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Over the last 12 months Decentralised Finance also known as DeFi has really exploded with reported total value locked reaching $250bn.  R3 who operates in the permissioned blockchain space is spinning out Obscuro into the permissionless space of DeFi. In this podcast we’re joined by James Carlyle who explains the DeFi landscape, the challenges it faces in terms of privacy and scalability and how Obscuro can address these. &nbsp; What is blockchain? Blockchain is a distributed databased. Instead of one party running it, it is run as a network by a group of entities who don’t necessarily trust each other. It contains features that ensure that entities don’t need to trust each other, they can trust the infrastructure and the code itself. James has been on a blockchain journey since 2015 when he started off with permissionless public systems like Bitcoin and Ethereum prior to joining R3 in 2015 and helping to design Corda. Corda though had a very different principles than permissionless public systems as it was designed as a permissioned blockchain. The participants all have a verified identity so you know who you are dealing with, whilst on permissionless system they have a pseudonym. Now with Obscuro, James is returning to permissionless public systems. &nbsp; Decentralised finance (DeFi) Over the last 12 months Decentralised Finance also known as DeFi has really exploded. A few weeks ago JP Morgan reports that total value locked (TVL) has grown from last year’s $20bn to $200bn today. For James, Defi is an expression of freedom and of innovation. It’s growing very rapidly as it’s able to innovate at lightspeed. All of these applications are open source which means that it is possible to take an existing idea to either build upon it or in some cases to steal it and simply rebrand it. These things increase the level of innovation and increase the level of take up. At the heart of DeFi is transparency. It runs on permissionless systems, which means anyone can take part, download the data and help in the validation process. The first generation of DeFi builders and users were not interested in privacy and James believes that DeFi is heading towards a new generation to builders and users who are aiming for a more mass market where privacy is important. The ECB released a report on the digital Euro where privacy is seen as a key digital enabler. Whilst privacy is important it can unfortunately also be used as a cloak for illegal behaviour. For DeFi to be picked up and used by the mass market it has to be more regulated. Regulation needs identity and KYC. R3 is uniquely placed to interact in this space as it has this rich heritage of having very strong ties with regulation and regulators &nbsp; Miner extractable value (MEV) In a public blockchain system such as Ethereum there are participants who are submitting transactions. Miners who are here to confirm transactions can see the contents of the transactions that users have submitted. They can take advantage of it in some cases in what is called front running. For example, if you want to buy something on the market you don’t want someone else to bid the price up ahead of the transaction. That’s what is possible when a miner can spot that a user is trying to something and they decide to step in first and thus get the transaction before the user and the user is left behind buying it at a higher price. It has been estimated that around <a href="https://www.coindesk.com/tech/2021/05/10/why-ethereums-miner-extractab...

Tim Nelson is the CEO of Hope for Justice and is part of the founding board of the charity which exists to try and end all forms of human trafficking and modern slavery across the globe. They work alongside major multinational businesses through an organisation called the Slave Free Alliance that they set up a few years ago. &nbsp; What is blockchain? Blockchain is a distributed database that is shared between the nodes of computer. It stores information electronically in a digital format. It maintains a secure and decentralised record of transactions and what differentiates it to other databases is that it guarantees the fidelity and security of a record. This generates trust without the need of a third party. &nbsp; Modern Slavery According to the International Labour Organisation (ILO) there are 40.3 million people in forced labour, sexual exploitation, domestic servitude, organ harvesting and forced marriage worldwide: * Including 24.9 million in forced labour and 4 million in forced marriage. * It means there are 4 victims of modern slavery for every 1,000 peoplein the world * 1 in 4 victims of modern slavery are children. * Out of the 9 millionpeople trapped in forced labour, 16 million people are exploited in the private sector such as domestic work, construction or agriculture; 4.8 million persons in forced sexual exploitation, and 4 million persons in forced labour imposed by state authorities. * Women and girls are disproportionately affectedby forced labour, accounting for 99% of victims in the commercial sex industry, and 