THE KEY TO A
WEALTH OF NEW
POWER TO THE
CHANGING THE WAY
ENERGY IS PRICED
BE THE SAME
WITH MIT’S JOHN
Blockchain is ushering in a new world economy based on direct peer-to-peer trusted exchanges, bypassing central
authorities such as banks, energy companies, pension funds and stock markets.
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#2 – October 2017 – Autonomy Paris Special Edition
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ENABLING AN ERA
OF SHARED USE
LETTER FROM THE EDITOR
If we are honest with ourselves those of us who are old
enough to recall the birth of the Internet will admit to having felt a certain
amount of skepticism when we read about how going digital was going to
In the media business we hired a few young people to post stories on the
Web. Anybody worth their salt focused on what was really important to
the core business: the paper newspapers and magazines that today are
rapidly shrinking and even disappearing.
So it is easy for me to understand the reaction of a top executive at a big
bank or utility who finds it incredulous that a complicated technology the
majority of people do not understand and some anarchistic kids could
come out of nowhere and turn the transactional price of energy to zero,
invent a new currency and – as was the case last June for one California
entrepreneur – raise $35 million in less than three seconds from total
The change ahead may be bigger than anything we have known.
It looks set to modify the role and status of governments and companies
and turn the notion of ownership and leadership on its head.
That said, we are at the top of the blockchain hype cycle. My advice? Don’t
follow in the footsteps of Time Warner and sell yourself to the blockchain
equivalent of AOL.
But don’t be too dismissive either. You don’t want to be the Jamie Dimon
of your industry. Dimon, the CEO JPMorgan Chase, threatened to fire any
trader “stupid” enough to trade in Bitcon.
I think IMF head Christine Lagarde got it right when she advised central
bankers to take the time to learn about this new technology and be open.
Keep your sang froid. Pay close attention to this shift – which heralds not
just technological but cultural and poltical change. And keep reading The
P.04 — THE INNOVATOR
With all the buzz around urban mobility during the
Autonomy event in Paris come several initiatives that aim to make
driving easier and smarter. The French electric utility company
Engie has announced a new electric car-sharing service, Co-move,
that is accessible via an online platform. Users can book a car via
a car from a charging terminal and off they go.
Meanwhile, ESPRIT has been testing small electric cars that can
be connected, Lego-like, and charged either separately or together.
They are meant to be used instead of traditional cars, but also as
an easy complement to public transportation in urban and suburban
zones. The German insurance company Allianz will soon announce
that it is expanding a form of car insurance that tracks customers’
driving. The offer is already available via a special box installed in
semi-autonomous cars, but will now be accessible to drivers of all
cars though a mobile phone app. Those with good records will be
offered a 30% discount on their rates
Smoove, which is taking over the management of the Vélib ﬂeet in Paris, will have bikes
available for testing at Autonomy. CycleEurope is presenting a new electric cargo bike there. The
company already operates the La Poste bike ﬂeet of the French postal service (the biggest worldwide
with 31,000 e-bikes). Ofo, which owns 10 million bikes in China and is expanding in Europe, will
also be showing off its latest innovations.
Of global new car sales will be electric
vehicles by 2040, according to the
up from 35% in their 2016 forecast
Ujet will be shown for the ﬁrst time (the ofﬁcial
launch will be early next year). The scooter is
from any regular socket, and features a light frame
that can be folded to ﬁt in your ofﬁce or the trunk
of your car.
20% off on your VIP Pass with the code INNOVATOR20 until 13 October 2017
19-21 October 2017
Paris, Grande Halle de la Villette
The world stage
for the urban
Keynotes • Roundtables • Meetups
Expo • Startup district • City workshops
Test tracks • Live demo • Pitch sessions
P.06 — THE INNOVATOR
By Jennifer L. Schenker
Cryptocurrency may or may not represent the future of
money. But blockchain, the technology underpinning it, may spell the
end of capitalism as we know it. How can something as mundane-
sounding as a distributed record of transactions that is maintained by a
network of computers on the Internet and secured through advanced
cryptography have such an outsized impact?
With decentralization technology, the owner of an asset has direct
control via a password, which is directly linked to the asset. No one can
touch it without your consent and no one can stop you when you want
to transfer the asset.
“Placing trust in a network rather than a single entity like a government,
a bank, or a multinational company, means that the types of assets that
can be stored are limitless: intellectual property, identity information,
land titles, financial assets, genetic information, social graphs, and
supply chain information, to name only a few,” says Bruce Pon, the
founder and CEO of Ascribe.io, a product of BigchainDB, a Berlin-based
startup that is using the blockchain to provide a trackable, verifiable
record of ownership between artists and their work. Bypassing central
authorities such as banks, energy providers and other types of large
corporations, stock markets and even governments, is a change with big
consequences not just for business models but power structures. A large
part of our economy is based around these intermediaries of trust, but
in this new era of distributed trust we won’t need them or the armies of
accountants and controllers that handle reconciliation processes.
Historically, trust has been added to products or transactions as they
flowed through a value chain for physical goods or services. Physical,
or electronic, records trail every object to prove its origin, destination,
quantity and history. Producing, tracking and verifying all this
information requires time and manual effort on the part of banks,
accountants, lawyers, auditors and quality inspectors. Important
information is often inaccessible or lost, sometimes intentionally. And
of course these intermediaries take a cut of the action, each and every
P.08— THE INNOVATOR
time a transaction is made. When combined with cryptographically
secure machine identities, blockchain is expected to create reliable,
immutable records to make it easier and less expensive for suppliers and
customers to transact with one another in a direct, verifiable way.
The same interoperable transaction layer permits people who don’t
know each other to dynamically start exchanging financial and physical
values on the fly and be confident they won’t be cheated. And it permits
machines to transact with each other in an automated way. Already the
blockchain is being used for the trading of currencies, diamonds, medical
marijuana and guns. Central banks, hospitals, shipping companies and
ports, insurance companies, auto makers, charities, government and
public record services are testing the technology as are musicians and
artists. You can even now apply for e-residency in the South Pacific
island of Vanuatu on the blockchain and pay the fee in Bitcoin, a kind
While blockchain and its use cases are evolving very fast, the technology
has a number of limitations, including scalability and computing
resource requirements. Still, some believe the digital ledger technology
TOTAL FUNDING AND ROUNDS
GLOBALLY SINCE 2012
2012 2013 2014 2015 2016
TOTAL NUMBER OF ROUNDS
Total amount in global funding in US dollars and rounds in the blockchain industry
since 2012 - Credit: funderbeam Blockchain Industry Report 2017
refugees in camps and to establish digital identities for everyone on the
planet, including the 1.1 billion people who don’t have any kind of
government papers. (See the stories on pages 16 and 19.)
«The blockchain is the only technology that employs transparency and
independence in a manageable and sustainable way,” says Marloes
Pomp, blockchain ambassador for the Dutch government, which is
trialing some 25 different uses for blockchain. (See the story on page
“Until now technology has mostly helped businesses to achieve more
for less. It never had a big impact on how people protect and exercise
their rights and values,” says Pomp. “Suddenly, blockchain technology
opens the opportunity for creating a new class of systems that are fueled
by the principles of independence, truth and transparency of operation.”
That’s why, she says, “blockchain is here to stay and will change the way
people and businesses interact.»
In a post-capitalist economy, knowledge rather than capital or labor is
the foundation of wealth, and traditional drivers such as supply and
demand and the need for profits are supplemented by more collaborative,
communal models that prioritize social good alongside shareholder
profits, notes blockchain expert Carsten Stoecker, a senior manager at
the Machine Economy Innovation Program at the German energy
Take the case of the SingularityNET, a new blockchain-based exchange
that will allow its users to create, combine and monetize artificial
intelligence at scale. (See the story on page 14.). One of the reasons it
is being launched is that the founders say they do not want the future
of artificial intelligence to rest in the hands of companies that are driven
only by profits. The founders have agreed that they will use a portion
of the evolved form of the AI the network generates to solve some of
the world’s most pressing problems, a challenge they believe companies
reporting to traditional shareholders are less likely to tackle.
As with other blockchain-based exchanges, participation in SingularityNET
requires people to buy network-specific crypto-tokens and use these to
buy services. This enforces a system in which the people who use the
exchange are the people who own it.
Others working in the blockchain sector agree that this concept could
be used to bring about positive change. “We have no incentive to solve
big problems because there is zero price put on things like clean air,”
is a vast improvement over the double entry accounting first invented
in Italy about 500 years ago, helping give rise to capitalism.
Think of blockchain as a triple-entry system, a ledger that records every
single transaction, to give us an accounting of everything happening in
our world, creating - at least in theory - a common shared truth. If it is
as secure and transparent as advertised it will eliminate fraud and
corruption, changing the way corporates and governments are run.
