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Questions in implementing a'security deposit' marketplace (decentralized autonomous organization) in the ethereum blockchain

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In my previous posts (here, here and here) I presented the concept of a guarantee marketplace and gave some examples. In this post I draft some questions concerning with the study of the practical implementation of smart contracts for an hypothetical 'security deposit market' DAO (decentralized autonomous organization) in the ethereum blockchain.

Questions to the guarantee seeker (demanding part)

• Who are you? Who manages your identity? Maybe you are an entrepreneur or just a

consumer...? • What type of collateral is required? Cryptocurrency, hard asset,...?

• What amount is required? Is it for microleasing, lending...?

• What is your offered fee (a.k.a. guarantee commission or insurance premium)?

• Can you pay it now or when (what's your balance)?

• What is the DAO/dapp/transaction to secure?

• Who/what contract is the beneficiary?

• What is the period of validity of the guarantee?

• What (programmable) conditions revoke the guarantee?

• How to prevent the beneficiary to falsely claim the guarantee (programming oracles humans

or sensors)? • What are the post transactions in the different hypothetical scenarios?

• If guarantee is called do you the guaranteed have an (extra/interest) responsibility to pay the

guarantor when your balance becomes sufficient (positive)? • How your performance translates in to a reputation system? How is this reputation used in

future transactions, how it affects premiums paid?

Questions for the Guarantor (deposit supplier)

• Who are you? Who/what DAO manages your identity?

• How is your current and future/expected balance of rights/obligations (streamline account)

in the required collateral? • Are you syndicated for this operation(multisig model)?

• What's your asked premium? How do you access financial risk measurements or ratings?

• Do you have a counterguarantor? How much risk% does he secure for this operation?

• Do you require a predictive market to give you the correct premium value? How much do

you pay them to get the estimate? Can it integrate with Augur DAO? • How your performance translates in to a reputation system? How is this reputation used in

future transactions, how it affects premiums received?

In the proposed DAO, all GΞMs (the subcurrency used to pay contracts) fees are locked in a crowdfunding investment account. By entering the contract do you accept this condition? What (external) DAO should manage the crowdfunding campaigns? Notice: the proposal to lock GΞMs is to promote investments in the ethereum ecosystem.

Questions for the beneficiary of the guarantee (the owner of the asset being secured/leased):

• Can you or a program lock / unlock the access to rented/leased/shared

asset/currency/commodity/...?

Is the collateral expected to lose value or appreciate during contract performance? How to measure its price, any market? Required to adjust to any denomination in case of claiming orexecution?

• What (decentralized oracle) system verifies that the asset is being correctly delivered and

mantained?In what use cases can the claim process be automated completly?

And finally, a new entry: The Auditing guys (or machines?)

Do we need a team of auditors? Decentralized oracles - give this option to the guarantor. In case of fraud in claim beneficiary pays indemnity predetermined in the contract. Guarantor may request beneficiary to also sign and put a security deposit (premium) for this risk of fraudulent claim. If auditors don't concluded there is fraud then it is the guarantor that must pay the expense of audit contract in full (pre-providing a security deposit for this). Auditors are not related to the 3 participants in the guarantee contract: they evaluate the occurence, accident or loss and vote on the matter, on the blockchain.

In conclusion:

Replace every security deposit in you smart contract deployment by a security deposit premium. Entrepreneurs and consumers shall not need to own the full security deposit in order to share, rent,lease or borrow.

Generalize the concept of security deposit: "With a couple of smart contracts this guarantee market would democratize the access to ether to newcomers and help in speeding up the development of the entire ethereum ecosystem. But that... is just my opinion. If you agree with this vision, stay in touch!"

Ecosystem view: DAO /Dapps related to security deposit operations: Identity; reputation; currencies; decentralized collateral custodians; shared services platforms; predictive markets,auditing /supply chain.

Follow GuaranteeMarket project and feel free to get envolved: contact or comment.

Check this examples of contracts (that could be coded and implemented in the ethereum blockchain):

•

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Garante eMarket: a peer-to-peer decentralizedmarketplace

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INTRODUCTION

GaranteeMarket is a project that intends to use the blockchain technology to create a transparent peer-to-peer marketplace for collateral arrangements.

Mutual guarantee schemes are private-public partnerships that subsidize banks in the lendingprocess. They are run by centralized boards. SME's need to buy a share to join the national guarantee mechanism. The entry cost is up to 500 € prohibitive for smaller companies. The difference between a mutual guarantee and a new proposed peer-to-peer guarantee system is this: in p2p every contract must be signed (voted) by at least a couple of guarantors and not by a central authority. The signers earn a commission (in a blockchain system we can call them contract miners) but they also need to put collateral at stake in the system. Collateral is managed by smart self-enforceable contracts. With blockchain technology collateral executionon a financial contract is coded as self-enforceable and doesn't depend on a central counterparty to be executed or transformed. Anyone can be a guarantor in the system and earn income without pledging exclusively cash as in the peer-to-peer lending model.We expect to collaborate with local banks and microfinance institutions helping small businesses.

https://www.linkedin.com/in/brunoricardoferreira?trk=pulse-det-athr_prof-art_hdr

DEFINITION, PURPOSE, MECHANISM * ABSTRACT

Garante eMarket is a decentralized autonomous organization (1) for financial collateral arrangements (2) that uses the blockchain technology (3) to store smart contracts (4) and updated governance mechanisms (5). It uses a distributed ledger for derivatives(4).

