Norwegian Seafood Giant Joins IBM Food Trust Blockchain Network for Better Traceability
Norwegian seafood producer Kvarøy Arctic today announced that it had joined IBM’s blockchain-based Food Trust. The partnership will enable Kvarøy Arctic to track its farmed Arctic salmon along the supply chain, Forbesreports, June 4, 2020.
Kvarøy Arctic Joins the IBM Food Trust
In a bid to leverage the benefits of distributed ledger technology (DLT) to enhance the transparency of its supply chain, Norway-based seafood producer Kvarøy Arctic has joined the IBM Food Trust.
For the uninitiated, the IBM Food Trust wants to mitigate rampant frauds and mislabelling practices in the food supply chain space. The initiative seeks to use blockchain technology to offer reliable data on food to its users.
By joining the blockchain-powered supply chain initiative, Kvarøy Arctic will be able to track its produce all along the supply chain from its point of origin to the customer. Notably, according to a recent study by Oceana.org, one in three seafood products in Norway is mislabelled. What the customer pays for at the supermarket might not necessarily be what they wanted in the first place.
Joining IBM’s Food Trust allows various stakeholders along the supply chain, including Kvarøy Arctic’s corporate customers – such as the Whole Foods Market stores across the U.S. and Canada – and several restaurants to track the entire history of the fish by scanning a QR code.
Similarly, consumers will be able to view the relevant farms’ pictures and videos and get information about the farming practice deployed by Kvarøy Arctic. What’s more, IBM’s DLT-enabled solution enables consumers to check the quality of the feed given to the salmon.
Commenting on the development, Alf-Gøran Knutsen, CEO, Kvarøy Arctic, remarked:
“Blockchain is the future when it comes to ending fraud in the seafood industry. It is a level of transparency that shows our dedication to being the best of the best.”
“The technology tracks a level of detail that helps us reduce food waste so we can feed more people in the world.”
Blockchain Solutions Used for Food Traceability
An increasing number of DLT-based solutions are being used by food companies worldwide to track the supply chain journey of their products.
Last year, BTCManagerreported that an Indian consortium of food companies had allied with tech giants to make the beverages and food supply chain less opaque.
One of the federal bank regulators in the U.S., and the only one that charters national banks, is seeking public input on how it regulates new technologies and digital banking activities, including cryptocurrencies and blockchain tools.
In an advanced notice of proposed rulemaking published Thursday, the Office of the Comptroller of the Currency (OCC) said it was reviewing its regulations around digital bank activities to ensure that these regulations “continue to evolve with developments in the industry.”
The notice, one of two published Thursday, was signed by Acting Comptroller of the Currency Brian Brooks, the former chief legal officer of Coinbase who took office at OCC last week.
In an emailed statement, OCC spokesperson Bryan Hubbard said:
“The request for stakeholder comment is part of the OCC’s commitment to responsible innovation and aligned with our understanding that banks must be able to evolve to meet the needs of the consumers, businesses, and communities that rely on them. Our role is to ensure there is a clear, supportive regulatory framework for banks to do so. The request for comments helps ensure we hear from stakeholders of all kinds on those important issues.”
The notice specifically asked what sort of cryptocurrency-related activities banks and other financial institutions are currently engaged in, and what activities customers engage in that impact banks.
“What are the barriers or obstacles, if any, to further adoption of crypto-related activities in the banking industry? Are there specific activities that should be addressed in regulatory guidance, including regulations?”
Separately from crypto assets specifically, the notice asked about the use of distributed ledger technology (DLT) in banking activities and – as with the crypto-related activities section – asked if there are any specific issues that need to be clarified.
“What new payments technologies and processes should the OCC be aware of and what are the potential implications of these technologies and processes for the banking industry? How are new payments technologies and processes facilitated or hindered by existing regulatory frameworks?” the filing said.
The notice also briefly addressed Brooks’ suggestion that his office could issue a national charter for cryptocurrency exchanges, which would essentially allow it to bypass the state-by-state framework that right now requires companies to secure 50 money services business (MSB) registrations to operate nationwide.