“There is a reason Florence, Milan and Vienna grew to be so wealthy,
it was because they were masters at double entry accounting,” says
Ascribe.io CEO Pon. “Whichever jurisdiction or company masters
blockchain and extracts value will be able to jump leaps and bounds
ahead of competitors,” he adds.
New Business Models and
There are huge productivity gains to be reaped from the efficiencies that
blockchain will bring: between $90 billion and $110 billion just from
global payments and trade finance, says Oliver T. Bussmann, a blockchain
expert and former CIO at UBS. (See the story on page 30)
But blockchain could have an even greater impact on other sectors. The
research firm CBInsights estimates that there are some 30 sectors that
will be massively disrupted by blockchain. They include insurance,
healthcare, energy management, transportation, real estate, stock
trading, government and public records and supply chain management.
Dole, Nestlé, Tyson Foods, Unilever and Walmart are among companies
exploring blockchain’s use in food safety and tracability. Energy
companies are testing it to see if same the digital ledger technology that
threatens to put it out of business will help them adapt and survive. (See
the stories on pages 36 and 40.)
Power To The People
But blockchain is not just about efficiencies and new business models
and new revenue streams – it is about the distribution of power,
including the ability of people to exert their rights and values, ownership,
and leadership. Blockchain is being tapped to help the stateless and the
voiceless. The United Nations is using it to deliver money for food to
Bruce Pon, CEO of Ascribe.io
P.10— THE INNOVATOR
says Pon, Ascribe.io’s CEO. “ But what if we could tokenize new ideas?
What happens if we could open source the Bill & Melinda Gates
Foundation? Everybody could buy tokens? Why not tokenize exploration
to Mars? Governments have budget constraints but what if we could
marshal resources by getting supporters to put their money into tokens?
This is a really hopeful and powerful vision. We all feel helpless in the
face of the misuse of funds but we have the possibility to create proper
governance through blockchain and tokenism.”
The Token Economy
In this new token economy the people starting blockchain ventures don’t
need to go to venture capitalists or raise money on the stock market
anymore. They just organize Initial Coin Offerings (ICOs), an unregulated
means of crowdsourcing funds.
More than a billion dollars in funding has been raised this way in 2017.
In fact, one report estimates that more than $1 billion was raised in ICOs
in the third quarter alone.
The Bancor Foundation made headlines in June when it raised $153
million worth of Ether (the coin of the cryptocurrency Ethereum) in just
three hours. The same month the former Mozilla CEO Brendan Eich,
raised $35 million in an ICO — and did it in less than 30 seconds,.
“Think of all the value that is currently captured by centralized
authorities — from the banking industry to music rights holder networks
to the court system,” Nathana Sharma, Program Director for Faculty
Affairs at Singularity University, writes in a blog post. “If that value can
Philippe Dewost, Vinci Group
WHAT IT DOES : A scalable blockchain
database, BigchainDB can be applied
to a wide range of use cases
industries, helping them decentralize
WHATIT DOES: TheBitFurygroup
Credit : funderbeam Blockchain Industry Report 2017
NUMBER OF CRYPTOCURRENCY STARTUPS ASSOCIATED
WITH OTHER INDUSTRIES
BIG DATA & AI
to established, recognized personas who are widely accepted and
respected by society. Think about the leader or leadership behind Bitcoin.
Despite much speculation and detective work, the people behind it are
still unknown. “So now we have a faceless leadership,” notes Dewost.
The inventor of Ethereum, who was born in Russia and grew up in
Canada, was 19 when he invented Ethereum, a flavor of blockchain which
is now being used to build smart contracts. So now, there is this kid who
came from nowhere and is leading a whole community of developers
across the world, and he is doing it virtually.
This brings up questions about how leadership is nurtured and formed in
cooperation with others. The second impact of blockchain that current
leaders need to think about is permissions, says Dewost. No one asked
permission to write the first white paper explaining Bitcoin. No one asked
permission to start mining them. And, he says, when blockchain startups
launch ICOs they don’t have to ask the permission of regulators or courts.
They don’t need lawyers. They just launch it.
Dewost says “This is where the blockchain revolution is – young people
who are extremely far from traditional education, leadership and controls
,using cryptocurrencies to launch ICOs.”
be shared among participants in the dominant blockchain, then how
much might the tokens that underlie the dominant blockchain be worth?
For that reason and others don’t expect the transition to be an easy one.
While blockchain looks poised to distribute power away from centralized
authorities, such powerful institutions do not let go of their influence
easily, Marc-David Seidel, RBC Financial Group Professor of
Entrepreneurship and Associate Professor at the University of British
Columbia, notes in a blog post.
“I view this as one of the most interesting cultural and political challenges
of this century,” says the blockchain expert Philippe Dewost, who recently
took on a job as chief of Leonard, the innovation structure at Vinci Group,
a French concessions and construction company. “The reason is the
following: decentralized token currencies are questioning notions that
have been at the very heart of the management system that has been
around since corporations have existed.” One of those notions is who gets
to be a leader? Until now leadership in many companies has been related
WHATIT DOES: Chaincreates
WHAT IT DOES : The world’s largest
production blockchain platform,
Blockchain develops products that
help people use and understand the
technology, including the most widely
used wallet for digital currency.
WHAT IT DOES : Using the blockchain,
AI and other technology, Circle aims
to make sending money to a friend as
easy as sending a text. There are
no fees, and the transaction is instant
WHATIT DOES: Coinbaseisanonline
P.12— THE INNOVATOR
demand- backed asset like a com-
modity or a unit of exchange. Ether
is an example of a token you can use
to purchase certain services. Smart
contracts run on Ether so you could
also use these tokens to keep track
of and use your frequent flyer miles.
To extend this further, a token can
be like a virtual good: companies
like (the Chinese conglomerate)
Tencent create their own digital cur-
rencies which are used in the game
world to buy virtual goods. This has
proven to be extremely successful
with lots of people buying or ex-
changing tokens. Imagine applying
this to the business model of
Facebook or Google. They have very
iffy data that can’t be properly veri-
fied. There could be a lot of value if
the person who owns the data
would agree to trade that knowing
that he can benefit from that finan-
cially. The notion of self-sovereign
ID and data is now accepted, and
companies that don’t comply will be
vulnerable to heavy penalty. Tokens
can be used to create a common pro-
tocol on how to handle permissions
to use data so companies don’t run
afoul of liability laws.
In a July ruling the Securities and
Exchange Commission (SEC)
found that the tokens in a
prominent Initial Coin Offering
(ICO) were in fact securities —
meaning the transactions
violated federal investment laws.
What are the key differences
between tokens and stock
— J.C.: When the SEC issued an opi-
nion on the DAO (decentralized au-
tonomous organization) blow-up
they correctly censored them be-
cause really they were selling secu-
rities. However if one is careful it
of capitalism as we know it.
— J.C.: In 1842 after (U.S. pre-
sident) Andrew Jackson shut down
the banks, people produced their
own copper coins, called hard-times
tokens. It was a bottom-up protest.
There is a similar logic with bitcoin.
During the 2008 banking crisis
people could not trust fiat and the
authorities that have oversight.
There is a real distrust in the conven-
tional mechanism so that is why
token sales, to a certain segment,
are seen as a safe haven.
What exactly is a token?
—J.C.:The concept of a digital token
is not obvious. It is a unit for ex-
change of value between two or
more parties, but it is more than a
transaction. It is a unit of value that
binds a relationship. Digital tokens
can take the form of smart contracts
and be quite complex. They can take
different forms under different
conditions. They can be a commo-
dity, a currency, a security, or all of
those things. That is why there is
some confusion and issues about
how to regulate them. Tokens can
also be an expression of trust. A
token could be a credential that I
use to assert something about my-
self. It can be used for digital iden-
tity. It can be certification of certain
attributes such as age or place of re-
sidence or a credential proving that
you earned a diploma. Tokens can
get you access to different kinds of
services. They assert different forms
of trust and value and can be dyna-
What is the difference between a
bitcoin and a token?
— J.C.: Bitcoin is a kind of token – a
John Henry Clippinger,
a research scientist at the MIT Media
Lab Human Dynamics Group, is
conducting research on trust
frameworks for protecting and sha-
ring information. He is the author of
A Crowd of One: The Future of
Individual Identity. He is also foun-
der and former co-director of The
Law Lab at the Berkman Center for
Internet & Society at Harvard
University and the founder and for-
mer CEO of four software compa-
nies. Clippinger regularly consults
with companies, foundations and go-
vernment agencies on technology,
policy and business strategy.
