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Is This the Blockchain Firm That Will Get Enterprise to Finally Embrace Open Networks?

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Concordium, an ambitious project whose founders have close links to companies including Volvo, IKEA, Saxo Bank and Nasdaq, is looking to shake up the seemingly glacial world of enterprise blockchain. 

The most striking thing about Concordium, which launches its third testnet next month, is the way it pushes what was once anathema to big corporates: public and permissionless blockchains.

Businesses, wary of tipping their hands and giving away any competitive advantage, have traditionally preferred the idea of private and permissioned blockchains. But many advocates of blockchain tech believe only open systems hold true transformational promise. The oft-cited analogy centers on the relevance of internet versus intranet.  

Read more: ‘Boring Is the New Exciting’: How Baseline Protocol Connected With 600 Corporates

Toeing the line between the privacy requirements of regulated businesses and full-broadcast blockchains like those of Bitcoin and Ethereum has led some very smart people to opt for an attenuated architecture when it comes to distributed ledgers. 

However, Concordium is confident it has found a third way, keeping sensitive data private using a clever identity and zero-knowledge-proof (ZKP) system, providing firms with a safe, flexible option to deploy open blockchains.

The momentum around projects like Baseline Protocol, which now has some 600 big firms using it, is a solid indicator ZKP tech is ready for prime time.

‘Something totally new’

According to Concordium CEO Lone Fønss Schrøder, sometimes you need a permission-based ledger; but in order to realize new business models, it has to come in combination with baked-in permissionless possibilities. 

“I think that’s really what large corporations are looking for,” said Fønss Schrøder. “If you look at Hyperledger, for example, or R3, I don’t think it is blockchain in the sense of really providing something new. It’s not decentralized. Companies are seeing it as just another way to do their mainframe applications. But when you talk about permissionless blockchain, it’s something totally new.”

Blockchain today simply doesn’t meet the needs of corporations, says Fønss Schrøder, and a lack of permissionless flexibility has led to no uptick in business adoption. 

Concordium’s chief marketing manager, Beni Issembert, went further: Businesses underwhelmed by today’s enterprise blockchain offerings are squarely in Concordium sights.

“Businesses that are open-minded feel a lot of frustration and desolation when it comes to using Hyperledger and R3 Corda. And we are talking to those disappointed businesses,” Issembert said.

lone-fonns-schroder
Concordium CEO Lone Fønss Schrøder
Source: Concordium

Big-name partners

It would be easy to write Concordium off as some kind of naive newcomer – both R3 and Hyperledger declined to comment on the Concordium white paper. 

But the project, which has its roots in Denmark, features an impressive cast of players from business and academia. On the science side, Concordium’s research center at Denmark’s Aarhus University is run by widely cited cryptographer Ivan Damgard. Last September, Torben Pryds Pedersen, creator of the Pedersen Commitment cryptographic primitive, was appointed as Concordium’s CTO.

Read more: Staying Alive: Why the World of Enterprise Blockchain Has Turned to Collaborations

In terms of corporate clout, Fønss Schrøder is a boardroom director at IKEA, vice chairman of Volvo and spent 22 years at A.P. Moller Maersk. Concordium’s founder, Lars Seier Christensen, founded Saxo Bank in 1992, while the blockchain’s advisers include former Danish Prime Minister Anders Fogh Rasmussen, and heavy hitters from Nasdaq, Mastercard and Skype.

It’s one thing to announce a paradigm shift in the way businesses intend to use blockchain technology, but another to show hard evidence of this new permissionless demand. 

“We are already in contact with those people [Volvo and IKEA] and looking at ways to fulfill what they would like to do. But we are not only targeting 20 or 40 businesses,” said Issembert. “We are focused on the next generation of commerce, the new unicorns; firms that you don’t have to convince the best approach is an open system.”

Open use cases

It should be pointed out that Volvo has blazed a trail when it comes to tracking the minerals used in electric car batteries with the help of Hyperledger Fabric. IKEA has also done some interesting blockchain experiments with the likes of Tradeshift using the Maker protocol. 

Neither Volvo nor IKEA would confirm to CoinDesk whether they were testing Concordium at this time.

Read more: IKEA in ‘World First’ Transaction Using Smart Contracts and Licensed E-Money

If large corporations have been mostly happy with proofs-of-concept using closed enterprise blockchains, what are the new use cases that open systems like Concordium can offer? 

Fønss Schrøder said a major opportunity exists in rethinking the way procurement and supply chains work, for example. (In terms of new entrants to the enterprise blockchain space, there have also been some interesting moves from the EOS ecosystem, particularly in Latin America.)