58% in other sectors Global Estimates of Modern Slavery Most people think that slavery was ended with the William Wilberforce Day. However every day around the world people are being trafficked every day. They are forced to work within the supply chains of major multinational businesses, into all forms of sexual exploitation, into forced domestic servitude and in countries where there is no organ donation scheme, there is organ harvesting. Most people are shocked to know that for example in the UK, the number one place people are trafficked to the UK is actually from the UK. People are actually taken in the UK. When Hope for Justice started doing rescue and investigation in the UK, the organisation started in an area in West Yorkshire that covers 2.2m people. At that time the entire police force across England and Wales had rescued 88 individuals and said that was the extent of it through an operation called Pentameter one. Hope for Justice within its first year of operation in just West Yorkshire alone, rescued 110 victims of which the youngest was just three months old trafficked for sexual exploitation and the oldest was 58 years old for forced labour. &nbsp; Impact of COVID The impact of COVID has been massive on everyone around the world. The shutting down has made a bigger impact on the most vulnerable in the world. Farmers have missed crop planting or harvesting whilst others haven’t been able to go to work putting them into a very vulnerable situation. It is in that backdrop that we see a real shift happening. Companies have rolled back efforts the they were doing globally. According to Tim,

Central bank digital currencies (CBDCs) are increasingly being talked about in the press with announcements of initiatives from different central banks working on CBDCs coming out left right and centre. Few however are as forward thinking and embracing a collaborative approach as the Bank for International Settlements (BIS). For this podcast we are joined by Daniel Eidan,  Adviser and Solution Architect at the Bank for International Settlements (BIS) in the Innovation Hub where he builds technology solutions for the central banking community with a special focus on blockchain and CBDC. He will share with us some of the exciting work his team are doing for driving CBDC forward. &nbsp; What is blockchain? Blockchain and DLT is often referred to as Web 3.0 whilst the internet of today is Web 2.0. Web 2.0 enables to globally connect communications protocol whilst blockchain and Web 3.0 isn’t just about putting communication protocols digitally but to store value digitally. What blockchain enables is to execute computations between different members and keep a record of state. Essentially as Daniel mentions we can encapsulate value. Value can be cryptocurrencies, central bank digital currencies, contracts and many other forms of value. This wasn’t something possible in the Web 2.0 because the fundamentals weren’t there. &nbsp; What are CBDCs? To fully understand what CBDCs, central bank digital currency, are you first need to understand what is a currency. Money and currency in general have three attributes: * They are a unit of account * A store of value * A medium of exchange What central bank digital currencies do is that they digitise those three attributes.   To explain how this happens Daniel uses the “money flower” approach which looks at its four different attributes: * Is it universally accessible? * Is it electronic? * Is it issued by a central bank? * Is it moved around in a peer to peer way? A retail form of CBDC will have all four of the money flower attributes. It will be universally accessible, it will be electronic, it will be issued by a central bank and contain central bank liability, and it will transact in a peer to peer way. What is important to recognise is that most of the retail monetary base is not central bank money, it’s commercial bank money. For example, when you deposit money at you bank it is likely that a large part of your fiat currency is with a claim against your commercial bank. Then through a set of mechanisms that claim is insured by potentially a central bank or a federal institution. The only claim that retail can have against a central bank is in the form of cash. Cash of course is a tiny percentage of the total amount of money individuals have. What CBDC does is takes that cash liability, in a retail context, to exist in a digital context in a way that’s accessible to anyone. The question is what happens to individuals who do not have a smart device, or electricity, or WIFI? In addition, how is universal accessibility attained to individuals with disability issues or are elderly? There are a number of technical solutions that can help to lower this barrier but it is one that is a challenge in terms of the last mile for reaching ubiquitous CBDC. In the case of wholesale, the case for CBDCs is to broaden the base of digital currency from tier one institutions that are regulated domestically to fintechs, startups and perhaps banks in other jurisdictions. So, it's really extending the promise and the capabili...

