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“Blockchain for insurance – from static to dynamic” Ryan Rugg, Global Head of Insurance, R3

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Blockchain for insurance
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Today we pay insurance on a set period, whether its weekly or monthly or annually, irrespective of the actual usage. Most of the times, good drivers pay for the consequences of bad driver behavior as insurance businesses are forced to pass the costs on to everyone.

Ryan Rugg, Global Head of Insurance at R3 Corda thinks that model is about to change, thanks to the efficiencies that can be realized from Blockchain Technology.

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Blockchain can help insurance transition to Dynamic model from a static one

Insurance

The existing insurance model is both static and outdated, whereby individuals and businesses are charged based on a set period instead of actual user needs. Individuals and businesses are now realizing that there are more cost-effective ways to manage services that are not in use.

This realization has led to the transition for digital technologies to become a top business priority for CIOs in 2019. Dynamic based-models that save companies time and money while providing the customer with a better experience.

Usage-based insurance enables insurers to incorporate behavior data and update it in real-time on the blockchain. The integration of telematics, IoT and GPS information opens up opportunities for pay-as-you-go policies.

Companies that resist this potential possibility will soon find themselves taken over by businesses that embrace it.

A Convergence of Technologies

Technology

While discussing how the fourth industrial revolution is paving way for collaboration between technologies to create a seamless transactional experience between businesses and users across multiple industries, Ryan said: “Blockchain has the ability to act as a common foundation that eases the convergence of other next-generation digital technologies such as machine learning, AI and telematics.”

For instance, a hospital could share certain information about its patients with the insurance company via a blockchain platform. Once a consensus is reached, settlements could happen across different technology platforms.

“We rethought the blockchain concept from top to bottom to build it specifically for business that offers privacy, scalability and interoperability,” Ryan said, “The Corda ecosystem is underpinned by Corda Network, an independent technology which enables interoperability between different applications and sets of nodes on Corda.”

Shared economy is the future state, Blockchain is laying the foundation

economy

If the current progression of the shared economy model is any indication in the form of Airbnb, Uber and alike, we soon will find ourselves in an economy businesses operate through an app. Based on immediate needs rather than long term commitment. Loyalty will gain a whole new meaning that is based on the usage rather than tenure.

For instance, customers may get loyalty rewards based on a number of hours or days of usage, or the number of transactions, rather than how long they have been customers.  And businesses will be judged on a similar aspect of cost, availability, and agility of providing effective services rather than just brand name.

While the current model of the shared economy is rapidly evolving, it lacks transparency and information sharing across multiple platforms.  Blockchain can add synchronization “among multiple different groups of people touching the same information,” Ryan said.

Tokenizing identity could be a solution to tackle privacy in insurance space

Talking the importance of privacy, Ryan said “Firms are finding that the security and privacy offered by Corda’s private blockchain model are essential for insurance projects which are highly regulated and often deal with very sensitive data. One way of doing this could be through identity tokens.”

Instead of revealing the identity of the individual or businesses, one could tokenize the identity that can be verified on the blockchain without ever revealing sensitive information and share that token to transact across multiple platforms.

This will help ensure the interoperability, speed, and efficiency, without compromising data privacy or tripping any Global Data Privacy Regulations (GDPR).

Educating people about Blockchain will accelerate its adoption

educating blockchainTalking about what we can do to accelerate the adoption of the blockchain, Ryan said “educating the individuals and corporations about the efficiencies that blockchain technology brings is the first step toward its adoption.”

R3  is ahead of the curve to support this, having set up the Corda insurance steering committee, formed from the industry leading firms to share best practice and support the implementation of this new technology.

Ryan also set up the InsureTech challenge that attracts talent from all around the globe to bring forth innovative solution-based Corda Applications.

They have free events, workshops, templates, extensive material available for the public to get the knowledge needed to get experience in the Blockchain space.

The Blockchain is easier to implement than people think

Most businesses and individuals stay away from Blockchain technology thinking about the complexities that may arise.  However, solutions offered by companies like R3 are easy to implement.

Ryan said, “People often worry that they are not going to have internal expertise or resources to support the implementation of blockchain, but they are frequently surprised at how easy it is to build a PoC on Corda.”


