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Margaret Fuller: ‘’If you have knowledge, let others light their candles in it’’

Let someone teach me!

It is interesting to know that in ancient Greek mythology, the Mentor was the tutor of the son of Odysseus Telemachus. Today, the name of the Mentor has become commonplace in European languages, and it means “tutor.” Mentoring is the process of interaction between a person more experienced in anything and a less experienced one, in which the first transfers his expertise to the second (knowledge, skills, and abilities within the framework of his mastery). The goal of the process is the achievement of a less experienced person of a certain results and successes in this area with the support of a more experienced mentor. World statistics tell us that this process is very popular in the world:

· 76% of organizations in Europe offer mentoring or coaching to their employees

· 71% of Fortune500 companies have corporate mentoring programs

· 77% of companies in the world say that mentoring helps retain valuable employees in the company

· 78% of employees involved in mentoring programs are not fired

· 60% of job seekers in Europe and the USA indicate mentoring as a mandatory criterion for a new job

· At $ 5,000 — $ 22,000 more annually receive employees who had a mentor

The mentoring process involves at least 2 participants:

· Mentor is a person who mentoring

· Protégé — a less experienced person in the process, a student of the mentor with whom he directly interacts

In the process of mentoring, the mentor at the same time combines the functions of an expert, teacher, trainer, coach, consultant, and sometimes even a psychologist. It is important to understand in which particular cases the request will require working with a mentor, and not with any other specialist. During the coaching process, the client does not receive accurate instructions and tips. The development process occurs due to leading questions, through which the coach uncovers the potential and reveals the capabilities of the protégé. He does not train his client, does not tell him his success stories and successful cases from practice, and does not share his experience and expertise. The coach supports the client in the search for talents and hidden abilities, reveals a palette of resources, and allows you to make mistakes. In no case, he does indicate what the path the success should be. He makes sure that his protégé himself finds the right solution and achieves the desired result. The obvious similarities between coaching and mentoring are a clear definition of the goal of teamwork, unconditional trust between the participants and the ability of the client to freely reason and choose the desired activity or behavior. A business coach, first focuses on the theory, gives the basics of knowledge and the basic principles of various tools. Often shows “how to” and always tries to work out the knowledge gained, turning them into skills. The similarity with mentoring is that the mentor explains to his protégé and demonstrates by his own example how to achieve one or another goal since he is more experienced in this matter. But the difference is obvious — the coach may not be an expert in the field that he teaches, often academic knowledge and coaching experience are enough in practical development of the necessary skill, depending on the specialization of the coach. The mentor should have its own arsenal of trial and errors, lessons and conclusions, in order to share them with the protégé, offering and choosing the best solutions. With consulting, mentoring is combined with the need for strong expertise, but the consultant’s responsibility for the actions and further selection of the client is minimal. Its main task is to analyze and select only the necessary activities. The mentor also entrusts himself with a motivating function, because the task is to make the protégé achieve his goal using the advice and recommendations of a mentor. Mentoring is a versatile set of tools and approaches to the development of protégés, where the mentor to some extent performs the functions of a coach and consultant. In general, mentoring is a larger process. All these areas help people come to success in a certain field of activity, but this is achieved by different methods.

Types of mentoring and types of mentors

First of all, a mentor is needed for employees who are just delving into the realm or want to grow. But he will be useful to those who have already figured out, that needs a “mirror view.” Let’s see what types of mentoring exist in companies. In the summer of 2019, SurveyMonkey and CNBC conducted a survey on happiness at work. One of the conclusions is that if employees have a mentor, they are more comfortable at the workplace. Employees who have a mentor are more satisfied with their salaries (79% versus 69%) and believe that their contribution to the work is appreciated by colleagues (89% versus 75%). Only 25% of those who have a mentor are going to change jobs in the next three months. In addition, among those who do not have a mentor, such 40%. Employees with mentors are inclined to believe that their company provides good career opportunities. Among top managers, 80% think so (against 60%), and among middle management — 75% (against 51%). For startups, mentoring is also important. In the United States, 70% of startups and small businesses whose founders are supported by mentors overcome the five-year milestone. This is two times more than in the case of startups without mentors. The Research University of Washington in St. Louis has classified the types of mentoring:

· Formal mentoring — structural programs in which the mentor is attached to the protégé. Formats depend on mentoring programs; there may be reports on the results.

· Natural mentoring — a more experienced employee (buddy) offers less experienced professional assistance (usually these people have common ground).

· The same level mentoring — employees with approximately the same experience share with each other what they recently learned or have lived. Usually they have common career goals, vital interests, they understand each other well.

· Situational mentoring — when one employee from time to time pulls up another in what is well versed in. It can be at any stage of a career.

· Supervisory mentoring — one employee acts as a strict observer and adviser to another. Not the most comfortable option, because grievances and conflicts of interest may arise.

· Mentoring on demand — when an employee asks the person who trained him to take over professional patronage. Or the company invites a consultant — mentor for a specific profile of activity

A mentor is not a position, but essentially an honorable “social burden.” Mentoring does not cost a company large amounts of money (except for stimulating bonuses), but it helps to reduce staff turnover, unite the team, and increase productivity. It is implemented through the Win-win concept. Although wealthy firms can afford the costs of large mentorship programs and consulting services.

Everyone needs mentors. In 2015, Harvard Business Review conducted a survey of 45 CEOs to find out what role mentors played in their professional lives. As it turned out, 84% of CEOs are sure that mentoring helped them avoid expensive mistakes and increase their expertise faster. At different stages and in different situations, we need different mentors. Not only names should change, but also roles — there are several of them. Ex-marketing director of Procter & Gamble, author of business books Scott Mautz offers the following classification of mentors:

1. Pioneer

This is an expert in the industry or in a separate direction. Thanks to him, it is easy to go on a professional path. He says: “I was there, know, I passed” and helps to look at things as clearly and deeply as a newcomer will not be able to do so soon. He sees the shortest path in the system and processes; he is clearly doing what his protégé has to learn. Tells about failures, gives practical advice, and tells where the pits are. It has a large database of useful contacts, which is invaluable in the modern business world.

2. Resonator

A colleague who can listen and comment on ideas. He does not teach anything much — he simply gives feedback based on his feelings and experience. In fact, this is the first focus group of one person — honest and most critical, but without criticism. According to a study by scientists from the University of Berkeley, testing ideas with such a person helps to find more solutions. You discuss the problem with the “resonator” — and at the output, you get 25% more ideas.

3. Magnet of success

Mentors of this type serve as a role model for success — simply because they have reached heights. Ideally, if they are from an adjacent or distant industry, then you do not copy specific solutions but are inspired by approaches. This is more important.

4. Advocate

A mentor of this type is entirely for you. He likes what you do, and he will help you progress faster than you could. The advocate is immersed as much as possible in the protégé’s career. Sometimes too prescriptive and invasive — but useful for business. Actually, fulfill the role of your business or career nanny.

5. Mirror

This mentor knows you well, your strengths, weaknesses, goals, and opportunities. You can turn to him for criticism — ask to say how he sees you and what you do. And he will be honest. This is not always sweet, but an injection of truth will help to correct the movement.

6. Feedback Mentor

Scott Mautz says that there was a top manager at P&G who took an intern every summer — and he told him what the situation looked like through the eyes of a “younger” one. In fact, it was a voice from below — so the top manager found out what they think about him and his management style, how he actually lives in the atmosphere that he builds. Such feedback is useful if you want to understand how much, in reality, you correspond to the values ​​that you declare. This is an opportunity to catch the trends in which the new generation lives and to discover a truly alternative point of view.