Leandro Nunes, Vice President, Product Development and Innovation at Mastercard, joins us to share how he leveraged Mastercard’s DNA in scalability, payment automation and governance. We also discuss the important of a data governance model and his top tips for building scalable blockchain solutions. &nbsp; What is blockchain? Blockchain is a distributed ledger technology (DLT) that uses a consensus methodology to immutably record blocks in sequence in a ledger. It’s a technology that is driven by data governance. The governance is on the data side not necessarily on the blockchain. Data governance looks at the question of ownership of the data, who has visibility over it and the rights for sharing it. It allows for the creation of networks to tackle use cases where the participants can integrate their systems in a decentralised environment where they can share the data. This provides the visibility to increase the trust between the participants. Leandro also stresses what blockchain is not. It’s not the saviour of the world and shouldn’t be a solution looking for a problem. As any other technology blockchain needs to connect and be integrated with other solutions such as AI, IoT, payments and others. &nbsp; Mastercard’s DNA – network builder When talking about blockchain there is this dependency on how to build and manage a network for different participants. In some ways these challenges are similar to the one of payment networks like Mastercard who has the established the credibility of having the global coverage, the need to scale, and acts as a neutral network builder not taking any sides. It is this element which is within their DNA. It is this DNA which can be leverage to build and gain adoption to new technologies such as blockchain. When you swipe your Mastercard within two seconds the user gets an approved message. Within those two seconds a lot of things happens amongst many participants to make sure the settlement is done. &nbsp; Mastercard provenance solution Mastercard’s Provenance Solution, is essentially an API layer on top of a Mastercard blockchain that serves as an orchestration hub for an entire ecosystem of partners. It bridges the supply chain traceability events with a payments network. This enables to share supply chain related data to inform the decision making process for the payment side. Decisions can be automated which in turn reduces the reconciliation costs, dispute resolution and speeds up the entire process. Leandro stressed that they’re not a tech company trying to sell blockchain. They use blockchain as a technology, the value they can bring in addition to combining supply chain traceability along with the payment side is around bringing scalability to the governance. Working with their partners to answer the questions of how do you build a network where you can be neutral within its governance structure? How do you create a governance where you don’t take sides? &nbsp; Use case: Australian farmers In August 2021, Cirralto, the B2B payment services business, announced it is leveraging the Mastercard Provenance Solution, and the Fresh Supply Co digital supply chain network, to provide Australia’s farmers with better access to trade finance. The WTO estimates <a href="https://www.tradefinanceglobal.com/posts/the-1-5-trillion-global-finance-gap-a-tfg-summary-of-bnys-global-i...

Alisa DiCaprio, is the Head of Trade and Supply Chain at R3 and also facilitates a lot of R3’s research. Whilst the concept of governance is familiar to many in the business community it has proven to be quite a challenge to blockchain business networks. In this podcast we discuss with Alisa, her latest research paper on the future of enterprise blockchain governance and collaboration. We cover some of the design and implementation of new business and technical models that will ensure that your blockchain journey is a success. &nbsp; What is blockchain? For Alisa, blockchain is just a database but what makes it different from other databases is that it’s decentralised that is global accessible. Like other digital technologies, blockchain requires the same adjustments to the global and commercial infrastructure. &nbsp; Discussing the future of governance and collaboration In July 2021, Alisa published a white paper entitled “The Future of Governance and Collaboration”.  R3 began itself as a banking consortium and thus gained from the get go experience on how to build and manage consortiums.  A lot of their consultations with companies building on Corda was about how do you manage a consortium? What they realised is that when projects go wrong it often is not because of the technology but because of the decision making process that doesn’t work or something with regards to governance. So, the white paper was an effort to set out the different examples of where governance has worked and all the different choices that need to be made. It sets out the policies that need to be thought of, it defines what is governance, and the questions that need be asked when building on blockchain technology. &nbsp; What is governance? Governance refers to the processes and the rules that determine how a system makes decisions as it evolves. It is something that needs to be thought of as early as possible as it establishes the core capability for a sustainable business network to last from its inception to the future. &nbsp; Are aspects of governance unique to blockchain? In legacy technologies there are well defined areas for adjudication when things go wrong. As blockchain is a new technology it doesn’t have those well defined adjudication history nor a long lasting legal infrastructure. A lot of today’s rules and regulations don’t apply to blockchain, so for this reason, governance becomes very critical. It contributes to its reputation as a technology that works. &nbsp; Why do blockchain projects fail due to governance? For Alisa, there are two types of characters that are early blockchain builders: * Entrepreneurs * Established businesses that may have an innovation fund or some money to play with Entrepreneurs who build on blockchain are usually new to the technology and are not necessarily thinking about establishing a governance structure. Established businesses which could be large companies or existing consortiums who are building on blockchain have an existing governance structure and they assume that it will work with blockchain and it doesn’t always. &nbsp; How do traditional business networks differ from blockchain business networks? Traditional business networks differ from blockchain business networks in three ways: * Consortiums are considerably more common in the setup of blockchain business networks. The reason for that is because blockchain allows to innovate on a sector wide level rather than just a business level * Blockchain business networks take a lot lon...