“It could be smart contracts, which actually will function as marketplaces for you and your whole procurement sector,” said Fønss Schrøder. “I think about what Maersk has been doing, but the disadvantage for Maersk is that this should never have been built on a permission-based blockchain; it should have been permissionless. But that’s the kind of logistical use case I’m sure we will be able to support.”

Volvo board member Fønss Schrøder also sees plenty of uses for open blockchains in the car industry, across secondary markets, for instance, and the service agreements that come with that.

“Nearly every car sold by Volvo has some kind of lease arrangement or car-care, and blockchain is well suited to support this on the insurance side and on the service side,” said Fønss Schrøder.

Public, but private

As far as the ZKP secret sauce, Issembert called this the “backbone of the network,” but could not disclose details.

“For the ZKP design approach, we are going to come to the market with our own solution. It’s not something that has been seen yet,” he said.

Read more: WATCH: ‘Big Four’ Exec Says Privacy Is Key to Enterprise Blockchain Adoption

Next month sees Concordium’s third testnet come into being, with a view to going live in January 2021. 

“We will have the smart contract layer ready and then we will see which corporations will build on it,” said Fønss Schrøder. “It will be very interesting. I don’t think we will disappoint you.”

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/concordium-permissionless-enterprise-blockchain

Blockchain

Tesla Reports $23 Million Impairment From Its Bitcoin Holdings

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Tesla, Elon Musk’s electric car manufacturer, released its quarterly earnings results, reporting more than $1 billion in profits for the first time since its launch.

It’s not all fun and games, though. To the delight of Elon’s crypto Twitter fans-turned-haters, Tesla’s investment in Bitcoin made it $23 million in losses after the markets crashed during the second quarter of 2021.

Oddly enough, the only mention of bitcoin appears in the “profitability” section of the report, mentioning the loss.

“Positive impacts were partially offset by growth in operating expenses including increased SBC, Model S/X ram (negative margin in Q2), additional supply chain costs, lower regulatory credit revenue, Bitcoin-related impairment of $23M and other items.”

Tesla Lost $23 Million… But Did It?

The $23 million loss might seem digestible considering Tesla invested about $1.5 Billion in Bitcoin. An almost 50% drop from its ATH could certainly trigger concern among investors, especially those who fear for a continuation of the downtrend that could accelerate upon Bitcoin’s drop below $30K.

However, this stat may be due more to the exploitation of a legal loophole than to an actual monetary loss.


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According to the US norms, accountants must record the value of their cryptocurrency investments at the time they are procured. If cryptocurrencies go up in price, nothing happens as long as the company hodl. The business only has to record the transaction in case of a sale. However, when prices go down, the company must record the decrease in its investment as an impairment charge.

Therefore, even though sales gains may be recorded, the tax incidence may be softened by the declines during the time the company hodled its tokens.This is due to the classification of cryptos as an “indefinite-lived intangible asset.”

In short, Elon haters probably don’t have much to celebrate, as it’s really all about a technicality… Although on second thought, $22 million seems like spare change for the world’s wealthiest man.

The Musk Effect

Tesla’s Bitcoin purchase was crucial to the Bitcoin price history.

After a brief exchange of tweets between Elon Musk and MicroStrategy CEO Michael Saylor, Tesla announced a massive purchase that put it on the podium of publicly traded companies with the most significant Bitcoin holdings.

As a result, the price of bitcoin skyrocketed at a frenetic pace, reaching an ATH in April 2021. At that point, Tesla had made more money with Bitcoin than it did with its entire car production.

However, another Tesla decision contributed almost decisively to killing this trend, driving bitcoin to its most significant decline since late 2017. The company’s announcement to stop taking payments in Bitcoin because of its environmental implications caused a panic in the markets that ended with a nearly 50% drop as the days passed.

However, recently Elon Musk acknowledged that Tesla could accept Bitcoin again if the network becomes environmentally friendly enough. After an online conference with the CEO of Twitter and a dose of optimistic rumors related to the possibility of Amazon accepting Bitcoin, cryptocurrencies had a significant rally today.

It seems that the “Musk Effect” is still alive after all.

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Source: https://cryptopotato.com/tesla-reports-23-million-usd-impairment-q2-2021/

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Blockchain

Tesla Reports $23 Million Impairment From Its Bitcoin Holdings

Published

on

Tesla, Elon Musk’s electric car manufacturer, released its quarterly earnings results, reporting more than $1 billion in profits for the first time since its launch.

It’s not all fun and games, though. To the delight of Elon’s crypto Twitter fans-turned-haters, Tesla’s investment in Bitcoin made it $23 million in losses after the markets crashed during the second quarter of 2021.

Oddly enough, the only mention of bitcoin appears in the “profitability” section of the report, mentioning the loss.