“The OCC is not seeking comment on its authority to issue a special purpose national bank charter,” it said.
In a statement, Blockchain Association executive director Kristin Smith said, “It’s heartening to see a top banking regulator understand the power of cryptocurrency. The notice today indicates that Acting Comptroller Brooks is serious about modernizing banking regulations so that innovators can bring new solutions to the legacy financial system.”
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A quick rally followed by a sharp decline earlier this week in bitcoin prices spelled trouble for bulls. However, volatility is back in the spotlight and that could bring other opportunities, according to market players.
Bitcoin (BTC) was trading around $9,816 as of 20:00 UTC (4 p.m. ET), gaining 2.5% over the previous 24 hours.
At 00:00 UTC on Thursday (8:00 p.m. Wednesday EDT), the world’s largest cryptocurrency by market capitalization was changing hands around $9,655 on spot exchanges like Coinbase. The price stayed close to that level until 13:00 UTC (9 a.m. EDT), when the price traded up as high as $9,891. Bitcoin is now above both its 50-day and 10-day moving averages, indicating bullish sentiment.
“Bulls had been shaken out in the last few days with the bull trap the bears set up,” said David Lifchitz, chief investment officer of quantitative trading firm ExoAlpha.
While the action over the past few days had seemed sleepy until Thursday’s breakout, steep price appreciations and subsequent drops are the norm for crypto traders. When compared to global stock markets, bitcoin is maintaining a higher level of volatility. Despite the recent global bout of economic turmoil, stocks are experiencing diminishing volatility.
“Bitcoin is realizing two to three times the volatility of the S&P 500, with altcoins registering well beyond that,” said Vishal Shah, an options trader and founder of a new crypto derivatives exchange called Alpha5. “By no means is crypto more stable, and there is no chance that it can be if it is to grow.”
Continued crypto volatility can partially explain why May was the best month ever for digital asset derivatives in May, to over $600 billion, according to data from aggregator CryptoCompare.
Volatility remains the name of the game for professional traders in the crypto market. Josh Rager, cryptocurrency trader and founder of educational platform Blackroots, throws out price movements in bitcoin that are rarely heard of in traditional markets.
“Bitcoin still has to break above $10,400 on a weekly chart for me to feel bullish,” Rager told CoinDesk. “I am looking to short if price hits the $9,800s again, and $8,500 needs to hold if it drops to there. Just taking it level by level.”
“Crypto traders have a high psychological threshold and expectation for volatility,” said Alpha5’s Shah. The market for derivatives will only grow because it gives traders something to do during flat trading. “When price action pauses for a few sessions, frustration channels into moans about the lack of opportunity,” Shah added.
Digital assets on CoinDesk’s big board are mostly in the green Thursday. Ether (ETH), the second-largest cryptocurrency by market capitalization, climbed less than a percent in 24 hours as of 20:00 UTC (4:00 p.m. EDT).
Cryptocurrency winners on the day include decred (DCR) up 9%, cardano (ADA) climbing 5.6% and lisk (LSK) in the green 3%. One loser Thursday is neo (NEO), down 1%. All price changes were as of 20:00 UTC (4:00 p.m. EDT).
In commodities, gold is in the green, with the yellow metal gaining 1% and closing at $1,716 at the end of New York trading.
Oil is climbing on the day, up 1.2% as a barrel of crude is priced at $37.21 as of press time.
U.S. Treasury bonds were mixed Thursday. Yields, which move in the opposite direction as price, were up most on the 10-year, in the green 9%.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Following a sharp decline to $9,400 earlier today, Bitcoin has caught some upwards momentum that is now leading it up towards the five-figure price region.
This volatility does appear to be favoring buyers, as it has allowed Bitcoin to erase a significant amount of the losses that came about as a result of its recent decline to lows of $8,600 on BitMEX.
The crypto is still down from highs of $10,400, and it remains unclear as to what could give BTC enough strength the surmount the intense resistance existing around this area.
If the benchmark cryptocurrency is able to push higher in the days and weeks ahead, it is a strong possibility that buyers will move to invalidate the triple-top formation that has been emerging, while also targeting new yearly highs.
