Snippings

xxx

“Combined with state data on things like temperature, motion or chemical composition collected from sensors on equipment (aka the internet of things) blockchain could cost-effectively confirm everything that has ever happened to the food someone is about to eat.”

via Blockchain For Supply Chain: Enormous Potential Down The Road

That sounds appealing, but it’s not the straightforward. As I explained in a Tomorrow’s Transactions blog post on this subject, the blockchain may be amazing but it isn’t magic. I share this authors suspicion that there may be a very fundamental and very disruptive connection between shared ledger technologies and thingternet technologies, but how would this help in practice?

Let’s look at a specific supply chain failure. The example I used before was that of the famous Amex salad oil scandal.          

“The Great Salad Oil Swindle was carried out by Anthony ‘Tino’ De Angelis, who traded vegetable oil (soybean oil) futures which was an important ingredient in salad oil. “

via How The Salad Oil Swindle Of 1963 Nearly Crippled The NYSE

The swindle involved falsifying records of the amount of vegetable oil that was being held in the supply chain. At one level, it was a simple and old-fashioned scam.

“American Express had recently created a new division that specialized in field warehousing, which made loans to businesses using inventories as collateral. American Express wrote De Angelis warehouse receipts for millions of pounds of vegetable oil, which he took to a broker and discounted the receipts for cash. This proved to be an easy way to get money, so De Angelis began falsifying warehouse receipts for vegetable oil he didn’t have. “

via How The Salad Oil Swindle Of 1963 Nearly Crippled The NYSE

The execution of the scam was, though, rather sophisticated.

“American Express sent out inspectors to make sure that De Angelis had the vegetable oil that acted as collateral, but what they didn’t know is that many of the tanks were filled mostly with water with a minimum of oil floating on the top to fool the inspectors, or that some of the tanks were connected with pipes to other tanks so the oil could be transferred between tanks when the inspectors went from one tank to the other.”

via How The Salad Oil Swindle Of 1963 Nearly Crippled The NYSE

xxx

So where could shared ledgers help, if not as a supply chain guarantor. Well…

“If American Express had done their homework, they would have realized that De Angelis’s reported vegetable oil ‘holdings’ were greater than the inventories of the entire United States as reported by the Department of Agriculture. “

via How The Salad Oil Swindle Of 1963 Nearly Crippled The NYSE

So if there had been some sort of salad oil blockchain, and every entry in the ledger was encrypted so that only American Express could read entries relating to their holdings and only Company X could read entries relating to their holdings but that actual amounts of the holdings in litres were in the clear then everyone, including the regulators, would have been able to easily calculate that the total amount of oil was greater than the total amount being produced. It’s the partial transparency that’s the key point here, which is why we refer to “translucent transactions” on shared ledgers as the platform for new kinds of financial marketplaces that will be cheaper and safer. It’s the shared ledger as a regtech again.

xxx

“Combined with state data on things like temperature, motion or chemical composition collected from sensors on equipment (aka the internet of things) blockchain could cost-effectively confirm everything that has ever happened to the food someone is about to eat.”

via Blockchain For Supply Chain: Enormous Potential Down The Road

xxx

xxx

“If the plans of the upcoming payment bank by IndiaPost are to go by, over 112 crore Indians who have an Aadhaar number till now will be able to transact – send and receive money – only on the basis of the Aadhaar number irrespective of the fact whether it is linked to a bank account or not.”

Pocket: Your 12-digit Aadhaar number could soon be your single point payment address

xxx

xxx

“The WoW Token is a simple market. All the tokens are identical, and have a static real-money cost. When there are more people wanting to buy gold than people wanting to sell gold, the price falls. When there are more people looking to sell gold than buy it, the price rises.”

Pocket: World of Warcraft’s gold rush has upended Blizzard’s economy

When Blizzard (the people who run World of Warcraft) first

“Prices fluctuated so much because nobody knows what a WoW Token is worth now. Since the WoW Token interface also doesn’t let you know how many tokens are actually for sale at any given time, it’s unclear whether buyers and sellers are rushing into and out of the market at different price points, or whether a single gold-rich buyer using a low point as an opportunity to liquidate can send the price skyrocketing.”

Pocket: World of Warcraft’s gold rush has upended Blizzard’s economy

xxx

xxx

XXX

xxx

Bankers are also attracted by the stability of transaction banking, which gives some respite from the volatility of earnings in investment banking and trading.

From Talent follows the cash into transaction banking

xxx

xxx

At the moment, bond and equity markets are far more transparent than the real estate sector:

From Crystal clear: Creating hyper-transparent property markets – JLL Real Views

xxx

xxx

In 2006 the top five European banks had a combined 20 per cent share of the worldwide investment-banking fee pool, according to Dealogic. Last year that share dropped to 16 per cent, even though Barclays had swallowed much of Lehman Brothers in the meantime.

From US banks’ profits leave European rivals in the shade

xxx

In my book “Before Babylon, Beyond Bitcoin” I look at how this infrastructure hs evolved.

Double entry

Accounting is one thing, but it is not the whole story. When the

At very high level, then, accounting led to the creation of modern markets and it’s cousin, auditing, set in place the infrastructure necessary for large-scale enterprise and modern prosperity. But they are not perfect. They are backward looking. But there is another way. I co-authored a paper on this some time ago and co-opted the architectural term “ambient accountability” to describe the combination of practical Byazantine fault tolerance consensus protocols and replicated incorruptible data structure (together forming “shared ledger” technology) to deliver a transactional environment that has a form of controlled transparency (“translucency”).  As XXX from R3CEV describes this new environment, it is much simpler to operate and regulate

The reconciliation comes as part of the fact recording; not after. Organisations can “confirm as they go“, rather than recording something, then checking externally afterwards. How? Distributed ledgers build in connectivity and validation criteria.

From Distributed ledgers: “Confirm-as-you-go” | Bits on blocks

Thus accounting and auditing are combined and embedded in the data structure.

If the relevant parties do not agree on a fact, it doesn’t get recorded for either party.

From Distributed ledgers: “Confirm-as-you-go” | Bits on blocks

xxx

xxx

So it’s a Fitbit for your old chap? Basically, yes, although I doubt that will be the slogan, for a number of reasons. You charge it with a USB cable and sync the data with your phone in the usual way. Then share it online, if you wish.

From Smart condoms: like Fitbit for sex – and you can even share your stats | Life and style | The Guardian

xxx