Garante eMarket is a conceptual proposal that intends to develop an alternative to centralized credit insurance and proceeds from a research on alternative and complementary credit systems such as the WIR Cooperative model (6), the C3 – Commercial Credit Circuit (7), the Mutual Credit Systems in Thomas H. Greco definition (8), the Palmas Banks model in Brazil (9), and from personal experience of microfinance and analysis of 14 microcredit models (10). A Long Finance report summarizes the concepts of alternative credit systems (11). For these motives, Garante eMarket is a proposal aimed at financial inclusion because it helps in solving the issue of the lack ofguarantees in an automated platform for contracts auction, clearing and recording providing a reputation system for social guarantors (12) simultaneously.

Garante eMarket governance is inspired and structured around the P2P Economy that includes the Sharing Economy (13), the Circular Economy(14) and the Transition Movement (15a).Methods of decision and voting are also derived from the Sociocracy and the Gift economy (15b).

The modern banking system is founded on the notion of letter of credit to support international trade. In comparison with endogenous and mutualized forms of money, Trust, Reputation and Risk inherent of the business and treasury cycle (receivables and payables) (16) is transfered to 3rd parties (Banks) outside the local trading community. International payment systems (Mastercard, Visa, etc) are all founded in the four corner model (17). More informal systems are also possible: see for reference the Hawala System (18) The alternative to delayed payment is the inneficient direct barter (19). SWIFT, an international cooperative of banks, is deploying the BPO bank payment obligation (20) that is a digitalized electronic letter of credit. Goverments and mostly corporations around the world are deploying SCF (supply chain finance) programs (21). These programs propose finance to SME's via dynamic discounting (22). Due to high cost of subscription and commissions, this type of finance leaves behind small and microbusiness and bootstrapping entrepreneurs (23 – evidence). Also critics have been made to government support export finance and loan guarantee models (24.a -critic, 24b – SBA, Regar, AECM). Independent alternative finance companies (25) use invoices as guarantee to investors in auction marketplaces, competing against corporate and bank SFC platforms. We can imagine other types of P2P asset based finance emerging through commoditization.

Garante eMarket is simultaneously a marketplace and virtual notary. Proposals to use the

blockchain as a registry service, specifically for microcredit as been also explicited by Maclane Wilkison (26). Collateral management is possible through the blockchain by the way of digitization of physical assets (for example stored in a vault) that can only be access by a (multi)signature key . For more detail on the companies using smart contracts in the clearing and settlements for securitieswe recommend reading the report “Permissioned Ledgers” (27) with proposals for KYC/ AML. Collateral operations in Finance can be designed on top of the blockchain similar to those adopted by IBM “ADEPT” (28) and the Uber alternative DAO La'Zooz (29) with the implementation of distributed smart oracles or IoT sensors(30).

Provided secure identification of users and wallets, systems of storage(32) Garante eMarket works as a reputation system (33). Members put, individually or collectively, collateral at stake in favour of small business and entrepreneurs that lack collateral. The platform is currency-agnostic: it does not provide finance in a local currency or digital token. Financial arrangement contracts are calculated in G.eM, the token of Garante eMarket, that varies in accordance to law of demand and supply. The platform is also blockchain agnostic. This means that the user can choose the blockchain in wich she wants the contract to be stored. Individual investors are rewarded with G.eM's, the guarantee commission, that they can cash out or invest in crowdfunding DAOs. Individuals who reinvest G.eM in decentralized crowdfunding platforms are rewared with additional G.eM's. Startup and Entrepreneurs are subject to a p2p credit rating system using the wisdom of the crowd (34).

DISCUSSION

Important public figures have praised the counterparty model as a solution to prevent the proliferation of “weapons of mass distruction”, OTC obscure banking practices(35). At the same time the FBI is fighting the fraud in bank guarantees due to a lack of standardization and public market(36).