Formats and 10 Mentoring Rules

Mentoring takes different forms depending on who and how the mentor works. Here are the basics:

· Personal. This is the most common format — the mentor works with the protégé personally, supports it directly within the program or spontaneously. They become almost friends.

· Remote. If the first format of mentoring involves live communication, then the mentor works with the protégé or group remotely.

· Group. One mentor has several protégés. He works on a program that monitors progress, rhythm, and what exactly beginners learn.

As a rule, a protégé contacts the mentor independently, or in the case of a corporate request, the head or HR department selects and appoints a mentor for the protégé. The mentor is given the task: what exactly should he teach his protégé and in what period. The mentor’s motivation for what he has to do in collaboration with the protégé is very important. Indeed, even a very experienced, strong expert who does not want or is not able to share his knowledge will be useless in this case. If the mentor acts as a private person, he should also pay attention to his communication skills and the ability to educate adults. Often, even for professionals in their field, the very process of interacting with a protégé becomes an obstacle. If the mentor is confident in his abilities, then he begins to work with his student, whose goal is to achieve the indicated results. What does this work consist of? We outline the basic rules that a mentor fulfills to achieve a result:

1. The mentor evaluates the initial potential of his protégé: asks questions, conducts mini-interviews, and draws attention to his experience and competencies.

2. The mentor delivers the theoretical foundations of the selected process in a format that is easy to understand to the student, focuses on the risks and lessons that he himself has gained by gaining experience in a given area.

3. The mentor demonstrates the protégé on his own example how the work is done or shows different approaches, using the best practices from his own experiences and cases.

4. A mentor helps a protégé identify goals and ways to achieve them. It is important to give the protégé the opportunity to independently draw up an action plan and discuss its viability.

5. The mentor focuses the protégé on achieving a specific goal, does not allow him to disperse, helps to gather all thoughts together and concentrate on the desired process.

6. The mentor acts as a psychological motivator for his protégé, supports with failures, helps to overcome indecision, fears, allows him to start with the right attitude.

7. The mentor provides effective networking and helps the protégé to acquire business contacts and useful connections, conducts a detailed educational program in the market, if necessary.

8. The mentor gives his protégé practical tasks, the implementation of which will bring him closer to his goals. He does not hide secrets, together with the protégé checks hypotheses and new approaches, shares proven tips, gives recommendations as the protégé performs these tasks.

9. The mentor objectively evaluates the results of his protégé, is able to give relevant developmental feedback, be flexible and adapt the activity plan to change if necessary.

10. The mentor motivates his protégé to achieve the goal, provides moral support and does not allow to give up or abandon the previously stated ambitions.

Rules can migrate and change places; there is no clear algorithm of actions. In successful mentoring, the main thing is the synergy of the mentor with the protégé and understanding of the goal, then the developed plan will definitely lead to success. Speaking about the benefits of mentoring for a business or a specific company, it is worth noting that this is an excellent mechanism for disseminating knowledge within the organization. Protégés receive new information, and mentors systematize their own knowledge and experience. As a result, the company’s overall productivity is also increasing. For a mentor, such cooperation is a chance to quickly gain practical experience and, as a result, the possibility of rapid career or professional growth. Being a mentor means enriching your own experience in communications, as well as showing your own professionalism and value for the company. By dedicating time to mentoring, we contribute to the development of a continuous education culture as part of a corporate culture. It’s no secret that the main model of mentoring is the Tell — Show — Do model. The mentor formulates the purpose of the training. He stipulates that the protégé should be able to, at the end of training, from what he did not know how to do before:

· TELL. The mentor explains the task to the protégé, having previously distributed it in steps. Large tasks are divided into several parts and held in separate sessions. The mentor asks questions to the protégé to make sure that he has learned the information. The employee retells the contents of the assignment in his own words.

· SHOW. The mentor shows how to complete the task, commenting along the way, what step he performs. At the end, he asks if everything was clear.

· DO. The employee performs the task himself. The mentor may ask the employee to take this or that step again if he is not satisfied with the quality of the work. At the end, the mentor gives feedback and agrees with him according to what criteria the acquired skills will be evaluated.

Very often, people ask the question — where and how to find a mentor. This is the concern of your employers and corporate bosses, but also, you can find out a mentor for yourself. Worldwide, the Lifeaddwiser mobile application helps solve pressing problems. This is a unique online mentor that evaluates key elements of your life for free: career, finance, health, social well-being, and living environment. These elements are based on a Gallup Institute study conducted over 50 years in 150 countries. The virtual mentor determines strengths and weaknesses, calculates the Life Index using a special algorithm, and gives personalized recommendations and tips for improving life. With Lifeaddwiser, you can hire a trusted mentor online to develop elements that score low. In the Russian-language Internet, there is a similar application — https://www.unimentors.ru

Goals and objectives of mentoring

Having resorted to the mentor, the business owner is well aware of the prospects that will be opened up. An experienced mentor forces participants in a business or startup to take a fresh look at the project and the opportunities that will open up for everyone if the idea is successfully implemented. Mentoring helps company employees:

· learn to think strategically;

· make key decisions and help colleagues;

· learn how to conduct meetings, as well as effectively negotiate;

· competently evaluate new ideas;

· choose the right startup development strategies;

· develop a business plan and seek investors;

· form a project team;

· make decisions that will make the project investment attractive.

What results does the business want to see in its project or in the enterprise, in addition to the main tasks associated with the successful launch of a new project?

· a significant reduction in the number of errors and malfunctions in the company;

· staff turnover decreases;

· establishing a relationship between company employees;

· increases the efficiency of staff at all levels;

· principles of self-training of employees and optimized training costs;

· set goals are quickly achieved;

· there is a quick adaptation of new employees;

· corporate values ​​of the company are strengthened;

· Increases motivation and improves the process of communication, as well as information.

Effective mentoring is focused on these goals and objectives. Mentoring in its modern concept is a unique tool in the hands of company executives. Actual problems are being solved and new horizons are being opened. Having learned to effectively apply the principles of mentoring in practice, you can be 100% sure of the successful implementation of a new project and the development of your core business. All this can be achieved if you overcome the main fear of a person who wants to be a mentor — not to have ready-made correct answers to the protégé’s questions. A mentor is not an encyclopedia. He is a guide on the road to improving the knowledge, skills and personal qualities of the student and his own. It is not scary if you do not have a ready-made correct answer to the question. It is possible that no one has it. Finding the best answer is an integral part of the mentor’s work. What a good mentor looks like? He wants to train. The desire to transfer his knowledge is the engine of the relationship between him and protégé. If you do not want to share your experience, nothing will work. Have a sufficient level of knowledge. How sufficient is a subjective concept. You must understand your area, be able to find solutions, take responsibility for your words and tips. Success in your business is the main factor that protégés want to learn. Love your job and continuously improve in it. A good mentor should be both a teacher and a psychologist, friend and student, consultant and trainer. What a mentor should do:

· Listen attentively

· Form objectiveness bypassing emotionality

· Suggest ideas and options

· Change focus around the problem

· Be able to argue and dispute

· Encourage and praise

· Search for options and use brainstorming

Possible problems when implementing mentoring in a business, project, and enterprise

When introducing mentoring, a number of problems inevitably arise, which should be taken into account even at the stage of development of such a system. Otherwise, the company has every chance of encountering one or more of the following problems:

1. The haphazard implementation of mentoring

It entails a formal approach by process participants. When the system is not associated with KPI, and other training and assessment programs are not interconnected, the company does not get the desired result.

2. Recession of enthusiasm, lack of interest

Participants work a couple of months on a wave of enthusiasm, then stop paying due attention to mentoring. This is thanks to the lack of adequate systems of motivation and control of results, as well as during the legislative implementation of the system as an initiative of business owners

3. Poor process organization

Poor organization, lack of documents regulating the work of mentors and their mentees, lead to chaos and formal execution of tasks. As a result — uncertainty of duties and measures of responsibility of mentors, vague tasks related to the professional training of mentees, lack of clear responsibility of the company to mentors.