Analysts think this is a serious possibility, as there are a few factors that have led traders to believe that a movement to $14,000 is imminent.
Bitcoin Posts Strong Reaction to Overnight Decline to $9,400
At the time of writing, Bitcoin is trading up just under 2% at its current price of $9,750.
The upswing that sent it to these highs came about after bears attempted to spark a downtrend earlier this morning when they pushed it to lows of $9,400.
Almost instantly after touching these lows, the crypto found a significant amount of momentum that led it up to its current price levels.
This reaction has sparked what appears to be a short-term uptrend, but the resistance that exists directly around $10,000 is incredibly strong and may prove to be insurmountable.
Nevertheless, analysts do think that Bitcoin’s mid-term outlook remains incredibly strong.
One analyst explained that he believes Bitcoin is poised to rally up towards $11,000 in the near-term, noting that this is where its major diagonal log resistance exists.
“The price should continue to climb until we hit the major diagonal log resistance in the 11K range,” the analyst noted.
Image Courtesy of Kaleo
Why One Trader Thinks BTC Could Soon Reach as Far as $14,000
He recently explained that after breaking the resistance within the mid-to-upper $9,000 region earlier this week, it has now confirmed it as support.
Because of this, he reckons that the crypto is poised to push as high as $14,000 in the weeks ahead.
“Don’t lose sight of the HTF…Our prior resistance region has now been broken and is now being tested as support. Bulls remain in control and gunning for the highs again imo. HTF has been bullish since posting this weeks ago,” he explained while pointing to the below chart.
Image Courtesy of Credible Crypto
If Bitcoin faces another swift rejection within the lower-$10,000 region, however, it could be a clear sign that the crypto is not ready to push any higher.
A Number of Hong Kong Vending Machines Support Bitcoin Cash Payments Over BTC
Just recently, cryptocurrency evangelist Roger Ver shared a video on Twitter that shows a number of vending machines in Hong Kong that accept bitcoin cash and ethereum, but not bitcoin. A bunch of people got upset at the Tweet, including the crypto-pundit Tone Vays because they couldn’t deal with the fact that onchain bitcoin transactions could not provide such services. The reason bitcoin cash is supported by these vending machines in Hong Kong is because bitcoin transaction fees are 1,931x more expensive than bitcoin cash transactions.
Hong Kong Vending Machines Choose Ethereum and Bitcoin Cash
For years now the concept of leveraging cryptocurrencies with vending machines has been a popular trend because the two go hand in hand. In the early days, when bitcoin (BTC) fees were cheaper, vending machines that utilized BTC were gathering steam. News.Bitcoin.com reported on the subject back in 2016, just before BTC fees skyrocketed to $50+ per transaction at the end of 2017. The network clog and higher fees have made it so bitcoin vending machines are not realistic if they are powered by BTC transactions. There have been a few Lightning Network-powered vending and candy machines, but the Lightning Network is riddled with issues like failed transactions and a myriad of other vulnerabilities. Hardcore BTC maximalists don’t like to admit it, but in a much shorter period of time, the Ethereum blockchain handles more BTC-based offchain transactions by a long shot.
Just recently, the well known digital currency investor, Roger Ver, tweeted about a few vending machines in Hong Kong that only accept ETH and BCH. “Why do these Hong Kong vending machines accept bitcoin cash and ethereum but not bitcoin?” Ver asked his Twitter followers. The reason why cryptocurrency vending machines cannot use BTC is because it is currently 1,931.56x more expensive to transact on Bitcoin (BTC) in USD,” according to Coin Dance statistics. So let’s just say a candy bar or can of soda in the machine costs $1, and according to Billfodl’s BTC fees web portal the average transaction will cost a user between $1.23 or $1.72 per transaction. So that dollar soda would cost a person a minimum of $2.23 for an 8oz can of cola, and anyone with some brain cells knows that’s not sustainable for vending machine operations.
