designed blockchain software that records the invoices and keeps track of transactions that have already been financed. The blockchain records the transactions without revealing details about them that would erode the competitive positioning of the companies involved. The project has been live since March, and activity has steadily grown, says Jesse Chenard, MonetaGo’s CEO. He expects that MonetaGo can make about $20 million annually on the service in India.

The system has been embraced by major industry players in India.

“This technology threatens profit margins across the board,” contends Brian Behlendorf, the executive director of Hyperledger.

“We’ve introduced a capability for financiers to securely share data that they would never have shared before,” Chenard says. “In order to share it before, they would have had to share the details of those invoices, and nobody would have trusted each other to not look at the competitor’s information.” Hiring a third party to oversee invoices for all financiers would have been “cost-prohibitive,” he adds.

“When we started in India, we said, ‘We’re a blockchain company, we can do anything with blockchain,’ ” he says. “The worst part about going in and saying, ‘Hey, I’m a blockchain company’ is that they send you to the innovation team. And as much as people like IT, it’s a cost center.”

Now “our pitch is completely different. We ask to talk to the person in charge of trade finance and say, ‘Would you like to reduce fraud on receivables financing?’ The answer is almost always yes.”

Cost has stalled the adoption of blockchain. Some of the existing players within industries may have to accept lower returns in the future if blockchain is adopted—a prospect that makes blockchain a threat as much as an opportunity.

“This technology threatens profit margins across the board,” Behlendorf of Hyperledger contends.

International Data Corporation estimates that companies will spend $1.5 billion on blockchain this year, double last year’s amount. But even corporations that believe in the technology are loath to spend too much on it, because they have no guarantee of returns.

“Blockchain challenges what you do rather than amplifying what you do,” said Rajesh Kandaswamy of Gartner. “Technologies like mobile amplify what you do. Mobile was additive for banks. Blockchain as an underlying technology makes you rethink your business processes or even your business model. That will take years for people to pass.”

The companies spending most heavily on blockchain projects are often central players in the industries where they operate—some of them could be considered the middlemen that blockchain had promised to dislodge.

Broadridge Financial Solutions, a major player in the proxy-voting industry, has spent about $150 million on blockchain, and ran proxy voting for Banco Santander’s annual meeting on the software, according to CEO Rich Daly. Nasdaq has used it to allow private company stock transfers, among other applications.

The Australian Securities Exchange’s decision late last year to rebuild its equity clearance system using blockchain technology could lead to other exchanges moving to similar software. ASX says its system could allow trades to be settled faster than the current two days when it goes live in 2020 or 2021.

In the U.S., another central intermediary is similarly upgrading its software to a blockchain platform, and expects to go live even sooner than ASX. The Depository Trust & Clearing Corp., or DTCC, a holding company that settles and clears the vast majority of financial trades in the U.S., is building a blockchain-based system to record the 15 million credit derivatives transactions it processes on an annual basis. The system, now conducted on a more costly mainframe run by DTCC, is projected to go live with its first phase of the blockchain project in the first half of next year.

“The industry saw the value in distributed ledger in terms of its auditability, and the sharing of data between participants on a near real-time synchronized basis,” says Jennifer Peve, the co-head of DTCC’s office of financial-technology strategy. Blockchain will also eventually give participants a “single source of truth on the network” that will make it easier to reconcile trades.

Still, Peve says there are limits to the technology. The software isn’t ready to replace the DTCC’s equity clearing and settlement software, for instance, because it still can’t process the 100 million or so transactions that run through the system each day. “It’s going to take some time before it can support those volumes,” she says.

Major banks are exploring blockchain through other avenues, too, though it’s early days for most projects. A private company called R3 built a blockchain software program called Corda Enterprise that allows businesses to trade syndicated loans, among other capabilities.

JPMorgan Chase has developed its own software called Quorum, built on the public blockchain Ethereum, that’s designed to reduce paperwork and lag time in financial transactions. The software, downloadable on JPMorgan’s website, is somewhat unusual for the bank, whose chief executive, Jamie Dimon, has called Bitcoin a “fraud.” But Dimon has since conceded that “the blockchain is real” and is clearly carving out a niche for the bank.

How these many blockchain projects will work together remains a mystery. R.A. Farrokhnia, executive director of the Columbia Fintech Program, says that blockchain still “needs its Cisco,” referring to the company that built the internet’s modern-day switchboard. (Cisco Systems, as it happens, is working on blockchain, but is apparently not the “Cisco” of it.)

IBM wants to stand at the center of many of these partnerships. In banking, one of the most ambitious projects that IBM has worked on is a trade finance consortium in Europe called we.trade. Deutsche Bank, HSBC, and seven other banks are leading the project, which went live in June with seven trades in its first five days.

Trade finance—banks lending money to businesses trading across borders—is a paper-heavy process that can take a week or more for transactions to clear. With we.trade, trades can settle in real time once the conditions of the transactions are met. There’s no guarantee that any one platform will become dominant. HSBC has also executed trade finance deals on the Corda blockchain, and Barclays has completed trades working with another start-up.

Finance attracts most of the headlines in the blockchain world, but the biggest long-term opportunity may be in managing supply chains, which are now traced on pieces of paper, Excel spreadsheets, and incompatible computer systems. The Danish shipping giant A.P. Moller-Maersk is working with IBM on a project called TradeLens that will digitize and standardize shipping documents and place them in a blockchain database.

Blockchain Is Starting to Show Real Promise Amid the Hype
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“The documentation now is all over the place,” says Peter Levesque, the CEO of Modern Terminals, which runs shipping terminals in Hong Kong and mainland China and has signed on to the Maersk project. Some shipping deals still depend on fax machines, he notes. TradeLens takes all of the data the company tracks in different formats and “puts it all in one place.”

Blockchain, he says, “won’t change our operations, but it will make our operations more efficient, because we’ll have better scheduling of ships and better berth planning just by having more data sooner.”

The food-supply chain is also a juicy target for blockchain entrepreneurs, because identifying the original source of a food product—tainted romaine, for instance—can take days.

Walmart, Nestlé, Dole Food, and other companies are building a platform with IBM called Food Trust that would put the whole food-supply chain—farm to supermarket —on a blockchain that presumably can track the entire chain in seconds. The software can now track about 50 products, far from the whole supermarket but enough to get a sense of the software’s viability.

That includes more than following a head of lettuce as it’s trucked across the country; the software has been tested on trickier tasks, like tracking all of the ingredients in a container of Gerber’s sweet potato-apple-pumpkin puree baby food.

IBM says it expects to start offering the software for sale to the public in the next few weeks. The product is being packaged as a cloud-based subscription service, priced based on the size of the enterprise. For small businesses with under $50 million in revenues, it goes for $100 a month; for larger ones, the price goes up to $10,000.

Despite the efforts by companies like IBM, it is probably a mistake to think that Big Tech alone will dominate blockchain technology. Blockchain may be separate from cryptocurrency, but the entrepreneurial spirit behind digital coins is also present in the field.

One of the most important consortiums developing blockchain’s technical standards, the nonprofit Enterprise Ethereum Alliance, wants more small players to get involved, says its executive director, Ron Resnick. As with any modern tech platform, blockchain’s value will eventually be determined by the usefulness of the apps that end users can access.

The little companies “are driving this,” Resnick says. “They can move faster than a bigger company.”

Big, risk-averse companies like Royal Dutch Shell are in the Ethereum Alliance, but the organization also has members from the world of cryptocurrencies. Big oil companies won’t be issuing digital coins anytime soon, but the alliance does connect them with developers focused on building public open-source products.

*This post is credited to Barrons.