4. Inadequacy of the mentors themselves

The success of protégé training using the mentoring system is highly dependent on the experience and qualifications of the mentors.

5. Resistance

Disinterest of mentors and mentees in mentoring. This occurs in the case of a programmatic introduction of the program and in the case of an inadequate motivation system or lack of proper information with setting goals and objectives.

Since the system is built on the creation of alliances, the mutual responsibility of participants, the key to its successful functioning is the close interaction of all players in the process. Careful planning and preparation of the environment for change is a prerequisite for the successful implementation of the mentoring system.

Mentoring in business processes and start-ups

A modern entrepreneurship is an economy, marketing, communication and negotiation skills, management and team building skills, law, accounting, and design. To know everything is impossible. The main thing you need to know is who knows what you need now. Moreover, the search for such a person for business is not necessary for the delegation of responsibilities to him, where you do not know. Before you delegate, you as a businessperson need to figure out a lot yourself. Somewhere superficially and somewhere immersed thoroughly. If you don’t know how to develop negotiation skills, then you won’t build a business. You can delegate marketing to “young and ambitious guys” who in six months will say that they did everything they could, but sales did not increase. After that, live with a picture of the world that no one needs your product and marketing does not work. Well, if you completely outsource accounting and do not delve into the issues, you can one-day get news from the tax office with a substantial fine. In order to close such “gaps” of the entrepreneurship and get an outside look at business worldwide, there has long been a model of business mentoring. Let’s start with the concept of a business mentor. What kind of person is this? A business mentor is an experienced entrepreneur who has been able to build his profitable company and is ready to share his experience. Moreover, a mentor is also a big pool of contacts and useful connections that have been developed over years of work in a business niche. It follows from the definition above that a real business mentor is not an info businessperson or a coacher, here the emphasis is on real experience from the business that the mentor has right now. Why should an entrepreneur become a mentor? Researchers say the reasons are as follows:

· Other people helped me in due time, now I also want to return the “debt”.

· There is free time, so I am ready to be a mentor at this time.

· You giving — you receiving.

· I am just curious

Who needs a mentor in business?

1) Beginning entrepreneurs in order to quickly enter the market, while making fewer mistakes. In addition, mistakes in business are always a waste of money and time.

2) To existing entrepreneurs. Communicating with different business founders, it is clear that for many years they have been banging their heads against the same gate. Profits only fall, employees work poorly, there is no marketing strategy. There is simply not enough sight from a more experienced person.

How worldwide one does work with a mentor to promote business or start up? There are several models:

1) Some mentors can be negotiated for free

2) Set a fixed payment once a month

3) Professional mentors (world-famous scientists and entrepreneurs) can ask for a stake in the company. However, this is worth going only in the case of a person already familiar to you. And conclude a contract!

Sergey Golubev (Сергей Голубев)

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business

Join the chat — https://t.me/joinchat/AAAAAE84vCXg5PK-VpHADg

What stops crypto from bullish growing?

To my mind, the main reasons are not the volatility and lack of clear legal regulation, but the lack of new users (new blood), which creates a ‘’narrow’’ market.

‘’If you invested in bitcoin (or in another cryptocurrency) exactly a year ago, then even now despite the market drop caused by the new “black swan” — a recession against the background of coronavirus, you would get more than 35% growth’’ — Why is this not like a strong PR message? A message that can potentially attract the attention of brand new users who cannot take into account other investment tools (because of their complexity or high entry point or just because of the restrictions of policies of accredited investors). Let us look at the chart below.

Chart ‘’Bitcoin to USD from March 2019 to March 2020 ’’

Why do we see that the audience of followers is not updated? Why all the projects are fighting for the same fans who entered the crypto before 2018 and continuing to place media uselessly on the same sites?

As we all remember, until 2018, each project had access to 2 billion audiences, through a whole set of tools from advertising on social networks to context advertising. We used LinkedIn, Reddit, Twitter, and of course, the 2 main tools for attracting traffic (google and Facebook). Each crypto project, using these marketing instruments, brought its advertising messages to a new audience, not only carrying out the KPI of the project but also fueling up interest in the blockchain as a whole industry; thereby, increasing the demand for crypto and its liquidity. Like any new financial instrument, crypto is faced with the resistance of the old financial system:

· misinformation on TV and the mass media (crypto is a lie, crypto is a drug and terrorism)

· pressure from regulators (SEC refused, limited, punished)

· And, of course, a decision that has the most “destructive” effect — a ban on the largest advertising platforms in the world.

Unfortunately, the sweet times before the “ban” can no longer come back. Since January 2018, advertising of blockchain and cryptocurrency projects on most of the platforms in the world and social networks has been prohibited. The first to limit the right to advertise was Google AdWords and DoubleClick, introducing a direct ban on advertising content in terms of cryptocurrencies and related materials. A similar situation with context advertising is in Yandex Direct. Social networks also show unfair attitude to the crypto industry. Nonetheless, the crypto industry is approaching a line that it becomes simply impossible to ignore. After all, no matter how the new model is revolutionary and capable of making the world a better place — it is doomed to die if no one knows about it. Of course, if you have a good marketing agency, and you are a large and successful venture blockchain project (from the top of best and most famous), with all the necessary licenses, you can still compete for banning in Fb and google. Moreover, although it takes a long time, I know several projects that now have permission for official advertising. Despite the fact that the largest platforms have banned startup blockchain advertising, there are still ways to promote it.

What should everyone else do? What to do for a new comer that is just entering the market. Or for an old project that failed to get into the top of the most recognizable?

‘’Use your existing inventory’’ — it seems like the most important piece of advice that almost every project follows. Now we see how hundreds of projects are simultaneously placing on the same platforms (crypto news, ICO listings, bloggers), squeezing the last attention and investments from the same target groups. What are the results? They are obvious. Fundraising is falling, the number of new users and investors is not increasing, and liquidity is falling. In addition, for these reasons, in the last year, crypto has finally turned out from an instrument that would destroy the hegemony of big money, into an instrument — not very studied and too volatile.

What to do in order to revive the interest to crypto?

Right now, to start to search and apply new traffic tools. Sources that can give huge coverage and this will help attract new users to your project, for whom you can become the first successful investment in the blockchain. What to study from? What and how to apply? The easiest way, as always, is to learn the experience of those who live in the world of advertising restrictions for a very long period. For example — casinos, forex, bookmakers, unlicensed video, etc. We analyzed the largest representatives of these advertisers and chose the most effective method of placement, which appeared at the top of all advertisers — pirate sites with unlicensed content. It is also not a secret that many well-known offline and online retailers and not only are not ashamed of advertising on such sites along with advertising of the above-discriminated businesses. In addition, the crypto industry can be considered so far as discriminated in its rights.

What makes pirate sites so attractive?