Conclusion

Ryan’s passion is very evident from the responses she gives about blockchain technology’s impact in the insurance industry and she is excited to be a leader on that path.

“I love what I do and it doesn’t feel like work when you are that passionate about it,” she said.

Why not, the fourth industrial technology revolution is taking place in front of our eyes and people like Ryan are leading the way and that is a cause enough to be excited about.

You will learn a lot from the interview with Ryan about blockchain’s impact on insurance in particular and our lives in general.Cryptotapas ExclusiveCryptoTapas: Thank you so much, Ryan, for joining us today, we are excited to learn about Blockchain’s role in Health Insurance in general and R3s journey in particular.

Ryan Rugg: Looking forward.

CryptoTapas: Looking at your profile, I see that you have had a successful career with world-renowned companies. Tell us a little bit about yourself and what made you step into Blockchain space?

Ryan: I was a computer science major, starting my career out at Lehman Brothers’ Technology group. I was very fascinated with the front office; the way strategic investment managers worked and in time became a lead member of a team at JP Morgan.

I remained passionate about technology, so I took Python classes and kept myself up-to-date and then about 3 years ago I read an article in The Economist about blockchain and how it could revolutionize how financial services do business. My research led me to meet with R3 and became immediately inspired by the Corda platform. While there are other players in the blockchain space, R3 is the only the blockchain software firm that is built specifically for business.

My passions were aligned with the goals of R3 and I took a leap of faith to go back to my technology roots. It’s been 3 years and I haven’t looked back.

CryptoTapas: What about blockchain was the aha moment for you that propelled you to take the leap?

Ryan: Revisiting my days at Lehman Brothers at their Technology back office, where you have disparate parties trying to reconcile same information, because you all had your own record of truth, but if you had the shared truth – that is what I see is what you see – you wouldn’t have all these breaks and different manual processes, and quite frankly large expense ratios.

You would be able to streamline and your customer experience would be better.  I related my early experience to what I read in the article and I thought that this technology would have made my life easier at Lehman Brothers.

It felt like the right opportunity to see what this technology was and figure out where I thought was the most opportunity in the infrastructure of the future state.

Having talked to several banks, they are trying to leverage blockchain with different models, like JP Morgan coin, etc., where a lot of real assets are backed by and tokenized.

That kind of infrastructure is where the opportunity is and it was the best fit for my passion.


CryptoTapas: Awesome. Have you ever bought Bitcoin for your personal collection?

Ryan: I did. It was crazy when I think about how long it took to buy and the inefficiencies at the time to be able to buy. Nonetheless, I did do it.

CryptoTapas: What do you think the Blockchain’s state right now in general and R3s evolution in the space in particular?

Ryan: I am going to talk about it from an insurance perspective since I run the insurance side of things and have the most visibility to that space. I will also talk in general about the banking space.

R3 has done over 200 proofs of concepts and in the last year, which is now going into production.

From an insurance perspective, one of our applications went live last April. It is called Insurwave. It’s a coordination of E&Ys Guardtime that build the project for Maersk, coordinating insurers, reinsurers, and broker information, all of which is on the smart contract. 

What I think is fascinating about that project is when you talk to the Head of Risk at Maersk to streamline a process to gain efficiencies and lower expense ratios. What is really fascinating to me is current models have a static policy. That is, you go out to the market once a year and you say ‘how much does it cost to ensure my 1000 ships?’, the broker then goes to the insurer, the insurer goes to reinsurance and so forth.

From telematics and other satellites, they know when the ship is in pirate waters and they know when it’s in the safe waters.

A company like Maersk may say ‘I don’t want a static policy’, I want a dynamic policy. That to me is stage one of this technology, where you are able to streamline the efficiencies to lower the costs, but the future is its potential to evolve into new service products using this technology.

CryptoTapas: We agree. We all have felt the brunt of someone else’s mistakes when the insurance company decides to increase costs for everyone, and we are left to scratch our heads as to why we are penalized for someone else’s mistakes.

Ryan: Even if you think about autonomous vehicles, why would you want to pay an annual fee if you are only in the car for an hour?  You should use space model.   We are still in the early Proof of Concept (PoC) stages but they are already looking to the future.

