The MIT Media Lab's first digital currency director is transitioning out of his role as the leader of the research initiative.

To be announced later today, former White House senior advisor Brian Forde will be migrating to MIT’s Sloan School of Management where he will serve as a senior lecturer and teach two classes on cryptocurrencies. Forde cited other factors as influencing the decision, such as his desire to move back to Los Angeles, his recent engagement to his fiancee and his desire to focus on a forthcoming book.

Representatives of MIT's Digital Currency Initiative, first launched in 2015, reported that the transition has been pending for months, while Forde said he has been seeking to initiate a September transition since May.

Speaking to CoinDesk, Forde commented on how the MIT-based project has thus far played a key role in organizing events, promoting diversity, funding development and embarking on research projects aimed at advancing blockchain technology.

He said he was perhaps most proud of the work done to promote student interest in the emerging technology, calling this the group’s “main priority”.

Representatives from the DCI said there are currently no plans in place to fill Forde’s role. MIT Media Lab remains under the leadership of director Joi Ito.

Looking back, Forde acknowledged the sometimes difficult position of managing the expectations of the diverse set of stakeholders that make up the burgeoning bitcoin and blockchain industry.

For example, Forde said he was conscious of the need to strike a balance between appearing supportive and distracting from efforts organized by the open-source community, addressing criticism that the organization perhaps hasn’t been more public about its work.

"Looking back, I think we could have been more helpful to the community by hosting more events and workshops at MIT. [Early on] we were very sensitive to any perception that we were taking too much of an organizational role supporting bitcoin," he said.

He went on to remark about the difficulty of choosing projects to sponsor given the demand placed on the MIT DCI following its launch. Still, Forde said he believes he was able to prioritize high-impact engagements, including work with Mexico's Ministry of Finance as well as the Bank of England.

He concluded:

"These are projects that are just starting to see light."

Brian Forde image via Wired

Academic ResearchMIT

Ernst & Young has announced six startups will participate in its first-ever startup contest focused exclusively on blockchain.

Over a six-week period beginning next week, the firms will work with mentors from the "Big Four" accounting firm to build products focused on digital rights management and energy trading.

The founder Ernst & Young's Startup Challenge, Jamie Qiu, said that the selected startups represent his firm's belief that the potential benefits of blockchain expand beyond the financial sector.

Qiu described the challenge's dual focus:

"These two key areas are ripe for change and we believe blockchain has the potential to bring about notable enhancements in productivity and transparency."

The selected startups include Adjoint, BitFury, BlockVerify, BTL Group LTD, JAAK and Tallysticks.

Over the course the six week program, the startups will work with mentors at Ernst & Young's Canary Wharf, London, offices to build products aimed at ensuring intellectual property rights can be more easily managed and to make it easier for new business models to evolve in the energy trading space.

Mentors include Oliver Thomas, Viacom’s director of strategy and digital; Graham Davies, PRS for Music's director of Strategy and Digital; Matt Phipps-Taylor, head of insights and innovation for PPL; and Peter Walesby, Discovery's vice president of finance.

This third annual Startup Challenge is the first to focus exclusively on blockchain applications, with last year’s cohort working to build new supply chain technology.

Concluding 20th October with a demo of the products, selected prototypes will be given additional opportunities to develop their pilots with its support, Ernst & Young said.

Image credit: James W Copeland / Shutterstock.com

Ernst & YoungStartups

If Microsoft Azure's CTO is right, R3CEV may have just been the beginning.

Mark Russinovich envisions a world where every industry is involved in a blockchain consortium. In fact, since the network effect of a blockchain is only amplified by the number of participants, he thinks this future will prove inevitable as companies seek efficiency in numbers.

And there's evidence so far to suggest that Russinovich is right.

Since blockchain industry groups first began to pop up last year with the formation of financial consortium R3CEV, the rate those efforts being announced has only increased. To meet the growing demand, Microsoft went so far as to launch Project Bletchley, an effort designed to make it easier to establish consortia.

Whereas Microsoft's Blockchain-as-a-Service (BaaS) suite of tools will remain open to all protocols, consensus algorithms and databases, Bletchley was built from the ground up to help companies in the same industry take advantage of their similarities, even while they compete against each other.