The main sense of advertising on resources with unlicensed content is the incredibly large coverage of the audience at relatively low prices. The largest resources provide 10 million unique visitors every month. The cost differs depending on the format — pre-roll, branding, banner, and order of display. Price — from $ 10 for 1 thousand unique views. It is also worth considering the possibility of paying with crypto and a simple workflow, which allows you to make placements for very young and unknown companies. Technically, such platforms can track all interested users, so that later they can activate their attention in other campaigns to optimize marketing and advertising costs, which will allow the advertiser to save the customer’s budget in such a financially turbulent time while generating even more leads. Indeed, traditional media today are still too expensive and do not have such technical capabilities of their platforms. The millionth audience of pirate resources is explained by the fact that the user loves unlicensed content, and such a user has other interests and hobbies, including the crypto, blockchain, venture projects and much more, which is so discriminated in advertising by official media and social networks. The ethical issue in the modern world of capitalist chaos caused by the global crisis can be left aside, as for marketing strategies, such ‘’pirate’’ resources:

· provide an opportunity to build moderate total project costs

· save on advertising, but do not limit yourself in their use

· as much as possible and as soon as possible can reach your target group and collect leads

· despite of discrimination to the dissemination of information about the crypto and blockchain project, to have workarounds to gather your audience

· not depend constantly on the changing policies of official expensive advertiser’s platforms and their instructions

That is precisely what projects need in order to be successful during the limitation and expensive media.

If you are interested in the opportunities described above or you can offer services that will help crypto projects gather more audiences — feel free to write me: regionprojects@rambler.ru or in telegram — @golubev_serge

Sergey Golubev (Сергей Голубев)

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business

The biggest US and worldwide challenge for the cryptocurrency world has historically been from the Securities Exchange Commission (SEC), which establishes regulations for companies that wish to be traded publicly on the stock market and to raise some funds. In recent years, the SEC stated periodically that while bitcoin (and ether) may not be security, many tokens are securities, and relevant regulations applying to normal stocks and IPOs would apply to them as well. Known how ICOs usually operate, this presents an obvious problem. This position by the SEC amounted to statement that most ICOs were, in fact, illegal security offerings. It also destroys efforts for truly decentralized networks to launch, because, in order for those networks to function, the tokens that power them must be distributed, and if team building the project can’t do that without running directives of regulator well, it’s easy to see the problem here.

The desire to avoid the SEC’s wrath has led most projects to ban US citizens from participating in ICOs, and some exchanges even refused Americans as customers that is open discrimination against US people. It’s no surprise then that many projects choose to relocate abroad to more crypto-friendly locations like Malta, Singapore, Switzerland, or Hong Kong. In many cases, the people behind those projects are actually American citizens, but the regulatory ambiguity is so deep, and the consequences of getting it wrong so risky that they won’t take the risk of running the project in their home jurisdiction. In order to avoid falling behind in the blockchain revolution, the United States will clearly need to make some changes. That’s why Commissioner Hester Peirce’s recent comments on providing a temporary “safe harbor” for new crypto projects was a pleasant surprise to many in the industry.

SEC Commissioner Hester Pierce proposed a token safe harbor for decentralized projects from aggressive review by the SEC. The SEC currently reviews practically any decentralized project from its earliest stages and often applies the same regulations that it applies to publicly traded securities. The extent of these regulatory measures and review makes it harder for developers to experiment and flesh out their decentralized networks, which may eventually not fall under the definition of a security. The proposal would create a three-year grace period where the SEC provides developers with more roads to grow their projects without stringent review. Projects in the grace period are still subject to some regulations, like data disclosure (source code, transaction history, etc.) and review for fraud and malpractice. Upon conclusion of the safe harbor period, developers must show that their projects are robust, active decentralized networks where tokens wouldn’t be considered traditional securities or they become subject to the same SEC regulations as publicly traded securities. The proposal represents an important step forward in fighting the legal uphill battle that blockchain technologies have often faced, and making it significantly easier for developers to experiment with various architectures without fear of aggressive review and regulation by the SEC.

SEC Commissioner Hester Peirce, colloquially known as “CryptoMom,” launched a proposal at the International Blockchain Congress in Chicago for a token safe harbor proposal for the SEC and decentralized finance projects. The motivation behind Peirce’s proposal comes from stringent and confusing SEC regulations and review. These processes tend to disincentivize people from pursuing the creation of various tokens and decentralized networks and adds more friction to the process of developing decentralized networks and working out various problems and pain points in its architecture. Currently, the SEC aggressively tries to classify decentralized cryptocurrency projects as securities, which puts these projects through a strict review process because of legal regulations around how to trade securities publicly. Developers often work hard to build their architecture with characteristics to avoid the security classification, but often, in early stages, the SEC classifies their projects as securities nonetheless, subjecting many early-stage decentralized networks to the review process. The SEC Safe Harbor would essentially allow early stage decentralized projects (contingent on a few conditions) to be able to initially develop and grow without strict review by the SEC, making it significantly easier for such projects to move forward.

The proposal, formalized as Rule 195, gives some leeway to growing projects that hope to eventually become full-fledged decentralized networks that fall out of the conception of a “security” under the SEC definition. To qualify for the safe harbor, projects must meet a certain number of requirements. Developers must show that their project is evolving into an active, decentralized network where token transactions would not be considered securities transactions. They also are subject to a plethora of reporting and disclosures, including source code and transaction data, information on the token mining & minting process, and clear explanations of token governance (how supply is regulated, procedures for burning, consensus protocols, etc.).

The projected time for the safe harbor is three years, where developers have more leeway to play around with their network architecture without needing to worry about aggressive SEC review. During this grace period, projects would function as SAFTs, or Simple Agreements for Future Tokens, where the tokens are not yet considered securities. To qualify as a SAFT, projects must also create significant liquidity in the market and allow purchasers to resell tokens to third-parties. After the three years, developers must show a decentralized network that falls out of the conception of SEC securities (as determined by the Howie Test) or must be subject to scrutiny under SEC security standards and laws.

The safe harbor would not allow any projects that have already been disqualified as bad actors through SEC review; it would also maintain the SEC’s power and jurisdiction over antifraud cases, meaning that developers found guilty of lying about their tokens could still be tried by the SEC for fraud activity. The vast majority of the crypto community has been thrilled by Peirce’s proposal. Catherine Coley, CEO of Binance, claimed that it could be the “most groundbreaking development for the U.S. cryptocurrency market to date.” Proponents argue that the safe harbor will lead to a much smoother growth curve for decentralized networks and also give developers the space they need to explore various paths and possibly fail in their development process, while still maintaining the benefits of SEC review. The proposal represents a huge step forward in allowing developers to differentiate their projects from conventional, publicly traded securities, and also giving more federal & legal credibility to cryptocurrency projects across the country. Legal recognition and adaptation have always been an uphill battle for decentralized projects, and a safe harbor could be the first step in changing that.

The term “safe harbor” basically means a reduction in liability in some situations if certain criteria are met. There is a precedent for this concept; the SEC’s Rule 10b-18 was established in 1982 to make it easier for companies to buy back shares of their own stock, and reduce their liability as long as specific conditions were met. But that’s just one, very specific situation. In order to put crypto investors and developer’s minds at ease, a crypto-specific safe harbor rule will be needed.

That’s what Hester Peirce’s idea is designed to provide. Under this proposal, new projects would be given a 3 year grace period in which the SEC would take no action against them as long as five conditions are met (quoting from the source):

1. First, the team must intend for the network on which the token functions to reach network maturity — defined as either decentralization or token functionality — within three years of the date of the first token sale and undertake good faith and reasonable efforts to achieve that goal.

2. Second, the team would have to disclose key information on a freely accessible public website.

3. Third, the token must be offered and sold for the purpose of facilitating access to, participation on, or the development of the network.

4. Fourth, the team would have to undertake good faith and reasonable efforts to create liquidity for users.

5. Finally, the team would have to file a notice of reliance.

This proposed framework would give new projects some breathing room where they can do their work without fear of being fined, arrested or having their offices raided. It would also provide a reasonable amount of time to actually build viable decentralized networks, and require them to be fully transparent with users online (while many projects do try to do this by publishing roadmaps and white papers, there are no actual laws requiring them to do so). This obviously filer out the bogus projects that have no intention of building a workable, decentralized product. For investors, this would essentially legalize token sales in the United States as long as these specific criteria are met. While some in the crypto community does have a certain anarchic libertarian aversion to government scrutiny, these new regulations may not be such a bad thing, given that a vast number of ICOs turned out to be fraudulent during the pre-2018 “Wild West” era of cryptocurrency.