We are in the fourth industrial revolution of technology where we see all these technologies converge.  IoT, telematics, AI, all are converging, and it’s really fascinating.

CryptoTapas: In a future decentralized model there could be a time where you don’t even need to own a car. You just pick a car, use it for a few hours and you pay for the usage, not for a fixed term like a day or a week.

car insuranceRyan: I definitely agree, and it’s exciting to be on this journey into the future state with insurers as well as other industries. 

Going back to the beginning, when R3 started, it’s not like all the bankers were dying to work together but they had a common objective of ‘how else can we lower the expense ratios?’, you have already done your headcount reductions, you have already lowered your lucrative ratios, you have already done all these cost-cutting measures.

As other industries have moved to the shared operation model, for example, if 10 years ago you were going to sleep in a strangers’ bedroom or get into a strangers’ car, it would be unheard of.

The shared economy model will be the way to lower costs and bring efficiencies.

Corda is that synchronization layer for the back-office systems where each has multiple different groups of people touching the same information, with Corda, you have to reach consensus before a policy or a transaction is recorded on the ledger, so all those reconciliation costs are reduced greatly.  

CryptoTapas: What are the top 3 challenges in the insurance space that need to be addressed before Blockchain can penetrate into the mainstream?

Ryan: The biggest challenge we are seeing right now is bringing all the players like procurement, compliance, info sector teams, lawyers, etc., together. 

One of the things we are focused on is helping onboard those who do not have the technical know-how or the budgets for innovative technology. We are building these templates to speed up the whole deployment process.

Making the legal side, compliance-regulatory teams, comfortable to work with this technology is part of the journey.

We started a Legal Center of Excellence about a year ago. We have about 17 different law firms that are part of that network now that participate in our projects, contribute to the legality of everything from smart contracts to different jurisdictions regulations and how it is viewed in different courts.

It is a global network and we want to ensure that each of our participants has that advice, so we are working really closely with the legal. It is interesting to see all the different perspectives on it.

A lot of lawyers are worried about disruption. Business models will change and we are not here to say who is or not disrupted, but perhaps you move from an hourly based model to a policy library where you almost charge an annuity when someone uses your smart contract as a policy.

Again, business models will change and it is strategic for lawyers to keep focused on getting involved.


CryptoTapas: Absolutely. The modern threat to traditional businesses doesn’t come from another company, it comes from someone cooking up an App idea and disrupting the whole space.

If you were to pick one big challenge you need to overcome for R3 to succeed in the insurance business, what would that be?

Ryan: A lot of it has to do with how green this industry is. That’s why we do so much outreach, education and publish thought leadership pieces. We really want to educate the industry by sharing the lessons we learn along the way to accelerate the pace of adoption.

Our focus in 2019 is moving applications into production. We have the InsurTech challenge where we are about to close round 1. We had 51 submissions of potential Corda Apps out there, and it is fascinating to see people participating from around the world where I thought people did not know what Corda was ended up showing up and wanting to build Apps.

Bringing industries along, helping them through education as well as code, templates, etc. to accelerate industry as a whole is what we at R3 are doing to accelerate the adoption pace.

CryptoTapas: Is Corda interoperable? 

Ryan: Interoperability is the one thing we really focused on from the beginning. We realized that a lot of these early projects were creating strayed assets where you couldn’t actually share between two different applications. We have what is called as Corda Network, it’s a not-for-profit foundation, a separate entity from R3 with a separate board. 

Interoperability is extremely important, we are working with the banks, insurers, assets managers, exchanges, and so forth on this.

CryptoTapas: Talking about insurance, let’s say you are working with a hospital network – they can be on their own blockchain but they can still interact with an insurer who uses a different blockchain?

Ryan: You can have a segregated sub-zones, which basically means your network map can be private just to, let’s say, that hospital, but if you need to be able to share your patient data to a different business network or different hospital, whatever the case is, you could potentially be able to use the identity in both the networks and share those records.

CryptoTapas: Since we are talking about healthcare and insurance aspects, do you think blockchain will be able to address privacy regulations, like GDPR, around the world?

