analysis: blockchain case study:


IBS Journal December 2015


tor Digital Currency Group (DCG), which is also being backed by venture capital firms TransAmerica and Bain Capital as well as Canadian bank CIBC. Amex, meanwhile, has participated in a $12 million series A funding round for Abra, a blockchain service that aims to make cross-border payments simple using the technology behind bitcoin. The Abra app enables users to store


and send digital currency on their phone without an attached bank account. Nasdaq has also utilised its block-


chain connections in developing a new trading platform, Linq. It aims to use the new system in its Private Market platform, which multiple companies use for their pre-IPO trading. Among the first takers of this new blockchain-powered solution are ChangeTip, PeerNova and Synack. Nasdaq is hoping to use distributed


ledger technology for a number of oth- er services as well. The firm is reportedly working on a way to manage proxy voting via blockchain in Estonia. US software firm Ripple seems to be


taking that mantle. It’s signed a deal with payments software vendor DH Corpora- tion (D+H), aimed at integrating the ven- dor’s Global Payplus offering with its dis- tributed ledger technology. Ripple is the second-largest crypto-


currency in use after bitcoin. The Ripple protocol has seen increased adoption in a number of companies, including Germa- ny-based direct bank Fidor Bank. Gene Neyer, head of product man-


agement at D+H, reckons that distribut- ed ledger technology has ‘the potential to radically transform the payment process.’ Hot on the heels of this agreement


Ripple snapped up another partner – IT consulting and services firm CGI. This partnership will see Ripple’s dis-


tributed financial technology capabilities brought into CGI’s portfolio of payments


38


Putting the crypt in cryptocurrency


While blockchain has been booming, 2015 has been a rocky year for bitcoin compa- nies. With its value fluctuating wildly, a number of merchants have struggled to stay afloat, with others failing entirely to keep their heads above water. There have been more recent casualties to the currency’s fluctuating future, including Harborly and 37coins, which have joined Buttercoin on the scrapheap. US bitcoin exchange Harborly has shut down little more than a year after its launch


after taking the decision not to pursue another round of funding. The company claimed that it was going to be a more user-friendly bitcoin


exchange and spent a year in development before being released late last year. It had operations in the US and Canada and had plans to extend its reach to India. Harborly snubbed rumours that it had been a victim of a security breach, some-


thing that led to the downfall of heavyweight bitcoin exchange Mt. Gox. Instead, the firm insists, the shutdown is due entirely to an inability to undergo another round of investment. It isn’t just Harborly that closed its doors recently. Bitcoin remittance start-up,


37coins, has also gone under, though it is giving users until 30th December this year to withdraw their bitcoin balances. 37coins aimed to use cheap mobile phone technology as a way to ensure that transactions could be as low cost as possible, but ran into prob- lems with making that aim a reality. Both the start-up’s service and SMS-based wallets will be closed, with 37coins noti- fying users that they need to withdraw their funds or risk losing them. Harborly and 37coins join Buttercoin, which shut up shop in April this year. Despite


managing to raise $1.3 million in funding and having big name backers like Google Ventures, Buttercoin eventually lost clients to marketplace rivals and ceased operations on 15th April. Then-CEO Cedric Dahl blamed the dip in bitcoin’s value as a driving fac- tor behind his company’s closure.


solutions. CGI’s offerings in this sector includes payments hubs, financial mes- saging, liquidity management and watch list filtering.


Larsen hails distributed financial tech-


nology as ‘the next chapter in banking’, which he hopes will give way ‘to an Inter- net of Value in which value will move like information moves on the web today’.


Security and bitcoin Blockchain, it seems, will forever be associated with its shadier accomplice,


© IBS Intelligence 2015 www.ibsintelligence.com


bitcoin. The cryptocurrency, which in its history has been used in deals involving drugs, weaponry and other illegal goods, leaves a bad taste in many banks’ mouths (not least because of its risks to conven- tional currency). Bitcoin has been hit with a number of scandals and thefts, as well as a steadily plummeting value. According to Ripple’s executive


vice-president, Patrick Griffin, blockchain and distributed ledger technology need to step out from under the shadow of crypto- currency and bitcoin to be taken seriously.


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