Although crypto community has questions for SEC’s Safe Harbor concept as well. The proposed safe harbor would give digital token projects three years to demonstrate that the tokens they issue are not securities, and therefore should not be subject to the SEC’s securities regulations. The hotly anticipated proposals were met with approval from many in the crypto community. However, a week on, many prominent names in the sector have had time to deep-dive into Peirce’s proposals and have now raised a range of concerns. “Thinking more about Hester Peirce’s proposal for a token safe harbor, which really does advance the ball re US SEC issues,” wrote Caitlin Long on Twitter, a Wyoming-based blockchain expert. The open problem that there are issues that still need to be addressed — the basic one is whether the tokens are presumed securities during the safe harbor or not.

During a speech in Chicago last week, Peirce discussed the problem at hand. Many crypto entrepreneurs are seeking to build decentralised networks in which a token serves as a means of exchange on, or provides access to, a function of the network. In the course of building out the network, they need to get the tokens into the hands of other people. But these efforts can be stymied by concerns that such efforts may fall within the ambit of federal securities laws, adding the fear of running afoul of the securities laws is real. Given the SEC’s enforcement activity in this area, these fears are not really unfounded. As it stands, entrepreneurs looking to issue tokens can be hesitant to do so in fear of breaching the SEC’s stringent regulatory regime.

“We have created a regulatory catch-22,” said Peirce. That means that Would-be networks cannot get their tokens into people’s hands because their tokens are potentially subject to the securities laws. The laws cannot be ignored, but neither can SEC, as securities regulators ignore the conundrum our laws create. It’s a case of investors causing issue for the very entrepreneurs they are investing in. Most investors buying tokens when they are first available are not in fact immediately acquiring them for a ‘consumptive’ purpose. They believe that, over time, the related network will grow and they will be able to sell the tokens for a profit. But what of third parties who want to use the tokens for their intended purpose, and what about exchanges that want to provide access to tokens? If adopted, the safe harbor proposal will address these secondary sale transactions by persons not affiliated with the initial development team. There is no policy reason why such asset sales should comply with the securities laws.

Let’s suggest the proposals are positive, but points out some issues: the proposal opens at least two problems — the custody question, and creates problems for issuers outside the US. Many countries recognize that tokens aren’t necessarily securities, but if the US thinks they are, then other countries may follow. This proposal moves the ball, but there’s still a big catch-22 preventing the security token industry from flourishing in the US. But, on the other hand, if the tokens aren’t presumed securities during the three-year grace period, then they’re property. In the US, individual states, not the SEC, have jurisdiction over property — meaning the SEC would need to cooperate with each state for the proposal to work. This matters a lot because property and securities are treated differently under commercial law (different negotiability, different ways of perfecting security interest, etc.). Others made similar points.

The first thing that struck crypto community was the tone of mission statement implied. This looks like ‘how do we make workable token sales that allow networks to develop?’ not ‘how do we apply the securities laws to issuers of instruments?’ Is this a policy shift? Some commentators have questioned if the safe harbor proposal is a ratification of the Simple Agreement for Future Tokens (SAFT) framework. SAFT is an investment contract offered by cryptocurrency developers to accredited investors (in 2017), which is considered a security and therefore is compliant with securities regulations. It was first created to help new cryptocurrency entrepreneurs raise money without breaching financial regulations; specifically, the regulations that govern if the investment is a security or not. Some expected Peirce’s safe harbor to be a formal ratification or extension of the SAFT model. Others suggest it is not. That this is not an extension of the SAFT framework at all. It is like a dramatic new approach to regulating token issuance desire.

‘’The SAFT framework looks downright conservative next to this”, wrote Marco Santori, president and chief legal officer of digital asset platform Blockchain.com. For many, this proposal is far superior to the SAFT framework. It exempts from the registration requirements not only resales of tokens, but also primary issuance. By and large, under the SAFT framework that became standard in 2017/18, primary issuance of tokens in the US could only be to accredited investors. In contrast, this safe harbor proposal permits initial sales to the public right out of the gate; it gives retail the same early access as venture capital funds.

According to Jeffrey Amico, counsel at tech venture capital firm Andreessen Horowitz, if the safe harbor passes, “it would not only be very positive news for new token launches, but also for existing SAFTs that are sitting in regulatory limbo”. These points show that the proposals need to be worked out in details — far from unusual for this type of regulatory change. In her speech, Peirce suggested that her office would be open to discussion. Hopefully, there is one point on which we can all agree: if you are in this space, it is critical to understand the arguments on both sides and to have an informed view on them. The safe harbor proposal is the beginning of an important dialogue on this topic, if you do not take into account the hysteria in the global economy around the coronavirus.

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**Sergey Golubev (Сергей Голубев)
**

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business

***‘’Despite being quarantined within our homes to protect the health of our society, it doesn’t mean we still can’t continue to socialize, strengthen relationships, and build culture’’
***

Forced to stay at home due to the COVID-19 and to quarantine introduced by many world governments since March 2020 is not only an opportunity to protect yourself or relax at home but also a chance to enjoy music, theater and cinema or exhibitions of leading world cultural artists and museums online. This is the situation when you can finally take the time not only to entertain but also to educate yourself. You can learn a foreign language, listen to a series of university lectures and seminars, or “walk around” the virtual library. And you know, the list of activities is not limited, it is quite wide and interesting in content. Time can be spent not only on alcohol or on gossip on messengers, but also on the development of new professions, knowledge, skills, and quality cultural leisure. From our part, we are going to make a series of publications that will be devoted to such types of quarantine home activities as home education, entertainment, hobbies, work, and health. And in general, many other interesting things that you will feedback us as well.

However, it is worth starting with the most valuable thing of all time — education. You can learn new things and learn different skills without leaving your home or even getting up off the couch — thanks to the great and powerful Internet, thanks to social networks!

We recommend that you join our online open source (Free Learning COVID19) at the link -

https://sites.google.com/view/free-learning-covid19/home

And to our telegram https://t.me/be2do, where there will be news about online education (free, with discounts, promotional), but also full of information about different virtual things and virtual hangouts. Here are a few other ideas for virtual hangouts:

· Poker tournament (www.pokerstars.net)

· Donut (https://www.donut.com/) — slack extension to regularly pair up team members who don’t know each other well for conversations

· Movie night (https://www.netflixparty.com/)

· Company gym on zoom — hire a trainer to train employees online

· Facebook messenger hangout with friends — easy face filters for fun

A few words about the best online learning sources:

· Coursera (https://www.coursera.org)

Language: depending on the author of the course, most often — English.

Probably the most famous platform for online education. The advantage of the site is that eminent universities post their educational materials here: Stanford, University of Illinois, University of Michigan, Harvard, Penn, Columbia University, MGIMO. There are hundreds of courses, dozens of topics.

· Udacity (https://www.udacity.com)

English language.

Nearly 200 free courses on data, programming, business, and career.

· Edx (www.edx.org)
English language.

Another site that publishes materials from the best universities in the world: Berkeley, Caltech, all 8 Ivy League universities. The subjects of the courses are enormous — from architecture to physics.

· Khan Academy (https://www.khanacademy.org)

Language: English and Russian

The Academy offers practical exercises, a training video and its own educational platform, which allows you to master the disciplines at your own pace. Service motto: you should know only one thing — you can learn everything

· Udemy (https://www.udemy.com)
English language.

