Category: Banking on Blockchain

In this week’s episode, we explore how blockchain technology can help you create a digital fingerprint. Blockchain technology can help secure that personal information and empower users to control their own identity and share it between trusted entities with meaningful consent. Innovators in Canada are leading the way in building digital identity solutions on the blockchain. Blockchain can change the game in a digital age where many believe the notion of privacy is dead.

 

Our guests on this week’s episode are:

• Andre Boysen, Chief Identity Officer, SecureKey
• Joni Brennan, President and CEO, Digital Identity and Authentication Council of Canada (DIACC)
• Franklin Garrigues, Vice President, Digital Channel, TD Bank

 

Views expressed do not necessarily represent those of Navigator or its affiliates. 

A portion of our discussion with Andre Boysen is transcribed below. Subscribe here to have the Navigator’s latest insights delivered right to your inbox.

Clare: Andre could you tell our listeners a little bit about your companies origin story and how you first got involved in this space.

Andre: Yeah. SecureKey’s been working with banks to solve the online delivery service challenge for quite some time. And so what we started in this program is we’re helping the Government of Canada solve a problem they had and the challenge that the Government of Canada has is they have very important services to deliver online. The challenge is that Clare and Andre and everybody else who comes to their website doesn’t do it very often. And so the challenge is you can’t remember your password. And so the Government was locked in this challenge where they have a high value service that Canadians want but people can’t remember the password and so people are getting locked out which was frustrating, it was also very expensive for the government and so working with the banks so they came together to build a service that allows Canadians use their bank account to get to the government and that service has been quite successful and I can take you through some of the key elements.

One of the key reasons those service was adopted and accepted by Canadians is because we introduced in the service the notion of triple blind privacy which says when I use my bank account to get the government that the bank doesn’t get to see the online service I’m trying to access and the government in its place knows I came from a Tier 1 bank in Canada but they don’t get to see which bank I came from and certainly not my bank account details. Our company SecureKey which operates the network, we don’t know who they are we don’t have any personal identical identifiable information.

Clare: SecureKey has done a lot of good work with the government of Canada and IBM to build a digital identity network. But the goal of helping citizens access e-services. Could you tell us a little bit more about how that works and what types of services it covers.

Andre:  Sure. So The challenge today is for high value services things like government, getting a new bank account, or a new cell phone, or health care insurance. The challenge we have today is we can’t deliver these services on the Internet. We require you to come in for a counter visit to get to the service the first time and then we make we give you a user id and password. So the challenge with that is that as we try to grow the economy and make it more digital these in person visits are one not convenient for consumers and two they’re very expense. Any given counter visit for one of these industry players would be you know half hour to 45 minutes at the counter to photocopy your documents and sign the papers and whatnot. And that’s expensive depending what industry, that’s 50 to 75 dollars. And so the opportunity with a network like this is to take the cost down from 50 to 75 dollars down to two or three dollars. And you know a bank or a telephone company is happy to see that reduction in cost but more importantly because we can do this online now we can take the cost down but even better we can automate compliance. We can demonstrate the documents are real. We can demonstrate they belong to the person who’s presenting them and we can verify they haven’t altered since they were created. So this creates a level of integrity we can’t even do in person today. And so that’s the opportunity for business. The opportunity for Canadians is to allow you to prove you who you are and get the services you want online.

In Episode 4, we explore new crowdfunding mechanisms made possible by the advent of blockchain technology and smart contracts called Initial Coin Offerings (ICOs) and Initial Token Offerings (ITOs).

We speak to the leaders of two regulated platforms that seek to employ this new mechanism to help entrepreneurs in Canada and how they’re playing by the rules amid all the hype. We also speak to  a blockchain-based social media network who used their tokens to sponsor a Canadian athlete.

Our guests on this week’s episode are:

-Christopher Kramer, President and CEO, OneName Global

-Adrian Rosenbusch, Chief Visionary Officer, OneName Global

-Peter-Paul Van Hoeken, President and CEO, FrontFundr

-Alan Wunsche, CEO and Chief Token Officer, Token Funder (exerpt below)

Views expressed do not necessarily represent those of Navigator or its affiliates. 