Which tokens are the new, new
thing? Some say they herald the
beginning of a new kind of
economy and maybe even the end
— P.13— P.13
which allows people to buy part of
a Lamborghini and have access pri-
vileges at all times. This is indicative
of where things are going. It’s a
membership model like timeshare
but much lighter and easier to do.
What is an initial coin offering (ICO)
and why are we seeing so many
— J.C.: ICOs are token generation
events. There is sloppiness in how
people talk about utilization tokens
versus speculation tokens. An exa-
mple of a utilization token is when
you join a community and create a
kilowatt of sustainable energy and it
generates a token.
How will this change in the way
that companies are getting
funded impact stock markets,
venture capital and the global
economy in general?
— J.C.: We have a monetary system
and fiat system that is quite ancient
and not digital and does not reap
the benefits of what digital tech and
cryptography can do. The rate of in-
novation and change is only accele-
rating so it is just a matter of time
before we shift to a highly decentra-
lized and digital system with crypto-
graphic proofs and other kinds of
mechanisms to verify transactions
and services. You are seeing that
already in the rapid uptake of cryp-
to currencies in different jurisdic-
tions around the world: Singapore,
Switzerland, Luxembourg, UK,
Russia. There is lots of activity in
China but the government there is a
wildcard in this. We are seeing the
beginnings of a new international fi-
nancial system. Right now there are
lots of issues around the technology
and it is in an early phase but in my
experience I have never seen such
rapid speed of innovation.
can be treated as an asset token. If
it is a rewards program with no pas-
sive income derived or voting shares
then it is really not a security. When
you increase the supply of a curren-
cy you have to offset that by creating
debt because you can’t print money.
With digital currencies it is not ne-
cessarily the case. If you issue tokens
with specific value propositions
around different sectors you don’t
have to offset that with debt. There
are examples of this in the sharing
economy. If you look at next-genera-
tion mobility services and autono-
mous vehicles, it is very unlikely the
vehicles will be privately owned.
There will be a huge congestion pro-
blem but if you can have access and
that can be guaranteed then that is
better than owning your own car.
There is a token called Lambo coin
Every week something changes.
Decentralization is starting to take
place. If you can avoid and control
the inflation and bubble manipula-
tion then you are creating a much
more accurate, more transparent
system than you have currently be-
cause you can have analytics and ar-
tificial intelligence looking at every
pattern in hyper real-time speed.
One of the key benefits of tokens
is to align incentives among
participants of the ecosystem.
So far only startups have
launched tokens. Is it possible to
tokenize existing large enter-
prises? How would that work and
what would be the benefit?
— J.C.: Don’t incur debt. Don’t give
up equity and make customers
token holders. There will be a lot of
new options for public financing.
Underwriting will be dramatically
What should corporates do to
prepare for the changes ahead?
— J.C.: Tokens are a very powerful
way of distributing control. How
many companies will make the shift
to a token-based economy? Big com-
panies coming from China like
Tencent and Alibaba understand it.
The old industrial companies will
fight it. They may win some battles
but they won’t be able to compete
because of the way they are orga-
nized. The net of this is not an easy
message. Corporations like to think
about change being incremental and
they don’t like it when I tell them
that in this case it won’t be.
P.14 — THE INNOVATOR
— SingularityNET, a new artificial intelligence exchange being built on
blockchain technology, is aiming to compete with Silicon Valley giants to
provide corporates with better AI, usher in an age of super intelligence,
and also set aside time and resources to apply the improved technology
for the global good.
Companies are poised to spend billions of dollars on AI
technologythat will affect the work force and the growth of economies. But
today it is difficult for corporate buyers to have an overview of the best AI
agents available and connect with the startups or individual developers that
built them. Nor is there a way for AI agents and tools to swarm together to
fulfill a request by sharing relevant skills and information.
That is why SingularityNET says it is creating a blockchain-based exchange
that will allow its users to create, combine and monetize AI at scale.
Rather than limit AI’s development and direction to a handful of tech
the process, allowing anyone who has developed a good AI service to sell
The exchange will also permit individuals to be in control of their personal
data while sharing and monetizing the generalized learning with AI agents,
which in turn will collaborate with each other on projects, helping AI to get
will help speed what is called The Singularity, a time when humans and
computers essentially fuse, hence the name SingularityNET.
Blockchain technology is being used for the core plumbing of the exchange’s
architecture because it creates a powerful framework for different AI agents
to interoperate for tasks such as flexibly configurable data security.
The distributed structure is designed to ensure that no single party controls
exchanging value, allowing different AI agents to interact with each other
contracts allow the AI agents to exchange work, agree on the value of the
exchange and pay each other automatically in digital crypto-tokens. In this
decentralized open market any node is able to create smart contracts to
request tasks, creating a resilient, self-organizing economy, says Simone
Giacomelli and his SingularityNET co-founders — Ben Goertzel, a globally
recognized AI researcher and David Hanson, founder of Hanson Robotics, a
company behind a series of realistic humanoid robots — have agreed that
the exchange will use a portion of the evolved form of the AI it generates to
solve some of the world’s most pressing problems, a mission they believe
companies reporting to traditional shareholders are less likely to tackle.
Web Services, Microsoft Azure and Google Cloud.
“SingularityNET has the potential to profit tremendously from the now
of customers to drive the emergence of general intelligence, and to direct
the profit thus generated to apply AI for global good,” says Goertzel.
as an energized, decentralized community of AI developers in every country
around the world,” he adds. There is already a lot of open-source AI code
accessible to developers in code-sharing and publishing services like Github,
COVER STORY SingularityNET’sfounders,fromlefttoright:
but it is not easily accessible to clients outside the technology world. Putting
AI code in the SingularityNET will make it available to any customer. What’s
more, it will make it possible for different AI agents to connect with each
SingularityNET is encouraging consumers to volunteer to sell their data on
the exchange to enrich the AI. Thanks to the underlying blockchain
infrastructure, if the transaction generates a positive beneﬁt to a company
the source of the beneﬁt will be automatically attributed, tracked and
rewarded, providing a way for users to own, control and proﬁt from their
own data. Hanson says he believes the change will motivate consumers to
provide more data. That, in turn, is expected to lead to more proﬁts for
companies, because the data provided will be richer and there will be larger
data sets. What’s more, because consumers will have control of their data
and its usage will be transparent, the founders expect that compliance with
data privacy laws will no longer be an issue. “The end result is more people
faster,” says Goertzel. The decentralized network (https://singularitynet.
for use by customers in mid 2018.
At the time of the ofﬁcial launch supporters will have the opportunity to
for the launch will be any type of future user of the service interested in
owning SingularityNET network-speciﬁc crypto-tokens in order to buy and
sell on the open marketplace. The opportunity for early members is that as
the AI gets smarter the network will become more valuable to its users and
the marketplace – and the tokens invested in it – will increase in value.
AI to analyze bio-medical data or to help educate children in developing
countries. SingularlityNET is seeking corporate partners as well as
governmental regulators to help it develop the community.
“As we endeavor to bring this dream to reality, we will be navigating a
technological, business, economic, political and regulatory landscape that
is both more complex and more rapidly shifting than anything humanity
has ever seen.” says Goertzel. “Creating SingularityNET is going be a hell of
the odds of a positive Singularity.”
P.16 — THE INNOVATOR
Some 1.1 billion people have no means of identification.
They can’t vote, go to school or receive government services. Digital ID
is also key to doing business. You also have to have to have an established
identity to do business.
But how do you implement digital ID in such a way that privacy is built
in? The way forward is rife with challenges but blockchain technology
– an immutable ledger that allows third parties to validate that an at-
tribute has not been changed or misrepresented, is being seriously consi-
dered as a way of developing, safeguarding and storing digital IDs. One
of the United Nations’ Sustainable Development Goals is aiming to pro-
vide every person on the planet with a solid and tamper-proof digital
identity based on common, interoperable standards by 2030.
As a first step, the United Nations is seeking to develop scalable iden-
tity systems by 2020.
An Opportunity for Developing Countries
Vendors such as Switzerland’s WISeKey, Microsoft and Accenture are all
working on technology solutions to try and meet that need. Solving the
digital identity issue could answer some of the developing world’s big-
gest problems, including financial exclusion.
Digital identity services are also key to a whole array of new types of
business and government services in the developed world. And they mi-
ght help banks to morph into brokers of digital data.
The World Economic Forum argues in an August 2016 report that finan-
cial institutions are well positioned to drive digital identity systems,
since they already have well-developed ways to verify user information
for commercial and regulatory purposes.
There is a strong business case for banks to move into such services, the
report says. Doing so would allow banks to offer extended financial ad-
visory services and things like behavior-based insurance. Banks could
also offer “identity-as-a-service” to businesses that can’t or don’t wish to
store their clients’ personal data. Other options include offering iden-
tity management as a separate, fee-based service or anticipating the
need for capital, pre-empting requests for financing from small businesses
and providing real-time credit.