Courses on almost any topic: from first aid to financial analytics. Among the instructors are Mark Zuckerberg and Marissa Mayer.

· Skillshare (https://join.skillshare.com)
English language.

Here you can learn literally everything from experts in their field. Marketers, writers, designers and even bakers share their experience; explain it in an accessible and humorous way. There are both paid and free materials.

· CrashCourse (https://thecrashcourse.com)
English language.

The authors of the project are sure that education should be accessible to everyone; therefore, they created a free educational platform. There are many courses: biology, psychology, technology, art

· BBC. Learning English (https://www.bbc.co.uk/learningenglish/)
English language.

An excellent resource from the well-known television channel for those who want to improve their language level. There are a large number of materials, including business English.

· Exam English (www.examenglish.com/)
Language: English

The site will help those who are preparing to pass the exam in the format of IELTS, TOEFL, TOEIC, etc.

We hope that it became interesting to you and you are ready to view more than 100 links prepared by us for free courses, and you are also ready to add your information about such courses that exist in your country, region, and continent. We welcome the whole world and all languages!

Join the channel — https://t.me/be2do

View open source and add more courses — https://sites.google.com/view/free-learning-covid19/home

What it is?

Recently, more and more one has to read a lot about the need to improve the properties of certain objects and subjects — from plants, in order to increase productivity and their resistance to droughts or diseases, and up to humans — in terms of enhancing our certain qualities (health, immunity, appearance, longevity ) What seemed like science fiction is today quite real projects with results. Here is one of these methods of improving properties that will be discussed beneath.

We owe our longevity to stem cells, which are located deep inside certain tissues of our body and replace instantly old cells. In recent years, science has made significant progress in the treatment of certain genetic diseases by editing the stem cell genome. To do this, scientists are first removing from the body, editing by making necessary changes in genome, and then place back into the patient’s body. This procedure is called CRISPR. CRISPR is one of the most promising technologies of recent years, and its role will only grow in the upcoming years. However, not everyone understands exactly how gene editing works, and a number of ethical issues arise. In short, CRISPR — more precisely, CRISPR / Cas9 — a powerful tool for editing genomes. It is based on an element of the bacterial defense system that biologists have adapted to modify the DNA of plants, animals, and even humans. The technology allows corrections in just a few days, not weeks or months. Human being has never had such an accurate tool for manipulating genes.

The history of CRISPR began in 1987 when Japanese scientists who studied Escherichia coli discovered unusual repeating sequences in its DNA. It was not possible to find out their biological significance, but soon similar fragments were found in the genome of other bacteria and archaea. The sequences are called CRISPR — Clustered Regular Interspaced Short Palindromic Repeats. Their function remained a mystery until 2007, when specialists in the Streptococcus bacterium, which is used to prepare fermented milk products, determined: these fragments are part of the bacteria’s immune system. The fact is that bacteria must constantly repel the attacks of viruses — their natural enemies. To do this, they produce special enzymes. Each time a bacterium succeeds in killing a virus, it cuts off the remains of its genetic material and stores them within the CRISPR sequences. This information is then used in the event of a new virus attack. When attacked, the bacterium produces Cas9 proteins that carry a fragment of the genetic material of the virus. If this site and the DNA of the attacking virus match, Cas9 cuts off the genetic material of the last and neutralizes the threat. For some time — this discovery was interesting only to microbiologists. However, everything changed in 2011, when biologists Jennifer Doudna and Emmanuel Charpentier decided to study the CRISPR mechanism more precisely. They found that the Cas9 protein can be tricked into giving artificial RNA. A protein carrying such RNA will look for genetic fragments that match what it carries. Having found a match with someone else’s DNA, it will begin to grind it, regardless of whether it belongs to a virus, plant or animal. As noted in a 2012 article by Doudna and Charpentier, this mechanism can be used to cut any genome in the right place.

In February 2013, it was proved that CRISPR / Cas9 can be used to edit DNA in mouse and human cell cultures. Moreover, it turned out that the technology allows not only removing unnecessary genes, but also inserting others in their place. To do this, just add enzymes that restore DNA. Scientists quickly realized the enormous prospects of CRISPR. If in 2011 only 100 articles about it were published, then in 2017 this figure reached more than 14,000.

The idea of ​​gene modification is not new, and its various methods have existed for many years. However, CRISPR is superior to all previously known technologies due to its availability and accuracy. Editing a single gene will cost only $75 and take several hours. In addition, importantly, the technology works with any organism on Earth. There are almost infinite potential applications of technology. First, CRISPR allows scientists to figure out the function of various genes. It is enough just to cut out the studied gene from DNA and see what functions of the body were affected. However, the public is much more interested in practical applications. They can be divided into several points:

1) Changes in agriculture

CRISPR allows you to make crops more nutritious, tastier and more resistant to heat and stress. You can give plants other properties: for example, cut out the allergen gene from peanuts, and introduce resistance to the deadly fungus into bananas. The technology can also be used to edit the genome of domestic animals — for example, cows.

2) The fight against hereditary diseases

Scientists intend to use CRISPR to excise mutations in the human genome that are responsible for a variety of diseases, such as sickle cell anemia. The technology will also allow the excision of Huntington’s chorea genes or BRCA-1 and 2 mutations associated with breast and ovarian cancer. Theoretically, a CRISPR attack can even stop the development of HIV.

3) New antibiotics and antiviral drugs

Bacteria develop resistance to antibiotics, and developing new ones is expensive and difficult. CRISPR technology makes it possible to destroy certain types of bacteria with high accuracy, although a specific technique has yet to be developed. A number of researchers are also working on virus-targeted CRISPR systems.

4) Genetic drive

Using CRISPR, one can change not just the genome of an individual animal and plant, but also the entire gene pool. This concept is known as “genetic drive”. Usually, any organism transfers half of its genes to offspring. However, the use of CRISPR can increase the likelihood of gene transfer by inheritance to almost 100%. This will allow the desired character quickly spread throughout the population. In a more sparing version, mosquitoes can be made resistant to infection with malarial plasmodium. They will not be able to transmit the parasite to humans, and malaria will be put to an end. However, to implement such projects, it is necessary to overcome the doubts of skeptics who protest against such a large-scale invasion of nature.

5) The creation of “designer babies”

This possibility attracts the most public attention. However, according to scientists, so far our technological capabilities do not allow us to create children with desired qualities. For example, thousands of genes are responsible for the level of intelligence, and adjusting them all is not yet possible. Perhaps in the future technology will reach the desired level, but so far there is nothing to worry about.

In 2015, Chinese scientists attempted to correct the genome of a human embryo. They took a fertilized human egg with a spoiled gene leading to beta-thalassemia blood disease. Cas9 protein and RNA — guide were implemented into the cell, which were supposed to find and “bite” the wrong copy of the gene, followed by repair using a healthy matrix. As a result of the experiment, in 5–10% of embryos, the mutation responsible for the occurrence of the disease in adults was indeed corrected. It’s a good news.

The bad news is that all the cells of the treated embryos had a large number of mutations that did not appear at all where they were supposed. Thus, the technology needs to be improved, it is not accurate enough. Accurate editing is obtained when a portion of the target DNA with a length of a little more than 20 nucleotides complementary interacts with a completely corresponding RNA — guide. But there can be a large number of variants of the target sequence in the genome that differ from it by only one letter, even more variants that differ by two, and so on. Each of these variant targets interacts worse than a perfectly suitable target, say 10 times worse. However, since there are many such sequences, incorrect recognition (and, therefore, cutting and editing) is very difficult to avoid. How to deal with this is still unclear. Obviously, you need to improve the specificity of Cas9 protein and choose guides very carefully.

