The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.
News Item 1: AWS Blockchain Templates
Decrypted: Amazon AWS introduced Blockchain Templates for Ethereum & Hyperledger fabric.
AWS Blockchain Templates help quickly create and deploy blockchain networks on AWS using open source blockchain frameworks. Developers can deploy Ethereum and Hyperledger Fabric frameworks, as containers on an Amazon Elastic Container Service (ECS) cluster or directly on an EC2 instance running Docker.
These templates will let anyone launch an Ethereum (public or private) or Hyperledger Fabric (private) network, with just a few clicks. Amazon wants to make it easy for developers to create projects based on the blockchain technology, with blockchain templates.
Our take: With an increasing number of enterprises interested in distributed ledger technology, some of the world’s largest software companies are rushing to meet the demand. In fact, big cloud providers like Amazon, Microsoft, IBM, Oracle, Huawei, HP, Baidu and SAP, have developed their own blockchain-as-a-Service (BaaS) offerings.
Other companies like Google have bought up blockchain technology firms like Firebase in order to try to secure a foothold in what is shaping up to be a highly lucrative market. According to a report released by Bloomberg in March this year, Google is also developing a blockchain solution for its cloud business.
Blockchain-as-a-service (BaaS), offers enterprises a way to test the technology without the cost or risk of deploying it in-house. A recent article in Bitcoin Magazine predicted that the Blockchain Technology Market to Reach $7.7 Billion by 2024.
AWS is a fast-growing segment of Amazon’s business, which saw sales increase 55% in 2016 and 43% in 2017. The division is in fierce competition with other tech giants’ cloud computing arms, including Microsoft Azure, which showed an early interest in providing blockchain as a service when it partnered with the Ethereum startup ConsenSys in 2015.
According to Coindesk, on January 12, Chinese web search giant Baidu has launched its own Blockchain-as-a-Service (BaaS) platform. Based on technology developed by Baidu, the open platform sets out to provide the most user-friendly blockchain service. Baidu Trust allows the conducting and tracing of transactions. it can be applied in various use cases, including digital currency, digital billing, bank credit management, insurance management financial auditing, and more.
Chinese Telecommunication firm Huawei announced its latest Hyperledger powered Blockchain service at a conference in Shenzhen. The Blockchain-as-a-service (BaaS) tool, which is launched a month after the release of Huawei and Hyperledger’s joint project Caliper and will be known as low-key Blockchain Service.
Oracle has pushed its own blockchain offering described here, it’s not immediately obvious which blockchain technology is being used since the company does not seem to develop any blockchain offering by itself.
In November 2017, Hewlett-Packard Enterprise (HPE) joined a growing number of tech vendors that began offering BaaS, most of which are aimed at financial services firms. HPE offerz a flexible charging model, similar to other BaaS offerings, with prices based on the server node, CPU or core.
In May 2017, SAP revealed its cloud-based blockchain service SAP Leonardo. With SAP Leonardo, SAP announced a digital innovation system that meaningfully integrates next-generation technologies to help its customers redefine their business, including ready-to-use blockchain technology and its SAP Cloud Platform Blockchain service.
IBM, which also has a cloud computing service, is one of the leaders in enterprise blockchain development. The company reported $5.5 billion in revenue from cloud in the fourth quarter of last year.
In 2015, Microsoft became one of the first software vendors to offer BaaSon its Azure cloud platform. The Azure cloud service is open to a variety of blockchain protocols, supporting simple, Unspent Transaction Output-based protocols (UTXO) like Hyperledger; more sophisticated Smart Contract-based protocols like Ethereum; and others as they are developed, Microsoft said via email. Currently, Azure supports distributed ledgers such as Ethereum, Hyperledger Fabric, R3 Corda, Quorum, Chain Core and BlockApps.
This means it’s now easier than ever for dApp developers to create and test on a public or private blockchain nodes, before publishing into a real node.
Also, given the recent increase in regulation around cryptocurrencies and ICOs, platforms like these provide a more legitimate tool for developers to develop peer-to-peer and decentralized solutions, as well as new consensus based DLT that could impact a broad range of industries.
Without a doubt blockchain is set to make some pretty big waves in the coming years. We’ll have to wait to see just how big the blockchain technology market will become, given that it has huge potential benefits, for just about every industry in the world.
News Item 2: Walmart Wants to Store Payment Data On a Blockchain
Decrypted: Walmart may be looking to the blockchain to store payment data. Newly published patents released by the United States Patent and Trademark Office (USPTO) reveal that Walmart has plans to store and secure private payments data via a blockchain-supported platform.
Walmart filed applications, in October 2017 that outline how blockchain technology. would be used to prevent third parties from accessing customer information and payment details. While the applications do not mention or refer to a permissioned blockchain, the described platform, would allow customers to see their payment histories, without third-parties being able to see the payment histories of customers.
This is not the only blockchain-related patents filed by Walmart in recent months. Walmart wants to use blockchain technology to perfect its drone delivery system. In early March, the company filed a patent for a smart package that would leverage blockchain to improve tracking capabilities.
Our take: In their patent applications for a Courier Shopping System and a Vendor Payment Sharing System, Walmart hopes to corner the market on distributed ledger technology and weave together vendors, customers, and couriers into one shopping network, where payments are collected, divided, and paid out among the vendors and couriers, using blockchain.
