Deutsche Kreditwirtschaft https://buff.ly/3hjreAH
It is interesting to see that the German banks, who you would think of as conservative, have come out in favour of extending access to tokenised (wholesale) CBDC to non-banks.
IT Doesn’t Matter
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The trap that executives often fall into, however, is assuming that opportunities for advantage will be available indefinitely. In actuality, the window for gaining advantage from an infrastructural technology is open only briefly. When the technology’s commercial potential begins to be broadly appreciated, huge amounts of cash are inevitably invested in it, and its buildout proceeds with extreme speed.
From IT Doesn’t Matter:
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The Fable of the Cats – Alt-M
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Indeed, in British as well as the Continental usage, “free banking” and its equivalents (“le banque libre,” “bankfreiheit”) refer to genuinely free banking of the Scottish sort, not the phony antebellum U.S. version.
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The Meltdown of IRON. How Polygon’s first billion-dollar… | by Irony Holder | Jun, 2021 | Medium
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In practice it looks a little different. I’ve mentioned in the beginning the the whole episode isn’t over yet, because $272 million worth of USDC is still locked up in in the contract. Why hasn’t everyone recovered their 74 cents? Here things become truly hilarious. It is due to the following line in the redeem function of the IRON smart contract:
require(_share_price > 0, “Invalid share price”);
_share_price here refers to the price of TITAN, as provided by an oracle, which is correctly reporting it as… 0 (somewhere in the distance, you can hear a room full software engineers burst into laughter ).
Since the condition is specified as greater than (>), rather than greater than or equal (>=) , the condition can no longer be met, and so every call to redeem fails. A code audit likely would have caught this (this type of bug is so common in software development, I’ve probably made it hundreds of times myself), but of course this smart contract was not audited. Only its sister-contract on the Binance Smart Chain, written in a different language, was.
In the Telegram group, the developers had the following to say:
Because the TITAN price falls to 0 which we have unthought of [sic], the contract will revert the redemption transaction. [emphasis mine]From The Meltdown of IRON. How Polygon’s first billion-dollar… | by Irony Holder | Jun, 2021 | Medium:
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Be Your Own Bank? Why Would Any Sane Person Want To Do That?
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Irreversibility is absolutely the coolest feature of Bitcoin — it’s an inexhaustible comedy gold mine. One lost crypto key, and boom! So it’s good to see Ethereum carry on the tradition. Crypto company StakeHound had a pile of ether it was staking for Ethereum 2.0. StakeHound is now suing the custody company it was working with, Fireblocks, over the loss of 37,504 ETH out of 63,009 staked — about 60%. Fireblocks says they helped StakeHound with creating shared keys to the ether, but StakeHound never backed them up — “The key shares created in connection with this project were managed outside of the Fireblocks platform and were not part of its MPC production wallet structure or backup procedure
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Mutable and immutable
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Democratic Rep. Bill Foster of Illinois, co-chair of the House blockchain caucus, said Tuesday that laws must be passed to allow federal courts to identify digital-asset holders and then reverse transactions in bitcoin BTCUSD, -1.69% or other digital currencies, a policy that is anathema to many cryptocurrency investors.
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Now we all know what the bitcoin blockchain is, don’t we? It’s just one particular version of the general class of blockchains, which share the characteristics that data is stored in blocks and because of some cryptographic jiggery-pokery the blocks are chained together, so that you can’t go back and change the contents of a block without having to then change the contents of every subsequent block. And depending on the consensus protocol that is used, you can’t change the blocks without everyone else agreeing to let you do it. Thus it is, as my colleague Salome Parulava describes it, “mutable by consensus”.
Whereas auditing at present entails the confirmation of transactions and balances on a company’s accounting ledger at the end of the period, a transaction on the blockchain would provide a permanent and immutable record of the transaction almost immediately.
The reason that this kind of structure is called immutable, even though it is mutable by consensus, is that it is computationally infeasible to go back post-consensus and make a change. Even if you obtain consensus and co-ordinate more than half of the “hashing power” in the case of bitcoin, and could in theory go back to the very first block, change it to send the bitcoins in it to yourself, and then go forward rewriting all of the subsequent blocks, it would take years and years of massive computing power. Someone could, in theory, treat all of the bitcoin transactions from the last checkpoint up until now as the wrong side of a fork. (For all we know, secret mining pools are As my good friend Gideon Greenspan pointed out to me, just because you could see that corrupt agents were rewriting history in this way it doesn’t mean that you could stop them. But it’s not a realistic attack. We can live with the description “immutable” to mean “theoretically mutable but not mutable under any practical circumstances that we can envisage”.