Ryan: When I think about all the projects, Corda Apps that are going into production, in general, it’s been in the Property and Casualty Insurance (P&C) space. We have a handful of health application but due to personal identity aspects, we haven’t been able to address some of these issues.

We are working through the aspects of what information is on-ledger and what information should be stored off the ledger, could you tokenize identity and just put the token and cryptographically hash that and we have done several cases of that and we are starting to see more of that emerge.

First and foremost, we want to make it 100% compliant before we push it to production.

CryptoTapas: What experiences do you go through from working in this space which people from outside may be oblivious to?

Ryan: A lot of people when they hear about Blockchain or Distributed Ledger Technology think that it will be complex. They almost become nervous because they don’t fully understand. Corda is a Java-based language – we did that intentionally because we did not want to make something extremely difficult to understand.

People often worry that they are not going to have internal expertise, they don’t have the resources, their team is not well suited but they are quite frequently surprised that how easy it is actually to build a PoC on Corda.

B3I was originally on Fabric and what took them basically two years to build on Fabric they replicated in a month on Corda. 

The notion that it is extremely difficult to hire resources that are blockchain proficient is misleading. You have a lot of resources internally that you could re-utilize and we could help train them. We have online certifications, free business training online, we have resource papers, all meant for the community to help build everyone up on this journey.


CryptoTapas: You working in a relatively new industry helping build the technology while educating the space. How do you find work-life balance in the middle of all this chaos?

Ryan: It’s very interesting to think about work-life balance.  I have been accused of being a workaholic quite a few times.  We are running a global business and I find myself on calls at 2 am. It doesn’t feel like a job to me.  I am extremely passionate about the work I am doing and find it extremely fulfilling.  From an employer stand-point, they are not demanding all of this from me, but I believe that we are going through a digital transformation and it’s important that we stay focused on that and that we help our clients and industry go through that.

I love what I do and it doesn’t feel like work when you are that passionate about it.  I have an extremely supportive family, I am a mother of two and am fortunate to have such a wonderful husband who supports me with my workaholic addiction.

CryptoTapas: How do you stay away from digital noise when you are with your family?

Ryan: We have a rule that during a two-hour window every day, when I have dinner with my kids and spend time with family, we put our phones and laptops in the other room and we completely focus on the family. 

Once everyone is asleep, we get back online.

CryptoTapas: What can individuals and businesses do to help this technology get adopted faster than it is right now?

Ryan: I really think that using all the free resources right now, educating your teams, insurance as a whole is worried about their aging workforce and attracting new talent.  InsurTech has brought a lot of new talent. Read articles, attend workshops, we have a ton of things on R3.com, events that are free to the public. We do workshops for individual insurers showcasing what other entities are doing.

Staying on top of what this technology is and how it could impact your business, will certainly help its adoption.

Resources:
R3 Education material
R3 Insurance report

Thank you for reading this article.

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

CryptoTapas does not endorse or guarantee the accuracy of the information and claims made.

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About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

RK Reddy is an ardent fan of Blockchain and Cryptocurrencies. You can see the excitement about this new technology in every article on Cryptotapas.com. Sometimes this excitement leads to an overly optimistic view. Guilty as charged. RK Reddy says what may seem like an ‘overly optimistic expectation’ today may become an everyday norm in 5-10 years; look at the history of cars or airplanes, Blockchain and Cryptocurrencies belong to a similar frame of reference.”  Of course, that is just his opinion.

Interview

“Coda is world’s lightest Blockchain,” an exclusive interview with Emre Tekisalp of Coda Protocol

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Coda Protocol Interview

What happens when the miners decide to pull out their support of a public network? What
happens when nodes find a project not-profitable and they abandon the project?

It makes the blockchain network weak and vulnerable to attacks. In theory, all public blockchain
networks that rely on network strength to sustain face this existential threat.

Coda Protocol “addresses blockchain’s scalability problem at its source by utilizing recursive zk-
SNARKs to ensure the blockchain never exceeds the size of a few tweets, making it the world’s
lightest blockchain.”

Coda wants to provide a viable scalable solution without sacrificing the decentralized nature of
blockchain.

