Blockchain competition

Given that Blockchain technology poses a growing challenge to the banking industry, this paper aims to analyse the innovation of Blockchain banking with regard to its systemic dimension, as well as dynamics of competition. The empirical research demonstrates how the systemic characteristics of Blockchain banking relate to the pursuit of strategies and to what extent these strategies influence the directional path and level of technology diffusion. The research study uses a case study methodology to explore the strategic competition of Blockchain banking. The study proposes the systemic innovation model for analysing and tracking the path of innovations. The model can be applied to any industry to understand the process of innovation development and the strategies to win market share in the banking industry.

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Content:

• The banks are poised to meet their scariest competition yet: blockchain
• Mitigating Antitrust Concerns When Competitors Share Data Using Blockchain Technology
• RMIT Fintech Blockchain Competition 2021
• Post navigation
• Blockchain and Antitrust: Addressing Potential Competition Law Risks
• 4 Blockchain Contenders in Competition with Ethereum
• FIU team captures top national honors in blockchain competition

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The banks are poised to meet their scariest competition yet: blockchain

Almudena Arcelus is a principal at Analysis Group. Arcelus specializes in the application of economics, finance, and information technology to complex problems in business litigation, and has managed many high-profile litigation projects in technology-intensive industries.

Mihran Yenikomshian is a vice president at Analysis Group. Yenikomshian specializes in data analysis and economic modeling, and he has consulted on economic and strategic issues to companies in a variety of industries, including pharmaceuticals, medical insurance, blockchain and cryptocurrency, computer software and technology, and cybersecurity.

Noemi Nocera is an associate at Analysis Group. Nocera specializes in the application of microeconomics, econometrics, and statistical methods to litigation and government investigations, and has consulted on economic issues in technology and manufacturing industries.

Blockchain technology has the potential to reshape many industries, including finance, health care, and any other field that requires data management.

While the most popular use case of blockchain technology is cryptocurrency e. Fundamentally, blockchain technology is a way to record, process, and authenticate data without centralizing the data or engaging in manual processing. Since blockchain technology uses sophisticated encryption methods, it becomes difficult for an individual to manipulate the data.

Blockchain technology can be very useful for conducting transactions or collaborating when trust between the parties is low, such as between anonymous people on the internet or between two competitors. There are two models of blockchain networks: public and private. A public blockchain relies on decentralized governance and is typically open to the public. A private blockchain is operated by an administrator who is responsible for either performing or delegating the task of granting access to the network.

When blockchain technology is used to share data between competitors, legitimate competition concerns may arise regarding the applications. Many collaborations might be driven by economies of scale or scope. However, they could also involve risks associated with new ways of enforcing traditional anticompetitive practices, including active collusion price-fixing , information exchange, exclusion of competitors, and standard-setting. Despite the risks, data sharing with blockchain technology might dramatically increase efficiency for an industry, leading to lower costs, or might even be unavoidable, such as if it were to become a requirement of legislation.

We argue that most of the antitrust challenges arising from the adoption of blockchain technology can be alleviated when appropriate network design and regulatory oversight strategies are put into place. Blockchain technology is a distributed ledger technology whose features makes it amenable to a large variety of applications.

The ledger is immutable and tamper-proof thanks to its distributed structure, meaning that it is shared by and synchronized across multiple users, and the use of cryptographic hash functions. Similarly, in the instance of two competitors sharing data, trust may also be low, and having smart contracts that execute without human intervention when certain conditions are met ensures that no party will gain the upper hand over another by not honoring an agreement.

The supply chain and autonomous vehicle sectors are two examples of applications that make clear how blockchain solutions can be a source of efficiencies for transacting parties. A supply chain is a process that provides a path for the movement of goods and services from the supplier to the end customer. Two of the main potential use cases of blockchain technology in supply chain management are product source tracking and automated transactions.