An article reports that “the broker model is broken” (37).The central counterparty entities despite recent efforts in digitizing and automating process carry operational counterparty risk. The Repo markets, where banks borrow cash against securities(mostly corporate and government bonds) will continue to see a drain caused by central banking quantitative easing measures. Counterparties lack real time clearing and settlements' in payments and securities. Lack of real time clearing and settlements subjects counterparties to additional liquidity requirements. The point is that Banks don't work as they should do in mutualizing business risk and financing the real economy. The financial crisis of 2007-08 is stil in the subcounscient of bankers. This why the central bank QE is useless. An alternative model to finance SMB is growing with the advent of P2P lending. However,

a monetary system based on positive interest needs a constant growth in money supply to be stable(38). Commercial banks are the key in the monetary transmission mechanism. Mezzanine Finance is already being subsidized in most countries ofEurope with participation of the EIB and the national mutual guarantee systems. Garante eMarket can add a layer to mezzanine finance. Anyone (with assets or reputation) can be a guarantor and earn income, in theory. Transparency is the key in Garante eMarket: every (loan) guarantee contract must be signed by at least 2 members and not by a centralized board. Also, execution does not depend on a central counterparty, collateralis being stored, executed and/ or transformed in a replicated ledger, the block chain. Through smart property we can even think of using any type of physical asset as collateral as long as it is controlled by a smart contract and facts observed by distributed oracles. The ricardian contract can be translated to a smart contract (39). A piece of written contract can be coded in the blockchain (40)

Proposals of P2P insurance outside the blockchain (Friendsurance, Guevara, Bought by Many) (41) and those of the Bitcoin 2.0 ecosystem (Peercover, Bitsilk) (42) can be seen as new forms of transparent and secure risk sharing and mutualization-demutualization (something in the middle). The JOBS Act must be seen as the first step for a more democratic and participative aproach in investments: another layer in mezzanine finance.

For VC's the next big thing is just a modern version of the letter of credit (43). Garante eMarket helps small businessesand entrepreneurs getting a loan (in local currency, bitcoin, you name it) to leverage growth and economic wealth respecting the communities and the environment. Business Angels and Venture Capitalists are allways welcome as Social Guarantors.

See more information about GaranteeMarket startup project on twitter.

Draft Paper in Progress

Blockchain technology for microfinance guarantees

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GaranteeMarket is an automated system securely stored using distributed blockchains where it is possible to store financial collateral agreements in the form of smart contracts and also specify some rules (governance rules) that can be used to manage institutional relations between the agents involved in standardized contracts (namely the guarantor, the currency issuer and the entrepreneur) .There are many types of collateral arrangements but our focus is on those collateral arrangements that take the form of financial guarantees that banks (or other local currency issuers) request when they provide loans in a local currency. There are two types of loans that we are interested: loans to acquire productive capital and loans to acquire working capital. The first type of loans is more complex because entrepreneurs don't have yet collateral in the form of mature capital (an asset that guarantees a certain yeld) to put at stake. Imagine this entrepreneur that is starting to build an hotel. If he is the owner of the land he can give the property of the land as collateral to be written in a promissory note to the bank, but the value of that collateral is inferior to the full amount of currencyneeded to buy supplies in order to build the hotel. There are many type of risks associated to many type of guarantees that a bank (or the issuer of currency) is being put at risk: it can be technical risksrelated with engineering and construction, it can be risks associated with temporary lack of particular supplies, or macroeconomic risks (country risks) like the international demand for tourism, or if your country is being subject to terrorism, etc.

The basic premise is that someone, you could call him an investor, but we shall call him a social guarantor, (and will explain why) - this person - changes the bilateral negociation to a trilateral negociation. This investor is tipically someone with mature assets and reputation in the market, society and / or the community he lives. He is going to make a deal with the bank and the entrepreneur. He is no money lender. He will sign a contract where he will take some part of risk, maybe because he has a way to hedge against that risk that he is taking from the hotel construction and exploration. The bank will accept this agreement because now he can lend the money (maybe he has some bitcoins too, it doesn't need to be a bank) without the risk of not getting back its money. If for some reason, the entrepreneur shall not repay the loan on due time, then the bank will ask the guarantor to liquidate a part of its assets and pay him with the currency that the guarantor earn from that transaction. (Normally the guarantor is a smart guy and he will manage to hoard some cash instead of selling the asset that serverd as a guarantee , also, he guarantees many deals)

You may now say (possibly when the hotel is built and receiving money from tourists) why the bank himself hasn't taken the risk of guaranteeing the loan to the entrepreneur. Possible motives: thebank, in fact, is a currency issuer, but, he may not own any assets. The bank doesn't want to accept full risk he wants to eliminate certain risks out of the loan. The bank doesn't trust the management of the hotel, there is no credit history for the entrepreneur.

What we saw until the crisis is that the commercial and investment funtion of banks where concentrated in the same entity. This brought agency problems that lead to the crisis of 2009 because banks could invest and print money at the same time, they were bringing naked loans and this added to the global monetary supply as fake money or technically speculative investment. It is not technically correct to give as guarantee something that does not yet exists and proven to give a sustainable yeld.