Not all scientists consider CRISPR a safe technology. For example, according to recent studies, gene editing can cause extensive non-targeted mutations. The authors of another work note that CRISPR is mistaken in 15% of cases.

Prospects to study CRISPR-systems

Today CRISPR is one of the most popular technologies. Many scientists and entrepreneurs dream of working with CRISPRs. Now these studies are becoming generally technological. There are few fundamental questions left. There are several established strong groups in the world, the competition is very strong. It is promising to do now what in 5–10 years can be hype, repeating the success of CRISPR/Cas. But where the next breakthrough will be, it is impossible to predict, this is the beauty of science. It is interesting that this yet unknown area of ​​the future breakthrough should not at all be in the mainstream now. After all, 10 years ago, none of the “serious” scientists did CRISPRs. By the way, CRISPR/Cas is already the second case of how studies on the interaction of bacteria and their viruses lead to a revolution in biomedicine. The first revolution occurred in the 1970s, when restriction enzymes were discovered, without which molecular cloning and genetic engineering were impossible. Among the existing unresolved problems in the biology of CRISPR/Cas-systems, the following can be distinguished. We do not know where most spacers come from. After all, only a few percent of spacers are of viral origin, similar to DNA fragments of known viruses, all the rest, the vast majority, do not look like anything. An interesting question is the evolutionary origin of CRISPR/Cas systems. There is a hypothesis that they are related to transposons — DNA sections that encode special proteins that are busy rearranging those same DNA sections that encode them. Such unusual jumping genes. Now scientists are trying to confirm this hypothesis experimentally. In addition, the search for new, still unknown CRISPR / Cas-systems is quite relevant. Until recently, three different types were known, one of which, type II, turned out to be editable. Recently, scientists have experimentally confirmed the presence of three additional types of these systems, that is, people do not yet know all of their diversity. And among unknown systems there may be those that are promising from a practical point of view and free from the disadvantages of Cas9-based systems.

Another interesting goal of research, which has obvious practical interest, is to understand the molecular mechanism of target recognition and learn to control this process. This is a special case of the general problem of the specific interaction of macromolecules. Scientists do not understand very well how in cell molecules of proteins, nucleic acids find their “right” partners and avoid “wrong” interactions. Who helps cells make the right choice? CRISPR/Cas9 gene editing technology is uncomplicated, it is important to make sure that it is safe for humans, but in the future, it can democratize research in life sciences in general. Earlier media reported that for the first time it was possible to edit the human genome using CRISPR/Cas9 technology, which allows you to cut out certain sections of DNA that determine the body’s predisposition to certain diseases. A group of Chinese scientists introduced cells with a CRISPR/Cas9-edited genome into the body of a patient suffering from incurable lung cancer. In principle, this technology is effective and easy to apply. But there is only one serious problem: the human genome is very large, it is very difficult to ensure that you have edited only in the place where you need, and did not make any additional changes in other places in the genome. Cas9 is a bacterial protein that binds a small piece of the nucleic acid of the virus and, upon recognition, cleaves its corresponding DNA. It turned out that such a protein can be introduced into the cells of mammals, for example humans, and instead of a small portion of the nucleic acid that naturally originates from the virus, any other DNA fragment can be taken and it will induce the Cas9 protein (Cas9 protein itself is molecular “scissors”) to the site of your choice, actually programmed by you. Using CRISPR/Cas9 technology, one can make the Cas9 protein recognize virtually any place in the genome, break it, and then “fix” it. Imagine that in some place a mutation occurred, a change in one DNA base to another and due to which some kind of genetic disease arose. Therefore, using CRISPR/Cas9 technology, one can recognize this changed place, and then replace it with the correct one, that is, edit the genome. In terms of practical application in humans, it is still very early to speak, since clinical trials are ongoing. Chinese scientists took immune cells from several patients who had small cell lung cancer, and then the genome of these cells in the laboratory was changed using CRISPR/Cas9 technology to make these cells more active in terms of recognition of cancer cells. Then the edited cells were propagated in laboratory conditions. Now, each patient will be injected several times with his own edited cells, and for several months, they will see if it is harmful, because such hyperactive immune cells can lead to undesirable consequences. Patients will not be cured, now they are just checking that they will not get worse: safety tests. Similar clinical trials will begin soon in the United States. Scientists believe that for some types of cancer, but not for everyone, the technology will work. Within two years, you can wait for experiments on volunteers already with treatment. ”CRISPR/Cas technologies are rapidly developing and commercializing in the USA, China and Western Europe. You need to understand that, in principle, this is a simple technology, you can edit genes in your “garage”, you just need to know what you are doing and why. In the near future, this technology will make it possible to very democratize research in the life sciences and make it more accessible.

Problems, threats, CRISPR moral and ethical standards

Potential applications of the new technology include the treatment of hereditary diseases (hemophilia, beta-thalassemia, and muscular dystrophy), therapy of oncology and viral infections, including HIV. But there are more exotic potential uses. For example, the fight against multifactorial diseases (diabetes, schizophrenia, etc.) or editing embryos with artificial insemination to select a specific appearance for children. It is here that many ethical issues arise, which began to be discussed, but so far have not received a consensus solution from the world community. When is it possible and when is it impossible to apply genome editing? So far, in the absence of a single position among humankind, each country decides this in its own way. New genome editing technology can give wealthy parents the opportunity to pre-buy their inborn (and inherited) physical and intellectual benefits for their future children, which will equate them with divine providence. American biochemist Jennifer Doudna, one of the authors of the method, is already comparing her innovation with the atomic bomb. In both cases, we released forces that are very difficult to control and that are potentially capable of destroying humanity — or changing it beyond recognition. Today, she is an opponent of this technology and understands what its total implementation can lead to. Unprecedentedly accurate and at the same time relatively simple genome editing technology, probably opens the way to healing from many terrible diseases, from which there was still no protection. But at the same time, any ill-considered introduction of inherited changes in the human genome can lead to no less terrible consequences and jeopardize the very existence of our species. One of the ethical issues associated with CRISPR-Cas9 relates to issues of social justice — how this technology will affect society.

Or here’s another example of an opinion against. One of the creators of CRISPR/Cas genome editing technology, Feng Zhang, called for a global moratorium on the implantation of edited embryos and the birth of such children after a Chinese scientist reported the first successful experiment in this area. Chinese scientist Jiankui He announced the birth of the world’s first children from genetically edited embryos. According to the scientist, twins were born in whom he tried to create resistance to HIV infection by disabling the CCR5 gene. Although human cloning is prohibited in China, there is no direct ban on the genetic editing and implantation of viable embryos, unlike in the United States. The moratorium, according to Zhang, should act until the scientific community has developed safety protocols for such experiments. Based on the two views of the pioneers of genetic modification — Genetic modification for reproductive purposes would jeopardize universal human rights. However, there will be even more ethical issues related to new technologies in the field of genetics and reproduction in the future. Bioethics is becoming an increasingly important discipline.

Other problems are related to the fact that the possibilities of genetic editing change the very concept of a family. With the advent of artificial insemination and surrogacy, in principle, the understanding of the institution of the family has become more complicated. Now, some children, in addition to their father, may have two mothers: surrogate and “legal”. And if an egg is used for conception and a sperm pair, which are then transferred to a surrogate mother, the child also has two mothers — a genetic and a surrogate. Theoretically, situations are possible when a legal, genetic, and surrogate mother is three different people. Another problem is the emergence and development of Biomedical Offshores. People go to countries with loyal legislation to implement procedures that are ambiguous in terms of ethics and admissibility by the legislation of a particular country. Gene therapy is already becoming at the center of such “controversial” cases. In general, now, the world community is very careful about editing the genome, when it is not directly related to the treatment of serious diseases that cannot be cured otherwise. The fact is that technologies are still imperfect and not as specific as possible. So, in the mentioned experiment of Chinese scientists on embryos in the DNA of many embryos, not only the sites that the scientists planned to change, but also other, random ones, changed.