IDunion is a new European decentralised identity management platform that is promising to bring user centric digital identity with privacy at its core. In this podcast we had Adrian Doerk – Product manager at Lissi and communication &amp; Public relations at IDunion, walk us through IDunion. &nbsp; What is blockchain? For Adrian, blockchain is just a data structure. When you expand its definition from a DLT (distributed ledger technology) perspective with multiple nodes on a network what makes it interesting is whether the rights to writing on the network are permissioned or permissionless. This is determined by the type of consensus that exists on the network who determines who and what is written into the network. &nbsp; Present challenges with digital identity History of the digital identity on the internet: * Isolated siloed identity where users would login and authenticate themselves with the provider of a digital identity for accessing a service * Federate identity where multiple companies and institutions got together and agreed on a single sign on for multiple sites. However, the challenges of this model is that the identity was still focused on a central operator and not all companies and institutions where comfortable with this approach * User centric identity where a classic example is login with Google login or Facebook login. Whilst this is very convenient for the user it does lock up the user in a proprietary ecosystem which is very dangerous since these providers live from user and behavioural data which they resell to third parties. The next generation of digital identity will be designed with privacy by design principles. It will be a user centric proposition that is both convenient but also gives the user more control around their identity for authentication and identification purposes. * Identification asks: who are you? * Authentication asks: is it you again? &nbsp; IDunion vision IDunion is a consortia, whose aim is to build an open ecosystem for self sovereign identities controlled by its user. Whilst the platform can be used everywhere it is based on European values, laws and regulations. Everyone (including natural as well as legal persons and things) has the possibility to manage their identity information by themselves and to decide when they want to share this information with whom. The sovereignty over one’s own data is tremendously important, especially when it comes to very sensitive and personal information. Users can choose one of several wallets, which are used for storing and presenting credentials to third parties as required. This is helpful for a wide range of use-cases and enables a new way of identity management. Thus, technology companies are no longer acting as a central identity manager, but the user himself! The user can decide where the information can be seen, which program is used to manage information and with whom this information is shared. We call this concept the self-sovereign identity. &nbsp; IDunion platform Source: IDunion IDunion uses Hyperledger as a kind of technical umbrella for their multiple implementations: * Hyperledger Indy for the implementation of the network * Hyperledger Aries for the agents which communication with the network * <a href="https://www.hyperledger.

Jim Nasr, is the CEO of Acoer, a software development company whose vision, and work is all about building useful, usable, real time technologies that are fundamentally targeted at the healthcare industry. Jim was the former chief software architect at the Centre for Disease Control and Prevention (CDC) in the United States. In this podcast we discuss how NFTs and blockchain can be used to empower individual’s consent. &nbsp; What is blockchain? Blockchain is a public infrastructure that should be used within the public context. Blockchain provides transparency, auditability and accountability. Blockchain is a layer of trust that can be used to impute trust between parties who don’t trust each other. Jim is keen for blockchain to move past the world of cryptocurrencies and proof of concepts. He wants to make blockchain as practical as possible with real practical solutions. &nbsp; Challenges of consent Consent is an element of compliance. In the healthcare industry, when you go see your GP, you fill out paperwork to essentially give them consent to your medical health information for all time. For Jim there are a number of issues with that. It’s wrong that the patient doesn’t always fully comprehend what they’re signing, the process is complicated, it has to be done multiple time and the patient has no rights to say they’ve changed their mind. Jim gives the example that “if you're my orthopaedic surgeon, you should not have access to my mental health information”. There is a double challenge with regards consent. On one side individuals who sign consent forms have no idea what they have exactly signed, what data is shared and where that agreement is. On the other side organisations have limited idea on who signed what agreements, what data was covered and where the agreements are stored. This creates repetition of the process where the individual is repeatedly asked to sign new consent forms. Dynamic consent is the recognition that consent is not a and done concept, it is more dynamic with potential multiple phases for providing consent with the ability to revoke the consent, where the consent may expire after a certain amount of time and where it could be renewed. Dynamic consent is digital which gives it properties to be tracked and monitored. &nbsp; Data dignity Data has creators like individuals on Facebook, Instagram and Twitter to name a few who create data on those platforms. Essentially, we are implicitly giving those platforms the ability to use this data and along the way we become the product for the “free usage” of that platform. Consumer of those platform are creating content for the platform to leverage in a manner that creates a financial windfall for themselves. The issue is that we as consumers have no say in how that data is marketed and no say on whether firms like Cambridge Analytica use our data and create secondary data markets for themselves. &nbsp; Regulation: GDPR &amp; CCPA Regulation such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) provide an important opportunity for regulators to help regulate consent. GDPR gives EU citizens the right to grant access to their information to third parties, including consent and gives them the right to be forgotten. Crucially this regulation carries some serious teeth where t...