In the GaranteeMarket system we change the figure of the (private) investor to the social guarantor. We are interested in supporting local entrepreneurs in businesses with very little speculative hedge. With that, we mean that our interest is bridging people with wealth that are interested in suppportingother people with ideas and motivation to build, to bring something useful to consumers, to the environment and the social economy. Even if the entrepreneur is solving problems of real people in the world who don't have purchase power, we believe that by building other types of measurement like social impact or social currencies this entrepreneur can achieve a level of sustainability in his business.

There are many advantages of using guarantees to foster international trade. With the internet it is much easier that a supply chain subject becomes complex even for a small entrepreneur. If you haveworked with Airbnb or Paypal you now that if something goes wrong there is insurance provided bythis trusted agents. But imagine if any one or maybe the wisdom of the crowds (with the right knowledge and technical competence) could insure your receivable or guarantee that your package has no defects?

Through the years trade associations have developed certain codes that standardize the operations related to physical transactions (Incoterms). Also there is a cooperative of banks (SWIFT) that standardized some rules relating to international payments, even before Paypal and Ebay were even imagined as businesses. In our opinion much of the procedures and paper work related to international transactions and international payments is yet subject to a digital revolution. The blockchain technology and the internet of things provide a background to start building decentralized applications that eliminate rent seeking activities with the same or better level of efficiency of Paypal or Swift.

It is important to bring the buzz of the IoT to our discussion because in GaranteeMarket we use

smart oracles to control assets that serve as collateral and not only smart contracts that translate the traditional financial contracts. The issuing bank needs to make sure that the asset that served as collateral for the loan is being correctly mantained, that there are ways we can measure and predict the yeld of that asset. If for example the collateral used was a highway we would need to gather information from various sensors, for example we would like to now revenue information from tollbooths or the state of the pavement, etc.

Now, imagine another example where a couple of entrepreneurs create a new social business: a social laundry. You may argue that if they buy everything done (like washing machines) they don't need to build any capital and they can use directly this assets as collateral against a loan to buy these washing machines. But, that is not the efficent way of a bank working. The bank correctly managed knows that trouble can come, such as entrepreneurs not running the business as they should, lack of demand, or even worse, machinery failure and machinery mantainance costs and economic devaluation (another example is that if you wanna sell a brand new car with few miles of usage the car dealer will buy it only at a discount).

In the washing machine example the entrepreneurs also need working capital: they need legal tender to pay electricity, water bills, employees and consumables. It is possible, in our current way of managing payments, that the new business may be done 30 to 60 days of delay payments (namely workers that earn salaries at the end of the month). This means that part of the working capital can be financed by the suppliers “at their own cost” (at least interest unearned): it is the cheapest way, and most suppliers accept this terms. On the other way if your business is being a supplier of business (B2B) it means that you don't earn currency at the moment you sell your items (this would be consumer-to-business). To solve that you may need to contract a revolving credit linewith your bank (remember, the same bank that gave you the capital loan).

GaranteeMarket, however intends to support a different method of financing short term liabilities. We like to call it self issuing currency. It can be issued against collateral that belongs to the entrepreneur, that it is in his property and that will earn future income. These income may be irregular, maybe seasonal, but it does not depend in the variations of long term capital and how that capital acquisition is being financed (imagine that the Hotel entrepreneur is planning to build a new Conference complex next to the hotel), Self issuing currencies have special properties, is that they are self clearing. With certain credit limits, we can easily set up a system of local interconnected currencies, guaranteed by short term revenues along complex and interconnected supply chain. GaranteeMarket could support this currencies in terms of connecting information from sensors to smart oracles that could be stored with blockchain technology.

In conclusion, GaranteeMarket aims to deliver a system where productive capital can be reproducedto the state that it finally arrives as a mature asset with a sustainable rent. Also an entrepreneur in

that way can became a social guarantor later.

The most developed models (that we are aware) of bridge finance are being tested for SMBs the mutual guarantee societies in Europe, the SBA Act in the US, and for entrepreneurs with microfinance institutions around the world. The following graphic describes a possible implementation of ethereum:

More information and the draft paper can be consulted in twitter (english) and there is a website in portuguese. The project was present at Novabase (a portuguese partner of IBM)

The project follows Ethereum, Eris Industries and other projects that use permissioned ledgers.

https://twitter.com/garanteemarket

https://communities.cyclos.org/garanteemarket

Entrepreneurs, investors and banks: making money in guarantee markets

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After the 2007-2008 crisis it turned out to be much harder for small and medium businesses to get loans from banks without guarantees. Also, international commerce was affected: exporters could not find sufficient trade finance and in most developed countries, government agencies stepped in toprovide the necessary counterguarantees to keep the blood pumping in to the economy.

Currently, it is the government budget, disguised in state guarantee (funds) and ultimately, taxpayers, that are taking the risks, a function that is supposed to be provided by investors.