Creating such services would enable banks them to create new revenue
streams, helping to make up for disruptions that blockchain is causing
in other parts of their business.
There is a need for identity to be international but establishing a stan-
dard will be very challenging, says Jesse McWaters, the project lead of
Disruptive Innovation in Financial Services at the World Economic Forum.
“Identity is at some level it is extraordinarily cultural – in some instances
you are talking about centralized government programs and in other
cases there is a lack of trust in government or the ability of the govern-
ment to coordinate , so in these instances a federated or distributed
approach to a digital identity might be used, says McWaters.
The question of you how operate and how you protect ID are separate
questions, he says. It depends on what rails the service is running on.
Even if blockchain is used as the technology underpinning digital iden-
tity the level of control over those systems is different, says McWaters.
Three different types of systems are built around digital ledger techno-
logy. One is in Estonia, where almost all public service are digitalized
and accessed through secure digital identities that are provided to eve-
ry citizen and resident.
Another can be found in Canada. There, a federated system involving
a number of large financial institutions, operates a service in coopera-
tion with government.
When it was first announced in 2016 the Canadian project was hailed
as the largest privacy-by-design consumer digital identity service initia-
tive to date and among the first widespread commercial uses of blockchain
distributed ledger technology by financial services institutions.
The Canadian program is being built on top of the secure digital ID that
banks have already established nationwide with the help of SecureKey,
a start-up specialized in secure identity and authentication. In addition
— Will blockchain give people more say over who can
see and use their data?
P.18 — THE INNOVATOR
curity number. The entity to which they send that information retains
it. The data is out there in silos and that creates both risks in terms of
data loss and forces all sorts of companies that might not want to be in
that position to store that information. It also creates businesses that
are able to harvest that data for commercial purpose that do not neces-
sarily benefit the owner of the data. “The opportunity we have around
digital identity is to turn that on its head,” says McWaters, “ to put users
more in control of their identity attributes and prove things to people
while transferring as little information as possible.”
A lot of the focus on blockchain places all of the importance on how it
could enable secure digital identity. “A more valuable way of re-archi-
tecting identity is to better serve consumers and offer them more priva-
cy so when they hear the word digital identity it no longer means gi-
ving massive amounts of data – to someone else.”
to blockchain technology SecureKey uses biometrics to ensure the iden-
tity of the person logging in.
When fully launched blockchain technology will be used to allow the
secure exchange of any type of personal data. The permission-based sys-
tem would allow, for example, a bank to release all of the digital docu-
ments needed for someone to be approved to rent an apartment. Banks
would charge a fee to the business requesting the information.The ser-
vice aims to make it much easier and safer for consumers to do business
online with private and public sector service providers and to conduct
peer-to-peer transactions with other individuals
SecureKey, which has partnered with IBM, is now testing its technolo-
gy in other markets.
A Safer Way to Exchange
The third model is being proposed by a group called Sovrin, a private-sec-
tor, international non-profit that was established to “govern the world’s
first self-sovereign identity network”. Self-sovereign identity is the concept
that people and businesses can store their own identity data on their
own devices, and provide it efficiently to those who need to validate it,
without relying on a central repository of identity data.
“What is more important than the underlying technology is the expe-
rience that enables the user,” he adds. Today there is a conception of
identity that is not necessarily best for users, says McWaters. When
people want their identities to be confirmed they have to transfer a
whole bunch of information such as name, date of birth and social se-
inJordan’sAzraqcamp are now able
to pay for their food by means
of entitlements recorded on the
Blockchain is a way of organizing
data through a distributed ledger.
This can speed up transactions while
lowering the risk of fraud or data
mismanagement. The ledger records
transactions in a secure manner that
cannot be changed. It allows any
two parties to transact directly, and
removes the need for third-party
intermediaries such as banks.
Robert Opp, Director of Innovation
and Change Management at the UN
to test digital ledger technology after
speaking with the finance division
overseeing the WFP’s cash transfer
The United Nation’s World Food
Program has a $6 billion budget. Its
job is to give around 100 million
people in 80 countries a year some
sort of assistance. In addition to
in-kind emergency relief in places
where there are functioning food
markets. Cash assistance is loaded
on a card, mobile phone or digital
A Scan of their Eye
Instead of Cash
distributed is almost $1 billion.
The WFP was transferring huge sums
banks, along with a list of those
eligible for assistance.
The banks would transfer the funds
onto cards or vouchers that those
receiving assistance could use to pay
retailers. The banks would handle
Now, “blockchain is replacing the
piece that banks would do,” says
Opp. Using the blockchain the WTF
1% and 3% and the necessity of
transferring a list of names to a third
to the bank on behalf of specific
individuals, the organization now
deals with only 200 settlements to
retailers, he says. After a trial in
Pakistan earlier this year WFP rolled
the service out to around 10,000
people in a refugee camp in Jordan.
up to serve hundreds of thousands
Because there is yet no globally
recognized digital ID (See the story
page 16.), the WFP’s system relies
on biometric registration data from
for Refugees (UNHCR) and uses
purposes. Refugees purchase food
from local supermarkets in the camp
by using a scan of their eye instead
of cash, vouchers or e-cards. The
pilot aims to create a platform that
the wider humanitarian community
could use. Depending on the results
the use of blockchain technology to
areas such as digital identity
management and supply-chain
Mobile technology, biometrics and
solutions such as blockchain, have
the potential to transform the lives
of people in need across the world
and address the roots of hunger, says
Opp. The WFP has opened an
innovation accelerator in Munich to
work on developing new tools and
approaches to eliminate hunger by
“New business models are needed
people in the world and blockchain
can be an enabler,” Opp said.
— Blockchain’s distributed network of trust is helping
step up the fight against hunger
P.20 — THE INNOVATOR
The digital ledger technology could help solve some of the
developingworld’sbiggestproblems, including the recording of births and
More than a billion people do not have a recognized means of identifying
assistance and financial services.
The Swiss technology firm WISeKey’s CertifyID is a digital identity dual
factor authentication that sits on top of a blockchain, an immutable ledger
that allows third parties to validate that an original digital identity or
attribute certifications have not been changed or misrepresented. This
and similar new technologies could help the United Nations achieve its
goal of helping everyone in the world have a secure digital identity by the
year 2020, paving the way for a better life both for citizens of emerging
market countries and refugees. (See the related story on pages 16 to 18.)
In June the government of Andhra Pradesh, the seventh largest state in
India, announced it had teamed with WISeKey to explore the use of
blockchain to secure government-recorded data, including the provisioning
and security of citizens’ identity. It is also considering ways of applying
the technology to the local transportation sector.
WISeKey, which specializes in cybersecurity, blockchain and the Interent
of Things (IoT), is also building a blockchain/IoT Center of Excellence in
Kigali in partnership with the Rwandan government. The center is deploying
a “Trusted Blockchain as a Service” platform to enable the creation of a
blockchain ecosystem in Rwanda. The project is part of the broader Smart
Africa initiative with 17 countries participating, representing a market of
about 360 million people.
Removing Constraints On Opportunities
Blockchain won’t just address digital ID. It could also help address problems
caused by political instability, because unlike fiat currencies, blockchain-
based cryptocurrencies do not depend on governments or the credit of the
state to guarantee their value and are immune to local inflation caused by
war or political crises.
Blockchain technology also provides a means of exchanging capital in places
where traditional banks are not present and could help provide fast and
cost-efficient access to investment capital. That’s not all. The technology
could potentially release some of the estimated $20 trillion worth of trapped
land capital around the world. Due to the lack of trust in and corruption of
land records, many banks in emerging markets refuse to accept land as
collateral for loans.
Two startups — BenBen, which was chosen to participate in a Barclays bank
accelerator program and now counts Barclays Ghana as a client; and another
called Bitland — are working on solving that issue by using blockchain as
a way to allow governments to convert physical land titles into secure,
transparent and easily accessible digital records. Both startups have global
ambitions but decided to first focus on Ghana. The country’s paper-based
land registry records are unenforceable by the court system so banks there
won’t accept land as collateral, leaving millions without the possibility of
leveraging their property to get loans and break out of the cycle of poverty.
Supply Chain Integration
benefiting small-scale farmers. An estimated 125 million people make a
living growing coffee in countries such as Ethiopia, Ivory Coast, Uganda,
Rwanda, Tanzania, Colombia and Brazil. Most are small-scale farmers whose
families live on $2 a day or less. Bext360, a U.S. startup using a combination
of blockchain, machine vision and artificial intelligence to improve the global
supply chain for agricultural products, wants to make it easier for these
farmers to get a fair price, and get paid instantly.