Maximalists Dismiss Facts, Bitcoin Network Fees Crippled a Number of Concepts
Despite the facts, the Youtuber and crypto-pundit Tone Vays busted out a logical fallacy and said: “Because you probably paid for that feature of the machine.” Vays then switched goalposts, and said that the real question was “how many transactions have they processed since that demo.” Vays didn’t get into the fact that leveraging BTC is not sustainable to run a vending machine with dynamic and unreliable transaction fees. Vays forgot to mention that vending machines are not the only projects BTC’s high fees have neutered. Bitcoin cash fees are always low and less than a U.S. penny per transaction. BCH fees even remained that way in September 2018, when the BCH chain processed 2.4 million transactions in 24-hours.
Vays and the other people who decided to dismiss simple facts, didn’t mention that coin tumbling and coinjoin applications are much harder when BTC fees are so high. A number of mixers and tumbling services that operated in the early days are hardly used these days because of BTC high network fees. On the other hand, BCH fees are super low and have allowed for projects like Cashshuffle and Cashfusion to thrive. Both of these applications continue to allow people to shuffle millions of dollars because of low transaction fees. Let’s not forget that BCH developers pioneered Cashfusion and even BTC proponents are beginning to understand it offers more privacy than traditional coinjoin practices.
The Replace-by-Fee Vulnerability and No One Wants to Use Bitcoin for Color Coin Projects These Days
Critics of Ver’s tweet forgot to mention all the great companies that dropped BTC because of expensive and unreliable transactions. Well known companies like Fiverr, Expedia, Reddit, Steam, Stripe, Paypal, and Dell all dropped BTC support over the last few years. People on the vending machine thread on Twitter did discuss zero-confirmation transactions and how BCH benefits from them. Of course, maximalists claim that zero-confirmation transactions are “unsafe,” but the chances of them being unsafe are extremely minimal. However, as far as BTC is concerned the software called replace-by-fee (RBF) is not safe for zero-confirmation transactions and double spending can happen with any amount of funds on the BTC network using RBF.
Unfortunately, people forget that even color coins (tokens) were eclipsed from the BTC chain too for the most part because of fees. This reasoning alone is likely why Tether has moved most USDT over to other blockchains instead of relying on Omni. Ethereum is BTC’s sidechain because projects like Wrapped Bitcoin (WBTC) have outperformed the Lightning Network.
High transaction fees and network congestion has done a lot of damage to certain ideas like micropayments as well. If you cannot purchase a $1 soda in a reasonable manner, sending micropayments of $0.10 to $0.25 is even worse. The real reason the vending machines in Hong Kong accept bitcoin cash and ethereum is because it is not sustainable to run a vending operation with BTC’s expensive and unreliable transaction fees. No more no less.
What do you think about the response to Roger Ver’s tweet? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Billfodl, Twitter,
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Decentralized finance (DeFi) could soon boast a real-world use case.
MakerDAO, the organization behind the dollar-pegged stablecoin known as DAI, is in the process of voting on whether to further diversify the collateral it accepts for loans beyond cryptocurrency and tokens to include real-world assets (RWAs).
Specifically, Maker would also allow supply chain invoices and musicians’ future royalty streams as security when it lends out DAI. These assets would be represented on the Ethereum blockchain by non-fungible tokens (NFTs), the innovation that spawned CryptoKitties. Small businesses and artists could take the borrowed DAI, which usually trades 1-for-1 with the U.S. dollar, to crypto exchanges like Coinbase and convert it to cash.
If approved, the proposals would pave the way for the first application of DeFi to solving a tangible business problem outside the rarefied realm of crypto. The current crisis, like the 2008 financial meltdown, has seen big firms apply the brakes across supply chains, to the point where innovative ways of freeing up working capital for suppliers awaiting payment could be a lifesaver.
“The average crypto user that bought bitcoin when it was a few hundred dollars and is using DeFi to trade and manage their wealth is a very different user from a business that is actually quite cash-strapped,” said Lucas Vogelsang, CEO of Centrifuge, a startup focused on bringing real world assets to DeFi.
“These businesses are looking to DeFi as a way to get money quicker and get it on their own terms, without having to go to a bank,” said Vogelsang, whose firm has pilot-tested the financing of freight forward invoices with DeFi loans. “They don’t have crypto to get their DAI loans, so they need to be able to use their invoices or their inventory.”
