Building the blocks around the smartest cryptocurrency on the market



We’re talking Blockchain – but it began with Bitcoin.

So what is Bitcoin?
Bitcoin is a cryptocurrency and a digital payment system.  Invented by an unknown programmer (or a group of programmers), it was released as open-source software in 2009. There is a market cap with Bitcoin.  The value of an individual Bitcoin has increased substantially during this time, every year more and more merchants and vendors accept bitcoin as payments for goods and services, and millions more unique users are using a cryptocurrency (digital) wallet.

Why is there a worry about Bitcoin?
There are many concerns related to Bitcoin, price volatility, doubts around legal status, tax and (lack of any) regulation, Bitcoin has been notorious in criminal activity, and is well renowned for the role it has in cyber-attacks like Ransomware.  But for believers, Bitcoin has huge upsides, de-centralised thus outside the control of a central authority, privacy, deflationary, low cost to transfer funds across borders, but most it is an attractive “store of value”.

Why is Bitcoin important?
Bitcoin is important because it requires a blockchain.  A blockchain is an undeniably ingenious invention, but since Bitcoin, blockchain has evolved into something greater.  And the main question every person is asking is – what is a blockchain?

So what is a blockchain?
The simplest explanation “Blockchain is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.”  Sally Davies, FT Technology Reporter.

How does blockchain work?
A blockchain is a distributed database that is used to maintain a continuously growing list of records, called ‘blocks’.   Each block contains a timestamp and a link to a previous block. A blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retrospectively without the alteration of all subsequent blocks and a collusion of the network majority.   Functionally, a Blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don & Alex Tapscott, authors Blockchain Revolution (2016).

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance.  Decentralised consensus has therefore been achieved with a Blockchain.  This makes Blockchains potentially suitable for the recording of events, medical records and other records management activities, such as Identity Management, transaction processing and documenting provenance.

The entire financial, legal, and record-keeping industries are being disrupted using this decentralised, secure, and inexpensive method. It has therefore caught the eye of the Bank of England plus other large organisations including Microsoft, IBM and Cisco have consequently started to take note of it.

In summary the opportunities are infinite.

People need to understand that “blockchain” is NOT the same thing as “Bitcoin”.

Bitcoin was the first blockchain system designed, but there have been a number of others since then which are very different, designed by different people, often for different purposes. These people are in the business of designing things for use by corporations to operate their businesses to drive a competitive edge. This is no different to what Amicus ITS has been doing for 30 years, problem solving and designing solutions that deliver business value as we look constantly to the horizon at future technologies.

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This week’s technology news – 8th August 2014

Microsoft’s fight against the Feds ramps up another notch

The US Government is seeking to have email data from Microsoft’s Dublin server handed over, but the technology giant has been firmly resisting any such interference in a unique legal case that has been escalating since December 2013.  One of Microsoft’s main attractions for data sensitive companies is to allow its users to choose where their data is stored, helping them maintain strict governance and compliance controls and they argue that this case is about protecting data customers’ rights to privacy in the US and around the world.  As part of an ongoing drug-trafficking trial, a New York federal judge dismissed Microsoft’s latest appeal against a government warrant demanding access to emails stored on servers in Ireland.  Microsoft immediately announced plans to challenge the decision.    Tech companies worldwide have rallied around in support of their competitor on the issue.

The UK Government acted swiftly last month with emergency legislation to close a loophole, following a change in European law, which would have left a gap in the Government’s ability to provide unbroken access for the security services to people’s phone and internet records. as part of wider Government counter-terrorism measures.    Whilst not implying that the sort of data held by businesses is on a par with terrorism threats being tracked, it is the principle of privacy at stake – and the impact of this case will have important ramifications for business users regarding their data storage in the UK and Europe.

Bitcoin bandwagon

First it was the banks seeking to regulate Bitcoin, now the UK Government wants to enter the fray and explore commercial opportunity for virtual/cryptocurrency.   The tenet of its value (currently 1 Bitcoin is worth £347), is held by people’s belief that the virtual tokens have value – and there is a finite number of them being traded.   With retailers increased adoption of Bitcoin (60,000 worldwide), this growth in popularity and rising trade endorsement, has prompted Chancellor George Osborne to undertake a review of the merits and risks of including virtual currency as part of his flagship aim to promote the UK as the “global centre of financial innovation”.

Bitcoin has proved popular with the public, but it still holds risks as it remains unregulated. This is part of the public attraction, being alternative, but also part of the explanation of its allure to criminals as there is no registry identification, only a randomised Bitcoin address (27 – 34 letters and numbers creating a virtual postbox and traded in a Bitcoin “wallet”.  The European Banking Authority is concerned at the lack of consumer protection and the Bitcoin market IS volatile.  Market value is swayed by the volume of online enquiries, chatter and “mining” from the downloads (part of a reinforcement cycle identified in recent research by the Federal Institute of Technology in Zurich).

With the Government aspiring to identify alternative sources of finance for lending to business, Bitcoin might leave too strong a taste of risk on the tongue of industry for the timebeing, and would have to demonstrate greater stability – the exact antithesis of what Bitcoin wants.  This might prove one hurdle too far at present for a Chancellor seeking to be innovative and “on trend” with the City.

