Having all data in Blockchain may close doors for certain professions but proudly open vacancies for cybercrime busters even though in theory hackers cannot access data through a central point of vulnerability, on the understanding that Blockchain networks are nearly impenetrable.
With the onset of Blockchain technology, there is disruption. Soon, the world will greet a proliferation of Artificial Intelligence which empowers robotics, machine-learning and Blockchain systems that make verification by auditors and registration of certain traditional contracts redundant.
Readers may be jolted by this assertion and think that this prediction is nothing but scare-mongering. Yet, the way Blockchain technology is structured is said to revolutionise the method how records are kept and maintained.
Naturally, having all data in Blockchain may close doors for certain professions but proudly open vacancies for cybercrime busters even though in theory hackers cannot access data through a central point of vulnerability, on the understanding that Blockchain networks are nearly impenetrable. This may be the case, yet the concentration of data in distributed centres attracts cybercrime. Cybercrime’s footprint is increasing each year both in its sophistication and frequency.
Traditional defence strategies such as hardening of firewalls and intrusion prevention systems are no longer sufficient. Away from the curse of cybercrime and its nucleus of nefarious hackers, let us focus on the positive side.
The onset of Artificial Intelligence (A.I) coupled with the power of machine-learning will open new horizons in the next decade. There is no denying that it is a complex and ever-changing technological context. This interaction will be highly productive in creating new business opportunities which will be baptising the fourth Industrial revolution.
One may question why the fuss about Blockchain. Certainly A.I techniques are not new, although we are hearing about them as they are becoming more mainstream. Following the birth of the internet, twenty years ago we have seen and waited quietly for the next miracle in business development. It has arrived with the debut of Blockchain and its derivatives nine years ago. Many are purporting this to be the next miracle since the design of the ubiquitous steam-engine.
Taking the bull by the horns, Malta was quick to embrace the revolution and has promulgated laws to regulate it. But the ecosystem is still in the initial stages. For Malta, the drive for diversification of economic pillars is a good thing but this quest needs to be fully funded and supported by stakeholders. Obviously, to do this we cannot gild the lily and expect the green shoots to appear after the first rain.
The MFSA and FIAU are circulating for consultation with practitioners a tail of rules. These rules place a heavy onus on practitioners before accepting Blockchain clients and hold them responsible as a subject person to report to FIAU any suspicious transaction within three days of its occurrence.
There are other rules reining the governance of VFA agents and issuers, making them fully responsible to monitor clients before they are accepted to vet any business that may potentially lead to money laundering or financing of terrorism. The license fees payable to become an accredited agent or an issuer are not cheap when compared to other jurisdictions.
Making this an exclusive club reflects the way how authorities are raising the bar. Every firm needs at least three officials with a pass in an exam (apparently patronised by Institute of Management in tandem with a law firm – Ganado Associates) as a prerequisite to becoming accredited as a VFA agent.
Last month over 300 candidates sat for the exam but only a small percentage managed to pass. Certainly, starting on a high note will help the authorities shift the chaff from the wheat and avoid the apologetic story when licenses granted to three local banks, ended up being investigated for alleged money-laundering activities.
Another ingredient for the success in this sector is the attraction of technical advisers assisted by a number of crypto-friendly banks. The latter are conspicuous by their absence. Therefore, together with an eminent platform of rules, the government is expected to help in upgrading the levels of computer science and maths in schools.
Quality education is the building block of future generations of IT savvy students. Having raised the legal foundations to regulate Blockchain one must maintain momentum by recruiting more IT staff and A.I experts within the regulators.
Anything less will fail – it is like opening a grand pub with no beer. It goes without saying that more funds are needed to multiply the efforts in our university to research machine and quantum learning. It was a bold step when Malta decided to become a crypto and Blockchain hub in Europe and rightly so, government has sponsored a mega conference – Delta – to help promote this vision.
This has put Malta on the map and attracted the attention of giants such as Binance, Okex, and BitPay.
To help broaden the path for new business PKF Malta visited the headquarters of the Social Good Foundation Inc. in Tokyo, Japan – a company whose ICO raised an impressive $30 million from overseas private institutional investors. This foundation is headed by Soichiro Takaoka. and is using A.I to conduct research in the investment industry.
Simply put, it consists of algorithmic trading in which results are improved by analysing a variety of big data to discover investment targets, such as shares that are likely to increase in value.
The founder of Social Good Foundation says that it aims to become the Amazon or Rakuten of the Blockchain era. Soichiro Takaoka has an impressive biography. Having graduated B.A in Tokyo University, he started his career at Mitsui & Co., Ltd, where he was engaged in Overseas Investment Review, New Business Development, and M&A in the IT business sector.
Soichiro was engaged in overseas investment review, new business launches, and M&A in the information industry sector. He formed the Ayumi Trust Group (formerly the Abraham Group) in 2005. This is an IT media business pioneer, targeting the wealthy class. He then established and managed a Hong Kong securities company licensed under HKSFC (later sold).
Readers may ask, ‘What is the secret of success of Social Good?’ The answer is that it holds funds in reserve so as to maintain the value of the cryptocurrency and establish credibility. The novel idea behind this cryptocurrency is that it allows the holder to receive cashback when shopping at participating stores, part of which is automatically donated to charitable organisations.
The Foundation submitted its business model patent application regarding a cashback system utilising cryptocurrencies in Japan and the United States early this year.
At the end of April, the number of Social Good holders has surpassed 30,000 people worldwide. The image of Social Heart is one of a neutral fund rating organisation; it is positioned to use big data to carefully select superior funds worthy of long-term investment by the wealthy from a huge volume of fund data.
If Malta can lure such mega-asset managers given that it has enticed giants such as Binance, then one augurs that more Blockchain platforms are persuaded to weigh their anchor in our sheltered crypto harbour.
As always, fortune favours the bold.