Centuries-old conventional trade finance works by allowing banks to become third parties to supply chain transactions so they can guarantee payments and remove risk. Suppliers can also receive cash payments to keep their business flowing based on accounts receivable. Simply put, if Bob orders a crate of herring from Alice, his bank will front part of the payment and send the balance when the shipment arrives.
DeFi, which emerged about two years ago, broadly aspires to remove such intermediaries, opening up areas such as lending to a mass of participants rather than a handful of banks. But so far, the most active area of DeFi has been lending and borrowing crypto assets to facilitate margin trading – in other words, locking up crypto to borrow more crypto to buy more crypto.
The first companies ready to work with Maker on RWAs are ConsoleFreight, a platform for supply chain finance, and Paperchain, which makes musicians’ royalty payments from Spotify instantly available (similar to the bonds David Bowie issued in the 1990s backed by his catalog’s revenue streams).
“These should be seen as the first two [RWAs] in the greatest portfolio of assets that’s ever been built,” said Rune Christensen, founder of the MakerDAO project. “It’s just the first step. Thousands and thousands of assets will exist alongside them.”
The catch for lenders is that in the event of default, they would have to rely on the flesh-and-blood legal system to enforce their rights to the collateral, rather than an automated smart contract that can do so with on-chain assets.
“Each Tinlake pool has a legal structure (an SPV) that mirrors what happens on-chain,” Vogelsang said, describing his firm’s tokenization process. “It has a contractual relationship with both the borrowers and the investors ensuring that a claim on the RWA can be made by the investors.”
Holders of MakerDAO’s governance token, MKR, are voting on the proposals. As of Thursday, 96% of votes cast favored inclusion of trade finance assets, with a similar proportion supporting the addition of music royalties. The polls close in about four days.
Tough sell for corporates
Before DeFi, trade finance has long been a favorite use case for enterprise blockchain.
These types of private or permissioned networks are owned by groups of banks or large tech providers like IBM, and tend to be focused on making existing infrastructure more efficient, which would have the knock-on effect of making finance more accessible to small businesses.
DeFi’s take on trade finance combines openness and transparency, with settling value on-chain, something that is much harder to do, said Vogelsang. It’s a concept banks and more traditional players are going to struggle with, he added.
Having said that, he was optimistic about an interoperable blockchain future where DeFi could coexist with permissioned networks.
“I think in the long term all these projects will find a way into DeFi,” said Vogelsang. “Many projects have good ideas and decent systems. I think they might exist alongside DiFi, move assets into DeFi, and borrow liquidity from DeFi. Being truly open, ownerless and permissionless has the potential to be the fairest market of all.”
Alejandro Gutierrez, CEO at ConsolFreight, said his company had been experimenting with blockchain and had looked at the likes of IBM’s TradeLens and we.trade (which IBM recently became part-owner of), before connecting with Maker and Centrifuge last year.
“Our view was that, at the moment, TradeLens is for big players like Maersk, Kuehne & Nagel and Walmart,” said Gutierrez, whose family has been freight forwarding for two generations. “TradeLens is not cheap at all for an SME [small and medium-sized enterprise],” he said. “We.trade is the same story, backed by big financial institutions, they are not really trying to extend finance to the masses.”
IBM would not comment on any particular startup or project, but said it is committed to the broader principle of connecting networks together, what it calls a “network of networks”.
Richard Stockley, Europe Business Development Executive for IBM’s TradeLens, said the platform is “actively working with a wide array of application and platform providers – some using blockchain, others not – where the collaboration brings enhanced offerings to our clients.”
MakerDAO had a closer connection to enterprise via Tradeshift, the supply chain payments unicorn, which started testing DAI in mid-2018 to tokenize unpaid invoices of small businesses.
“Tradeshift has been doing experiments with Maker for a long time, but always experiments,” said Christensen. “This is completely different because we are talking about the first time ever a real company is actually engaging in the DeFi governance process, which is completely unprecedented and futuristic.”