With the rise of the investment banking industry came also a confusion and lack of transparency between the figure of the banker and the figure of the investor. This is a typical principal-agent problem where the currency issuers (commercial banks) are also investors (investment banks). This led to the proliferation of uncovered investment positions, by definition: market speculation. Banks would just print money to finance market positions with "clever" collateral financial arrangements.

By definition, you cannot give as a guarantee something (an asset) that hasn't yet proven a certain yield for a certain period of time.

The opportunity is rising. P2P lending and finance platforms have demonstrated that it is possible todesintermediate the "banking function". However, in various cited reports, including a study by researchers of the Bank of England, the true function of banks is not intermediation between investors (includes depositors with government guarantees) and businesses/consummers. The real function of banks is to introduce currency in the economy. The study demonstrated that banks don't need currency deposits a priori to provide currency loans.

With this clarification we can now start to understand that:

- P2P finance / lending activities do not raise the amount of currency in the economy, eventually canaccelerate the velocity of money circulating in particular industry value chains.

- "inflated" cryptocurrencies (currencies that are bought against legal tender) do not raise the amount of currency in the economy, eventually can accelerate the velocity of money circulating in particular industry value chains.

If the previous premises are true then if follows that:

- QE- quantitative easing- expanding the currency in order to respond or stimulate economic activity expansion is bullet-proof only and only if the new currency brought to the market is guaranteed by mature assets (and it is technically correct if this guarantees are provided by States and / or international governance entities)

- Mutual crypto-credit systems and not "inflated" cryptocurrencies should provide the correct "container" for a QE policy.

Although, in a systemic analysis, it is perfectly acceptable that central banks, states or multilateral agencies be in charge of providing guarantees, specially in periods of financial distress, it may be also be questionable whether this centralized and bureaucratic institutions are working with sufficient efficiency and transparency.

The last question can be translated to another: if a self-organized, transparent, representative and secure entity should be designed to outstand the current financial "guaranteed" model. The benefits (and risks) are simple to figure out:

-Ending the confusion between the roles of the investor and the banker. Clear and regulated fees for the function of the currency issuer.

- Relief of the public budget (+public debt) and the taxpayer. Stopping the creative accounting with the infinite capacity of states in providing all sources of guarantees (deposits, investments, trade finance, and maybe other insurance policies like unemployment benefits and health)

-Generating a new source of immediate Income for investors, particulary investors that don't necessarily own or wish to lend cash but put some assets at stake.

- A public market for the reputation of SMBs and entrepreneurs that request guarantees. Business failure and insolvencies are a natural ocorrence, specially in a world of positive interest rates. This doesn't mean, however, that we should not have clear and precise records, to avoid abuse and corruption.

- And lastly, but not less importantly, expanding the economy, specially the local and peripheral economies: creating (autonomous and stimulating) jobs , investing in clean energy "cooperatives", founding startups for the "local owned" sharing economy, deploying ambitious "circular economy" ecosystems.

Decentralized marketplaces for credit and loan insurance could be the killer application to create millions of jobs. These new web platforms sometimes called DAO's "decentralized autonomous organizations" could be deployed in about 1-2 years with the development of public blockchain networks like Ethereum, where it will be possible to securily store all sorts of collateral arrangementand financial contracts.

It is important to bring out the importance of the Internet of Things for the insurance industry. Blockchain networks, could simply store self-executing financial contracts automatically translated to and written with the "ethereum" code. But even better than that, with blockchain technology, we can even think of measuring and remotely controlling various types of assets that exist in the real world. These assets could be candidates for collateral arrangements.

In conclusion, we have a system of guarantees whose main goal is to allow for the replacement and

growth of productive capital. Eventually, by trial and error, new born capital will in the future assume a position where it can be placed as a mature asset. In this view, the entrepreneur can in the long term become himself an investor. Socio-economic mobility can be achieved.

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10 elements of blockchains (illustrated)• 434 views

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1. CONSENSUS MODEL(S)

Other Models /Developments: Ripple Consensus, Bitshares' Delegated Proof-of Stake, Stellar's Federated.. , Ethereum's CASPER, Hyperledger's n-out-of-m, Multichain's random (...)

2. TOKENIZATION vs "REPUTATION-AT-STAKE"

(TOKENIZED VS TOKENLESS blockchain)

• One way or another, this is the "credit" you need to deliver in order to reward validators for

the integrity of (your) data in the network. • Read: Eris - blockchains without a token

3. IDENTITY AND ACCESS: PUBLIC VS PRIVATE (PERMISSIONLESS VS PERMISSIONED blockchain)

• Recommended reading: a brief report on permissioned ledgers

4. SECURITY & CRYPTOGRAPHY (HARDWARE, ENTROPY,ENCRYPTION, MULTISIG, HASH, MERKLE TREE, SHA-256)

A bitcoin "home made" mining farm

• Learn more about blockchain technical features, here and here.