Monitoring each individual’s behavior and choices over time, this new Walmart shopping network would map out products and services they prefer and how they want them delivered.
But beyond using blockchain for payments, Walmart is also pursuing applications of blockchain for supply chain purposes, particularly for tracking shipments of food.
The retail industry appears most focused on supply chain use cases related to blockchain technology. Over tbe last year, the pursuit of customer satisfaction and confidence has steered companies in this sector to make some bold moves.
Retailers are using blockchain technology to provide customers with more information about their products, improve traceability of their food supply in order to build consumer confidence in their stores.
Food safety has become a crucial issue. Every year, one in 10 people around the world become ill and around 420,000 die as a result of contaminated food, according to global estimates from the World Health Organization. Blockchain can make the supply chain much more transparent. It allows the entire chain to be more responsive to any food safety disasters.
Last August, a group of leading companies including Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever, Walmart and IBM banded together to work across the global food supply chain to further strengthen consumer confidence.
In December, Walmart in collaboration with IBM, it launched the Blockchain Food Safety Alliance to explore how blockchain technology can be used to make the food supply chain safer.
Walmart piloted blockchain technology to track produce in the U.S. and pork in China, which increases consumer safety. Blockchain is used to inalterably record every step in the meat’s journey.
For the retail distributor, the ability to collect all this information, right down to details such as storage and shipping temperatures, from farmer to store shelf, creates a major competitive advantage in terms of product quality, food safety, and consumer confidence.
If Walmart adopts blockchain to track food supplies on a global level, this could become the largest-scale deployment for distributed ledger technology.
This type of deployment could open the door for next generation data analytics, because blockchain-type databases contain much more information than retail distributors currently possess, and would potentially allow better service and product to customers.
Decrypted: Tax authorities in Finland have begun matching bank records to cryptocurrency transactions in an effort to track down suspected Bitcoin tax evaders.
The Finnish Tax Authority is looking for bank transactions to crypto exchanges in to track the purchase and sale of cryptocurrencies. For 2017, the authorities have identified over 3,300 people that need to pay tax for cryptocurrency trading. The current cryptocurrency taxation in Finland is 30-34% tax on any profit, but you can not deduct losses.
Our take: Bitcoin is treated differently in different countries all over the globe. The absence of a uniform approach means different regulatory parameters and crypto taxation rules. The recent G20 summit wasn’t able to come up with a consensus, so for now each region has to make their own decisions.
In many countries tax season is here. As tax authorities are aware of the massive gains cryptocurrencies had in 2017, they are trying to bring regulations on Bitcoins.
Germany has been quite careful with crypto taxation. Last month the Federal Ministry of Finance issued a notice which treats Bitcoin as a currency. and will not be taxed when exchanged with euros. Purchases with Bitcoin are subject to VAT, just like any other. No tax will be imposed, however, on long-term investments in cryptocurrency. If a trader sells a Bitcoin more than a year after its purchase, the profit is exempt from taxation. The same applies to yearly profits of less than €600.
Tax authorities in Denmark said that fintech companies should pay taxes just like any other business. On the other hand, individual investors trading cryptos do not owe any tax on their gains.
In contrast, Spain is considering tax breaks for the businesses that utilize cryptos and blockchain technology.
In Singapore, buying Bitcoin will save you taxes. Digital coins are not considered commodities and are not recognized as currencies. In the absence of special requirements, gains from crypto investments of private individuals are not taxed. Companies trading cryptocurrencies, however, are expected to pay taxes on their profits.
According to Nikkei, Thailand will begin taxing cryptocurrencies. All cryptocurrency trades will be subject to a flat 7% value-added tax. Additionally, there is a 15% capital gains tax on returns for specific investments.
Gains from cryptocurrency transactions are still tax free in South Korea. The Finance Ministry and the tax authorities in Seoul are working on a legislation that is likely to change the situation. The new tax bill should be adopted in the first half of this year, according to officials.
Russia is collecting 13% tax on crypto incomes and 24% corporate tax on profits.
The situation in the US is more complicated. At the state level, several regulators have taken steps to become crypto-friendly jurisdictions. Wyoming passed a bill exempting cryptocurrencies from property taxation. Two other states want to legalize Bitcoin as a payment option for tax purposes. Arizona has promised to become the first US state to start accepting taxes in cryptocurrency. Georgia may also allow its residents to pay taxes in bitcoin.
Most people in the US that use or hold cryptocurrencies are trying to figure out how to file their capital gains taxes. The Internal Revenue Service treats Bitcoin or alternative digital currency transactions, which includes the collection of airdrops, trades, spending, and almost every type of exchange, a taxable event for U.S. citizens. Its estimated that Americans owe roughly $25 billion in taxable capital gains from cryptocurrencies
The taxation of Bitcoin and altcoins shows a lot of governments are looking at cryptocurrency in a completely different way these days. Taxing cryptocurrencies is a double-edged sword, as it automatically lends more legitimacy to this nascent form of money.
Ilias Louis Hatzis is a Blockchain entrepreneur who writes the Blockchain Bitcoin & Crypto (BBC) Weekly CXO Briefing each Monday.
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