Shanghai Blockchain Summit Day 2: Highlights of the Conference

Bloq Review : Financial services companies and startups want to be the bridge between blockchain ledgers, such as Dominic Williams of Dfinity, Mark Smith of Symbiont, David Johnston of Factom, and Rich Teo of Itbit and Paxos. Each speaker has demonstrated solutions to record and facilitate asset transactions. Bloq wants to be a bridge between traditional companies by using blockchain technology, providing support, maintenance and legal guarantees.

Translation: Nicole

Financial services firms and startups alike want to be the bridge between blockchain ledgers, continuing to dominate the second and final day of Blockchain Summit presentations, which also marked the end of Shanghai Blockchain International Week and the startup DEMO competition.

CME Daily Bitcoin Reference Rate

Derivatives heavyweight CME Group, investment bank and financial services giant UBS, Russia's largest bank Rosbank and other financial services firms all spoke on the first morning of the summit.

Sandra Ro of CME, the world’s largest futures exchange, has officially announced the company’s daily Bitcoin reference rate, designed to help facilitate trading in the digital currency. The beta version is expected to debut on October 3.

Ro said the company began “secretly researching” bitcoin in 2012 and formed its digitization group this year.

She pointed out that the currency trading volume is $5.3 trillion per day, compared to Bitcoin's daily trading volume of $50 million to $200 million.

Sandra Ro

She noted concerns about liquidity and regulators:

“If you ask a room full of foreign traders how many people are trading bitcoin, only a handful of them would raise their hands.”

She said CME wants to serve as a bridge for foreign traders, a goal that the few traders present would support.

She said:

“If you want to trade bitcoin right now, it’s not that easy, at least not right now.”

Russia adoption status

From the banking sector, Alex Batlin from UBS discussed blockchain in the industry, and Pavel Khodalev from Sberbank discussed the prospects of blockchain in Russian banks and government.

Khodalev pointed to how the Russian central bank is putting interbank transactions on a blockchain, but said widespread adoption will be affected by the “chicken and egg” question of standards and regulation, and whether to wait for clear standards to develop or encourage the Russian government to take action.

Blockchain in Fintech

Other speakers pitched their fintech infrastructure companies as bridges to distributed ledgers, such as Dominic Williams of Dfinity, Mark Smith of Symbiont, David Johnston of Factom, and Rich Teo of Itbit and Paxos, each presenting solutions for recording and facilitating asset transactions.

Post-capitalist world

Otonomos' Han is focused on advancing the business requirements of users, aiming to open up resources and run core businesses. He delivers on his promise through "ubiquitous computing," which he foresees as a post-capitalist world. He ridiculed the current legacy system, which still uses paper documents to represent company shares, a method that has been used since the 1600s, and companies today still use wax paper stamps.

Pushing the protocol

While not always clear or technical, implementation generally supported presentations by most blockchain services companies, a topic that was raised directly by Zcash and Bloq.

Zooko Wilcox described how their zero-knowledge security layer, or ZSL (Secure Sockets Layer, the internet’s first widespread encryption scheme), would provide “selective disclosure” services. This would use keys to restrict read access to certain parts of a trade, allowing direct parties, regulators and clearing houses to see details, while trade reporting libraries and market data aggregators would only see what price a particular commodity was traded at.

Linux Analogy

Next up was Jeff Garzik of Bloq, who quickly allowed Wilcox to address a unique approach to security and privacy, giving the example of Apple and Microsoft transactions appearing on the same blockchain and asking each party if they would give the other party access to transaction data.

Garzik discussed the "missing piece from DIY, download-it-yourself" projects, drawing lessons from his work with Red Hat.

Jeff Garzik

So he placed his bets on open source community development.

Garzik replied:

“Imagine if Goldman Sachs or JPMorgan Chase had a private blockchain, would students still stay up late to code? No, they would code what other developers would code.”

Challenges facing enterprises

Garzik pointed out the problems that arise with the demands of enterprise clients.

He said:

"Not only are they going to a website, but they're running a multimillion-dollar payment network on it. In the real world, we have deadlines."

He said Bloq wants to be a bridge between traditional companies by using blockchain technology to provide support, maintenance and legal guarantees. In an interview with Bitcoin Magazine at the event, he said they are using the “tried and tested blockchains” of Bitcoin and Ethereum.

Garzik said:

“There are other blockchain players out there building compatible stacks.”

He drew a comparison to the early days of Linux, when there was "a very large Japanese multinational hardware producer supporting their hardware."

"You know the normal development process: upload a patch, preview it, build it. There were culture clashes and sometimes it was hard to get on the same page with the developer community. When we uploaded our first patch, there was some criticism, it was ugly and cost the company a year."

He called for caution against friction between blockchain companies and well-known corporations.

“Similarly, we have a lot of libertarian, anarchist, crypto talent in our community who have no interest in working for a big bank.”

On the other hand, he said:

“You want to avoid running IBM on your countertop.”

TCP/IP for blockchain

To advance future protocols, Garzik developed a system of BIPs and EIPs to decide standards, and said he thinks Hyperledger will be a good forum for that.

Garzik said:

“Ethereum or Bitcoin, which will become the TCP/IP of blockchain?”