5. GOVERNANCE RULES AND SMART CONTRACTS (& RICARDIAN CONTRACTS)

• Read: A simple contract model

• Intersection with ricardian contracts

• Governance Rules: the rules written in the software that dictate how & what operations /

transactions can be validated by the network (see the "block size limit" debate). Bitcoin canbe considered a smart contract itself.

6. EXTERNAL VALIDATION: SMART ORACLES (AGENTS & INTERNET OF THINGS)

(image credit: Osiri)

Check out the slides for IBM ADEPT . Watch the live presentation: Next Generation IoT Technologies Using The Block Chain

7. SMART PROPERTY (CRYPTOCURRENCY, DIGITAL OR DIGITIZED ASSET/LIABILITY). INTEROPERABILITY & SIDECHAINS

Object 1

• You can have self-enforceable collateralized operations with pure digital assets or assets

that are secured / monitored with the blockchain (for example, along a supply chain).

8. DAPPS: DECENTRALIZED APPLICATIONS (WALLETS, BROWSERS)

Object 2

• Learn more about Dapps with Ethereum programing languages

9. PRIVACY CONTRACTS (ZERO KNOWLEDGE PROOF; SECRET SHARING): PSEUDONYMOUS VS ANONYMOUS TRANSACTIONSHawk and Enigma projects are developing "Privacy preserving smart contracts" based on zero-knowledge proofs

Watch the Hawk live presentation.

10. DAO's or DAC's: DECENTRALIZED AUTONOMOUS ORGANIZATIONS OR CORPORATIONS

• Read more about DAO's, here. See examples here.




My Favorite Blockchain Technology Projects (update 1)

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1. ETHEREUM: THE DECENTRALIZED COMPUTER

Ethereum is a platform and a programming language that makes it possible for any developer to build and publish next-generation decentralized applications.

Ethereum can be used to codify, decentralize, secure and trade just about anything: voting, domain names, financial exchanges, crowdfunding, company governance, contracts and agreements of mostkind, intellectual property, and even smart property thanks to hardware integration.

Ethereum borrows the concept of decentralized consensus that makes bitcoin so resilient, yet makesit trivial to build on its foundation. To find out more about how Ethereum works, consult the whitepaper.

2. ERIS INDUSTRIES: MILLIONS OF B.. MARMOTS

Eris Industries empowers developers to embrace participatory software architecture via distributedcomputing and smart contract systems.

Eris products comprise the first platform that allows the full potential of blockchain based technologies to be realized in enterprise. By combining blockchains and systems of smart contracts,businesses can take any data-driven human relationship and reduce it to code – guaranteeing accurate and consistent execution of functions which hitherto required human discretion to manage.

3. FACTOM: DECENTRALIZED REGISTRIES

Factom is creating a protocol to make Bitcoin 2.0 applications run faster, cheaper, and with much less bloat.

Building an application on top of the powerful Blockchain presents developers with a few core problems: 1) The system wasn't built for real-time applications 2) The costs get prohibitive as transactions pass a few thousand and 3) the blockchain wasn't built to handle the massive number of transactions that Bitcoin 2.0 Developers want to secure with the system. Factom is built to solve these problems.

4. STORJ: DECENTRALIZED STORAGE

Created in early 2014, Storj is an open source project that aims to offer a completely decentralized,secure, and efficient cloud storage service. With its two applications, MetaDisk and DriveShare, Storj aims to revolutionize the traditional cloud storage industry.

5. LA'ZOOZ: DECENTRALIZED RIDE SHARING

La'Zooz is an open-source and decentralized collaborative transportation system, that uses cryptocurrency technology in order to establish, coordinate and grow its community of users, developers, and promoters alike.

Transportation is one of our basic human needs and yet our current system is outdated and wasteful, directing most of its energy towards transporting empty seats.

Smart transportation is all about better using the already-existing infrastructure and resources instead of building new ones. At the heart of the La'Zooz vision lies Real-time ride sharing: people with private cars can share their drive with others who ride in the same direction.

6. SYNEREO: DECENTRALIZED FACEBOOK

Synereo is a Distributed and Decentralized Social Network. Founded in 2014, Synereo is currently developing a fully decentralized online social network, powered and enabled by its users.

Synereo is encrypted, does not depend on a central server, governing body or even a replicated blockchain, making it impossible to take down.

7. ORISI: DECENTRALIZED ORACLES

Orisi itself is a for-profit startup owned jointly by Tomasz, Kuba and Grzegorz. The business model is yet to be discovered - we’ll probably provide paid-for oracle hosting services, or launch/invest insome smart contracts ourselves. Orisi and FastCast source code is released under The MIT License (that is: open source, free to use).

8. BITSHARES: DECENTRALIZED DIGITAL ASSETS

The BitShares platform itself is run and maintained by the BitShares community – an open consortium of individuals and organizations committed to providing universal access to the power of smart contracts.

