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Chinese Insurance Firms Use Blockchain to Process Coronavirus Claims



Insurance firms in China use blockchain to manage coronavirus-related claims amid the outbreak. English-language local news outlet South China Morning Post reported on Feb. 9 that this month Chinese online mutual aid platform Xiang Hu Bao added the coronavirus to the illnesses eligible for the maximum one-time payout of around $14,300 (100,000 yuan).

Blockchain used for insurance claim processing

Xiang Hu Bao is not an insurance policy, but a blockchain-based collective claim-sharing platform that counts 104 million users. Per the report, blockchain technology is employed by the system to prevent fraud and allow for faster claim processing.

Xiang Hu Bao is owned by Chinese finance giant Ant Financial and uses its mobile payment processing service AliPay, which funds the payouts for coronavirus victims with its own capital. A firm’s spokesman said:

“Xiang Hu Bao has been able to process claims and make payouts to participants quicker, due to the decentralised, trust-free nature of blockchain technology. […] Claim applicants can submit their supporting documents as evidence while investigation firms can get immediate access to them on the blockchain. All parties involved can see the entire process.”

Blockchain used to reduce paperwork

Also Blue Cross Insurance, owned by the Bank of East Asia is reportedly helping to decrease the bureaucratic impact of the coronavirus outbreak with a medical claims app. The insurance service’s managing director Patrick Wan told South China Morning Post:

“Our blockchain-backed claims service has played a key role during the outbreak of the coronavirus by totally eliminating the paper process and the need for back-and-forth documents delivery to clinics. […] This really helps to mitigate the risk of infection from face-to-face contact.”

Blue Cross Insurance claims that its platform is capable of managing over 1,000 transactions per second without human involvement. So far, since its launch in April 2019, the medical claims app has on average seen a double-digit monthly policyholder user base growth. Patients using the app can see the result of their claims within a day after the hospital visit.

Blockchain’s relationship with coronavirus

According to the New York Times, 811 people died because of the coronavirus in China and the number of confirmed infections rose to 37,198. An infection of this scale has seen many advocate for the tools provided by the blockchain and cryptocurrency space try to be employed to address the crisis.

Blockchain-enabled applications developer Acoer has created a data visualization tool called HashLog to track the deadly coronavirus that employs the distributed ledger protocol Hedera Hashgraph.

Syren Johnstone —  executive director of the master in laws program at the University of Hong Kong — recently suggested that blockchain and AI-driven strategies should be implemented to better tackle responses to the coronavirus epidemic. Furthermore, blockchain startup Hyperchain announced the launch of a blockchain-based platform to fight against the coronavirus epidemic earlier this month.

The coronavirus also has a direct impact on the cryptocurrency industry, with multiple Asian blockchain events being delayed in response to the outbreak. Also, Hong Kong-based blockchain remittance startup Bitspark has abruptly announced its closure, citing the virus among the reasons.



 BoE Economist Gives Nuanced Explanation of Bitcoin’s “Digital Gold” Problem  



Peter Zimmerman, a senior economist at the Bank of England (BoE), has voiced his opinion on Bitcoin and the limitation its volatility poses. In a staff working paper published earlier this week, the Economist explained that several limitations of the inherent blockchain technology seem to be causing a conflict between users who are trying to use Bitcoin and those who simply want to speculate on the top cryptocurrency. 

Bitcoin’s Perfect Catch-22

The paper, which doesn’t reflect the official views of the BoE concerning Bitcoin or any of the other cryptocurrencies, explained that several people have looked at Bitcoin’s mechanics and are now treating it like digital gold. Due to this, many are hoarding the asset rather than spending it- a phenomenon which, amongst other things, has led to the price volatility that we all associate with the digital asset today. 

“When cryptocurrency is more valuable, households become reluctant to spend it on fees. Instead, they prefer to hoard it and endure slower settlement times. I call this a ‘digital gold’ effect: when cryptocurrency is more valuable, agents view it as an asset to store, rather than money to spend,” Zimmerman explained in the working paper. 