— Developing countries are planning to leverage
blockchain to improve their citizens’ well-being and
turbocharge their national economies.
to surpass Delaware and create a global corporate hub. Delaware launched
an initiative in 2016 to review its state laws and start working toward
implementing blockchain-based share ownership and blockchain transaction
its corporate and investment laws to facilitate foreign investment, could
take the concept further.
“As blockchain technology and IT infrastructure more broadly bring the
world’s entrepreneurs closer together there is a unique opportunity for a
forward-thinking jurisdiction to create a legal-technical framework for online
corporations,” writes Cameron-Huff. “A more trusted, transparent corporate
registry could be created based on digital ledger technology,” he argues.
Corporate voting could be handled on a blockchain and shares could be
distributed to the public through the Rwanda Stock Exchange or a new
venture exchange created for blockchain-based companies.
The Rwandan Stock Exchange or some other Kigali-based exchange could
become the listing venue for foreign technology companies, allowing them
to easily issue shares that could be freely traded, without incurring the
hundreds of thousands of dollars in legal expenses that are necessary in
Canada and in the U.S. Not all corporations would want to opt for this, but
many could benefit from a blockchain-based system that offers easier access
to capital and a more transparent public market without onerous regulations,
according to Cameron-Huff. The offer could be especially attractive to new
technology organizations based around smart contracts like The DAO (digital
decentralized autonomous organizations), he notes.
Blockchain registration would help avoid concerns about shares not existing
or the number of shares issued. The shares could be even more transparent
than those in Canada or the U.S. “If the market is more transparent, more
liquid, cheaper, and easier due to blockchain-based systems why wouldn’t
companies from around the world set up in Rwanda?” writes Cameron-
Huff. “ Perhaps this will be a next step for globalization.” And a boon to the
Rwandian economy as well.
The company has built a patented kiosk machine that uses machine learning
and AI to evaluate the coffee beans and divide them into grades based on
quality. Coffee farmers access a mobile app linked to the machine to view
offers from potential buyers. Once a farmer accepts an offer, he or she
receives immediate payment for the coffee beans. The distributed ledger at
the heart of the blockchain ensures payment and keeps a complete record
of every transaction.
Developing countries leapfrogged landlines and jumped directly to mobile
connectivity, allowing suppliers and buyers to shift to digital payments
because there are fewer legacy cross-border systems for trade, Bext360 says
its mobile access allows it to implement blockchain technology directly into
the supply chain for traditional supply-chain optimization, product payment,
and the financing of capital equipment needed to increase the value of
commodities in the country of origin, bringing more equity to local businesses
and communities in emerging economies.
Strengthening National Economies
Blockchain’s immutable ledger and transparency would expose and prevent
corrupt government practices, which are rampant in many parts of the
developing world, slowing or even preventing the uptake of the technology.
But there are some powerful incentives for governments to consider. Digital
ledger technology could help create new revenue streams from services that
energy sharing and automatic payment clearing. If one pundit is right, it
might even help Rwanda become the new Delaware. The American state
of Delaware handles registrations for more than 50 percent of companies
in the U.S. and more than 60 percent of the Fortune 500.
The Canadian technology lawyer Addison Cameron-Huff notes in a blog
post that there’s an opportunity for Rwanda to use blockchain technology
P.22 — THE INNOVATOR
TheNetherlands’blockchainhackathon which claims to be
the world’s largest—doesn’t just attract geeks and entrepreneurs behind
hot new startups. Attendees include Prince Constantijn van Oranje,a member
of the Dutch royal family, city officials and executives from large corporates.
That’s because the country is on its way to becoming a blockchain nation.
Some 25 different Dutch government agencies have launched blockchain
and the Port of Rotterdam are all testing the digital ledger technology.
In addition, on September 28, during the StartUpFest Europe conference
in the Netherlands, the Dutch government was given legal certification for
a digital ledger solution in the healthcare sector that will allow blockchain
to be used for communications between the country’s health institutions,
including hospitals and government agencies.
“Blockchain has a lot of promise and people are really keen to explore
what the opportunities are,” says the prince, who in his role and co-founder
and chairman of StartupFest Europe, acts as the country’s special envoy
for startups. The blockchain activity – which includes startups, government,
universities and corporates – is part of a larger effort to turn the Netherlands,
which for centuries has been at the heart of global trade, into a world-class
technology hub. While the Netherlands is home to high profile tech ventures
in a variety of sectors such as Adyen, which has achieved unicorn status
(a valuation of $1 billion or more) by providing businesses with a single
solution to accept payments anywhere in the world and the Hardt Hyperloop
project, which won Elon Musk’s SpaceX hyperloop pod competition.
Blockchain initiatives are multiplying and growing in importance.
processes as well as reduce costs, fraud and cyber risks. Its use could boost
the country’s vital economic sectors which include the chemical industry,
ports, agro-food, the manufacturing industry, the financial sector and the
energy sector. “There are a strong set of initiatives here in the Netherlands,”
says Rene Penning de Vries, a member of the Dutch Blockchain Coalition,
a joint venture between industry, government and academia initiated by
the country’s Ministry of Economic Affairs under the label Dutch Digital
Delta. “My team is organizing cooperation between public and private
partners because there are some fundamental issues that need to be solved
before services are introduced into the market at scale.”
Digital Identity Is Key
of persons, legal entities and objects are at the top of the agenda. “We have
a number of banks on board, insurance companies and utilities and we have
the Dutch regulatory authority on board and we all feel that identity is the
key for all of these blockchain applications,” says Penning de Vries. “So
where are we? We are at the stage of defining prototypes, defining what
we really want in terms of identity management.”
Working on identification processes requires a focus on both interoperability
and industries. “One of the most important aspects is to figure out how to
work together with different government organizations and share data
while respecting privacy,” says Marloes Pomp, project leader of the Dutch
government blockchain projects. “Between government services we can
build excellent services and share data and sometimes money. We think
blockchain can help us do that in a better way.” One of the items on the
agenda for 2017 is creating clarity about the relationship with all government
organizations and the speed of rollout for those that are considering using
blockchain to create identities that can be used in government registers
— Digital ledger technology is expected to bolster
the country’s vital economic sectors
such as the State Service for Identity Data (RIVG), Dutch Chamber of
Commerce as well as the basic registrations of the police and the Ministry
of Security and Justice.
That’s not all. At least seven cities are testing different ways of using digital
ledger technology. For example, the Dutch city of Groningen has launched
a trial – using technology developed by a local startup called Dutchchain
– allowing government payments to 20,000 citizens with a minimum income
to be paid in smart digital vouchers instead of euros. Academia is also
playing a strong role. The Netherlands is home to Delft University of
technology. Its work combines running code with novel approaches to
broaden and strengthen the cybercurrency field, says Johan Pouwelse,
head of the university’s blockchain lab. The university is taking part in a
new blockchain consortium focused on logistics involving the Port of
Rotterdam, operator of Europe’s largest shipping port. The Netherlands-
based effort includes support from anumberoflocal and regionalinstitutions,
including Royal Flora Holland, a major floral auction house, the Netherlands
Organization for Applied Scientific Research and Dutch bank ABM Amro,
among others. ABM Amro has also teamed with IBM on a blockchain trial
for real estate transactions to record and exchange information using an
application called Torch. The bank is also exploring how blockchain might
solve issues in financial auditing and compliance and in Financial Recovery
and Restructuring (FRR).
Banking On Blockchain
ABN Amro and RaboBank are among multiple banks who have joined a
project designed by SWIFT, the world’s largest financial messaging system,
designed to determine if blockchain technology can help banks reconcile
most large Dutch banks have intensified their blockchain initiatives in 2016–
17 and are evolving from the paper-based exploratory phase to mobilizing
proofs-of-concept across different business lines, according to consulting
In 2016, ING, another Dutch bank, worked on blockchain projects with
partners inside and outside the bank, including consortiums such as R3,
the Dutch Central bank, the Dutch Payments Association and the European
Banking Forum. The bank also partnered with Société Générale and trading
house Mercuria to test a live oil trade using blockchain.
trade finance and working capital solutions, financial markets, bank treasury,
lending and compliance and identity, according to Accenture. Tangible key
performance indicators (KPIs) were used to validate the results and suitability
of these proofs-of-concept, according to an article written by Accenture
Netherlands consultants. For instance, the proof of concept on blockchain’s
application to trade finance showed considerable gains in an otherwise
paper-based process, resulting in potential cost savings of 10%–15% and
administrating healthcare payments will be lowered by 10 times or more,
predicts van Megchelen, because once a patient signals that he has used his
digital wallet to pay for healthcare the insurance company is notified and
a payment can be issued immediately. And finally, since transactions on the
blockchain are immutable, if someone wants to try and change the data
they would have to break into six different data bases, making it is nearly
impossible to hack, he says.