For example, blockchain technology could be used to verify the authenticity of a high-end handbag for sale. The technology would allow a purchaser to see when and where the bag was created and all the entities that took possession of the bag even temporarily to the point of sale.

This technology could virtually eliminate counterfeiting attempts for many products. In the case of automated transactions, a blockchain system can act like an incontestable enforcer among all the parties involved in a trade via the use of smart contracts, facilitating financial transactions among unknown parties without dispute.

This can ensure safe cargo shipping, even in cross-border trades, and can minimize paperwork, save on labor cost, and ensure data protection.

As an example, major software providers such as IBM[4] and Oracle are actively developing private blockchain solutions for firms managing complex supply chains.

By thinking of the blockchain as an audit trail to track a particular product throughout its life cycle, firms can gain unmatched insight into the status, condition, and location of every product in the pipeline in real time.

A second application of blockchain is related to the automotive industry in general and to autonomous vehicles AVs in particular. Autonomous vehicles, or self-driving cars, are vehicles capable of sensing the environment and moving safely with little to no human input. The AV technology, when widely implemented, has a potential for disruption in multiple areas, including shipping, human transportation, and vehicle ownership.

There are various fundamental applications of blockchain to the development of AV technologies, but the most promising application relates to sharing test data and digital identities.

Developing autonomous technologies requires testing, which can be expensive and time consuming, and, especially when it comes to actual road testing, requires multiple permits and authorizations. This can dramatically limit the amount of data that each company can obtain and process. In addition, most vehicle manufacturers operate in fierce competition with each other and have little incentive to collaborate on research or exchange data freely.

Blockchain technology can deliver a solution in which each piece of data is catalogued, labeled, and immutably branded by the company that generated it. All the data can then be traded[5] between different companies in an open market, which can facilitate cooperation between competitors and significantly speed up the development of AV technologies. Such solutions can be applied to many different fields of research, accelerating the development in multiple areas of technology.

Finally, IOTA, a permissionless distributed ledger technology firm, has announced several recent partnerships in this sector. These include a partnership with Volkswagen[8] to develop a Digital Car Pass to collect and communicate car data, and a partnership with Jaguar Land Rover[9] to develop a smart wallet for vehicles, enabling drivers to earn money and pay for selected services while on the go.

Despite the potential efficiency gains spurred by collaboration on blockchain platforms, some have argued that the adoption of blockchain technology by firms will lead to anticompetitive outcomes.

Networks with distributed ledgers that make certain sensitive data, such as price, accessible to competitors potentially could aid in collusion, such as price-fixing and bid-rigging. Specifically, competitors that form or participate in blockchain ventures might use price, cost, or output data to enter into unlawful horizontal agreements.

This could provide cartelists with a very powerful monitoring tool to detect deviation from agreed-upon prices, as well as transparent data that allow those who collude to reach terms on price or market share, for example.

Firms in oligopolistic markets may achieve cooperation tacitly with this level of information. Additionally, some believe[11] that if a specific private, permissioned blockchain network becomes critical to competing in a market, it is possible that certain competitors could be excluded from the blockchain and thereby be barred from competing in the market, depending on who administers the network.

This could occur if relevant players in a particular market coexist in the same permissioned blockchain and hold the credentials to grant access. In such a scenario, these players may have an incentive to prevent new firms from entering the blockchain. Entrants would then need to compete without this resource. Finally, if a market relies on a decentralized network, governments may not have entry points into the network to enforce regulations, and might also have trouble identifying perpetrators if the network offers users anonymity.

Consequently, we believe that the impact blockchain has on competition will depend on whether firms actively utilize thoughtful network design strategies to promote competition, and whether regulators create and enforce clear guidelines for firms to follow while designing and operating their blockchain networks. We discuss these points in the next section. Regulators and firms are actively considering how to offset the antitrust risks associated with blockchain adoption.