In January 2020, 12 global pharmaceutical companies and 17 public and private entities; including technical, legal, regulatory, academia, research organisations and patient representative organisations, got together to form PharmaLedger, the pharmaceutical blockchain consortium. Joining us for this podcast is Daniel Fritz, PharmaLedger Industry Project Leader and Supply Chain Domain Architect at Novartis and Marco Cuomo, Manager Applied Technology Innovation at Novartis, a team that brings in new technologies, such as blockchain, into Novartis. Marco is also the co-lead architect at PharmaLedger for the blockchain platform. &nbsp; What is blockchain? Daniel likes to introduce blockchain with the five A’s: * Assets, too often blockchain is associated with cryptocurrencies as assets but assets can also be data and medicinal products that can be exchanged on a distributed ledger technology * Audit, the immutability aspect of blockchain is good for audit. * Automation, use of smart contracts eliminate non-value adding steps * Anonymize, especially important in the healthcare care industry to protect the patient’s data by keeping it confidential and protecting their privacy * Authority, no central authority where authority is distributed amongst the participants For Marco the real strong added value blockchain provide at its core is the immutability function. Whatever you store on the blockchain, transactions and data are immutable so no one can change it. &nbsp; An introduction to PharmaLedger PharmaLedger, launched in January 2020 as a public private partnership under (IMI) the Innovative Medicines Initiative, a joint undertaking between the European Union and the (EFPIA) European Federation of Pharmaceutical Industries and Associations. It’s a three project with over €22m of public private funding. There are 29 partners in the consortium which includes 12 pharmaceutical companies whose goal is to accelerate blockchain adoption. Its aim is to prove that this technology can bring value to patients, increase trust amongst all of the different ecosystem stakeholders and enable new capabilities around supply chain clinical trial and health data. In addition it aims to demonstrate that blockchain can address some of the key challenges the industry has around identity and governance. The whole idea of the IMI is actually about building consortiums to address problems or challenges that are too risk for any one company or too expensive for any one company and which would benefit from having public partnerships. &nbsp; PharmaLedger use cases PharmaLedger has launched with 8 use cases broken down into three domains: * Clinical trials * Health data * Supply chain Within the supply chain domain, you have two versions of supply chain traceability: clinical supply and finished good traceability. There is electronic project information (ePi) which is also known as an e-leaflet, or an e-patient information leaflet. It’s a digital version of the leaflet you find in a medicine box. It contains the latest approved version of that leaflet in a manner that preserves the patient’s privacy. In the future it will have the capability to send out recall notification, if there was a quality issue of that product, to send updated product information and also to apply some additional checks on the provenance of that medicine to help reduce the risk of counterfeits. On the clinical trial side,

Arnoud Star Busmann, CEO of MineHub and Carl Wegner, CEO of Contour join us in this exciting podcast to discuss their cross blockchain ecosystem collaboration. Arnoud and Carl share their insights on how to identify opportunities for cross ecosystem collaboration based on customer overlaps and data to ultimately build an experience that will delight the customer. &nbsp; What is blockchain? Carl’s definition of blockchain, within the context of distributed ledger technology, is a way of managing multiple databases and keeping that data where they overlap is in sync. You have a set of consensus mechanisms to manage agreements between the multiple databases, a communications protocol and a rules-based system for them to work. Arnould’s definition of blockchain is one of a data infrastructure that provides a shared single source of truth that is distributed across an ecosystem. The responsibility for maintaining the shared truth maintained by a neutral, unbiased machine or machines. The data is owned by the data owners but the truth is controlled by none of them. The governance model of data is really the crux of blockchain technology and distributed ledger technology in Arnould’s opinion. ERP 2.0, it’s the ecosystem resource planning, building the apps and solutions that create value across an ecosystem instead of just one enterprise on the basis of that shared data. &nbsp; Challenges MineHub addresses In the mining and metals industry there are many parties involved in post trade management of physical commodity transactions and across general