Working together, this community has designed and developed the BitShares platform to include numerous innovative features within the smart contract industry.

9. RIPPLE: DECENTRALIZED PAYMENTS

Named one of the 50 Smartest Companies by MIT Technology Review, Ripple is a 100+ person startup backed by prominent investors, such as Google Ventures, Andreessen Horowitz, Lightspeed Venture Partners and IDG Capital Partners. The original developers of the Ripple protocol, support its growth by contributing code to the open-source software, as well as recruiting and developing tools for financial institutions and payment networks to use Ripple.

Ripple is an Internet protocol that interconnects the world’s financial systems to enable the real-time, secure transfer of funds in any currency. As settlement infrastructure, Ripple transforms and enhances today’s financial systems. Ripple unlocks assets and provides access to payment systems for everyone, empowering the world to move value like information moves today.

10. TWISTER: DECENTRALIZED P2P MICROBLOGGING

Twister is the fully decentralized P2P microblogging platform leveraging from the free software implementations of Bitcoin and BitTorrent protocols.

Because twister is completely decentralized no one can censor you. No one can remove your posts. Your account cannot be blocked. Private communication (Direct Messages) are protected with end-to-end encryption. Both content and metadata (the recipient address) are protected. The IP address you use to access twister is not recorded on any server. Your online presence is not announced.

11. OPEN BAZAAR: DECENTRALIZED E-COMMERCE

OpenBazaar is a different way to do online commerce. Instead of visiting a website, you download and install a program on your computer that directly connects you to other people looking to buy and sell goods and services with you. This peer to peer network isn't controlled by any company or organization - it's a community of people who want to engage in trade directly with each other.

12. GETGEMS: DECENTRALIZED MESSENGER

The primary goal of GetGems is to make it easy for millions of people to adopt bitcoin. GetGems has all of WhatsApp/Telegram functionality, with additional features.

Every GetGems user automatically gets his own protected wallet.The username is an alias to the wallet address, an innovation that allows users to easily send both bitcoin and gems to their friendsby sending a text message.

GetGems is a social network based on attention economy, If someone wants your attention, he should pay you. The blockchain is what enables the transfer of value.

13. NAMECOIN: DECENTRALIZED DNS

Namecoin is a decentralized open source information registration and transfer system based on theBitcoin cryptocurrency.

Namecoin was the first fork of Bitcoin and still is one of the most innovative altcoins. It was first to implement merged mining and a decentralized DNS.

14. FILAMENT: DECENTRALIZED IoT (INTERNET OF THINGS)

Filament (previously known as Pinoccio) is the best tool on the market for industrial sensor data collection, remote monitoring, and web-based control of the real world.

Even more importantly, Filament is building the first Decentralized IoT stack, so that any device can discover, connect, interact, and even transact, without any central authority required.

15. HAWK : PRIVACY PRESERVING SMART CONTRACTS

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Existing blockchain-based cryptocurrencies such as Bitcoin and Ethereum store all financial

transactions in the clear on the blockchain. This compromises the privacy of financial transactions,which is essential in numerous applications.

Hawk is a blockchain-based smart contract system that stores encrypted transactions on the blockchain, and relies on cryptography to retain the security of the cryptocurrency.

16. SOLARCOIN: P2P SOLAR ENERGY GENERATION

SolarCoin is an alternative digital currency that works like air-miles for Solar electricity generation. SolarCoin is claimed by individuals living in homes with Solar Energy panels on their roof or large solar electricity farms.

17. AUGUR: DECENTRALIZED BETS (PREDICTION MARKETS)

Augur is a fully-decentralized, open-source prediction market platform, intended to revolutionize the manner in which information consensus is collected and aggregated. For more information check out Augur.net and read the Augur White Paper

18. D-CENT - TECHNOLOGIES FOR DIRECT DEMOCRACY

D-CENT (Decentralised Citizens ENgagement Technologies) is a Europe-wide project bringing together citizen-led organisations that have transformed democracy in the past years, and helping them in developing the next generation of open source, distributed, and privacy-aware tools for direct democracy and economic empowerment.

19. SIDECHAINS (BLOCKSTREAM)

Blockstream’s core area of innovation is sidechains, a technology focused on improving on the blockchain, the most powerful public utility for distributed trust systems.

Sidechains are blockchains that are interoperable with each other and with Bitcoin, avoiding liquidity shortages, market fluctuations, fragmentation, security breaches and outright fraud associated with alternative crypto-currencies.

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This is not an exaustive list, it's just some projects that I found intellectually amusing and particulary interesting in my research and for a particular project.

There are lots of projects that I am not aware. For example, I recently watched Alex Tapscott speaking about a project that intends to emulate Airbnb in a blockchain!