Instead of wondering where the next consortium might emerge, Russinovich argues we need look no further than the existing consortia seeing to the needs of various industries. Where they exist, he said, intermediaries exist, just waiting to be made more efficient by blockchain or cut out of the picture entirely.

Russinovich said of financial firms so far interested in the idea:

"If they’re going to get disrupted, they want to do it to themselves and then take advantage of the disruption."

Disrupting consortia

Typically, a consortium is owned and operated by competitors within an industry as a way to create shared standards, unify supply chains and self-regulate so as to return profits to the industry as a whole, according to the Ecommerce Digest definition.

Examples that demonstrate the diversity of such vertically connected organizations include the British Retail Consortium, connecting the region's retail outlets and related businesses; the Additive Manufacturing Consortium, based in Columbus, Ohio, and run by EWI Associates; and the newly formed IoT in Healthcare Consortium, a not-for-profit, subsidiary organization of The Intelligent Health Association.

Though Russinovich couldn't go into details about which specific consortia Microsoft is meeting with, he said that the company is seeing "huge interest" across sectors, including retail, manufacturing, financial and healthcare. "We're seeing it all," he said.

To accelerate the formation of related blockchain consortia, Bletchley offers a framework of distributed ledger modules with different functionality derived from requests of previous customers. Instead of building from scratch, the companies can form consortia and share what they've learned.

Russinovich calls it best-practices-as-a-service for blockchain.

He said:

"This is part of the vision for Bletchley, vertical solutions that are focused on what we've learned with our partners where these pieces of technology fit together to solve a problem that other people in organizations in the same industry, with the same scenarios, could take advantage of really quickly."

Securing the consortia

But building a consortia to share skill-sets and make supply chains more efficient is only as valuable as it is secure.

Currently, Microsoft has two endeavors aimed at tightening up security around two crucial areas: the smart contracts that run on consortia blockchains, and the edges of blockchains where third-party data is given entrance.

During the original Bletchley launch, Microsoft unveiled a new form of middleware called 'cryptlets' designed to serve as gateways that allow trusted data to interact with a blockchain.

Cryptlets are code that can be executed in a verifiable way — the blockchain calls out to a cryptlet that can then "inject" into the distributed ledger real-world data such as the price of a commodity from verified sources. In a Microsoft white paper the company describes cryptlets as the "fabric" used to construct a blockchain enterprise consortium.

Whereas cryptlets are focused on making sure the edges of a blockchain are secure, Kinakuta aims to make what happens on the blockchain less susceptible to bugs.

Unveiled last week, Kinakuta is an early-stage working group where industry leaders have been invited to help make smart contracts more secure. If industry consortia are ever to form, the success of efforts like this are crucial.

As was made clear by the collapse of The DAO smart contract earlier this year, vulnerabilities in these programs can have wide-spread ripple-effects if enough people agree to the terms.

To make such bug less likely, Microsoft's director of business development and strategy, Marley Gray, told CoinDesk that Kinakuta employs a custom coding language designed to minimize human error.

Gray told CoinDesk:

"It will be closely linked into the Bletchley Project. A huge part of Bletchley is making blockchain secure."

Building on the past

By creating a framework with which consortia members can connect and enabling safe ways for consortia members to port-in their own data and data from trusted third-parties, Russinovich believes Microsoft has laid the foundation for an explosion of blockchain industry groups.

Microsoft first entered the blockchain industry in late 2014 when it rolled out its inaugural partnership with bitcoin payments provider BitPay. One year later, it would launch a new Blockchain-as-a-Service toolkit hosted on its Azure cloud development platform.

Since then, Microsoft has added over a dozen third-party "tools" to the platform, including most recently, a services created by cryptocurrency projects Monero and Tendermint.

As part of Microsoft's move to lay the foundation for wide-spread consortia, the company announced Bletchley in June, followed earlier this month by the opening up of access to its Blockchain-as-a-Service offering to all users of the Azure testing environment.

Currently, Microsoft is working on cryptographic tools designed to give future consortia members increased privacy while still leveraging the reliability of a shared ledger. According to Russinovich, his goal is that within the next three years consortia building with Microsoft’s tools will be operating on a larger scale with fewer middlemen.