supply chains. The multiple parties have a tendency to collaborate and coordinate themselves via email, sending PDFs or couriering paper documents. So, by the time that information is reconciled and acknowledged to be true, the cargo is already discharged or financed. There are a number of challenges with this approach in the sense that it is easy to manipulate, hard to trust for important business decisions making such as credit decisions, stockpile optimization, purchasing, pricing and compliance. The worst problem according to Arnoud, is that the valuable information has a tendency of being locked up in courier bags or boxes. World Economic Forum White paper: “digital transformation is estimated to generate more than $320 billion of value in the metals and mining industry over the next decade, including $77 billion” MineHub ensures that its users have high quality information, reliable information about the most important risks and opportunities in their daily work available in real time MineHub has developed its platform on HyperLedger Fabric. However, it is on their roadmap to go multi-ledger because they have a requirement to have a single reliable source of truth with data privacy and data residents. &nbsp; Challenges Contour addresses Contour was previously known as Voltron before they rebranded. Trade finance is a very paper intensive industry where information is being couriered back and forth. Goods are arriving before the paperwork gets there thus making credit decisions harder to make or slower. Contour focuses on one aspect of trade finance which is a letter of credit, which is where a buyer and seller have some trust issues between each other. The buyer doesn't want to pay for something that he didn't want, whilst the seller doesn't want to ship and let go of his stock ...

Asset tokenisation has become one of the most prominent use-cases of distributed ledger technologies (DLTs) in financial markets, for assets including securities, commodities and other non-financial assets. For this podcast we had Iota Nassr, Economist and Policy Analyst at the OECD, join us to discuss her recent OECD report on the tokenisation of assets and their potential implications for financial markets. Iota started working as an investment banker at Merrill Lynch and at Citigroup before joining the OECD for the last 9 years working for the committee on financial markets. The committee has set up an expert group on financial digitalisation which includes representatives of central banks, finance ministries, treasuries and other financial authorities from the 38 OECD members. The group looks into Fintech related matters in financial markets and their policy implications including the area of blockchain in finance. &nbsp; What is blockchain? Blockchain is a type of distributed ledger technology, that records information in a distributed manner, in an immutable, time stamped and programmable manner that allows for the exchange of value without the need for a trusted central authority or without the need of intermediaries. This allows for efficiency gains on the back of such disintermediation. &nbsp; Tokenisation of assets and potential implications for financial markets – OECD report On the 17th of January 2020, the OECD published the “Tokenisation of assets and potential implications for financial markets” report. Since 2018, the OECD committee on financial markets had been working on blockchain related issues. What kicked it off was the ICO (initial coin offering) hype, which the OECD looked at for their potential for SME financing in a report entitled “Initial Coin Offerings (ICOs) for SME Financing ”. With the drop in ICO hype the committee continued to have an interest on the potential of tokens and tokenised markets post ICO, particularly on their potential proliferation in the technique of tokenisation would affect traditional financial markets. What they were really looking at is a theoretical environment where tokenized assets and market for tokenized assets take off. If that were to happen, how would it affect financial markets? And what do policymakers need to know and think ahead of that? That was the initial objective of the tokenisation of assets report they published in January 2020. &nbsp; What is tokenisation of assets? The report looks at tokens from two perspective: (1) tokens representing a pre-existing real asset and (2) tokens “native” to the blockchain. Source: OECD Report The firsts case has tokenisation as the process of representing in a digital way by using the DLT an asset that already pre-exists. The tokens exist on the chain and carry the rights of the assets that they represent. They effectively act as a store of value for something that exists in the physical world. Source: OECD Report In the second case, we have native tokens which are built directly on the chain and live exclusively on the distributed ledger. Cryptocurrencies like Bitcoin or payment tokens are examples of n...