Transforming The Energy Sector
Other trials in the Netherlands involve the energy sector. For example, IBM,
revenue uptake of 15%. For its part, SNS Bank moved out of traditional
banking areas to test the use of blockchain in addressing inefficiencies in
the healthcare system, according to Accenture.
Several other trials applying blockchain to the healthcare sector are ongoing
and on September 28th Pels Rijcken, an independent law firm which often
works with the Dutch government and other public entities, delivered the
first legal certificate for a blockchain solution in the healthcare sector to
Erik Gerritsen, Secretary General of the Dutch Ministry of Health, Welfare
and Sport, during Blockchain Summit, a StartUpFest Europe event in the
says serial Dutch entrepreneur Jeroen van Megchelen, CEO and co-founder
of Ledger Leopard, a recently launched startup which built a blockchain
application called Mijn Zorg Log for Zorginstituut, the Dutch government
A commercial blockchain service involving a Dutch healthcare institution,
a private insurance company and Ledger Leopard will be launched before
the end of the year, van Megchelen said in an interview with The Innovator.
Applying blockchain to the healthcare sector brings four key advantages,
he says. The permission-based structure of blockchain technology puts
individuals in charge of their own data, allowing them to control which
information will be released to a doctor or insurance company. Secondly,
the blockchain connects healthcare data, which today is very scattered, onto
one digital highway, making it far more efficient. Thirdly, the cost of
P.24 — THE INNOVATOR
WHAT IT DOES : Uses the blockchain
to offer fractional ownership in the
sustainable infrastructure that
powers a person’s future, such as
power from windmills and rides in
autonomous cars, giving people an
alternative to traditional pensions.
TenneT and Sonnen are working on a trial in the Netherlands and Germany
that explores the use of a permissioned blockchain network to integrate
flexible capacity supplied by electric cars and household batteries into the
electrical grid. (See the story page 40.)
And in preparation for a time when it will be possible for everybody – and
everything –- to trade in energy, Dutch utility Enexis Groep is experimenting
with the use of blockchain to create new platforms and economic models.
In the long-term machines (such as autonomous/self-driving cars) are
infrastructure. This means an electric car might obtain solar energy directly
from a solar panel, making the fuel for the car free of charge. In May the
innovation lab of German untility Innogy,launched a working blockchain
product that tests that model. Together with Innogy and ElaadNL, Enexis
Groep plans to roll out this blockchain solution in the Netherlands on a pilot
basis during the first quarter of 2018.
Startups present at the September 28th Blockchain Summit in the Hague
are playing a role in other public and private initiatives, such as the future
of pensions, says Rutger van Zuidam, CEO of the startup Dutchchain, the
organizer of both the the September 28 Blockchain Summit in The Hague.
And the Netherlands’ annual blockchain hackathon, which attracts around
500 hackers from over 12 countries.
Dutchchain is behind the smart voucher trial in Groningen, a northern city
of 200,000 people about 30 minutes from the German border. Nick Stevens,
the city’s chief digital officer, says the trial is going well but is just a start.
“My perspective on the trial is not about the end result, it is about learning
how to think about blockchain and whether it will help us to do things
better and differently,” says Stevens. “We need to determine whether it is
primarily for operational efficiency or if it can also make for happier citizens.”
The digital voucher trial is “low risk”, says Stevens. “If it goes wrong it is
not the end of the world but when you talk about digital ID, if that goes
wrong that has significant consequences. (The trial) is about learning how
the technology does and does not work and how do we start upping the
risks to do the big things.” Other countries are also embracing digital ledger
technology, notes Stevens. “ If we really want to become a blockchain nation
and lead the way we will have to be daring and bring the technology in as
something fundamental and not something that in ten years time will be
seen as an amendment.”
— The Netherlands isn’t just trying to make
a name for itself in blockchain.
It wants to be a global technology hub.
Amsterdam is home to Booking.
com and TomTom, two startups
launched in the 1990s that went
on to become global tech stars. It
is also the headquarters of the
payments firm Adyen, one of
with a market cap of a billion
That is starting to change thanks
to efforts by StartUpDelta, an
organization formed in 2014 to
connect and promote the Dutch
startup economy as one single
hub. Neelie Kroes, a former EU
commissioner in charge of
the EU’s digital agenda, was
StartUpDelta’s envoy for startups
Europe, a technology conference
that comprises multiple events
around the Netherlands, was
launched under her leadership.
The Apple CEO Tim Cook was a
speaker last year. Deep Nishar,
at this year’s conference, which
took place September 25-28
and attracted around 15,000
entrepreneurs, investors and big
Prince Constantijn Van Oranje, a
is the country’s current startup
of Dutch startups to events such
tasked with ensuring that young
program is being tested at a
that allows students to combine
biomedical courses with a year of
entrepreneurial studies. The goal
is to encourage the country’s best
Canvas, a tool launched during
StartUp Fest Europe, helps Dutch
“Ministries are really talking to
startups, corporates are meeting
are finding ways to connect, we
to make it more entrepreneurial
access to the world and access to
networks for our startups and
connecting all the dots in the
Netherlands into a single hub,”
says Anne-Wil Lucas, a program
manager at StartUpDelta. “If we
work together we will have more
impact on the world.”
P.26 — THE INNOVATOR
StartupFest Europe, a conference that took place in the Netherlands
September 25–28, gathered startups, corporates and investors from around
the globe. The Innovator selected a group of the most interesting startups at
StartupFest’s seven events: CapitalFest, Impact StartupFest,
FinTech Vortex, EnergyFest, Digital Health & Medtech, The Future of High Tech
and the Blockchain Summit.
WHATITDOES:Using a cost-efficient and clean
process, SoundEnergy claims it can take waste
heat and convert it to sound and then into cold air
which can be used for industrial waste heat
recovery, air conditioning, cold chain shipments
and data center cooling.
WHATITDOES:Designed to store and manage
energy generated by solar panels mounted on
household roofs, the sonnenBatterie claims
a minimum lifespan of 10,000 charging-cycles.
It is participating in a blockchain-distributed energy
trial with TenneT and IBM.
KITE POWER SYSTEMS
WHATITDOES:KPS is developing a low-cost
solution to harness energy from the wind.
Its system employs two kites flying in the same
airspace so that while one is generating power the
other is being retracted, ensuring energy production
WHATITDOES:Rafiki Power supplies a
containerized solar-powered solution that can bring
electricity grid-style services to communities
lacking power. To date it has installed and operates
eight mini grid solutions in Tanzania.
THE OCEAN CLEANUP
WHATITDOES:Aiming to start extracting plastic
from the Great Pacific Garbage Patch within the
next 12 months, The Ocean Cleanup has
developed U-shaped screens that direct floating
plastic to a central point. The concentrated plastic
can then be extracted and recycled.
WHATITDOES:A blockchain specialist, Parity
develops software solutions for enterprises and
industries designed to unlock the full value of
decentralized technology. Its Ethereum browser is
the first in a series of planned software releases.
WHATITDOES:Photanol uses engineered
cyanobacteria to produce chemicals from CO2
sunlight. The first compound to market is a lactic
acid used to produce a biodegradable plastic.
WHATITDOES:Oviva uses digital technology to
help treat diabetes, obesity and food allergies.
It employs virtual clinics and high-frequency
follow-up to improve clinical outcomes and lower
the cost of delivering care.
WHATITDOES:Windhorse has developed a
specialist aid drone that can be loaded with food
and water, before flying independently to a
pre-planned destination. The drone’s shell can be
reused to provide shelter and the frame can be
burnt safely to cook food.
WHATITDOES:Fare Pilot uses machine learning
to help Uber, Lyft and taxi drivers find more fares
and earn better deals. Its data platform
uses historical and live data to identify potential
demand hot spots.
WHATITDOES:Amber is developing a modular,
autonomous, customizable electric car designed
specifically to be shared. ABN Amro has signed
on as a launching customer.
Amber plans to have the self-driving cars on the
road in Eindhoven by mid-2018.
WHATITDOES:General Fusion is trying to develop
the fastest, most practical and cost-competitive
path to fusion power. In its labs just outside
Vancouver the company is developing the key
components of a fusion power plant.
WHATITDOES:Built on the Ethereum blockchain,
Bancor’s tokens are a type of monetary reserve that
provides liquidity to other tokens.
WHATITDOES:Mmuze has developed an artificial
intelligence platform that can turn product
catalogues into smart shopping assistants.