Russinovich concluded:

"I think we’ll see blockchain in production in scenarios internal to companies, in consortia that are participants working together across a variety of sectors where we’re going to see some real-world usage of it."

Image via Michael del Castillo for CoinDesk

Microsoft AzureR3CEVTechnology

South America's biggest stock exchange operator has joined the R3 distributed ledger consortium.

BM&F Bovespa, based in Brazil, announced today that it is now part of the effort, launched last September. The news comes as more financial institutions and startups in the Latin American region and around the globe begin to experiment with the technology.

Fabio Dutra, business development managing director for BM&F Bovespa, said in a statement that the company is looking to "future-proof" its markets by exploring use cases for the technology.

Dutra said:

"Innovation with appropriate regulatory oversight is paramount to making the Brazilian markets even more efficient and reliable. Shared ledger technology may play an important role here.”

While it's unclear what aspects of the technology BM&F Bovespa would look to integrate, recent news that the company is beefing up its market surveillance efforts indicates it could have an interest in mechanisms for increasing transparency.

The exchange, which traces its origins back to the 1890s, has spent much of the past year growing its footprint within Latin America as a major destination for stock activity. 

Its decision to join R3 follows the addition of insurance giant MetLife and Chinese financial institution China Merchants Bank in recent weeks.

Image via Wikimedia

ExchangesLatin AmericaR3CEVSouth America

China's state social security system is reportedly looking into how it could leverage blockchain technology.

According to state-run newspaper China Daily, Wang Zhongmin, the National Council for Social Security Fund's vice chairman, the office is exploring the technology with the goal of reducing transaction costs.

The article, while presenting a potentially notable development from China, had few details on what this integration would entail.

Zhongmin said:

"There's no doubt that blockchain technology will be used in the Social Security system because of its valuable applications in the investment and management of social security funds."

While it's unclear what the integration would look like, it mirrors other explorations happening elsewhere in the Chinese government, including its central bank, though these trials appear to be more focused on financial technology more broadly.

Cooperation among business entities in the country as well as work with firms outside of China indicates that both private and public sector interest in blockchain exists. Investor activity in the country has also been on display in recent months, as shown by Chinese participation in Circle's recent $60m funding round.

China flags via Shutterstock

China

A Florida state senator is drafting legislation that could see bitcoin recognized as money in the US state.

Senator Dorothy Hukill says that while in the early stages, the draft legislation will seek to balance protections for consumers and startups. The effort carries additional weight given that a Florida judge tossed out charges in a criminal case earlier this year on the grounds that bitcoin doesn't fit the state's definition of money transmission.

Hukill, a Republican who represents Florida's eighth district and serves as chair of the Finance & Tax Committee, suggested that the particulars of the bill – the first of its kind in Florida – are still being developed.

Hukill told CoinDesk:

"I think you have to recognize it at some level, so you can legislate and protect your constituents. Then you have to figure out what you recognize it as and how you regulate it."

While Hukill didn't have an exact date to share, she suggested that her office has a goal of submitting the bill to the Florida State Senate sometime before 2017. The state’s legislative session doesn’t begin until March, she said, and with election season underway, any "substantive" bills have to wait until after Election Day in early November.

Hukill also indicated that she would seek feedback from industry stakeholders as the bill moves ahead, but said that process likely wouldn't start until the bill's contents are more defined.

The effort in Florida marks the latest attempt on the state legislative level to put in place regulations for bitcoin and blockchain technology.

States like California, North Carolina and New Jersey, among others, have moved in that direction, though in some cases not without courting controversy. Hukill referred to the backlash sparked by New York's state-specific licensing regime, the BitLicense, expressing hope that Florida's bill will encourage innovators rather than putting them at a disadvantage.

"If we can fit them under our current law, where it's actually money and can be used legitimately so we’re not chasing people away, that’s what we’re looking to do," she said.

Hukill argued that the bill is needed in part because of growing interest in bitcoin as a form of money, citing examples of local businesses accepting the digital currency.

"It’s not everywhere, but more and more I see companies accept bitcoin," she said. "So I think people will start to say, what is that? How can I use it?"

Any future growth in use, she said, drives the need for regulation that would put in place protections for those unfamiliar with the technology.

Image via YouTube

FloridaLawRegulation