April 2016

DRIVING DIGITAL COMMERCE
IN AUSTRALIA


Nick Giurietto


CEO's Message

"Structural change takes longer than you expect but then happens faster than you anticipate"

This old truth is a good description of the state of Blockchain adoption.

On the one hand, evangelists paint an impressive picture of the transformative potential of distributed ledger technology to overturn existing business models.  Meanwhile, business pragmatists are asking the hard questions: scalability, speed, security and, above all, "show me the business case".

Yet real applications are hitting the market, are being built and many more are in detailed evaluation.

As we reach what is potentially the peak of the 'hype cycle', the promised transformation seems further away than was once expected.  But, with more and more real applications hitting the market, it won't be long at all before we look back and notice that everything has changed.

One area where the scale of potential change is truly enormous but in which real strides are being made is in the area of digital identity.  A working prototype of a sovereign identity solution using the Blockchain has been built here in Australia. And ADCCA is playing a key role in bringing together industry, government and civil society stakeholders to solve the issues of economic and social adoption both in Australia and through global collaboration.   As Hugo O'Connor of BitTrade Labs shows in the next article, the rewards are worth it.

Government too is facilitating change.  ADCCA welcomes the announcement by the Treasurer, Scott Morrison, that the double application of GST to digital currency transactions will be removed. We are also delighted that the AML/CTF laws will be formally extended to digital currency businesses.  These are both changes that ADCCA has advocated for some time and we look forward to working with regulatory stakeholders to assist fine tune the detail.

Blockchain Bootcamp  is a new education workshop developed by ADCCA to assist Boards and Executive Teams to understand blockchain technology and business model implications.  It is the first of a number of extensions to our education programme that will be rolled out in coming months.

In other important steps recently, ADCCA has:
  • launched a collaborative effort with a number of accounting firms to establish accounting standards for digital currencies to ensure that transactions can be properly understood and digital currency businesses valued fairly and according to transparent standards;
  • developed a draft of the Digital Currency Industry Code of Conduct which is now being discussed with various industry regulators and other stakeholders before finalisation;
  • extended our network of international collaboration to include peer organisations in Japan and the UAE.
 
Finally - but very importantly - I am also delighted to welcome three new members of ADCCA: Dun & Bradstreet Australia, the Sydney Stock Exchange and the RISQ Group.
 
Nicholas Giurietto
CEO and Managing Director
ADCCA

   



Hugo O'Connor,
Blockchain Engineer 
Bit Trade Labs
Sovereign Identity on the Blockchain

The identity systems we use today are broken. There have been countless scandals of customer data being exposed by hackers. The financial system inquiry found that there was process duplication as users are on-boarded by many different services. $725 million was spent on AML projects. And each year, identity fraud costs over a billion dollars. Each time you prove who you are online, you are required to transmit sensitive documents, which can easily be duplicated, and to trust that that provider is able to store those documents securely. Those documents are being stolen en masse, and can be bought on black markets for a few dollars. Something has to change.

Sovereign identity on the blockchain promises to solve the problem of proving who you are online. Your identity data is encrypted and stored on the blockchain. Effectively, you become the owner of that data and are able to permit who has access to it. The veracity of the data can be established through web-of-trust attestations. That is, other identities using the system, vouching for various elements of your identity. In the same way you might present a utility bill, to prove that you live at a given address. That electricity company could attest to your address. We can combine the best elements of PGP, which is battle-worn and tested, with the features of the blockchain; time-stamping, cryptographic integrity and immutability, to create a robust solution. Bit Trade Labs has recently contributed to a prototype of such a system, as part of the Object Chain collaboration.

The key challenge now, is not technical, but rather getting such a system widely used and adopted. The system must be open-source, and a set of interoperable standards established, to enable such adoption. There are a wide range of stake-holders who stand to benefit greatly from such a system, which would, essentially, create a utility for digital identity. If we can trust the on-boarding methods of Company A, then subsequent Company B might not need to on-board the same user, but can rather look at Company A's attestations about that person. The documents currently supplied by individuals to prove their identity, are in essence evidence of attestations given by trusted government and non-government institutions. We can carry those attestations forward using cryptography in such a way that they cannot be duplicated or forged. With a sovereign identity, users would also be able to cryptographically sign files and documents. Furthermore, they would be able to encrypt data such as messages to other users. In the same way X509 enabled online commerce, sovereign identity could help to establish trust between parties acting over long distances, building prosperous societies. ADCCA and its relevant stakeholders can play a key role in making this happen.

Hugo O'Connor
Co-Founder, Bit Trade Labs 

   
ADCCA Welcomes Fintech Statement
 
Digital currency businesses in Australia will be able to grow faster and offer more innovative services to consumers as a result of the removal of GST on bitcoin and other digital currency transactions announced by Treasurer Scott Morrison in his recent Fintech Statement.
 
Removal of double-taxation of digital currency transactions is an important reform that the digital currency industry has been calling for for some time. This reform means that digital currency businesses will now be treated equally with older payments systems. This level playing field will accelerate the development of innovative payments solutions that will benefit consumers and businesses across the economy."
 
The extension of AML/CTF regulations to include digital currency businesses is another welcome development.  It fits neatly with the Digital Currency Industry Code of Conduct to ensure that banks, regulators and consumers can have confidence in the innovative services offered by our members.  Formally extending AML/CTF rules to digital currency businesses will ensure appropriate safeguards are in place while providing further confidence and support for the growth of the industry.
 
The AML/CTF changes along with the self-regulatory Industry Code of Conduct, will be especially important in ensuring that banks can easily confirm the adherence of digital currency businesses to best practice standards and thus allow them to confidently extend transactional banking services to the sector.
 