Firms must first identify what type of blockchain network best suits their business needs, and then they should employ strategic design tactics to offset potential antitrust risks associated with the chosen network type. In this section, we discuss three sets of network design strategies that can help alleviate competition issues arising from the adoption of the technology: 1 sensitive data management; 2 centralized governance; and 3 transparency for regulators.

Three steps can be taken to mitigate the risk when competitors share sensitive data via distributed ledgers. First, certain particularly sensitive data on the blockchain could be encrypted and made visible only to select users who have received a special key, thereby limiting which transaction details those without the key can see.

Second, network administrators can use firewalls to manage which users have access to data stored on the network. Last, forward-thinking network designers could decide to keep certain more sensitive data off the blockchain and instead store such data on privately managed non-blockchain servers.

Network designers should carefully consider the types of data that should be encrypted and included in the blockchain, data that should be unencrypted and included in the blockchain, and data that should be excluded from the blockchain altogether. As a safeguard, designers should only include data that are mission critical and exclude data that do not have a specific and important business requirement.

At least three types of centralized governance strategies can offset the risk of competitor exclusion and inhibited regulation. First, regulators can offer guidance on how to define clear membership rules for accessing networks, and through oversight be sure that firms direct administrators of their centralized blockchains to incorporate and enforce those rules. Second, centralized blockchain administrators can design entry points that give regulators their own special access to networks so that they can carry out enforcement measures.

Last, administrators of centralized networks can iteratively encode measures directly into the governance to define appropriate actions on the network and combat anticompetitive behavior both before and after it occurs. Second, networks can be designed to provide investigators with more accurate, reliable, and comprehensive transaction data across an entire firm, rather than the piecemeal and inconsistent data that regulators often receive. Last, we could imagine the development of a blockchain, potentially accessible only by select parties or regulators, that contains industry-wide transaction data, which could provide an unmatched tool for investigators.

Furthermore, the standardized data format in a blockchain may lead to faster resolution of potential antitrust investigations. Whether or not these particular strategies would be effective in a real-world setting will depend on the industry or business context, the design of the blockchain network at issue, and the effectiveness of governance and regulatory oversight. Although antitrust concerns exist in relation to blockchain adoption and data sharing between competitors including access to information, collusion, abuse of dominance, and enforcement , blockchain serves mainly as a data management tool.

How it affects competition will depend on network design and regulatory oversight, among other things. When examining antitrust concerns, industry observers as well as regulators should assess blockchain technology according to its specific implementation and its role in the wider framework within which it is used. The Blockchain Antitrust Paradox , 3 Geo. Introduction: Uses of blockchain technology for data management Blockchain technology has the potential to reshape many industries, including finance, health care, and any other field that requires data management.

Why would competitors collaborate using blockchain technology? What are the concerns about anticompetitive uses of blockchain? Sensitive data management Three steps can be taken to mitigate the risk when competitors share sensitive data via distributed ledgers.

Centralized governance At least three types of centralized governance strategies can offset the risk of competitor exclusion and inhibited regulation.

Mitigating Antitrust Concerns When Competitors Share Data Using Blockchain Technology

Given that Blockchain applications are currently on the proof-of-concept stage, it is important for companies looking to be early beneficiaries of this technology to be aware of the potential competition risks. Blockchain technology, often dubbed as next major digital revolution began to gain traction after the dramatic rise of Bitcoin in The technology is now at the forefront of innovation in multiple industries, ranging from financial services, retail, and real estate to healthcare. It is therefore no surprise that companies looking to remain relevant in the global economy are examining and testing potential uses for Blockchain.

RMIT Fintech Blockchain Competition 2021

Nowadays, people live within worldwide virtual communities, just a click away from producing, sharing, buying and enjoying an ever-increasing diversity of products. The online world relies on trust that:. Consumers are more and more confused about whether a product is authentic or not. This figure represents the size of the combined populations of Belgium, Bulgaria, Greece, Ireland and Portugal. It is apparent that free riders, criminal organisations and others involved in illegal activities use the potential of the virtual world for their personal gain, with no consideration for environmental, health and social standards, not to mention the safety and health of consumers. This illegal EUR billion worldwide business is growing. We all face the risks of fakes and this is a concern for everybody, so we all have a stake in the game. At a global level, the European Union is involved in diplomatic and economic efforts to fight against fake goods.