The end of an era – Apple and Samsung agree to drop patent lawsuits

Many will recall that following the success of the iPhone, Apple started filing lawsuits for copyright infringement because they believed Samsung’s phones looked a bit too similar to theirs (both on the outside and what was on screen – including the individual designs of App Icons).  This has been ongoing for many years until now.    We are happy to report that an agreement has been made (ex US) covering Australia, Japan, South Korea, Germany, Netherlands, Italy, France and the UK – where all claims have been abandoned.

This potentially signals the closure of the saga (which will include the US) and this incredibly expensive, drawn out and occasional rather nasty patent fight, which has resulted in products being withheld from sale.

Despite the assumption that the outcome would be some new form of cross licencing deal, the two companies have put out statements stating they are NOT pursuing any new licencing deals or other pacts.  Samsung’s shareprice fell after the news.  However, whether this will change the ultimate judgement or outlook for the US case has yet to be seen.  Such a strategic alliance would certainly shake up the mobile industry, putting the squeeze on anyone who is not Apple or Samsung.

BlackBerry has finished the job cuts, but what does its future look like?

After a brutal three years for BlackBerry it seems the worst (the job cuts),  is finally over. Current CEO John Chen hopes to bring the company back into the black in 2016.  So how should the former smart phone juggernaut rebuild themselves in an Apple, Google and Microsoft world?  Being realistic, even in a best case scenario BlackBerry will not be eating Apple’s or Google’s marketshare in the short term, so what’s their best option?

Future Smart Phones should be designed with their primary audience in mind; corporations and governments, these customers demand ultra-secure comms and this should be the main area of focus for their devices. BlackBerry should also not shy away from their roots, while an all-touch option is good, their flagship device should have that old-school Blackberry physical keyboard. Despite popular opinion, they still have their strengths which make them stand out from the slab crowd.  Finally, services are where the real money will be made – and a chance to win over other phone users without getting them to change their phone.

Blackberry has already delivered their BBM app to iPhone, Android and Windows Phone, and they also support their competitors’ devices on their latest servers.  If they made a bigger push in this direction they could substantially build a new user base and really get businesses excited about using BlackBerry once again.

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This week’s technology news from Amicus ITS – Friday 19th April 2013

UK SMBs Main Target For Cyber Threats
Symantec’s latest Threat Report shows cyber attacks having risen by 42% in 2012, with the UK being the subject of 20% of all global threats. Whilst smaller businesses with weaker security systems are traditionally the initial target, these are seen merely as stepping stones for larger company breaches. BYOD trends have added to the headache with virtualisation, mobility and cloud requiring security across all devices (32% of all mobile threats were aiming to steal information). Even if companies have not been directly attacked, their websites have been compromised, spreading malware (30% up on the previous year). We believe companies must be more proactive and create “defence in depth” security measures, as it is no longer an option to ignore this issue if they are to stave off future attacks.

Microsoft obtains its largest patent licensee with Foxconn
Microsoft will be celebrating this week with the news it has secured its largest ever patent licensee with Taiwanese phone maker Hon Hai, owners of Foxconn. Although details of the deal are currently scarce, Microsoft will be getting a flat fee per Android device produced, accounting for 40% of Smart Phones worldwide including Kindle Fire. These patents include how file names are implemented, data management and contact databases. Microsoft already extracts royalties from most big name Android manufactures such as Samsung, LG and HTC. Adding Foxconn gives Microsoft a highly profitable new revenue stream, which is more per device than the manufacturers make on the sale of phones themselves.

Amazon takes on Google with their App Store
Amazon has announced over the next few months it will be extending support to almost 200 countries from their app store that runs on top of Android for the Kindle Fire tablets. The Amazon Appstore for Android will support more countries than the native app store available on other Android tablets, such as Samsung and HTC. Indicating Amazon’s commitment and momentum in the mobile sector it will drive sales of Kindle devices in countries where Google’s app store is not supported. In our opinion, it also fuels rumours of Amazon’s move to the Smart Phone sector later this year. Without the support of additional countries, the company would have trouble launching worldwide.

Sony streams in to lay claim to world’s fastest home internet
Google Fiber has been generating internet chatter with its rollout of 1Gbs internet access in America. However Sony have announced what they claim is the ‘world’s fastest commercially-provided home internet service’, which launched in Japan this week providing 2Gbps downloads. We think Sony may be using the service to help the launch of their next-gen HD streaming service later in the year, driven by their acquisition of Gaikai. The launches of these super speed internet connections could make the commercial and business thin client PCs mainstream. From our point of view, it is no coincidence that Google and Sony who would be interested in delivering these services, are preparing the groundwork to make this a reality.

Money on a flashstick
Bitcoin a new virtual currency is making waves. Whilst used for buying goods and services online its distinct feature is its anonymity and independence. Hard to regulate and with transactions tough to trace, it’s a growing honeypot for black marketeers. It’s also an interesting alternative to cash if you are in a country caught in a crisis. Largely disliked by banks and governments, it appealed sufficiently however to the Wikelvoss twins, who went public this week claiming to own 1% of the internet currency worldwide ($11m). They have preserved security from hackers by keeping their digital cash on flashsticks in safe deposits in different banks. Anonymity is a big attraction, however the risk due to wild fluctuation in bitcoin value will keep the meek at bay. We consider that if it continues to grow, it could signal a new player in the global economy. In the meantime, businesses will be more comforted by traditional forms of payment for services, rather than in kind.