A portion of our discussion with Alan Wunsche is transcribed below. Subscribe here to have the Navigator’s latest insights delivered right to your inbox.

Clare: I guess this is one of the harder questions out there almost as hard as asking you know what is blockchain. But today we’re going to be talking about inital token offerings and I’m wondering if you could in the very simplest of terms explain what that might be for listeners.

Alan:  So in order to understand initial token offerings what we should do is take a quick step back to what happened in 2017. Most your listeners will probably be very familiar with the initial coin offering craze and hype cycle that that happened throughout 2017. Many projects spun up with the intent of essentially exchanging your base currency such as Bitcoin and Ethereum for example and exchanging your crypto currency for one of their new project crypto currencies. So many of these new crypto currencies where we’re called coins on on their platforms, on these projects platforms. So what we have is essentially a new mechanism for projects around the world getting funded through cryptocurrency and this this whole initial coin offering craze took off.

Now tokens are the more generic term, tokens are the more, are the term that we actually  in the Ethereum space and there’s a standard around an Ethereum token that these projects we’re using and it’s the more it’s the more generic term because not everything ends up being a coin. So initial token offerings now is going to be and is the the next evolution of the initial coin offerings and what that will mean is a creation of an entirely new asset class because as these tokens don’t need to represent coins per say or as some call them utility tokens or utility coins for platforms they can now represent real world assets and real world value. As we all talk about it in the industry blockchain allows us to transfer value from from peer to peer and then and Bitcoin basically was the first transfer value and it was meant to be digital cash. Now we’re able to very frictionlessly and rather easily through the blockchain and securely I should add be able to transfer value that could represent shares in a business, shares in areal asset, shares in a royalty stream, many different applications. So these are not coins anymore. These are tokens and that’s where our marketplace will evolve to.

Clare: That’s interesting because I often heard those terms used interchangeably so it’s good to have that sort of differentiation in our listeners minds. As I understand it your company TokenFunder is Ontario’s first regulated blockchain venture funding platform. Can you tell us a little bit about it and what exactly that means for the market.

Alan: Definitely and by venture funding we come back around to one of the one of the initial use cases here, allowing for new projects and new businesses to take advantage of this very frictionless funding mechanism. So we were starting there as one of our first applications. It’s not the only application but as a platform, and we are the development phase of the platform, we’re currently in the token offering phase. So the the story is or are the backdrop and the story goes like this, the the coin offering craze is going on and we see that with my background, I mean you mentioned that I’m a chartered accountant, chartered professional accountant and I’ve worked in the capital market space for a long time, you can just imagine how how the regulatory environment is going to evolve and to allow this space to mature. So I envisioned and those those around me, we envision how frankly this can’t be unregulated and be sustainable going forward. There’s reasons for that which we’ll get into I’m sure and other questions that you have. The fact that we’re regulated what we did was we started working with the Ontario Securities Commission as soon as they came up with their launch pad and we brought in a new idea and that was that we would apply this token offering model to allow for all kinds of start ups in mainstream ventures to take advantage of this technology.

Now the first step in this is to launch our own initial token offering and that is a regulated security financial instrument. So by being a regulated security we’re in the process of developing a regulated platform but the regulated side of this is that we actually have, we’ve got real disclosure beyond white papers that that provide you with vision. We’ve got disclosure, we’ve got credit, we’ve got audited financial statements, we’ve got an offering memorandum, and this is how the industry in terms of creating a new asset class will emerge will emerge in ways that allow investors to feel more safe and to kind of understand what they’re buying and the nature of the regulated aspect is really that we’re accountable to the to the regulator to do as we say we were going to do and if anything even if investors have questions or concerns they know how to get a hold of us and you know we’re not in some other country asking for their crypto.

Could virtual cats break the Internet? In this episode of Banking on Blockchain, we explore the world of Ethereum, a blockchain-based platform developed by two Canadians, Anthony Diiorio and Vitalik Buterin. You’ll learn about how Canadian innovators are leading the charge in developing smart contracts and digital collectibles that will change financial markets, government records, and mobile gaming. We talk with our guests about the challenges that face Ethereum with respect to governance and scalability, while hearing how our country can best cultivate more unicorns in this space.

