On 31^st October 2018, Oxford Blockchain Foundation (OXBC) and Government Blockchain Association (GBA) held an event known as the OXBC Day and GBA Summit a day prior to the official commencement of the Malta Blockchain Summit. With their shared interests and objectives, having OXBC and GBA collaborate together for this event was an obvious choice.

 

 

Steve Tendon introduced the event and welcomed the attendees. Mr. Tendon is not a stranger to the Blockchain community, given his work in the field to develop the appropriate Blockchain Acts. He is also the Managing Director of TameFlow Consulting/ChainStrategies. The attendees were encouraged to join the My Blockchain Island Club. This is a safe space for people from different disciplines to share ideas and continue on topics beyond what is discussed in the summit. This is also a safe place which allows ICO Advisors to ask about Malta, the Blockchain Island.

Mr. Tendon understands that Blockchain and Crypto are often mistakenly used interchangeably. He emphasized that Malta is the Blockchain Island and not the Crypto Island. He started his Blockchain journey in 2016 and has taken a very involved role in bringing Malta up to the standards of being the Blockchain Island. To do this, there are six key projects which make up part of the strategy.

The six key projects are public services on Blockchain, Research and Development, Education and Innovation, appoint a “Blockchain” regulator and create a regulatory infrastructure, Regulate Cryptocurrencies/Tokens including exchanges and ICOs, E-Residency (individuals and legal entities), and Smart Governance Project. The E-Residency and the Smart Governance Project are very ambitious projects without an estimated time frame when they will be ready.

As a very conservative estimate, Malta is expected to reach 10% of GDP by 2027 through the Blockchain sphere. In reality, Mr. Tendon’s expectations of the amount of GDP is much higher but preferred to give us a more conservative amount. The aim is to transform Malta into the crypto-economy superpower. Mr. Tendon made room on the stage for Stephen McCarthy with a small introduction.

 

Stephen McCarthy is known for his position as CEO of the Malta Digital Innovation Authority (MDIA). He presented the talk on Malta’s Regulatory Framework for DLTs and Smart Contracts to the audience. The MDIA deals with the technological side only whilst the MFSA deals with any certification, anything needed to start the ICO, and requires the MDIA when dealing with technology.

Mr. McCarthy has been working on the MDIA act since July and continued on the work done by Steve Tendon and others. The good news is that the requirements for the Systems Auditor are finally out. If you want to read more about this, please click here. To summarize, Systems Auditors require a qualification in ICT (MQF level 6 or higher), certification in I.T. Audit, I.T. Risk or I.T. Security, and relevant experience in the ITAS field. Another requirement is that there must be a connection in Malta for a person to apply for a Systems Auditor.

There are the general requirements for the standard application. However, there are certain cases when the risk is significantly larger and would require more enhanced requirements. In this respect, the MDIA understands that it cannot expect the same requirements from one that might exchange millions of euros a day to another which exchanges only 50 euros a day. These enhanced requirements will be coming out in a few days. Since this is a new technology, the authority figure, MDIA, understands that they needed to take a flexible approach to the requirements.

In the case of the role of the Technical Administrator, this can also be an employee of the company. In the case that the appointed Technical Administrator is an employee, it is important that his/her contract specifies that the law supersedes the contract as it is a requirement that this role allows the intervention of the Systems Auditor if required. The roles can charge any price they deem fit as it is a free market and there are no recommendations. However, they should remember that they will have a difficult competition with others of their roles.

Whereas the Systems Auditor decides whether the functionality agrees with the white paper, the Technical Administrator checks whether they are complying to the law and regulations. The Technical Administrator cannot interfere with the opinion of the System Auditor. When a company makes minor changes to the implementation (which differs from the whitepaper), there is no need for the company to inform the Technical Administrator or the System Auditor. The VFA agent decides what is to be considered as minor and what is to be considered to be critical.

 

Dr. Christopher P. Buttigieg is a lecturer of the Faculty of Economics, Management and Accountancy, the Director of the Securities and Markets Supervision Unit of the Malta Financial Services Authority (MFSA) and the main author of the MFSA act. Dr. Buttigieg had (and has) a very active role in the Blockchain community. Dr. Buttigieg stated that the biggest challenge he had was choosing the right people in his team. He then took this opportunity to thank all the people who have helped to make the Acts happen. The team consists of people with backgrounds in security and have the role of securities regulators since the field is very similar to financial securities but tailored.