We asked Emre Tekisalp, Director of Business Development at O(1) Labs, the team behind
Coda Protocol, a lot of questions about Coda Protocol and his answers are below for anyone
wanting to learn about Coda Protocol.

Emre spent two years at Coinbase’s Business Development team where he led a number of strategic programs during a period when the company grew 10x. Before Coinbase, Emre was a Product Manager at Intel’s wearable devices group. Originally from Istanbul, Turkey, Emre has an MBA degree from Columbia University.

Q&A with CryptoTapas

In a world of 1000’s of blockchain projects and protocols, how do you envision Coda
making its mark?

Coda addresses blockchain’s scalability problem at its source by utilizing recursive zk-SNARKs
to ensure the blockchain never exceeds the size of a few tweets, making it the world’s lightest
blockchain.

Legacy blockchains like Bitcoin and Ethereum are incredibly heavy chains from a data
perspective. The heavier the chain, the greater the data processing requirements placed on
nodes, which limits the number of nodes eligible to participate. As the pool of potential nodes
diminishes, decentralization declines, jeopardizing the strength of the network.

Decentralization is not a sacrifice blockchains should be willing to make, yet this is
precisely the danger facing blockchains that focus solely on scalability. Coda confronts this
problem by using recursive zk-SNARKs to encapsulate the entire history of the chain in a single,
lightweight zero-knowledge proof.

To ensure sufficient decentralization upon mainnet launch this summer, we launched Genesis, a
token program to prepare members of our community to be block producers. With more than
500 users joining our testnet, Coda is now one of the largest layer 1 testnets by peer count. It’s
the strength of our technology and commitment to our community that differentiates us from
other protocols.

What would you say to convince the team of a project that is already on another protocol,
say Ethereum or Tron, to move to Coda?

Coda is designed for developers and for projects to use it as an easy tool to enable value
exchange in their existing apps. It is incredibly lightweight and prioritizes decentralization and
security. Already more than half of all web traffic can be attributed to mobile, and so it is
absurd to believe any blockchain system that does not work on mobile will be able to meet
the needs of the increasingly mobile digital economy. Coda’s inclusive and lightweight approach
will allow the protocol to be useful for the existing mobile internet ecosystem.

Who is behind o1Labs.org? How big of a team is working on Coda?

Emre Tekisalp founder of coda protocolCo-founders Izaak Meckler and Evan Shapiro created Coda with the goal of solving the
scalability problems that have plagued blockchain since its inception. We now have 28 full-time employees and hundreds of dedicated community members. The first cohort of validator teams participating in our Genesis program includes Bison Trails, Figment Networks, dsrv labs, and Sparkpool.

Coda Protocol Team

[CryptoTapas Side note: Bison Trails is a Libra Network member]

How does SNARKs make Coda better than other projects, can you explain in a way that a
non-blockchainer can understand?

The basic idea of zk-SNARKs is that they allow one to verify the result of any computation
without having to redo or acquire any detailed information about said computation. For example
you can prove “you are who you say you are” to a website without sharing any sensitive
information like a password. Coda uses zk-SNARKs to enable anyone to easily connect to the
blockchain from any device just by downloading a couple kilobytes of data. In contrast,
traditional blockchains like Bitcoin require expensive desktop machines to download hundreds
of gigabytes over many hours.

In the whitepaper, we read “The resulting consensus protocol is consistent and
responsive as long as at most 1/2 of the mining power is malicious,” can you elaborate
what this means?

In order to function, blockchains require all nodes connected to the network to periodically come
to consensus regarding the latest state of the world. The way this consensus is achieved varies
from blockchain to blockchain.

Coda Consensus

Bitcoin, for example, also requires at least half of the nodes participating in consensus to stay
honest. Unlike Bitcoin, which is a Proof-of-Work network, most Proof-of-Stake networks like
Cosmos or EOS require at least two-thirds of the nodes to stay honest. This higher requirement
makes such networks less resistant to attacks. The specific consensus mechanism we use in
Coda, a variant of Ouroboros, allows Coda to stay secure as long as half of the nodes are
honest, similar to Bitcoin. This is one of the factors that allows Coda to be more decentralized
than other blockchains out there.

Will there be a token sale? What will be the maximum supply of Coda?