The Economist made it abundant that Bitcoin is essentially stuck in a catch-22, a situation where mutually conflicting or dependent situations make it difficult to find a way out of a challenging circumstance. 

He explained that the fact that the Bitcoin blockchain has a limited transaction range and that its value is governed by its usage in making payments are responsible for this challenge. As speculation continues to rise, he explained, Bitcoin’s use as a means of payment becomes more stifled. Investors who see this and start to send Bitcoin’s price surging to congest the Bitcoin blockchain, leading to difficulties in payment efficiency and a reduction in Bitcoin’s real value. 

However, he offered a possible solution for escaping this self-jinx. “My results suggest that price volatility may fall and payments usage increase if, in the future, a greater volume of speculation could be carried out outside the blockchain. Recent developments such as the evolution of cash-settled derivatives markets or the introduction of the Lightning Network could have profound consequences,” he explained in the post.  

Digital Gold Arguments Can be Spun

Of course, Zimmerman’s definition of digital gold seems to differ from those of several others in the digital asset space. Most recently, Coinbase published a blog post explaining the link between the top crypto asset and the digital gold moniker, pointing out that the halving- and the subsequent reduction in Bitcoin’s supply rate- will make Bitcoin more comparable to gold. 

In its blog post, Coinbase explained that since the gold standard breaking in 1971, the asset has risen by over 4,000 percent in value and has become more valuable than other assets due to its scarcity. The exchange argued that Bitcoin fits this description due to its Proof-of-Work makeup, adding that it also has the advantage of being transferred faster and more effectively than gold. 


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The Three Cs of Joseph Lubin: Construct, Contribute, ConsenSys



Canadian entrepreneur and software engineer Joseph Lubin helped spearhead the development of the open-source smart contract blockchain platform that came to be known as Ethereum. Lubin has long believed that this technology could serve “as an organizing principle for earth, the world, the planet.”

As one of the wealthiest and most influential public figures in the industry, Lubin founded ConsenSys, a company that develops Ethereum-based products and tools to increase adoption of Ethereum applications around the world, taking the view that the decentralized future is already here — just unevenly distributed.

Early life and career

Joe Lubin was born in 1964 in Toronto, Canada, with his father engaged in dental practice, while his mother worked as a real estate agent. In the early 1980s, Lubin began his study at Princeton University in electrical engineering and computer science. Following graduation in 1987, he spent three years working at Princeton’s Robotics and Expert Systems Laboratory as a manager, devoting himself to the exploration of the machine vision, artificial neural networks, autonomous road vehicle, 3D graphics and robotics.

The circumstances were such that in Princeton, Lubin was a roommate of Michael Novogratz , who studied economics and subsequently became a Wall Street veteran and a longstanding advocate of digital currency. Lubin spent the 1990s and 2000s in close quarters with the financial world, developing software for Goldman Sachs’ private wealth management division as the vice president of technology. He later established a hedge fund.

Lubin was among those who believed that the 2008 global financial crisis would plunge the global economy into an extended recession that would take “20+ years for the snake to digest this elephant of debt.” Indeed, the crisis reportedly resulted in a decline in the net worth of American households by nearly $17 trillion in inflation-adjusted terms, as well as a doubled rate of unemployment, with about 7.5 million jobs lost between 2007 and 2009.

Years later, in reference to the financial crisis of 2008, Lubin recalled: “Many people were disenchanted, disillusioned. So, when the Bitcoin white paper came along, it really captured the imagination of many people.”

As the financial instability afflicting the whole world seemed to have no end, monetary systems appeared to Lubin as though they were approaching the end of a life mired in corruption. Speaking at the Ethereal Summit in May 2017, Lubin said:

“It was folly to trust all those structures that we implicitly felt had our best interests at heart. I felt we were living in a global society and economy that was figuratively, literally and morally bankrupt.”