If you had a different kind of blockchain, however, you could design it work in a different way. It could be mutable by consensus, or mutable by a dictator, and it could be mutable in a computationally feasible way. This is what some researchers in the US and Italy have put forward in a paper called “Redactable Blockchain, or Rewriting History in Bitcoin and Friends” (5th August 2016). Giuseppe Ateniese, Bernado Magri, Daniele Venturi and Ewerton Andrade say:
We put forward a new framework that makes it possible to re-write and/or compress the content of any number of blocks in decentralized services exploiting the blockchain technology. As we argue, there are several reasons to prefer an editable blockchain, spanning from the necessity to remove improper content and the possibility to support applications requiring re-writable storage, to “the right to be forgotten”.
We don’t need to go into the clever mathematics behind this. Just take forward the idea that you can use that clever mathematics to substitute for massive amounts of computing power that I mentioned above and can rewrite a block without having to go forward and rewrite all subsequent blocks. The well-known and well-respected outsourcing company Accenture has filed a patent on this idea with Professor Ateniese.
By allowing a central administrator to amend or delete information stored on a blockchain, the [outsorucing company, Accenture] says that its prototype will make the technology more attractive to the financial services industry.
From
Accenture to unveil blockchain editing technique – FT.com
This announcement was met with widespread derision on social media, and I can understand why. One of the key reasons for considering a blockchain to implement certain kinds of financial services is that the state of the blockchain, the shared world view, is locked down and the end of each block. If the shared world view can be changed, it wouldn’t be useful for these services any more. Now, I can see why some people might want an accounting system that works this way (see, for example,
the case of Kingfisher Airlines in India ) but I wouldn’t have thought that society wants accounting systems that work this way at all. Why would you want a ledger that can be edited either by some group or subgroup of the consensus forming stakeholders or by some central authority? I can think of a few reasons, but none of them make any sense.
The financial services industry needs to face the question of how to balance the appeal of pristine accounting with the demands of the real world, where some things simply need to be struck from the records.
From
Downside of Bitcoin: A Ledger That Can’t Be Corrected – The New York Times
Nothing ever needs to be “struck from the records”. If a bank makes a mistake — let’s say it accidentally opens a couple of million bogus accounts — then it can’t just go back and scrub the backup tapes and pretend it never happened. The way to correct a wrong debit is with a correct credit. The Financial Times quotes blockchain entrepreneur and serious player Blythe Masters, the former JPMorgan banker running Digital Asset Holdings, as saying of Accenture’s approach that “we think it is innovative and can strike the right balance between preserving blockchain’s key features and adapting it for real-world requirements within some permissioned systems.” But what are these
real-world requirements within some permissioned systems that Ms. Masters is referring to?
I don’t think anyone would use the bitcoin blockchain consensus protocol that was designed for an open, permissionless blockchain (i.e., proof of work) for a closed, permissioned blockchain so you would never need to edit it this way. My reading of the paper, from a not-a-cryptographer perspective, is that it does not deliver against the real-world requirements for permissioned systems in financial markets. The use cases that are set out in the paper are the need to remove child pornography from a public blockchain, the “right to be forgotten” and the need to consolidate records financial transactions. My feeling is that none of these are real-world requirements.
As for the first use case, this is not something that our clients need consider since none of them are proposing to implement critical national financial infrastructure on a public blockchain with arbitrary content controlled by unaccountable consensus groups. If, for example, a stock exchange were to implement a blockchain settlement system, it would not be of such a type as to allow members of the general public to store child pornography on it (or at least it wouldn’t be if it had people such as Consult Hyperion designing it).
What’s more, if a stock exchange were implemented on an editable blockchain, it would be utterly chaotic since at the execution of any transaction, no-one could be certain about the state of the ledger (since it would be possible for some future intervention to change it). My granny dies and leaves me IBM shares. I sell you my IBM shares. I use the money to buy a car. Then a decade later a court order overturns my granny’s will as it turns out she had a son that we’d never heard of. So we go back and change the blockchain so that the IBM shares belong to him instead of me. So now I didn’t have the money to buy the car. So I have to give the car back. But the car was scrapped… and so on.
Interstellar overdrive… then I go back five years later because it turns out he wasn’t her son at all and now I want the blockchain changed to give me my IBM shares…
Richard Lumb, global head of financial services at Accenture, told the Financial Times that financial institutions and regulators would need a means to quickly correct errors on the blockchain before using it in securities markets. He gave the example of a “fat finger” trading error, or a trade assigned to the wrong counterparty.