Dr. Buttigieg emphasizes that MFSA recognizes the need to perform an exercise to identify risks. The risks that may be identified are fraud, failure (not delivered) and money laundering. The objections are to detect soundness, integrity and credential regulation. The spotlight in Malta has been on Anti-money laundering, considering the recent events in Malta where the government is being accused of money laundering.

MFSA work closely within the Malta Analysis Unit and with peers abroad since the businesses and work MFSA deals with in regards to Blockchain, can work internationally. The regulations would also work internationally. It is important that the regulations need to be robust, credible, understandable and acceptable. These regulations could change the world and we are definitely seeing other countries who are being influenced by Malta’s introduction of these regulations. France has been working closely with Malta to create regulations and has taken a different approach since there is no requirement for licensing auditing roles. Other countries such as Switzerland and Liechtenstein seem to be following suit.

 

Rupert Edwards from OXBC had the opportunity to address the attendees and introduce OXBC to those who might be new to the organization. Rupert Edwards is a founder and chairman of OXBC (Oxford Blockchain Foundation). He is also the Director of Protocol partners which is a company which offers advisory services within the Blockchain and technology realm.

OXBC, which has no relation to Oxford University, was set up with the intention of creating a safe space for people to share their knowledge on Blockchain. Although many people associate the group with the UK (specifically London), the group has grown to have an equal ration between British and non-British nationalities. Members of the group come from everywhere from around the world. Readers are welcomed to visit the company’s website here. In case of any questions, Mr. Edwards welcomed attendees to contact him directly at his email address.

 

Karl Schranz gave an enlightening talk on tokenomics; the use of utility tokens. Mr. Schranz is a Director at E&S Group. Although many people often mistake utility tokens for being similar to shares, utility tokens do not give up ownership. Many people are afraid that the ICO phase and hype has died but Mr. Schranz believes that ICOs have changed but have not died. They are still alive and valid. The next steps we should expect to see are properly pre-funded ICOs and tokenization of existing businesses. There are exciting times ahead.

Anyone following the Blockchain scene in Malta will realise that there has been a lot of talk about VFA agents but not many regarding VFA Whitepaper Requirements. Jasper De Trafford is a Director at Zeta. Mr. De Trafford has an academic background in History and International Relations and experience in the banking industry (HSBC) and investment funds. He has managed to obtain certification from the Oxford Blockchain Strategy Programme.

 

Jasper De Trafford informed the attendees that Zeta is aspiring to be a VFA agent. In Mr. De Trafford’s talk, we had the opportunity to learn what is required for a whitepaper to be approved. This does take a different direction to what Satoshi Nakamoto had in mind when he presented the bitcoin whitepaper. Mr. Nakamoto is expected to be horrified at the regulations. He encourages the attendees to read the Ethereum whitepaper which is about 30 pages. The whitepaper is well-written and easy to understand, even by those without a background in IT.

In order to approve a whitepaper, there is a face-to-face meeting, a preliminary meeting and if these stages receive an approval, then the VFA goes full mode onto the submission process. When asked if Satoshi Natamoto’s whitepaper would have been accepted within the current regulation, Mr. De Trafford gave a very honest, ‘No’. There are several missing sections which are considered to be very important and mandatory, such as, having no roadmap, no biography on the team and the target audience is not listed. He offered the idea that had regulation been in place prior to the invention of Bitcoin, Bitcoin may not have existed at all.

Mr. De Trafford addressed the audience’s questions with great attention and detail. Attendees were pleased with the quality of responses. He encouraged the attendees to take a look at the Zeta website. You can access it by clicking here. He concludes question time by saying that whether or not regulation exists, people would still need to know certain criteria.

 

Government Blockchain Association (GBA) opened up the next portion of the summit. Oliver La Rosa is the President at Government Blockchain Association but is also known for his roles as COO at Globiance, Chairman at EUCC, Board Member at the Maltese Italian Chamber of Commerce and the CIO, Angel Investor at CreAppTec GmbH Germany. Mr. La Rosa ‘cut the rope’ to the Globiance project and showed the attendees a video on what Globiance is about and how it makes it easier for people to exchange and trade Crypto and Fiat currencies on their Globiance platform.