The Mmuze chatbot can identify most discussed
product features and real-time social trends that
impact customers’ purchasing decisions.
WHATITDOES:Using its open industrial IoT
platform, GuardHat has developed a smart
hardhat that supports real-time location tracking,
audio and video streaming, as well as gas
detection and biometric data capture.
WHATITDOES:Unbabel supplements machine
translation technology and artificial intelligence
with 50,000 bilingual individuals around the world
who post-edit the outputs from the automated
WHATITDOES:Enerkem’s proprietary technology
converts the carbon contained in garbage into a
pure synthesis gas (also called syngas), then turns
in into biofuels and chemicals..
Compiled and written by David Pringle.
Pringle is a former Wall Street Journal telecoms
and technology reporter. He currently works
as an associate senior analyst at STL Partners,
running the Dealing With Disruption stream which
covers Google, Apple, Amazon, Facebook and
Microsoft, as well as the broader digital commerce
WHATITDOES:To detect early and potential signs
of chaotic growth (skin cancer), SkinVision has
developed an algorithm that can scan an image of
a lesion and check for irregularities in color, texture
WHATITDOES:By offering free international
money transfers and fee-free spending in dozens
of currencies via a mobile app, Revolut has gained
over 730,000 customers across Europe who have
collectively transacted over US$3.2 billion.
P.28 — THE INNOVATOR
If you want a glimpse at the future potential of blockchain,
visit Estonia, urges Kaspar Korjus, the country’s managing director at
e-Residency. Almost all public services in Estonia are digitalized and accessed
through secure digital identities that are provided to every citizen and
One of the innovations that is integrated into some of the services is a
distributed ledger that can never be erased or rewritten. This kind of ledger
technology is now more commonly known as a blockchain. Estonia’s digital
ledger was built years before current-day blockchain existed but is based
on the same principle. The distributed ledger gives citizens and residents
control over their own data. “Every transaction unit is backed up on the
digital ledger so no one can misuse it or change it,” says Korjus. “As a citizen
no one has a right to check my data without permission. Before I had to
trust some government employee. Now I put my trust in mathematics and
encryption.” While digital ledger technology is secure it isn’t failsafe. In
September a group of international security researchers identified a potential
security vulnerability that affects the use of Estonia’s ID cards and digital
IDs. The cards are used to access a wide range of digital services, from
signing documents to submitting tax returns and checking medical records,
as well as by foreigners who are e-residents in the country.
When notified, Estonian authorities immediately took precautionary
measures, including closing the public key database and being transparent
about the risk. Korjus, who points out there was no actual breach, says
other governments could learn from the way the country has implemented
public policy to foster the use of innovative technology and digital IDs
while protecting its citizens and e-residents.
For example, he explains that simply having the technology to monitor
who is accessing people’s data, conduct e-voting or digitally signing
documents, would be pointless without a policy framework to ensure
improper access of data is punished, e-votes are counted and digitally
signed agreements are legally binding.
Estonia’s e-residency program is another example of smart public policy, he
says. It allows people from anywhere in the world to apply for a digital
identity in Estonia. You can then use a government-issued identity card to
sign documents, open a bank account and register companies from abroad.
“It has opened up a business opportunity for Estonia,” says Korjus.
The primary benefit at present is the ability to establish and manage a
have already opted in. Now blockchain entrepreneurs have started asking
how the digital IDs can be integrated into their products and services as a
way of on-boarding their customers faster and at lower cost.
“Estonia is now a blockchain nation,” says former President Toomas Hendrik
Ilves. “Our digital society is underpinned by blockchain technology and our
that need to verify online identities. Through e-Residency, Estonia is ready
to support blockchain pioneers from anywhere in the world so they can
build the future through our digital infrastructure, even without stepping
foot in Estonia.”
Estonia should take advantage of its edge while it can. Trent McConaghy,
the founder and CEO of the Berlin-based blockchain startup BigchainDB,
says he believes it is only a matter of time before the tiny Baltic state has
“The concept of e-residency is based on the same philosophy as blockchain
– spreading power,” says McConaghy. “I am sure other nations are going
to start to copy them. In 10 to 15 years 10 or more nations will have
e-residency programs. These nations are going to be competing on which
benefits they give. As the power of nations fades and everything becomes
more decentralized this movement will follow.”
— Estonia’s early adoption of digital ledger
technology is giving it an edge.
Europe’sIOTAFoundationis planning to launch a blockchain-
based exchange that will allow corporations to securely buy and sell data
collected by devices on the Internet of Things (IoT). IOTA plans to make
in Paris, says co-founder Dominik Schiener, a scheduled speaker at the
event. Initial participants in the data exchange include Bosch, Huawei,
Samsung, Engie Lab, SAP and Deutsche Telekom, he says.
IOTA, which is developing its own flavor of blockchain, called Tangle, aims
to help big corporates use the technology to create new business models
and new revenue streams for the financial services, logistics and supply
chain, energy, auto and healthcare sectors.
The IoT is made up of applications that connect to the Internet everything
from cars and factory-floor machines to home appliances and humans. All
of these machines generate enormous amounts of data which, for the most
part, is currently neither analyzed nor monetized.
While some of this data contains valuable business insights that could be
used to launch new services, there isn’t an easy, secure way for companies
and individuals to start buying and selling it directly from each other.
In order for businesses and consumers to safely use the IoT, each device
on the network will need to have a secure digital identity, says Schiener.
That’s the first challenge. Then, a settlement layer needs to be established
in order to enable a new “economy of things,” allowing devices, sensors
andmachines toexchange value in real-time, without automaticallyincurring
fees. And, to be trusted there needs to be an immutable record of the
The IOTA Foundation aims to meet all of those objectives through Tangle,
its blockchain offering, which claims to be scalable and to enable the transfer
of data in an authenticated, tamper-proof and encrypted fashion.
The exchange will be a proof of concept to illustrate how an IoT sensor
IOTA is asking corporate and institutional partners
to participate in the initiative.
“The goal of IOTA is to obviously run on tiny sensors but for this proof of
concept we intend to make it possible for corporates to easily submit non-
sensitive data to the data marketplace,” says Scheiner. “Some of the data
that is being submitted is from weather stations, environmental sensors,
machines in shopfloors, cars, base stations and more.”
IOTA’s technology is open source and free to use, so any one can join the
in the foundation is crucial, says Schiener, an Italian entrepreneur who has
been in the blockchain space for more than five years. There are big use
cases but IOTA isn’t sure what corporates want. “Our attitude is ‘let’s do this
together,’ ” he says.
The IOTA Foundation is a member of a consortium called Trusted ID Alliance
that also includes Cisco, Bosch, Gemalto and Foxconn. The Trusted ID
alliance is working on ways of standardizing how blockchain can be used
to secure and improve IoT applications. The IOTA Foundation is also a
member of the Decentralized Identity Foundation, a grouping of competitive
companies, including Microsoft and Accenture, launched in May, that aims
to create a universal, secure, decentralized way for data to be accessed by
institutions and for individuals to verify identity. These consortia are among
several collaborative efforts aimed at advancing the development of
— Using the blockchain to exchange data generated
by the Internet of Things
P.30 — THE INNOVATOR
More than seven million container ships move in and out
of The Port of Rotterdam annually carrying flowers from Kenya, oranges
from California, pineapples from Colombia and a whole array of other
merchandise. Europe’s largest port is always bustling because 90% of goods
in global trade are carried by the ocean shipping industry each year. It is a
highly inefficient process that is ripe for disruption.
Maersk, the world’s largest shipping container company, found that just a
simple shipment of refrigerated goods from East Africa to Europe can go
through nearly 30 people and organizations, involving more than 200
different interactions and communications. So it is no surprise that Maersk
has teamed up with IBM to test how the blockchain, which enables more
secure, transparent monitoring of transactions, might streamline the supply
chain. It is just one of a number of trials involving blockchain’s use in the
supply chain. Supply chains are basically a series of transaction nodes that
link to move products from point A to the point-of-sale or final deployment.
With blockchain, as products change hands across a supply chain from
manufacture to sale, the transactions can be documented in a permanent
decentralized record – reducing time delays, added costs, and human
errors. Some of the world’s biggest retailers and food companies – including
— Supply chains are often highly inefficient
processes that involve hundreds of interactions.
Blockchain can help.
Nestlé, Unilever and Walmart – are now working with IBM to use the
blockchain to improve food traceability and transparency in the supply
chain. Several blockchain startups are innovating around supply chain in
other sectors, notes the research firm CBInsight.
