Blockchain in space
Sound far fetched? Well it is real. Blockstream have had satellites orbiting the earth transmitting the bitcoin blockchain to users for a few months now, announcing this week that the coverage now includes Asia and Australia.
The idea is you can connect to the bitcoin blockchain, spend, receive and verify without an internet connection. It’s borderline crazy but it is designed to illustrate that the protocol can survive even without the internet. What’s more, you will shortly be able to send encrypted messages and payments over the lightning network.
The images below are from Blockstream’s website. The ground stations beam the latest blocks to the satellite, users connect their own nodes to the satellite and you’re set. No internet connection required.
Australian encryption laws
Here in Australia, we love a new a rule; park rear to the curb, mandatory voting, don’t feed the crocodiles etc. etc. but our most recent addition was vaguely sinister. Here’s a short summary of the new encryption laws:
1. Technical Assistance Notices: where a company can decrypt or bypass decryption they can now be compelled by law to do so;
2. Technical Capability Notices: compels companies to build infrastructure to enable access for law enforcement;
3. Technical Assistance Requests: these are voluntary and circumvent the oversight required for mandatory notices (so if someone on the inside agrees to help, there’s basically nobody checking what is done and why).
No doubt all of this is well intentioned but it’s not great for those working in Australian tech and let’s see how this plays out when one of the giants like Facebook or Google receive a notice (I assume they already have given the government’s hurry to get this in).
I highlight all this for one reason. Decentralised technologies are not impacted by laws like these, truly decentralised protocols are not companies, they have no directors, there is nobody to compel or throw in jail for not doing your bidding. If you take a crypto coin protocol, any change needs to be coded and reviewed by the community (dispersed around the globe) and then adopted, everyone needs to download the new software.
If there are any positives at all in this, they are:
1. Encryption really works and so does encrypted value transfer;
2. In one fell swoop of hurried legislation, the Australian Government has shown the way to the future, decentralisation.
Institutional involvement
The race is on between the Wall Street titans NASDAQ and NYSE. Each has launched their own platform to support institutional investment in cryptocurrencies.
Bakkt is the NYSE backed ‘digital asset futures exchange’ due for release in January 2019. It will support futures contracts for bitcoin and also support physically delivered contracts. The most important part though is the custodial solution, this has been the real barrier to entry for institutions. For example, Goldman’s has indicated they are looking to use the Bakkt custodial platform when they enter the space.
Up the road at NASDAQ HQ, they have invested US$27 million into ErisX to support cryptocurrency assets and futures contracts. Again, fully licensed and secure (we’ll find out because every hacker in the world will test them out) and all designed to attract institutional money.
All of this matters a lot:
- It proves that there is institutional demand for these products or they wouldn’t be taking the time and spending the money to support them;
- It adds huge credibility to the space that investors can gain exposure to them through recognised exchanges.
When they launch in 2019, it will be a big deal.
and finally….
Many of you are no doubt taking some time off over the holidays. This time last year if you mentioned bitcoin or blockchain around the dinner table you would have been feted as an interesting genius. This year you will attract murmurs of sympathy and be asked to pass the salt. Fear not though, the good news is this, the vast majority of people have not yet realised the enabling power of this technology. I’m not suggesting people are not capable, just that who is really sitting down pondering the impact of decentralised, trustless technology? Answer, virtually nobody.
So this year, we’re idiots who got it wrong, five years from now we’ll all get together and take another look because if you want to know where the future is heading, this graph from Bloomberg is compelling.