 

The first panel discussion of the day was moderated by Steve Tendon. The topic of the panel discussion was Energy, Blockchain & Governments. Joining him on the stage is Bryan Ogden, Christian Nussbaumer, Pavlos Polianidis and Molly Webb. Bryan Ogden is an AI and clean-tech entrepreneur and the Founder of Ninjamoba Ltd and Wastewater Science Ltd. Christian Nussbaumer is a Customer Experience Advisor at Eloom and a Team Lead Customer Success at Hotjar. Pavlos Polianidis is an Advisor at Varius World Tech, a Technology Lead, and a blockchain enthusiast. Molly Webb is the Founder of Energy Unlocked, Co-founder at FLEX Token and also has an Exergy project role at LO3 Energy.

The main motivation of this panel discussion was to bring environmental awareness to the blockchain sector. Mr. Ogden says it all boils down to wanting to use energy but still have a planet and Blockchain could be a transparent way to get there. He understands that things such as Carbon Tracking to create a Carbon Footprint on the Blockchain could provide a solution for the issue caused by overfishing. (Stafford, 2016) Increasing the ocean’s predators (sharks) also increases carbon sequestration. As a result, the ocean will act as a carbon sink. This basically means that carbon would be removed from circulation since the ocean would absorb carbon. We, humans, must find a way to restore fish species and allow the ocean to function correctly so that it acts as a healthy ecosystem and stores CO2 as required.

 

 

Mr. Nussbaumer said that people globally have been misinformed that oil companies are the main cause of the damage done to our planet by burning fossil fuels. Only 7% of the damage is caused by these oil companies. We, the people of the earth, are producing the most fossil fuels and harming this planet. Mr. Naussbaumer says we need to empower people and entities. China exceeds other countries in the amount of carbon dioxide being put into the atmosphere. This amount has gone up to 28% of the total damage in our atmosphere in 2017. (Roston, 2017)

 

 

Another speaker, Mr. Polianidis says that we live in an era which shows the beauty of technology and how the trust issue has been handled through Blockchain. The environment is one of the use cases which can be applied to Blockchain. Mr. Poliandis questions whether proof of work is damaging the atmosphere through global warming or not. This is a controversial topic which needs to be addressed. Mr. Polianidis suggests that to empower people to use less energy that we should create networks of incentives and punish people who overuse energy. One way to do this is by using tokens as tokens are a great way to make wealth out of nothing. Mr. Tendon questions whether this is a form of gamification.

 

Ms. Webb believes that nobody cares about tokens and that we shouldn’t assume that people care about the environment. We can, however, assume that people would appreciate receiving rewards such as loyalty points or air miles. The attendees were captivated by Ms. Webb’s interesting views on how Blockchain can help protect the environment and encourage people to consume less energy. She correctly stated that the energy system is wasteful and the damage caused by this overuse overweighs the benefit we are receiving from the waste.

We are paying for this damage to our health. We must create more renewables because it is not always sunny and it is not always windy. We live in a world where we consume so much energy. Our mobile phones and devices are always plugged in. There are simple solutions for our daily activities such as turning on the dishwasher at a different time. A smart plug could be a simple solution but newer devices could have this feature built-in. The Internet of Things could prove to aid for devices to be turned on at the ideal times to use the least energy needed.

 

In a talk on Legal Personality for ITAs, Dr. Max Ganado discusses difficult legal questions which nobody can answer. On the 30^th of October, 2018, a new set of Anti Money Laundering guidelines have been published. One of the biggest legal issues in the DLT sphere is knowing who to sue in case of illegalities. If a person or company opts for regulation, the identification of the owner can come from the Whitepaper. The whitepaper will have a section on the operator or owner, whilst also defining the purpose and the user consensus mechanism.  On the DLT platform, there are several contractual relationships such as those with the developers, administrators, accounting team, regulators, compliance team, users and contract of insurance.

Dr. Ganado offers some solutions to gain knowledge to the owner or ‘who to sue’. He suggests that better contracts are drawn up to clarify ownership, add terms and conditions for different parties, use DLT in legal organizations, and include the clarification of the law. Adding a legal personality to the software n the blockchain originates from the idea from when churches needed more power and thus it was given legal personality. Blockchain and smart contracts have been given legal personality from the Government of Malta.

 

Another panel discussion, Healthcare, Blockchain, and Governments concerned Healthcare and how Blockchain can help in this sector. The chosen moderator was Mirko De Maldè. Mirko De Maldè is the President of Government Blockchain Association Italy, an Italian Member of the Board of Directors, and the COO at Lynkeus. Joining him on the panel were Bruce Jeong, Maria Marenco, JP Fabri, and Joel Semczyszyn. Unfortunately, Nicholas Warren was scheduled to be present but had to leave.