We have not disclosed any plans for a token sale before the mainnet release of Coda. Coda will
not have a maximum supply, as it will have ongoing inflation per our Economic Whitepaper. At
mainnet launch, Coda will have an initial supply of 1 billion tokens.

Can non-technical members become Genesis Founding members? How many of your
1000 slots are still available?

Absolutely! We see Coda as a decentralized network and currency built by its participants, and
this includes users with many different sets of skills. The majority of the 1,000 Genesis
Founding Member slots are still open, so hop on over to our website to start getting active on
our testnet.

If you were to meet all of your goals, what would Coda look like in 5 years? What kind of
clients would it have on board and what kind of social impact does Coda have in the
blockchain space?

Coda is built first and foremost for developers.

In 5 years we see Coda enabling internet users to exchange value from any app. This will allow
any developer and business owner to easily accept money and new novel types of tokens from
anyone around the world from any device. We recognize that such a future is not built just by
one company. This is why we emphasize inclusivity above all else and are encouraging people
of all backgrounds to participate at this early stage through our Genesis program. Only by
supporting diverse participation today can we be sure the system will be equipped to serve the
diverse, global population of internet users.

CryptoTapas wishes all the best to Coda Protocol.

Thank you for reading and sharing this article and if you have spare satoshis lying around – consider donating.

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Interview

“The Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks” Says Dr. Brendon Wang, founder of Asensys

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Asensys AMA with CryptoTapas

There are over 5100 crypto projects that are listed on CoinMarketCap. This is not a complete list though, there are 1000s of other blockchain/crypto projects that are out there that are not listed on CMC yet for various reasons (one big one is they may not have their own cryptocurrency to trade). 

With 1000s of Crypto projects already existing – it is difficult to get excited about new projects.  However, when you hear about a project that is conceived and built by a Lead Researcher who lead the team at Microsoft on Distributed Systems, you want to learn more.  

Brendon WangDr. Brendon (JiaPing) Wang, along with Co-Founders Minghao Pan and David (Xiaobing) Zhang, has conceived of an idea that could increase the current transaction speeds by 1000s of times that of Bitcoin or Ethereum. The exciting part about Asensys is its performance increases with the user base. The more users who use the network the faster the network becomes.

This counterintuitive novelty could give Asensys the edge in the blockchain space.  But, is it all hype or is there mettle in this project?

We wanted to find out directly from the founder.  This exclusive Q&A with Dr. Brendon Wang is geared to provide great insight to the reader about Asensys.

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CryptoTapas Q&A

1) How would you describe Asensys to an already confused novice with 2000 odd projects in the market?  What sets it apart?

To understand Asensys, you first need to understand the problem we are solving. Bitcoin revolutionized finance by introducing the first peer-to-peer electronic cash system. Its brilliance lies in the fact that two individuals can exchange value without verification from a third party intermediary, upending the system we’ve relied on for centuries that gave undue power to trusted, centralized entities like banks and governments to validate transactions and provide legitimacy to currency itself. The way Bitcoin circumvents the need for trusted, centralized validators is by outsourcing verification to a decentralized web of computers, called nodes. This means that every transaction and action on the network needs to be broadcast and replicated by all nodes, a process that takes time—too much time to meet the needs of the fast-paced digital economy. This issue of how Bitcoin and all blockchain networks can scale has been one of the biggest roadblocks to adoption of cryptocurrency and blockchain systems to-date.

One obvious way to improve the speed at which blockchain networks can process transactions is to decrease decentralization. The more centralized a system, the fewer nodes need to be communicated with to replicate the action. However, decreasing decentralization compromises the security of the network, making it more vulnerable to a 51% attack—when a majority of nodes collude against the whole to update the chain of transactions in their own interests (AKA: cheating). Incentives are designed to deter nodes from weakening the network, as they stand to benefit from a fully-functioning blockchain, but most members of the crypto community believe weakening security is a bad idea. Furthermore, decreasing decentralization is contrary to the spirit of cryptocurrency that drew so many of us to cryptocurrency in the first place. 

What we’ve done with Asensys is introduce a way to dramatically reduce over-redundant actions across the network (the main culprit contributing to blockchain latency). Our novel solution utilizes Asynchronous Consensus Zones to essentially “divide and conquer” all intra-network tasks into “mini” networks, which are independent and parallel zones.

