Category Archives: Cobinhood

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Mastercard Secures Multi-Currency Blockchain Patent

Multinational financial services corporation Mastercard has won patent rights to a blockchain partitioning method that would make storing multiple forms of cryptocurrency on a singular blockchain possible.

Why is this so significant?

As explained in Mastercard’s application, all established blockchain systems require each block to maintain data of the same format, type, and sometimes size. This is what makes blockchains incapable of supporting different cryptocurrencies or combining permissioned and open access data on the same chain.

Operating multiple blockchains at once to manage this data uses what is described in the document as a ”significant” amount of resources and computing power.

Mastercard’s application

What Mastercard proposes in its patent filing, is a blockchain that can be divided into a plurality of separate sects that manage these opposing data sets, dubbed ”subnets”. The document notes that the transaction records of each of the subnets are capable of differing in format and allowing different cryptocurrencies to be transacted.

Each completed block would be stamped with a hash code that applies to all of the transactions. This new blockchain system is described by Mastercard as ”more robust” with a ”greater utility” than those currently being utilized.

Its implication

One of the issues pointed to in the debate over how to expand cryptocurrency users is the need to improve accessibility and ease of use. If different cryptocurrencies can be transacted on a singular blockchain, more investors may be encouraged to purchase a variety of tokens, as one specific token no longer requires as many areas in which it can be used.

The issue of this fragmented ecosystem has been discussed by the Vice President of Cobinhood, Hsuan Lee. With so many blockchains established with no protocol to communicate with each other, their overall effectiveness suffers. He framed the predicament in terms of social media: ”Can you imagine using Facebook if you only have five friends on the platform? It’s not very useful.”

The US Patent and Trademark Office published the approved application from Mastercard Tuesday. It was first filed in July 2016.

 

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Cobinhood VP: Blockchain Payment Systems “On Shaky Foundation”

Hsuan Lee, vice president of Cobinhood and Dexon spoke at Blockchain Live 2018 in London on Wednesday, where he outlined a number of prominent issues with current blockchain payment systems and offered a solution of his own.

He said, ”We see a lot of promising projects but there is still an underlying problem in the ecosystem: we’re building all this on a shaky foundation.”

”Blockchain was meant to empower people to transfer money even without a central authority so you don’t have to trust the bank, you just have to trust the algorithm,” he added, laying the basis for why an efficient blockchain payment system is so crucial. Bitcoin, however, is just a prototype of this use case as he sees it because the network is only able to support up to 7 transactions per second – far from sufficient for a mass-adopted payment network.

Lee noted several of the issues in addition to speed, such as needing a blockchain that can be know-your-customer (KYC) compliant as the area becomes more regulated, meaning there must be a way to know which address belongs to who exactly.

Blockchain technology right now is still relatively slow and expensive, and cannot compete with the big players in fiat currency on nearly the same efficiency scale. While Lee recognized the Ethereum blockchain could conduct transactions better than Bitcoin at around 20 transactions per second, this is significantly outperformed by the likes of Visa. On a low day, he cited Visa’s bandwidth as conducting 2,000 transactions per second, and tens of thousands at its peak. ”So right now it’s not enough. We need a better solution,” he told the audience.

Another issue blockchain faces is a fragmented ecosystem; with so many different blockchains being used for different things, and no protocol to communicate with each other, so overall effectiveness suffers.

Lee framed the predicament in terms of social media:  ”It’s like, can you imagine using Facebook if you only have five friends on the platform? It’s not very useful.” His blockchain project Dexon may have found a way to integrate blockchain with one another, and he urged the audience to read the whitepaper and look at his proposed solutions.

Dapps are the future

Alongside payment systems, Lee thinks there is a promising future for blockchain in terms of emerging digital assets exchanges and peer-to-peer markets, as well as with stablecoins built on the technology, but he also thinks the blockchains currently available are inadequate in the long term for applications. He believes it has ushered in a whole new era of decentralized apps (Dapps) that will replace the traditional model.

”When Apple introduced the iPhone to the world it opened up a new era of mobile apps. I think nearly everyone uses at least one mobile app these days, it’s hard to imagine a world without messaging apps, Facebook, Instagram. Now we have a new era, a Dapp era,” he said, sharing his theory with the audience, ”Maybe in 5 or 10 years it will be hard to imagine a world without blockchain technology and Dapps.”

This new era has not come without any challenges as he outlined, comparing blockchain to the dot-com bubble. He predicted, ”Companies are taking advantage, raising a lot of money and some lack the capability to lack what they want to achieve. I believe that in 5 to 10 years from now a lot of these companies will perish but at the same time blockchain still will shape the future.”

 

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Image Courtesy: Amelia Trapp/ Blockchain Live 2018

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