Another interesting project that just came up last week is uPort, an indentity-linked ethereum wallet created by Consensys, a blockchain app production studio.

Can you name me other conceptually interesting blockchain projects?

Cheers,

Bruno Ferreira




The blockchain decentralizes the sharing economy to the local level: the case for shared resources platforms

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Let's keep it simple, what is behind the sharing economy:

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Trust.

I see the sharing economy as a movement towards the concept of reusing. Basically you are increasing the value and the economy of unused productive capacity which is sharable (however wedon't expect to share our toothbrush, the extension of what is shareable is subjectively variable). I believe the sharing economy should not be mistaken with political views, our perspective is merely a technical one, of an ecological mindset.

As the circular economy activates and updates the general concept of Recycling, so does the transition and permaculture movement with a culture of Reducing. Sharing is basically Reusing

underused pooled capital. We are getting to concept of smart city.

In Lisbon there is a not-for-profit Resource Plataform called CLIP - Plataforma de Recursos, that uses self issued tokens, a social community mutual credit-based currency, called clips. It works mainly at the inter-association level with projections of being open to the local neighborhood and local businesses of Alta de Lisboa, close to the Airport location.

It works like this: for each service you provide to the community including the sharing of a video projector, a training facility space or maybe a sound system for another associations' birthday party, you will get Clip credits that you can only currently reuse in a closed loop system. You also get rewarding CLIPs if you increase the range of assets that are available for lease between associates.

Clips are currently not convertible between euros and there is no exchange operator that could offer that option. It is possible that, but hasn't yet been tested, Clips could be combined with euros in mixed payments for each or particular transaction to increase the number of users and local money circulation. With LM3 the local money multiplier tool conceptualized by the New Economics Foundations start to analyze the local acummulated social impact of this local currencyusing the theory of change model.

The Clips credits and the online exchange market are currently stored in the community currency cloud service provided by Cyclos online and mobile banking solution a project developed by the STRO - Social Trade Organization. STRO is a dutch non governmental entity that has been researching money issues for more than 40 years and started experimenting local development strategies to make money work for communities since the 90's.

Cyclos started has an open source project in 2004 and uses Java programming language and mySQL databases. There is a forum where you can learn more about Cyclos development. Important and specific features are incorporated like money aging, bonus-malus systems or demurrage. This concept was used in the past as a local monetary expansion policy (and still is, with relative success), being only prevented by central banks.

The Cyclos 4, the cloud version, is basically free under the community license and you can have a maximum if 300 users and 15 active auctions per user in the basic setup. It only takes 5 minutes to create a new community and you can costumize your access with a domain html code and CSS styles.

Despite cyclos is a great product for prototyping and piloting (it even earned a prize of 50,000 USD for innovative payment systems and its code is being forked and rebranded by Sardex an Italian barter system with a turnover >30 M euros) I believe that, however, it is not the perfect solution interms of cyber security and user trustability in the system could be increased.

• For your notice, other interesting alternative currency models are the Wir Bank and the

Palmas Bank model that mixes a local social currency with microcredit for capital acquisition with legal tender. (Note: they don't use CYCLOS)

If only the database and governance rules were stored in a decentralized blockchain that would increase the trust and appropriation of the system by its users and free up Social Trade from expensive cloud services for the more than 500 registered communities. More importantly the system would never suffer from down times or DDoS attacks or backdoors being virtually incorruptible. Maybe all the communities could share an unique blockchain with a model similar to bitcoin colored coins. The unique technical aspect in Cyclos is that you have a mutual credit or initial credit options to choose.(Note: I am not aware of Cyclos downtimes or DDoS attacks stats)

With blockchain migration we shall have enabled automation for this sharing platform, expanding

the user territorial range, at the urban level, with minimum human effort to monitorize the physical movement and level of utilization of the shared resources.

In the case of the original lease model created by Clip Association in Lisbon we can think of incorporating GPS, virtual locks other monitoring sensors in the most valuable shared resources. This project would then integrate the blockchain capabilities like smart contracts, smart oracles and smart property in a IoT environment.

UPDATE: WATCH HOW SLOCK.IT MADE IT: IoT running in the BLOCKCHAIN

Click here

Disclaimer: I am a partner of Micre Portugal that is a collective associate of Clip Resources and Development association. Clip has it's genesis from the K'Cidade project (spelled capacity in Portuguese) that had support from the Aga Khan Foundation.

Me and Maria Gomes, the lead coordinator of the Clip Resources Platform, are researching and developing partnerships with international entities to jointly apply for the Interreg European territory cooperation and similar programs and we are currently open to enter into technical conversations with interested entities in order to design a network of pilot projects and knowledge dissimination practices.

If you would like to know more about our project and point us to fundraising opportunities please ask us join to our discussion group.

Cheers,Bruno Ferreira

skype: bruno82ricardo

blockchain articles bruno ricardo ferreira

Economy & Finance