Dividing workload produces substantial performance lift for the entire network, but it raises two problems: cross-zone transaction handling, which is when a user in one zone transacts with a user in a different zone, and mining power dilution. Asensys addresses the efficiency issue of cross-zone transactions with eventual atomicity and the security threat of mining power dilution with Chu-ko-nu mining.

Eventual atomicity enables transactions to be verified and executed in the zone where the transaction’s first state was initiated. Groups of operations are then conveyed to other zones in relay transactions, but the data pertaining to the transaction remains in the zone in which the initial state resided.

Chu-ko-nu mining protects each zone and the entire network against a 51% attack by incentivizing miners to create multiple blocks for different zones with a single nonce, which enforces even distribution of mining power across zones.

2) Most projects do well in a test environment but fail miserably when it comes to real world application – what factors contribute to this variance and how is Asensys going to circumvent these very issues?

We have conducted an in-house experiment to simulate how Asensys will scale as more users are added to the network and greater capacity and throughput are required. The results demonstrated that performance by the Asensys protocol increases proportionately to the community size. This means that as the user base grows, Asensys becomes even more efficient at processing transactions. In a test including 1,200 virtual machines worldwide to support 48,000 nodes, the Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks. The below graphs are from our whitepaper.”

Linear scaling

cross zone transactions

3) Your claims are in line with companies like Credits, Hedera Hashgraph, etc., all of which have raised substantial capital to fund their projects.  How big is your team to gain traction for Asensys and how are you going to fund it?

I lead a global team working from the United States, China, and Germany. Co-Founders Minghao Pan and David (Xiaobing) Zhang are based in Frankfurt and Shanghai, respectively. Michelle Chuang leads Audience Engagement and Customer Experience for Asensys. She comes to us with over 20 years of experience in marketing and customer engagement and has led key initiatives for companies such as Starbucks, Chevron and Staples Inc. We have funding from angel investors who are also high-profile leaders in technology, news that we will be [releasing] very soon.

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4) Will you have your native currency on Asensys?

Asensys will have its own currency just like Bitcoin and Ethereum to incentivize miners to add blocks of transactions to the chain. Ultimately, however, Asensys intends to be the underlying system powering a decentralized web of applications, each capable of issuing their own tokens.

5) Is your network designed to support micro transactions, and will it be blockchain platform (bitcoin/ethereum/ripple/etc.,) agnostic? 

Asensys is its own infrastructure layer, distinct from Bitcoin, Ehtereum, Ripple, etc.

6) How does Asensys’s unlimited scalability translate to a real world business use case, can you give an example that can be understood by a non-technical business person?

Asensys will be the system powering the decentralized web, which will be comprised of dapps for entertainment, finance, healthcare, e-commerce, education, and more. Just as developers can build on Ethereum, they will be able to build on Asensys without concern for its capacity to scale as the number of users grows. Asensys has a programming language, Parallel Relayed Execution Architecture Language (PREAL), specifically designed for blockchain systems and based on asynchronous consensus zones (just like nVidia has CUDA language to GPU programming). PREAL is based on a functional programming model that allows developers to describe transaction logic without concerning themselves with the underlying parallel blockchain system. 

7) We only saw Academy research reference on your site, is there a white-paper or document that describes Asensys and contrasts it with existing projects?

If you’d like to learn more, please refer to our whitepaper, which describes the details of our system in great detail. This research was also presented at the prestigious NSDI’19 conference. We are continuing to add to our website and build our community. Feel free to follow us on LinkedIN and Twitter channels for updates on news and developments:

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We do not endorse or guarantee the accuracy of the information and claims made.

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Interview

A Crypto Crimes Database Is Here, and It’s On to Something

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Crypto Crimes regulations

If you have ever seen crime shows from the 90s or early 2000s, you inevitably saw a frustrated detective wring his hands and say, “there is no record of the crimes from the other state.”

Even to this day, a national crime database is not a thing in many countries.

In the United States, there is no simple search system to scoop records from national, state, county, and federal databases. These databases operate on a different search parameter.