In the recession years, Lubin decided to transition from the world of finance and eventually made a turn to the music business in 2012 by founding music management company SyNerG Music. However, the real turning point in Lubin’s career happened two years after the company’s launch.

Joe Lubin meets Ethereum

Lubin was already thoroughly familiar with blockchain technology by the time he came across Ethereum, a public, open-source, blockchain-based distributed computing platform designed to create decentralized applications.

Fascinated with the idea and purported opportunity to transform the existing financial system by removing the third party, Lubin continued exploring the space until he stumbled upon the first version of the Ethereum white paper in the beginning of 2014, written by 19-year-old Russian-Canadian Vitalik Buterin.

The Ethereum blockchain network was claimed to outperform Bitcoin in a number of ways, enabling the deployment of smart contracts and the development of decentralized applications without control or involvement of a third party. Moreover, Ether (ETH) transactions were confirmed in seconds, while Bitcoin’s took minutes.

“Vitalik’s paper was the best that I had read,” Lubin eventually said. He became committed to supporting the Ethereum project and did not waste any time meeting Buterin. Lubin later recalled

“In November 2013, Vitalik Buterin wrote the first version of the Ethereum White Paper. On January 1, 2014, I spoke with Vitalik about it and received a copy. It sketched a set of mechanisms that would enable the concrete development of that comprehensive vision that many of us glimpsed when we had that initial Bitcoin moment. That was my Ethereal moment.”

Thus, Lubin, who is in his mid-50s, joined the team of Ethereum developers and promoters as a co-founder and the chief operating officer. The further development of Ethereum was funded through an online crowdsale — which raised over $18 million — in the summer of 2014, for which Lubin and Ethereum’s other co-founder, Anthony Di Iorio, reportedly provided up to 95% of the funding.

In 2014, Lubin also held the position of chief operating officer at Ethereum Switzerland GmbH, a company that supported the development of the Ethereum platform, and he co-founded the Ethereum Foundation, a Toronto-based nonprofit organization whose objective is to promote and support Ethereum platform and base layer research, among other things.

However, not long after Lubin joined the Ethereum founding team, things became complicated. That same year, Lubin and Buterin differed in their views concerning the motives and methods of carrying out business: Lubin saw the future of the project in the building of a commercial ecosystem around Ethereum, while Buterin continued to focus on the technology.

The schism resulted in the formation of Lubin’s new company, ConsenSys, which develops software primarily for the Ethereum blockchain system.

New beginnings with ConsenSys

Lubin’s new, blockchain-focused organization eventually united developers, businessmen, programmers, journalists, lawyers and other industry enthusiasts in a bid to create and promote blockchain infrastructure and peer-to-peer applications. The organization was founded in 2014 and is currently headquartered in New York.

The ConsenSys incubator is engaged in multiple blockchain-related projects, including the creation, management and trading of fractional ownership shares in real estate assets, development of peer-to-peer trading, engaging in prediction markets, and providing cryptographic tool for managing and signing documents, among many other functions. ConsenSys’ technology has also been recognized by and collaborated on by philanthropic organizations such as the World Wildlife Fund and Oxfam.

Lubin estimated that ConsenSys is probably 65% focused on public mainnet, although everything the company does is applicable in a private permissions context as well. 

In late 2018 and throughout 2019, ConsenSys — now the world’s leading DApps development firm — was hit by a series of upheavals. In December 2018, Lubin was rumored to have made significant cuts to the company’s staff, letting go up to 50% to 60% of its workforce counting 1,200.

Later, ConsenSys asserted that the staff cuts were a “natural movement,” mainly affected support employees, and did not exceed 13% of the company’s headcount. In the spring of 2019, ConsenSys saw a major restructuring of its various operations to bolster its market presence as it sought $200 million in funding.

Finally, ConsenSys confirmed to Cointelegraph in December of last year that local offices in India and the Philippines would be shut down and that 11 employees were being laid off.