ADCCA welcomes these changes and looks forward to working with Government, regulators and the banking industry to finalise the detail of these initiatives to support the growth of a key c omponent of Australia's Fintech future.
   
Blockchain Bootcamp
 
ADCCA has launched an executive workshop to assist Boards and Leadership Teams to understand the fundamentals of distributed ledger technology and the business model implications.

Facilitated by leading technology writer, entrepreneur and educator, Mark Pesce, and ADCCA CEO, Nick Giurietto, the Blockchain Bootcamp program is designed to help business leaders understand the likely implications of distributed ledger technology on their industry and to develop a pragmatic adoption strategy.
 
The core program runs for four hours and guides the leadership team of a business through three levels of knowledge-building:

 * Blockchain Foundations - the insight of Satoshi Nakimoto and the practical mechanisms for the operation of blockchain including the inter-relationship (or not) with bitcoin.

* Industry Impacts - tailored for each client this session includes a prototype demonstration of a distributed identity solution and explores the intersection of identity, smart contracts and smart invoices along with supply chain management and the evolving internet of things

  * Client Implications - including a facilitated discussion on potential roles for the client in a blockchain-enabled industry and the necessary enablers. 
   


- NEW ADDCA MEMBERS -

   
Dunn & Bradstreet Australia
joins ADCCA
 
 

Established in 1887, Dun & Bradstreet is Australia and New Zealand's longest-established credit information bureau. Backed by its extensive database, D&B helps businesses to make informed credit decisions, and consumers to access personal credit information.

D&B works across the entire credit lifecycle to deliver data-driven solutions in sales and marketing, credit risk management and debt collection.

Through analysis of financial, credit and behavioural information, D&B also provides current and predictive assessments of the economy, business conditions and credit activity. 
   

Sydney Stock Exchange
joins ADCCA

 


Sydney Stock Exchange (SSX) is a securities exchange in Australia with a market licence granted by the Australian Securities & Investments Commission (ASIC). SSX provides opportunities for growth oriented companies to raise the capital they need for expansion from a diversified range of domestic and international investors, especially from the Asia-Pacific region. SSX offers Chinese market participants an alternative listing venue to the Shanghai and Shenzhen stock exchanges in China.

SSX operates its official list of securities as a Main Board, but it has the flexibility that a Second Board provides as well. SSX will provide and develop specialised markets in a number of sectors, including Mining, Oil & Gas, Real Estate (REITs), Hi-tech, Agribusiness, Servicing and growth companies.



RISQ Group
joins ADCCA

 

When RISQ Group was created, the vision was simple: build the best employment screening offering in the APAC region. The team identified a need in the market for a better kind of employment screener and brought together an elite group of people and companies under a single brand with a single mission.

Standing behind this mission is a unique combination of innovative thinking and decades of frontline employment screening experience that knows exactly how to best protect organisations throughout the entire employment life cycle.

With RISQ Group, the customer knows that it is getting a team of people devoted to delivering the best employment screening available. And it knows that this team is also committed to developing and executing next generation screening technologies that will keep its clients protected and well ahead of the curve.


DIGITAL CURRENCY HEADLINES
 

More than $13.8 billion in venture capital (VC) was invested in a variety of fintech companies globally, more than twice the amount invested in 2014, according to "The Pulse of Fintech 2015 Review," a global analysis of fintech venture funding by KPMG and CB Insights.

VC-backed investment in bitcoin and blockchain companies jumped from $3 million in 2011 to $474 million in 2015. The number of deals rose from 2 in 2011 to 74 in 2015. 


 

 
Why Bitcoin is Better for Crime Fighters Than Criminals

Coindesk, April 2016
 
 
Jason Weinstein is a partner at Steptoe & Johnson LLP and a former assistant attorney general in the US Department of Justice in charge of cybercrime and organised crime.  He is the Director of the Blockchain Alliance and a member of the advisory boards of the Chamber of Digital Commerce, Coin Center and BitFury.

In this opinion piece, Weinstein discusses why he believes the misconception that bitcoin is 'anonymous' has hidden the fact that the technology actually better meets the needs of law enforcement.
 
-Read More-

 
i
 
"Blockchain Technology Could Solve The Problem Of Fake Sneakers"

International Business Times, April 2016
 
 
Collecting sneakers has becoming a multimillion-dollar industry, with rare limited-edition sneakers selling for many multiples of their retail price on the secondary market. With such interest inevitably come those seeking to take advantage, with the problem of fakes seriously damaging the market. Step forward, Chronicled.

The Silicon Valley company has just raised $3.42 million in seed funding, led by Mandra Capital, a prominent Hong Kong-based venture capital firm, to continue development of its system of verifying the authenticity of sneakers by using the blockchain technology that underpins bitcoin. Chronicled's idea is to create an open-source, distributed and decentralized ledger of sneakers - and other luxury and collectible goods - making it much more difficult for anyone to pass off a fake as real.

-Read More-

 

 

Coindesk releases State of Bitcoin and Blockchain 2016 report


 
Article Here + Report >>



 
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Copyright © 2015  | ADCCA | All rights reserved.

Published by the Australian Digital Currency Commerce Association 
Editor: Ronald M. Tucker


The ADCCA Industry Newsletter reaches a regular audience of over 1200+ Industry and Government Leaders, domestically and abroad. This reach includes regulators, parliamentarians, enterprise C-Level executives as well as cross-industry stakeholder participants both at the professional association and emerging FinTech business levels. To learn more about ADCCA or enquire as to Membership opportunities, please contact us via the below:

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