Brave new world
Futuristic indeed. As Christensen admits, the entirety of the Maker community is about equivalent in size to a fairly popular indie computer game.
On top of that, crashes and failings are a given.
“There are going to be crashes, there is going to be fraud, and all the ways things can fail in DeFi, they will fail. That’s guaranteed,” said Christensen.
“Individual failures are actually meant to happen,” he went on. “They are meant to be absorbed and hedged by diversification, so you need other assets that are not correlated, and through that the system can continue to be learned about and evolve and ultimately adapt.”
There are also trade-offs in the ongoing collateral diversification of MakerDAO, such as the recent addition of the Coinbase and Circle-backed USD Coin (USDC), a dose of crypto centralization to make DAI stablecoin more stable.
Christensen said bringing the real world into DeFi means introducing new risks, adding that the Maker community is also introducing gold in the form of the Paxos Gold token, and there is a lot of interest from various quarters in real estate.
“It’s a simple principle of not putting all your eggs in one basket. You have to spread your risk across many different points of failure, so in the end that means you are not going to see DAI holders get a haircut,” Christensen said, referring to the risk that those who redeem the stablecoin get less than 1-for-1 dollar value.
Regarding a decentralization trade-off and the risks that come with it, Vogelsang said some asset originator from the real world may be a legal entity, but that doesn’t mean it has unlimited power.
“Just because there is a legal contract in place, the asset originator cannot do whatever they want and just pull the plug.”
Skin in the game
Centrifuge’s asset tokenization process, called Tinlake, is complex.
Freight invoices, or royalties in the case of musicians’ rights platform Paperchain, are represented on-chain by unique NFTs. The individual loans are bundled together in a set of smart contracts that issue an interest-bearing ERC20 token against the pool of NFTs.
ConsoleFreight and Paperchain are “solid lenders,” said Vogelsang, with loans that are due in 60-120 days being relatively easy to price because macroeconomic circumstances normally don’t change too much in that time.
“I think that given the current economic climate, and the very short-lived nature of trade finance assets, it makes them very interesting. I don’t know if I would want to try and bring a 10-year or 20-year mortgage on-chain right now,” he said.
The trade finance industry’s default rate is under 1%, while Paperchain records over 99% confidence on its predictions on invoices, thanks to easily accessible data from platforms like Spotify, according to the platform’s chief operating officer, Budd White.
“This is quite different from car loans priced at 30% given to people with a credit score of less than 650, or something like that,” Vogelsang said.
Long positions in the second-largest cryptocurrency by market cap have gone parabolic, alongside the asset’s best use case. Bullish sentiment is picking up, and according to a global macro investor with over 25 years of market experience, Etheruem‘s chart looks to be on the”verge” of an “explosive upmove.”
The analyst projects a target of $500 per ETH “minimum” once the asset clears resistance at $300. But what catalysts are ahead that could push the asset through the critical resistance level?
Macro Investor: Ethereum on the Verge of Explosive Upmove, But Waiting For Catalyst
Ethereum is not only testing horizontal resistance but downtrend resistance from the June 2019 top.
According to Dan Tapiero, Co-Founder of 10T Holdings and DTAP Capital, a break of that level sets the stage for Ethereum reaching $500 or more over the next six months to a year.
Tapiero is a self-proclaimed BTC and bullion holder but is paying close attention to Ethereum price charts to watch for a rise in the altcoin. And although technical analysis suggests an “explosive upmove” is coming, Tapiero asked his Twitter followers what the catalyst may be for such an increase.
Possible Catalysts That Will Propel The Altcoin Toward $500 Per ETH
In terms of what could propel Etheruem higher, investors are currently hyped up for the coming ETH 2.0 launch. Long positions on margin trading platforms have reached insane numbers ahead of the event many expect to cause a major Ethereum rally.
Grayscale clients are paying a nearly 800% premium for ETHE, the company’s institutionalized version of the altcoin that is broken down into shares of approximately 0.09402547 ETH per share.
With Etheruem brushing up against such strong resistance, bulls somewhat overconfident, and a highly accurate sell signal triggering, the explosive move could head to the downside first to gain enough momentum to finally breach above $300.