Our guests for this episode:

• Moe Adham, Co-Founder, Bitaccess
• Bryce Bladon, Director of Communications, Axiom Zen; Co-Founder, CryptoKitties
• Benjamin Roberts, Co-Founder and CEO, Citizen Hex

Views expressed do not necessarily represent those of Navigator or its affiliates.

Would you dig through your attic for an old hard drive if it had bitcoin on it? In this episode, we explore why Bitcoin and other cryptocurrencies have become so valuable and why Canadian investors are watching the space with interest. We take a look at new financial products being built around these cryptocurrencies now arriving on the scene – ETFs, futures contracts, trust funds, and new vehicles for investing in blockchain technologies. Find out why Canada could beat the United States in bringing regulated bitcoin products to market.

 

Our guests for this episode:

• Karsten Arend, President, Just In-Genius Inc.
• Karl Cheong, Head of ETFs, Canada (exerpt below)
• Shidan Gouran, President, Global Blockchain Technologies
• Elliott Johnson, Chief Operating Officer, Evolve ETFs

 

Views expressed do not necessarily represent those of Navigator or its affiliates. 

A portion of our discussion with Karl Cheong is transcribed below. Subscribe here to have the Navigator’s latest insights delivered right to your inbox.

Clare:  You had mentioned earlier that there are some challenges both here in Canada with the OSC and with the U.S. Securities and Exchange Commission looking at these Bitcoin ETFs and not sure what to do with them. Will we ever get to a point where there’s a real chance these products come to market and if they do what does that mean?

Karl: Yeah. So I do believe in every asset class I have ever seen whether it be gold or equities and real estate, if there is enough demand by the public it will be made available in some form. We’re already seeing some form of access to Bitcoin via over-the-counter trusts. Just because there is no Bitcoin available right now, there’s one in the U.S. I’m thinking of in particular G BTC that trades in the over the counter market. So it’s an exchange traded fund but it’s not exactly like an ETF in a sense that it trades at a 55 percent premium to the net asset value of the product because you cannot create in redeem shares. But if an investor wanted to go on an online account they can get access to the Bitcoin price by paying a huge premium to do so. And so that’s why I feel the ETF will make it far more efficient for the everyday investor to get access to a burgeoning asset class.

Now I would say though you know the timing is going to be a bit tricky. When I first started talking about this I thought it was going to be by summertime, given the demand and what we saw. And and we have filings that have been in the market place for over three years four years with the Winklevoss twins being the first to file. So I feel they’ve been working with regulators and they’re going to need to continue and educate and address these concerns. I would say it’s probably going to happen in the next three years. But that’s kind of … I don’t have the crystal ball. And obviously regulators will do the necessary homework they need to on this product. But as it becomes more of a utility in society and you see more companies accepting crypto currencies,  you’ll see others like you know Kodak, for example, they’re creating their coin that they can pay others and remittances in other areas. I feel this this whole blockchain and Bitcoin concept can really disrupt many and it becomes more everyday usage. You’ll see a product eventually.

Clare: Yes exactly. And you know what the regulators have been okay with, we saw back in February the OSC approved Canada’s first blockchain ETF. Is that a different way to go, is that is that a better way to go right now. And why do they think that’s a that’s a better product or a product that has less uncertainty than say a Bitcoin ETF.

Karl: So we also launched a Bitcoin ETF last Friday and so I expected less red tape with blockchain ETFs. There are several in the U.S., there’s a few here in Canada now because it’s investing in the underlying securities. And so I’ll give you a few examples of companies that we hold in our blockchain ETF that you wouldn’t necessarily affiliate blockchain with the name. We hold companies like IBM. IBM, if you go onto their website I’m sure you’ve heard of software as a service, you would see something on the website called blockchain as a service. So they’re enabling other companies to use the blockchain technology in the one example I’ll give you as they’re partnered up with Wal-Mart for a pilot case study on how to track food and produce. They have this one example regarding a bad crop of mangoes. Wal-Mart went through their normal processes to try to identify the farm it came from to avoid you know food recalls and borne illnesses for example. And it took them about six and a half days to actually track that down via phone calls and other methods that they traditionally have. Wal-Mart partnered up with blockchain and within a consortium and it’s really important to distinguish blockchain could either be public which is the crypto currencies or private and in this case it was a private blockchain, Wal-Mart had all its suppliers on this blockchain. There’s no mining or what not. Everyone knows who everyone is on this blockchain it’s just an open ledger that’s verified by one or two people. So in this case Wal-Mart entered into a bar called of the mangos and identified where that farm was within 30 seconds. Right. And so you can see the time in efficiency and cost that this technology can produce.