For example, SteelTrace, a Dutch startup, is using the blockchain to
automatically trace steel quality from origin to end product. Another startup,
Provenance, is building a traceability system for materials and products,
gathered collaboratively from suppliers all along the supply chain, permitting
it to substantiate product claims with trustworthy, real-time data. Others
startups targeting this space include Hijro, which offers an alternative
platform for lending into global supply chains, and Skuchain, which builds
blockchain-based products for the business-to-business trade and supply-
chain finance market.
Trade finance is also being moved onto the blockchain. The trade finance
environment involves export and import, bank credit and managing the
whole supply chain. “The financial payment is not linked to the supply
chain so there is a paper version control issue and it adds significant cost
because it is manual,” says the blockchain specialist Oliver T. Bussman, a
former CIO at UBS.
Another issue is that the payment stream is not linked to the supply chain
from a time-to-delivery point of view. With the blockchain, smart contracts
can be issued between all the involved parties, delivery can be confirmed
and the payment will automatically be executed. Cost efficiency savings
are estimated to be between $14 billion to $16 billion, says Bussmann.
“This is an example of how blockchain allows for real-time integration not
only of the banking industry but to team up with peers and non-banks and
move that onto a platform to enable simplified real-time business,” he says.
A group of banks, including Deutsche Bank and HSBC, have formed Digital
Trade Chain, a project to build a blockchain-powered cross-border trade
finance platform for small and medium-sized companies in Europe.
The consortium started in January 2017 with seven European banks and
is expected to grow to include additional banks from other countries as
well as trading partners such as shippers, freight forwarders and credit
agencies. Bank of Montreal, Caixabank and Erste Group recently announced
that they are joining a blockchain-based trade platform started by UBS and
IBM. The platform, called Batavia, would help banks and their clients
automate the trade finance process. Among other things, Batavia will allow
parties to track a transaction from when a shipment leaves a port to when
it reaches its destination.
WHAT IT DOES : A blockchain-based
platform that enables traceability of
steel quality via digital certificates.
The platform enables data storage
and exchange of ownership
certificate in a format that machines
P.32 — THE INNOVATOR
cross-border payments, including
France’s Crédit Agricole, Brazil’s
Bexs Banco and Uruguay’s dLocal.
Banks need to be creative
It also said that SEB, the Swedish
bank, had used Ripple’s system to
and the U.S. in recent months to
help manage the cash balances of
one of the bank’s large corporate
customers. Ripple’s cross-border
payments system is based on using
its XRP cryptocurrency, which
customers buy and sell almost
instantaneously to move money
between countries and currencies
over the company’s system. It allows
within 10 to 15 seconds, compared
with about three days for interbank
transactions using the Swift network.
But along with opportunities for
improving the way existing business
is done, blockchain poses some
challenges. The new, decentralized
business platforms unleashed by
blockchain are spawning new, de-
centralized business models that
threaten some of banks’ core bu-
sinesses. “For banks the issue is that
access to capital is being disinter-
mediated pretty aggressively” by
initial coin offerings (ICOs), an
unregulated way of crowdsourcing
funds, notes Lex Sokolin, a partner
and global director of fintech strate-
gy at Autonomous Research. Some
$2.3 billion in funding has been
The finance sector is
divided on the virtues of
cryptocurrencies such as bitcoin.
JamieDimon made headlines when
he recently said he would fire any
trader who was “stupid” enough to
trade in them.
But there is one thing that almost
everyone in the banking industry
agrees should be embraced:
blockchain, the technology under-
Banks are scrambling to hire
blockchain experts and are joining
technology-oriented consortia such
as R3, the Enterprise Ethereum
Alliance or Hyperledger.
They are first focusing on low-han-
ging fruit: areas where there is a
lot of inefficiency such as global
payments, trade finance, auto-
mated compliance and post-trade
processing. Potential savings from
efficiency gains are between $80
billion and $110 billion, says the
blockchain expert Oliver T.
Bussmann, a former CIO at UBS.
SWIFT, in collaboration with lea-
ding global transaction banks, is de-
veloping a proof-of-concept appli-
cation that will test whether distri-
buted ledger technology can be
used by banks to improve the re-
conciliation of their nostro accounts
in real time, optimizing their global
But it would be a mistake for banks
to regard this as just an efficiency
play, Bussmann says.
Blockchain gives them the opportu-
nity to become the backbone of
large-scale, open, decentralized bu-
siness platforms, he says.
A first step toward that end is for
banks to organize themselves into
blockchain-based business networks
and consortia, such as one invol-
ving the U.S. startup Ripple, an en-
terprise blockchain solutions provi-
der, which has built a blockchain-
based direct settlement network
with more than 75 banks and pay-
ment providers. The company has
partnered with about 90 additional
banks across the globe, including
Standard Chartered Bank, Banco
Santander, National Australia Bank
Several banks recently signed up
to start using its technology for
— The finance sector may not agree on the virtues
of cryptocurrencies, but they are embracing
blockchain, the technology underpinning them.
about this negatively it is actually a
bullish signal,” Solokin says. “If
Jamie is being publicly negative
then it means it is actually reaching
him. This shows the power of the
moment. This thing is really going
raised that way in a very short pe-
riod of time and banks haven’t been
involved at all.
“It is the wild, wild west but crowd-
funding (through ICOs) actually
works. You are adding value to
these projects without the existing
financial system,” Sokolin says.
Banks need to think creatively
about how they might carve out a
role in this new world, he says.
They could, for example, become
the on-ramp and off-ramp between
fiat and crypto-currency and offer
data and analytics around different
new products. To remain relevant
banks will need to hire skunk-work
developers who can visit Internet
forums and use tools like Slack and
Telegram, where a lot of the conver-
sation is taking place – and figure
out how to get the data and how to
analyze it, Solokin says.“When the
number one incumbent is talking
WHATITDOES:Built on the Ethereum
blockchain, Bancor’s tokens are a type
of monetary reserve that provides
liquidity to other tokens.
WHAT IT DOES : Ripple connects
banks, payment providers, digital
asset exchanges and corporates via
RippleNet to provide one frictionless
experience to send money globally.
P.34 — THE INNOVATOR
— Exchanges are finding it pays to use
plex. Blockchain technology helps
to make the process more straight-
Nasdaq was among the first to em-
brace the technology. Called Nasdaq
Linq it uses blockchain technology
to power capitalization tables, which
private firms use to manage shares
in their companies.
The Linq takes what is typically a
system of paper certificates, which
then become outdated or invali-
dated by newer certificates, and
makes it more efficient and less
prone to errors.
First experiments across
The blockchain-based electronic
shareholder voting system solves
several problems. It allows people
to participate and cast votes remo-
tely, and it allows a shareholder to
delegate those votes. Other ex-
changes are also exploring uses of
transferred or the securities are
now transferred’ but once the
blockchain and cryptocurencies be-
come the intermediaries then the
function of trust is fulfilled by the
technology and not by intermedia-
Funderbeam launched its platform
of funding and trading in April of
last year. “At the start we had only
four startups raising funds- and
Funderbeam amongst those four –
to test whether the tech and bu-
siness model could get some liqui-
dity for the startup companies . We
proved it. We have 15 companies
trading and investors from 94
countries. Now we just need to
Traditional stock markets are also
investing in blockchain. The func-
tioning of stock exchanges involves
procedures that can be time consu-
ming, cost inefficient, cumbersome,
and prone to risks. The multi-laye-
red processes—pre-trade, trade,
post-trade and custody, and securi-
ties servicing—is extremely com-
Kaidi Ruusalepp, a
exchange, has built something akin
based on blockchain technology.
Her company, Funderbeam – which
was recently voted European
Fintech Startup of the year- has
created a funding and trading en-
gine for growth companies which
can issue tradable securities. The
platform is part research tool and
part investment platform, provi-
ding a way for startups to raise fun-
ding and for investors to invest in
potentially high growth companies.
Funderbeam’s underlying technolo-
gy is a type of crypto-currency.“We
kind of tokenize equity investment ,”
says Rusalepp. “We record, every
single trade on the blockchain so
we don’t need clearing houses and
central security depositories.
The reason stock exchanges exist is
to inject trust. “That’s their main
business, says Ruusalepp., “to pro-
vide the trust, to say ‘we can
confirm that the funds are now
The Australian Stock Exchange se-
lected U.S.-based blockchain star-
tup Digital Asset Holdings to deve-
lop distributed ledger based solu-
tions for clearing and settling
trades and later invested in that
company. The Korea Exchange is
using blockchain technology to en-
able equity shares of startup com-
panies to be traded in the open
The London Stock Exchange,is in-
volved in ways to improve the post-
trade space using the blockchain
technology. And the Luxembourg
Stock Exchange has already intro-
duced a blockchain-enabled secu-
rity system that stores a so-called
officially generated signature by ap-
pointed mechanism (OAM), along
with document type and document
URL, in the blockchain.
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