Bruce Jeong is a Deputy CEO at Fundshing, The Korea Representative Director Member of IDACB, Strategic Advisor at Bitxoxo and a Global Partner at BDLAW Lawfirm. Apart from these interesting roles, Mr. Jeong is also the Head of Business Development Asia at Globiance. Maria Marenco is the Chapter president GBA Sweden/Nordic of Government Blockchain Association, the Public Affairs and Content programming EMEA at HIMSS Europe, Founder at MentFort Ltd, and Ehealth/healthcare Vertical Lead at Swedish Blockchain Association.

JP Fabri is the Managing Director at ARQ Economic & Business Intelligence, a Member at the Investment Migration Council, Group Company Secretary at Afarak Group Plc and a Visiting Assitant Lecturer at the University of Malta. Joel Semcyzsyzn is the Founder and the CEO at Rubikon Blockchain Corp. Nicholas Warren could not be present but still deserves a mention. He is a Senior Manager in Blockchain and Financial Services at CSB Group.

 

Within the discussion, the panelists discussed many different healthcare issues and how Blockchain can be used. Mr. Jeong spoke about how Blockchain can be used to keep track of animal microchipping and how they can be used in healthcare. Mr. Jeong participated within this panel discussion but also had his own separate talk where he discussed Smart Crypto Cities.

 

 

Ms. Maria Marenco said that in the case of healthcare, we want our data to travel with us. We want to be able to be abroad and our doctors having access to all of the healthcare information (with our approval, of course). The Blockchain makes this possible and grants us the opportunity to all contribute. The problem would be the issue of language. People will be entering their data in their native languages and this could cause issues. It is important that only the necessary data needs to be stored and people need to be educated not to store all their data on the Blockchain. There are already a lot of countries which are making a lot of progress of getting their healthcare information on the Blockchain. These countries include Estonia, China, Singapore, and Hong Kong.

 

Mr. Fabri discussed the importance of identifying ownership of data and who this data belongs to. At the moment, the government has a monopoly of user data. Blockchain could change this and give back ownership to the individual. Blockchain adds a layer of transparency and trust which we cannot achieve from the traditional system. The true worth of Blockchain is through Artificial Intelligence and there are exciting times ahead.

 

 

Mr. Joel Semczyszyn spoke about the number of children who are dying around the world due to lack of proper healthcare. With Blockchain in place, these children could have received proper healthcare and they may have survived. Another use of Blockchain would be to track drugs/pharmaceuticals to make sure they are getting to the people who truly need them. Healthcare related subjects definitely have its place on the Blockchain.

 

Being in Europe, most people will be familiar with the term GDPR. GDPR has definitely changed the way we think about users’ data and how we can use store it. In the next panel discussion, titled GDPR, Blockchain and the Government, a group of experts had the opportunity to share their experience on how GDPR and the Blockchain can cooperate together to reap the greatest benefits whilst also respecting user data. This panel discussion was led by Steve Tendon.

The panelists chosen for this discussion were Mihaela Ulieru, Terence Cassar, Lynn Connolly, Celia Mifsud and Antonio Giannino. Unfortunately, Celia Mifsud could not be present for this discussion due to the discussion running at a later time than scheduled. Dr. Celia Mifsud is a Senior Associate at DF Advocates. Dr. Mihaela Ulieru is an Advisor at Bitlumens and a Chief Alchemist at Endor.com. Terence Cassar is a Senior Associate at GTG Advocates. He is a lawyer specializing in Tech Law. Lynn Connolly is a Partner at Harbor Peak, crypto and DLT advisory. Antoinio Giannino is the Chief Risk, Compliance and Valuation Officer at Amogis Capital.

Antonio Giannino spoke about the importance of penetration testing and that 90% of mistakes are stupid mistakes which could be easily detected through testing. He also emphasized the importance of Anti-money laundering and that Blockchain is not against GDPR, unlike the popular opinion. Another point made is that a person or bot could brute force their way to obtaining a person’s password by collecting user data and trying different passwords. User data must be protected.

 

Dr. Mihaela Ulieru states that GDPR is so convoluted and there were a lot of things to consider. The greatest victim in this is Artificial Intelligence. She emphasized the importance of applying smart contracts in real time. Tokenisation could be a great way to add governance. If people are rewarded for better content, fake news could be eliminated. If used correctly, Blockchain can be a tool to aid in ensuring that data is correct.