Over time it will be something like, I think like what we saw with cloud computing and Amazon. So very early on Amazon in 2011 started investing in the cloud. We all had high hopes that it would be a great business line for them. Today, fast forward web services is a significant part of their overall revenue and contributor to growth. So the way we have seen the blockchain ETF come to market because they’re playing it more pick and axe, you know think about like way back when in the 90s many people wanted access to the internet and the only company available for purchase was AOL right. And so you know I liken it to that period because right now you have certain blockchain companies that haven’t been a blockchain company for very long. They’ve changed their name in some cases to avoid getting delisted and some of them kind of very eerily reminiscent to the dot com era. And so with these products that are coming to market including ours of course, we are screening through and ensuring that you’re getting leverage to the blockchain exposure but we’re investing in infrastructure, in companies that have the resources to to build in this technology. RBC for example and Goldman Sachs that use this technology but you know it’s too early stages right now because there’s no one line item that shows blockchain revenue and that’s the challenge of creating portfolios so most of us are creating it via indirect exposure.

Everyone is talking about blockchain, but does anyone really know what it is? In this episode, we sit down with blockchain guru Don Tapscott, the co-author of Blockchain Revolution and co-founder of the Blockchain Research Institute to help us answer that key question and why Canada is at the heart of this emerging industry. Also, Don gives us a surprise update about his critically acclaimed bestseller.

A portion of our conversation with Don Tapscott is transcribed below. Subscribe here to have the Navigator’s latest insights delivered right to your inbox.

Clare: Let’s kick things off with a question on all of our listeners minds what is block chain?

Don: A block chain is just a technology to allow individuals and organizations to share information in a way that everybody can rely on the way the information is shared to be accurate. Mostly it’s a network in which get a lot of different people to agree on something when they might not necessarily trust each other.

Most people would say it’s a distributed ledger technology and we think of it quite differently, as the second era of the internet. For four decades we’ve had an Internet of information. But when I send you some information a PowerPoint or e-mail, I’m actually sending you a copy, even with a website I keep the original. When it comes to assets things of value like money, or stocks, or loyalty points, or carbon credits, or music, or art, or identity’s, or intellectual property, or you know votes which are now capital, value that belongs to somebody, sending a copy is a terrible idea. This has been called the double spend problem by cryptographers for a long time. And the problem got solved by an anonymous person or persons named Satoshi Nakamoto they came up with the bitcoin protocol. Bitcoin is an asset, a crypto currency, but what really makes it important to all of us is none of that. It’s the underlying blockchain technology.

For the first time ever now people can handle assets to transactions, communicate and manage them peer to peer and trust between people is not achieved by a big intermediary like a bank, government, credit card company, social media company, whatever. It has achieved by cryptography, by collaboration, and by clever code.

Clare: There are a few challenges still for blockchain adoption such as scalability and sustainability and there are many disagreements within development communities about these two topics. I read that bitcoin can process somewhere around 7 transactions per minute and Visa and Mastercard can obviously do thousands and thousands of transactions a second, so are we going to see a solution soon to that scalability challenge?

Don: Ironically speed is going to be one of the biggest benefits of blockchain not just in terms of number of transactions but speed from the financial industry. Think about it. You tap your card at Starbucks and a bunch of messages go through half a dozen companies each with ancient technology and then three days later clearing the settlement occurs where someone actually gets paid. Well ifall of that we’re based around a distributed ledger. There would be no three day settlement period because the payment in the settlement would be the same activity, just a change in the ledger.  So over time I think it’s inexorable that not just technology will get better but the payment system will move to blockchain.