“Positive impacts were partially offset by growth in operating expenses including increased SBC, Model S/X ram (negative margin in Q2), additional supply chain costs, lower regulatory credit revenue, Bitcoin-related impairment of $23M and other items.”

Tesla Lost $23 Million… But Did It?

The $23 million loss might seem digestible considering Tesla invested about $1.5 Billion in Bitcoin. An almost 50% drop from its ATH could certainly trigger concern among investors, especially those who fear for a continuation of the downtrend that could accelerate upon Bitcoin’s drop below $30K.

However, this stat may be due more to the exploitation of a legal loophole than to an actual monetary loss.


ADVERTISEMENT

According to the US norms, accountants must record the value of their cryptocurrency investments at the time they are procured. If cryptocurrencies go up in price, nothing happens as long as the company hodl. The business only has to record the transaction in case of a sale. However, when prices go down, the company must record the decrease in its investment as an impairment charge.

Therefore, even though sales gains may be recorded, the tax incidence may be softened by the declines during the time the company hodled its tokens.This is due to the classification of cryptos as an “indefinite-lived intangible asset.”

In short, Elon haters probably don’t have much to celebrate, as it’s really all about a technicality… Although on second thought, $22 million seems like spare change for the world’s wealthiest man.

The Musk Effect

Tesla’s Bitcoin purchase was crucial to the Bitcoin price history.

After a brief exchange of tweets between Elon Musk and MicroStrategy CEO Michael Saylor, Tesla announced a massive purchase that put it on the podium of publicly traded companies with the most significant Bitcoin holdings.

As a result, the price of bitcoin skyrocketed at a frenetic pace, reaching an ATH in April 2021. At that point, Tesla had made more money with Bitcoin than it did with its entire car production.

However, another Tesla decision contributed almost decisively to killing this trend, driving bitcoin to its most significant decline since late 2017. The company’s announcement to stop taking payments in Bitcoin because of its environmental implications caused a panic in the markets that ended with a nearly 50% drop as the days passed.

However, recently Elon Musk acknowledged that Tesla could accept Bitcoin again if the network becomes environmentally friendly enough. After an online conference with the CEO of Twitter and a dose of optimistic rumors related to the possibility of Amazon accepting Bitcoin, cryptocurrencies had a significant rally today.

It seems that the “Musk Effect” is still alive after all.

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Source: https://cryptopotato.com/tesla-reports-23-million-usd-impairment-q2-2021/

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Goldman Sachs Files for “DeFi” ETF to Track Tech Giants

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The banking giant filed an application with the U.S. Securities and Exchange Commission (SEC) on July 26 for a DeFi ETF that would offer exposure to public companies.

According to the filing, the proposed fund called the “Goldman Sachs Innovate DeFi and Blockchain Equity ETF”, seeks to provide investment results that closely correspond to the performance of the Solactive DeFi and Blockchain Index from the German indices provider.

The details were thin on the ground but the fund will invest at least 80% of its assets into securities, stocks, and fintech firms featured in the index.

DeFi Fund Without The DeFi

It appears that Goldman may be a little confused over the definition of “DeFi”. A closer look at the Solactive Index reveals that it is largely comprised of U.S. tech giants and international telecoms companies.

Of the top twenty components in its July 23 report, not one of them could be described as a DeFi or blockchain project or organization. The top three were Nokia, Facebook, and Google’s Alphabet.


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Also in the list of stocks tracked were payments giants Visa, Mastercard, and PayPal, tech giants Microsoft, IBM, and Intel, and Chinese e-commerce and telecoms monopolies Baidu, Alibaba, and Tencent.

Hardly what anyone would describe as “decentralized finance”.

It is not the first time Goldman Sachs has got its wires twisted over the crypto industry.

Confusion Reigns at Goldman

In a June 14 report, titled “Digital Assets: Beauty Is Not in the Eye of the Beholder”, the bank concluded that Bitcoin is not “a long-term store of value or an investable asset class”.

They contradicted a May 21 report titled “Crypto: A New Asset Class?” which was largely positive about them with the global head of digital assets at Goldman, saying “Bitcoin is now considered an investable asset”.

Earlier this month, analysts at the investment bank outlined their reasoning behind the claim that Ethereum will eventually become a better store of value than Bitcoin. It also reported that 45% of the ultra-rich are interested in crypto.

In April, Goldman added Bitcoin to its year-to-date returns report, and in March, the bank filed for a Bitcoin ETF with the SEC according to crypto custody firm New York Digital Investment Group (NYDIG).

Now it seems that Goldman has equated DeFi with the likes of Facebook, Google, and Microsoft!

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Source: https://cryptopotato.com/goldman-sachs-files-for-defi-etf-to-track-tech-giants/

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