A new blow was delivered in July 2019, when the founder of ConsenSys-incubated startup Token Foundry, Harrison Hines, filed a lawsuit against Lubin in connection with a “breach of contract, conversion, quantum meruit, unjust enrichment, fraud, declaratory judgment and unpaid profits arising from the defendants’ acts in connection with the business known as Token Foundry.” Hines intended to collect over $13 million.

Discussing ConsenSys’ corporate structure, Lubin once said:

“It’s been several different ConsenSyses since the start. For roughly four years we were working to be a big part of opening up an ecosystem, and now there are lots of entities pouring into the ecosystem, and we have to up our game and compete. It no longer is sufficient to show up and do something cool; now we have to do something excellent.”

Despite reported difficulties, ConsenSys has continued actively investing in startups and initiatives engaged in developing blockchain-based applications that it considers to be promising, as well as projects like MetaMask that facilitate the entire Ethereum ecosystem. In mid-October last year, the company selected seven new Ethereum-based projects to support, committing a total of $175,000 in funding. 

At the time, the company’s head of experiential marketing Yadira Blocker said: “In Wave 1, we saw a lot of applications but they weren’t super strong. In Wave 2, we started to see more credible teams and more unique ideas come to the table.” As part of Wave 3, ConsenSys chose Ethereum software client Lighthouse and mobile decentralized applications constructor Alice. On Feb. 11, 2020, it came to light that JP Morgan was considering merging its in-house blockchain unit, Quorum, with ConsenSys.

Still, the most anticipated development for the current year is likely the release of Ethereum 2.0.

Ethereum 2.0, public blockchains and geopolitical views

Ethereum 2.0, also called Serenity, is a major network upgrade on the Ethereum blockchain that is designed to shift its current proof-of-work consensus algorithm to proof-of-stake. The upgrade is expected to bring a number of extreme developments, such as realization of a new scalability paradigm called sharding and the introduction of a more efficient Ethereum Virtual Machine capable of executing high-performance smart contracts.

Lubin stipulated that the development of Ethereum 2.0 would bring a drastic scalability to the ecosystem, making the Ethereum blockchain about 1,000 times more scalable. The upgrade is geared to be used by software developers, with the subsequent deployment of their products based on the Ethereum blockchain by their customers — from governments and enterprises to journalism and music platforms.

Lubin seems to be stunned with the idea that the decentralized future may actually be closer that one might think. “The decentralized future is already here; it’s just unevenly distributed. Lots of people who understand the space well are already living to some extent in the decentralized future,” he said.

Speaking at the Deconomy conference last spring, Lubin argued that “closed platforms promote corruption and inefficiency,” further adding:

“As we tokenize the world, well-resourced financial houses and traders will spare no effort to manipulate markets for gain or political advantage. We don’t want the liquid deep token markets of the next generation economy to be similarly vulnerable. We must not choose anything other than a maximally decentralized base as the foundational settlement layer of the global economy.”

Lubin admitted that he would like to see more participation from China in the Ethereum ecosystem, and that he hopes China’s central bank digital currency, or CBDC, would allow for interoperability with public permissionless blockchains, including Ethereum.

Lubin also noted that he expects that China will continue to undermine the status of the United States dollar as the world reserve currency. But he also believes that China’s CBDC will only have a minor impact in this regard. He pointed out the efforts of Russia and China to conduct business without using the U.S. dollar, and concluded:

“There are lots of reasons why American influence is shrinking and will probably continue to shrink. That may not be a bad thing but in some ways, it’ll be a bad thing. China’s particular cryptocurrency I don’t think is a major factor.”

“In the last year or so it’s become clear that what I’ve been saying for a long time, that our global financial and economic systems are essentially bankrupt, and the central bankers have been kicking the can down the road for a long time, and now that yield curves are flattening we may not have enough dry powder in the central banks to kick the can down the road and this recession could be really problematic. So I’ve been talking about potential cascading collapses if certain contagions happen,” said Lubin.

As Ajit Tripathi, former partner at ConsenSys, said: “Joe has something about him, he is an inspirational figure, he has this ability to excite people about this future.”

