Blockchain Weekly Recap 6-18-2016
DAO Hack Raises Questions, Sends Ether Price Sharply Downward
News broke on Friday that an attacker executed a hack on the DAO that resulted in the theft of some 3.7 million Ether from the company’s blockchain - worth $79.6 million at the time of the attack. The amount stolen represented a significant portion of the $150 million that Ethereum was said to be storing on its blockchain as a result of its crowdsourced investing efforts with the DAO. Moreover, as news of the theft began to break, the price of Ether began a sharp turn downward, ultimately declining by 27% before all was said and done.
The markets reacted predictably, of course, since a hack of that magnitude exposes a vulnerability in the defenses of what many were already beginning to refer to as blockchain technology’s “killer app.” Given the size of the fund pool that was involved, the DAO community’s concern certainly seems to have merit. Already, some are calling for a rollback of the Ethereum blockchain to a point prior to the hack to erase the theft transactions from the record a “hard fork” that some have referred to as a betrayal of the blockchain’s immutability principle.
Sweden’s Land Registry Testing Blockchain
As Ethereum deals with its own blockchain crisis, another blockchain company, Swedish firm ChromaWay, has partnered with the Swedish government, Kairos Future, and Telia to test systems designed to use blockchain technology to manage the Swedish Land Registry. The project has already succeeded in developing a proof of concept to demonstrate how it would all work. Tests have been conducted with several banks, and the partnership is now entering the second phase of their joint project, which will involve testing in a broader environment.
As designed, the blockchain land registry would place real estate deals in Sweden onto the blockchain as soon as a deal and contract were agreed to by the seller and buyer. That would then allow the involved parties, including brokers, banks, buyers, sellers, and government agencies, to follow the deal through to completion. The use of the blockchain in this manner is expected to significantly shorten the time involved in completing Swedish real estate transactions – a process that now typically involves months of back-and-forth.
Deutsche Bank Completes Proof of Concert for Blockchain; Expresses Concerns
German banking giant Deutsche Bank this week moved its blockchain beyond proof of concept, as it prepares for its long-term disruptive technology strategy. As it did so, officials at the bank predicted that the technology itself remains at least five years away from being widely used. The bank’s announced strategy for using distributed ledger technology includes applications in the area of trade settlement, smart contract usage, and new transparency in financial instrument trading.
That five-year prediction for widespread blockchain use came in spite of the company’s own expectations that its project will be ready for deployment within the next two years, and was sparked by concerns over the need for a stronger legal and regulatory structure. There were also concerns expressed over the legal questions surrounding smart contracts, and the need to integrate everything into the legacy systems currently utilized by the bank.
Microsoft BaaS to Advance with Project Bletchley
As has been its custom throughout its existence, Microsoft continues to focus its Blockchain-as-a-Service efforts on making the technology more accessible to businesses. As part of that effort, the company has announced that its Project Bletchley vision will seek to provide an “open, modular blockchain fabric powered by Azure.” Bletchley is apparently designed to provide middleware and cryptlets – two new Microsoft concepts that are specifically designed to increase accessibility and interoperability for the company’s customers. Both concepts are being described as building blocks for the ecosystem Microsoft is striving to build.