From
Accenture to unveil blockchain editing technique – FT.com
That’s not how you correct errors, by just rubbing out mistakes.
These are regulated financial institutions, not the mafia. No-one is going to build a financial services market on top of a mutable blockchain. In one of the comments I saw about this proposal, someone said that it would be OK because the market participants would keep an audit log of the changes and who agreed them. I thought that perhaps such an important log might need to be stored on an immutable ledger. Uh oh, blockchain Inception .
As for the next use case, I am not a lawyer, but I think that the paper misinterprets the so-called “right to be forgotten”. However misguided the European Court’s decision on this might be, it does not demand the rewriting of history. If you publish an article about me that I think contains “
old, inaccurate or even just irrelevant data “, and I manage to persuade Google that it should be harder to find, then the article is not deleted. The link to the article is removed from Google search results but the article is still there. Here, for example, is the Daily Telegraph’s full list of stories that have been removed from search results.
Newspapers are not required to go back and tear out articles from their archives, they are exempt (but in Europe, Google opted not to be regulated as media company so is not exempt). And I’m sure none of us what would to live in a world where politicians could obtain court orders to go back a change the historical record! When it comes to the serious use cases (e.g., revenge porn) it is already impossible to purge the matrix and it won’t make any difference whether they are stored on a blockchain or not (although with a permissioned blockchain you would at least know who had put them there and therefore who to arrest).
The third use case, the consolidation of financial records is not clear to me at all. Since the invention of double-entry bookkeeping, the whole point of keeping a ledger has been that you have a record of all of the credits and debits that contribute to the current world view. Companies do not delete old transactions every few months to save space. In fact the law requires them to maintain the transaction records for years. Here’s one example: in the UK, the “direct debit guarantee” has no time limit at all, so all records relating to direct debits need to be kept forever. If there is something about this use case that I haven’t understood, I would be genuinely interested to be corrected.
In summary, then. We all appreciate the clever mathematical tricks behind the mutable blockchain, but when it comes to the serious world of banking and financial services, it seems like (in the casual demotic of our unlearned age) a bit of a chocolate teapot.
Emirates spearheads airline industry attack on credit card fees – ondequando
We are beginning to see new propositions emerge around payment invitation. Here’s an example. Emirates has just become the first airline to go live with the IATA/Deutsche Bank “IATAPay”. This enables real-time payments from customers who book tickets through the airline website, with money transferred directly to the carrier without the intervention of third parties. It charges a fixed fee of a few cents per ticket.The goal (for Emirates and other airlines) is for customers to choose to use it over paying with credit cards. Right now around two-thirds of their tickets are paid for by credit card, while the remainder is cleared through country-specific payment options.
Singapore’s founding father thought air conditioning was the secret to his country’s success – Vox
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Asked about the secret to Singapore’s success, Lee highlighted the importance of tolerance among different ethnic groups (the country is Chinese-majority, with sizable Indian and Malay minorities). But he also flagged up another factor that might surprise you: air conditioning.
Question: Anything else besides multicultural tolerance that enabled Singapore’s success?
Answer: Air conditioning. Air conditioning was a most important invention for us, perhaps one of the signal inventions of history. It changed the nature of civilization by making development possible in the tropics.
Without air conditioning you can work only in the cool early-morning hours or at dusk. The first thing I did upon becoming prime minister was to install air conditioners in buildings where the civil service worked. This was key to public efficiency.
Air conditioning might seem like a strange thing for Lee to cite in Singapore’s 100-fold increase in per capita GDP between 1960 and 2011. But it’s typical of his thinking: the basic things really matter.From Singapore’s founding father thought air conditioning was the secret to his country’s success – Vox:
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Why Does Windows 11 Need TPM 2.0?
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Why Does Windows 11 Need It?
Here’s one example: BitLocker encryption can store encryption keys in the TPM to protect your files. When your computer boots, the key stored in the TPM is used to unlock your drive. If an attacker yanks your system drive and inserts it into another computer, the attacker can’t decrypt it and access your files without the keys stored in the TPM. The TPM is tamper-resistant, so an attacker can’t just plug it into another computer or easily extract the decryption key from it.
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China’s yuan could become world’s ‘currency of choice’ by 2050 under dual circulation plan | South China Morning Post
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China’s yuan could become world’s ‘currency of choice’ by 2050 under dual circulation plan
Market entities will use yuan for cross-border purposes as China’s economy integrates with rest of the world, says ex-deputy central bank governor Hu Xiaolian
China’s dual circulation plan places a greater focus on the domestic market, and is its approach to adapting to an increasingly unstable and hostile outside world
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Snippings 