Joseph Lubin is ranked #7 in the first-ever Cointelegraph Top 100 in crypto and blockchain.


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Elizabeth Stark: From Human Rights to Humanity’s Decentralized Future



After more than a decade of Bitcoin’s existence, Satoshi Nakamoto, author of Bitcoin’s white paper back in 2008, remains the most mysterious person within the crypto community. Despite who he, she or they might be, Satoshi’s brainchild — the first decentralized currency — is still thriving, and it has changed the world as we knew it. 

The past 10 years were not a straight path: We have been witness to a lot of criticism of crypto, which was claimed to be “the mother and father of all bubbles”; Bitcoin’s record price hitting around $20,000 per coin and the subsequent collapse of around 2,000 cryptocurrencies — which lost around 80% of their combined market cap; experts declaring the end of the crypto winter; and many other small and big turns in Bitcoin’s history. 

Meanwhile, Bitcoin has proven its capacity to exist in spite of everything, and its greatest hopes now reside in the Lightning Network and solutions like it. Even though the identity of Satoshi remains a mystery, the person behind Lightning Network is a well-known leader in the global free culture movement: Elizabeth Stark.

From Ivy League to Silicon Valley

Born and raised in Brooklyn, New York, Elizabeth Stark — unlike so many of her tech industry peers who left school long before earning a degree — is a great example of a successful academic fellow. She holds a bachelor of arts from Brown University in international relations and earned her J.D. at Harvard Law School.

As a former academic, Stark was a fellow at the Yale Information Society Project, a lecturer of computer science at Yale University, an adjunct associate professor at NYU, and was an entrepreneur-in-residence at Stanford StartX.

Back to Harvard University, Stark served on the board of directors of Students for Free Culture and founded the Harvard Free Culture group. Elizabeth was also an editor-at-large of the Harvard Journal of Law & Technology and conducts research on the legal implications of new technologies. She worked with organizations such as the Electronic Frontier Foundation, Creative Commons Brazil and Audionautes in France, examining the impact of digital technology on law and culture. She also worked with the Harvard Advocates for Human Rights to make better use of new media to promote human rights. Elizabeth spent years researching for the Berkman Center for Internet and Society at Harvard on projects such as Filtering and the Digital Media Exchange, and taught different courses from technology and politics to cyberlaw, intellectual property and electronic music.

Into the crypto space for humanity’s freedom

Stark’s path into the crypto space started back to 2014, when she founded, describing it as “a group of entrepreneurs promoting the future of digital currencies & decentralized tech.” In 2015, she became a fellow at Coin Center — a non-profit research and advocacy center and the leading digital currency policy organization, based in Washington, D.C. and established to advocate for the implementation of good government policies toward cryptocurrencies and other decentralized technologies.

In 2016, Lightning Labs — the company that is building the next generation of decentralized, resilient financial infrastructure — was co-founded by Stark, who serves as the company’s CEO. Back in March 2018, the public beta Lightning Network was released, making open to all Stark’s work to build a programmable financial layer for the internet through fast, scalable blockchain transactions.

Related: What Is Lightning Network And How It Works

The Lightning Network Protocol 1.0 was released back in December 2017:

“As developers of the Lightning Network protocol, we’re excited to announce version 1.0 RC of the Lightning protocol specification along with a successful cross-implementation test on Bitcoin mainnet!

The 1.0 release of the Lightning protocol is an important step in our work toward standardization that started over a year ago in Milan. The Lightning specification was developed by our three teams (ACINQ, Blockstream, and Lightning Labs) and others in the bitcoin community through an open, collaborative process.”

As a software protocol built “on top of” the existing blockchain used by Bitcoin, the Lightning Network remains the greatest hope and arguably the most important development for Bitcoin the launch of the actual token itself.  

Related: Lightning Network Proving Less Electric for Bitcoin Than Promised

Elizabeth Stark is ranked #8 in the first-ever Cointelegraph Top 100 in crypto and blockchain.


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