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The event was also co-sponsored by SAP. Blockchain technology, made popular by its use in cryptocurrencies like Bitcoin, serves as an encrypted ledger which is accessible to multiple parties. The competition cases focused on solving the issue of tax evasion and fraud in the European Union, where value-added taxes are levied on products as they move through different stages of production or distribution. Vinod Krishnadas, president of the MBA Tech Club, said utilizing blockchain databases can help eliminate an estimated billion euro in value-added taxes that are not paid annually throughout the EU. That transaction has to go through a bank.

Blockchain and Antitrust: Addressing Potential Competition Law Risks

Telegram Open Network is a relatively new smart-contracts platform developed by the team behind the Telegram messenger. It was announced in late and first source code was published in September this year. Five weeks ago, they started a competition. In it, developers were asked to either implement a smart-contract or contribute to the platform in one way or another. For one of them we chose to use the development tools provided with the TON distribution, for the other one we decided to do what we like doing the most: implement it in a new language built specifically for TON and embedded into Haskell with its incredibly rich type system.

4 Blockchain Contenders in Competition with Ethereum

Blockchain in the mining industry: digitizing diamonds De Beers, Alrosa , gold, aluminium and steel. Blockchain in the supply chain for cobalt, gold, tin, nickel, mica. Blockchain for settlements for the supply of iron ore concentrate by BHP, Norilsk Nickel's experience in digitalization and tokenization of metals. Tanya started her career as a keen young geologist, roaming the mosquito-infested forests on Kola peninsula in Russia exploring for nickel, and snow-covered steppes of Northern Kazakhstan, in search for gold. Then followed 11 years in Canada, working on diamond and gold exploration in Nunavut, base metals in British Columbia, and uranium, coal and shale gas in Alberta. After move to the Netherlands Tanya worked in Africa, evaluating opportunities for rutile in Cameron, tin in Rwanda, bauxite in Guinea and iron ore in Tasmania. Working with large datasets taught her respect for good data management, so when she heard about blockchain she realized the great potential this technology holds for mining.

FIU team captures top national honors in blockchain competition

Pat Treacy and Alex Latham explore the main competition law issues related to blockchain technology in the latest issue of European Competition Law Review. Arguably the technological buzzword of our times, according to many, blockchain is a revolutionary force that will change the face of commerce as we know it. Whilst the underlying technology itself is not novel, most of us only came into contact with the idea of blockchain when the meteoric rise of bitcoin caught international attention in late , prompting many commentators to draw comparisons with Dutch Tulipmania in the seventeenth century. Originally conjuring up images of basement crypto-anarchists using the untraceable currency for nefarious purposes, over time the excitement around blockchain has led to extensive corporate interest and discussion of a myriad of potential uses.

Businesses constantly seek to innovate to obtain an edge over their competition and sometimes this leads to particularly noteworthy innovations that become disruptive forces within the market segment. This allows the innovator to determine their own price for their products and operate independent of the market forces of supply and demand. This has most recently been seen within the digital economy where several disruptive innovations have paved the way for a new way of doing business, often creating a new and unique market segment. Blockchain in the technology world is perceived to be the next big thing and the scale and magnitude of its use can potentially be the same as that of the world wide web.

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Bitcoin has not only been a trendsetter, ushering in a wave of cryptocurrencies built on a decentralized peer-to-peer network, but has also become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs. Cryptocurrencies are almost always designed to be free from government manipulation and control—although, as they have grown more popular, this foundational aspect of the industry has come under fire. The cryptocurrencies modeled after Bitcoin are collectively called altcoins, and in some cases, shitcoins , and have often tried to present themselves as modified or improved versions of Bitcoin.