However, blockchain and crypto space may be able to circumvent the painful lessons from this lack of a single-source reference.

Murphy & McGonigle, a financial services law firm with a focus on blockchain and crypto litigation, has built a database to act as a single-source reference for specific case laws, verdicts, and fact patterns.

Blockchain Litigations Expected to Rise

Daniel Payne, Murphy & McGonigle

              Daniel Payne

As more and more companies are now venturing into the blockchain space, Daniel Payne, a shareholder in Murphy & McGonigle’s FinTech & Blockchain Practice expects an uptick in the number of cases in the space and for the relevance of the database to be more prominent. “As the economy drives toward a blockchain future, we think the litigations in the space will follow,” Daniel said.

The database tracks the trend line of litigations in the space. For instance, the 2017 and 2018 trend line shows a massive increase in blockchain litigations, which has subdued in 2019 as illegal and unauthorized ICO’s died down.

According to a report by Murphy & McGonigle, securities-related fraud lead the litigation list, while Texas leads the charts for the most number of blockchain-related litigations in the US. The report also notes that “the SEC issued a warning that it has put market participants on notice and is now focusing on non-fraud violations.”


Comprehensive Search Functionality

CryptoTapas had the opportunity to preview the Blockchain Litigation Database with Daniel Payne. The search criteria are quite comprehensive, with options to search for a specific case by plaintiff, lawyer, code, verdict, or any number of parameters. All the charts and statistics on the database are hyperlinked, helping to take the users straight to the details of whatever information interests them, depending on their search.

The database lets users narrow down their searches to the minutiae of a specific type of complaint. For example, if you want to see only criminal cases within a broad category, you can do that. You can further narrow down the search to a particular jurisdiction. You can even find cases by law firm or attorney. “One interesting aspect of the database is it helps you find the law firms that dealt with specific case types,” said Daniel. “One of the interesting aspects is that a particular attorney in Florida has been very active in finding plaintiffs to file a specific type of litigations.”

“Our database helps tie the incidents together that lead to a case,” Daniel said. “A case is otherwise just a case; however, learning about the incidents helps us advise our clients so that they don’t fall into the same pitfalls.”

Bitcoin and the Blockchain Litigation Database Have Common Roots

The idea behind the database came from the mortgage litigations the firm dealt with during the 2008 financial crisis. To help the clients they represented, Murphy & McGonigle started tracking all the mortgage litigation cases, whether their clients were involved or not. This database gave them the edge in terms of finding case laws and rulings to leverage in their cases.

The utility that the firm drew from tracking mortgage litigations sowed the seeds for the Blockchain Litigation Database. Bitcoin was also born during the recession, which was primarily caused by the subprime mortgage crisis.



Smart Contracts Are Legally Binding

“Smart contracts can absolutely be legally binding, and because of that, parties entering into smart contracts need to be careful,” Daniel said. “They should consider getting the legal advice they need before entering the contract.”

All the aspects of a legally binding contract are present in a smart contract. For instance, an offer, conditions, an acceptance, and an execution are all part of the smart contract’s protocol, and as such, they can be just as binding as any other contract.

“Parties should be aware of the ramifications of entering into a smart contract before they enter into them,” warned Daniel.

Education Is Needed in the Space

“I do not think that the attorneys or the courts have the full understanding of this new technology necessary to get questions right that are being presented to them in every case,” Daniel said. “However, we have seen that many of the verdicts on the cases we are tracking are absolutely correct.”

Daniel said that there is a need to educate the individuals working in the blockchain space, especially in terms of the law. “We have seen instances where failure to really understand the technology has led to the decisions that we question,” Daniel clarified.

There is no one to blame here because this technology is so new that many people do not have the required understanding. This lack of understanding is part of the growing pains that any new industry goes through. It is part of the evolution.

“Many of the undertakings of the companies within this space fall within the purview of the existing laws, while few specific aspects need some updates,” Daniel said.

Talking about the efforts made in the space by the blockchain community, Daniel said, “I am happy with the efforts by the blockchain communities in educating the Congress so that they have the background necessary for dealing with the issues that come before them.”

The database is not available for public viewing, but they do offer subscriptions for those who want access.




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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

Read more about the author here.



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