 

 

Dr. Cassar spoke against GDPR, stating that it is stifling business and innovation, especially in the case of start-ups. GDPR is not about tech. it is about data. It is important for the clients to be informed with where their data will end up and who will be handling their data so as to advise them. It is vital that people are advised in each step of the way and to eliminate the element of surprise with where their data will end up and who will have access to it.

 

 

Lynn Connolly spoke about the balance that is needed between GDPR data privacy in terms of encrypting transactions on Blockchain and maintaining compliance with anti-fraud provisions such as AML transaction monitoring where transactions need to be traced back to the initiator. There are areas where fraud and market manipulation can potentially be conducted which may be stopped with workable policies. However, with areas such as marketing and advertising, she believes in a complete expectation of data privacy and there may be an issue with the immutability of information on Blockchain and the GDPR provision that people can ask a company to have their information deleted from all records, opt-out (as long as this is not in conflict with regulatory requirements), as well as fixing inaccurate information. All is solvable.

 

Bruce Jeong comes back onto the stage to discuss Smart Crypto Cities. Smart Crypto Cities make use of Blockchains and data, to provide for a more efficient city. There are many ways how Smart Crypto Cities can aid our day-to-day lives, such as providing real-time location of bus arrival time, providing smart crossing and smart parking (people are informed in real-time of carpark availabilities). We see a lot of cities which are adopting a smart city approach such as Barcelona in Spain, Helsinki in Finland, Vienna in Austria, Copenhagen in Denmark, Vancouver in Canada, Dubai in UAE, and cities in China, Japan, Germany, and Vietnam. He also points out that ICOs are dead and that we should be heading to use IEO (initial Exchange Offering).

 

The final talk was presented by Paul Bougnoux and dealt with the topic of STOs which he refers to as the real link between finance and Blockchain. Paul Bougnoux is the Co-Founder and Chairman at Olymp Capital. Mr. Bougnoux informed the attendees that 4 billion dollars have been raised on the Blockchain and ICO was a very exciting way to raise money. However, STOs are the next big wave. STOs are Security Token Offerings and the most STO friendly country in the world is actually Switzerland. Nobody knows exactly how much money has been raised by STOs but they are definitely the way forward.

 

The talks were followed by the Oxford Blockchain Foundation internal meeting where the attendees had the opportunity to ask questions to three important Businessmen in Malta about setting up businesses in Malta. The three invited guests are Godwin Schembri, Rudolph Gaerty and Wayne Pisani.

 

Godwin Schembri is the Co-Founder of KnowMeNow and was the CTO of RS2 and was involved in the process of acquiring Barclays projects.

 

Rudolph Gaerty is the Managing Partner at Epic Direct. He believes that the quality of your company relies on the quality of the people you hire.

 

 

Dr. Wayne Pisani

Dr. Wayne Pisani is a lawyer at Grant Thorton. He answered the attendees’ questions with the process of setting up a business in Malta.

 

 

The Gold sponsors of the OXBC Day and GBA Summit were ARQ, ChainStrategies, and Globiance. JP Fabri spoke about the services ARQ offered clients which are services to help set up businesses and for companies to settle in Malta. Steve Tendon introduced ChainStrategies which is a consulting firm for Blockchain technologies. He thanked DQR (Digital Quantitative Research) for their support. Globiance provides financial services for companies and clients.

Following these talks, OXBC startups had the opportunity to discuss their startup business ideas. The startups to discuss were AHA health, Project Crowd, Acorex, Project Esse, KONTRAKT, PolyAlpha, Visionarity, Racechain, Whirl, Origamex, and ID Theory. Overall, this event had a great selection of speakers and a diverse list of topics. The panelists for the panel discussions were well-selected and complimented each other. Given the smaller crowd, attendees were given the opportunity to ask questions in a safe environment.

 

 

 

References

Roston, E. (2017, November 13). China’s Fossil-Fuel Burning in 2017 Outgunned the Carbon Cutters. Retrieved from Bloomberg: https://www.bloomberg.com/news/articles/2017-11-13/china-s-fossil-fuel-burning-in-2017-outgunned-the-carbon-cutters

Stafford, R. (2016, October 27). How overfishing and shark-finning could increase the pace of climate change. Retrieved from The Conversation: https://theconversation.com/how-overfishing-and-shark-finning-could-increase-the-pace-of-climate-change-67664