And here we come to a more global problem of ethical character — gene modification for reproductive purposes threatens the rights of people of future generations. Editing the genome for human reproduction is fraught with huge social risks. Potentially, it could threaten the health and autonomy of future generations, exacerbate existing social inequalities and lay the foundation for new market eugenics that will exacerbate discrimination and conflict. It is now actively debated whether such risks are acceptable, however, such discussions are conducted mainly in publications and at meetings of scientific and professional organizations, far from the eyes of the general public and the attention of civil society. It is important that the views of human rights defenders be heard during this debate. Imagine a world where rich parents will be able to buy genetic improvements that will give their children real or perceived benefits, where the future of children will be considered predetermined by their genes, where at birth they will be divided into “good” and “bad” depending on their DNA. How will this affect human rights and the right of children to determine their future? Gene modification for human reproduction consists in changing the DNA of human embryos. It differs from genetic editing for the treatment of diseases. Editing the somatic cell genome, or gene therapy, aims at treating living patients, while editing the embryo genome is not a cure. The result of the last will be a new human being with predetermined genetic characteristics that will be inherited by his descendants — and this is a serious moral and ethical challenge to human evolution. Gene therapy, if it becomes a safe, effective and widely available method, will be a great addition to the arsenal of modern medicine. Germ line editing, by contrast, does not heal anyone. It creates future children, depriving them of future generations of choice, whether to accept the modification of their DNA. In cases where there is a risk of transmission of a serious genetic mutation, existing embryonic screening techniques in almost all cases can eliminate unwanted genetic variation from the family line. Of course, during embryonic screening, important ethical questions are raised about which diseases are “unworthy of life”. But this procedure is much safer and less fraught with social and ethical complications than manipulations with human germ lines.

At the end of the 20th century, academia, politics, and pop culture first embraced concerns about editing human embryos. The 1997 Gattaka dystopian film talked about a brutal society where genetically advanced people take advantage of unperfected ones. The press resonated the words of molecular biologist from Princeton University Lee Silver about a genetically stratified society. He predicted that “the wide gap that exists between rich and poor nations will continue to deepen and deepen until, finally, their common human inheritance disappears”. In the same period, due to concerns about security, respect for human rights, and the potential emergence of high-tech with consumer eugenics, more than 40 countries have banned the modification of genes transmitted through generations. Several important international agreements in the field of human rights have also appeared, in which it is argued that the modification of germ lines in humans encroaches on human dignity, and yet this concept is basic to human rights:

• These include the Council of Europe Convention on Human Rights and Biomedicine, 1997 (the so-called Oviedo Convention). Its article 13 expressly prohibits interventions aimed at “changing the genome of the heirs of a given person”.

• Another 1997 document, the UNESCO Universal Declaration on the Human Genome and Human Rights, states that “the human genome underlies the original community of all members of the human race, as well as the recognition of their inherent dignity and diversity.” Article 24 states that “effects on offspring” may turn out to be practices “incompatible with human dignity”.

One of the important motives for the appearance of the Universal Declaration of Human Rights was the horror that humanity experienced before the Nazi eugenic crimes during the Second World War. Meanwhile, the same logic is behind consumer eugenics, which will arise if the modification of the germ line is allowed: a person will have little chance of breaking through his life if his unmodified genes are considered second-rate from birth. Such a prospect should especially concern human rights activists in light of the fact that recently there have been attempts to move away from the old position, when editing human embryos was considered unacceptable in the world. So, in a report prepared in 2017 by a committee of the National Academy of Sciences and the National Academy of Medicine of the United States, it was recommended to allow, under certain conditions, gene modifications for the purpose of human reproduction, which leaves an opportunity to expand such conditions in the future. However, in the real world, with its market pressure and inadequate regulation, these restrictions will soon crack. One has only to open the door for the modification of germ lines in people — and the spread and application of this technology will be impossible to curb. Pandora’s box is no longer close. Although, on the other hand, if there is a chance for improvement, and all people equally will get health without harm, then why not? But we understand the world in which we live in around — a world of libertarian chaos, justifying itself by market necessity. Therefore, on the horizon of the future CRISPR is an instrument of social inequality.

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Sergey Golubev (Сергей Голубев)

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business

The economic costs of COVID-19 are devastating, on a scale perhaps never seen in modern times. At this stage, the human costs are vital. This is one of those rare points in history. The COVID-19 pandemic will profoundly change our economy, our behavior, and society. Some leaders who failed the test will lose their jobs. Some governments that failed their people will lose their power. Many institutions will come under scrutiny. Blockchain’s mission is to help “realize the new promise of the digital economy now.” It’s a new promise because we’re in a new second era of the digital age, where technologies like artificial intelligence (AI), the Internet of Things (IoT), augmented and virtual reality (AR/VR), biotech, and above all, blockchain is providing leaders with an unprecedented set of opportunities. These technologies are now relevant as never before, not just to business and the economy but the future of public health and the safety of global populations. Traditional systems have failed, and it’s time for a new paradigm. To build on Victor Hugo, “Nothing is more powerful than an idea that has become a necessity.” We have to understand the challenges of COVID-19 and the possibilities of using blockchain technologies in areas of need. We have to identify use cases where innovators are already deploying blockchain in Public Health and other sectors. Nodaway, we can detail five main areas for action:

1. Personal identity, health records, and shared data

Data is the most important asset in fighting pandemics. Without it, we can’t answer critical questions: Who are infected? Where have they traveled? If any useful data exists now, it sits in institutional silos, inaccessible to individuals and other stakeholders. We need better access to the data of entire populations and a consent-based data sharing system. The trade-off between privacy and public safety need not be clear. Through personal identities where individuals own their health records and can freely volunteer it to governments, clinicians, drug companies, and others, blockchain achieve both.

2. Just-in-time logistic and supply chain solutions

Supply chains are critical infrastructure for our globally connected economy, and COVID-19 has put them under tremendous strain, exposing potential weaknesses in their design. We must build supply chains that are transparent, where information can be accessed quickly, and where participants can trust that information about goods are accurate. Here blockchain is devoted to these targets. Blockchain serves as a “state machine” that allows us to know the state of not only our suppliers but also the assets themselves.

3. Sustaining the economy

If supply chains are the machinery of global commerce, then money is its blood. Yet, money itself has been a source of confusion and strain during this crisis. First, cash has been criticized as a carrier of the disease, and the drumbeat to abolish it altogether is growing louder. This use case highlights the what, why, and how of global digital cash. Second, the health crisis has become a financial crisis, destroying supply chains, closing off access to credit, and raising the alarm of counterparty risk. Third, insurance and risk management have been mishandled at business and personal levels. We must rethink ways to protect people and businesses from catastrophic risks. Fourth, decentralized models of governance, organization, and problem-solving can not only cut the costs of healthcare delivery but also transform how nongovernmental organizations (NGOs), governments, and individual donors contribute money and other resources to the fight against COVID-19 as an example.

4. HR database

Front-line medical professionals are the heroes and our last line of defense. Yet hospitals can’t onboard people fast enough. This is not for lack of talent; it’s the inability to find them. That’s what one calls the “talent management paradox,” where organizations continuously struggle to tap into the pool of skilled people looking for work. How does blockchain solve this? By streamlining coordination among different geographies, departments, and certification bodies so that process becomes more efficient and transparent. Convoluted criteria checks, redundancies in the certification process, and the processing of documents all slow down (re)licensing. If, as part of personal identity, every professional had verifiable and trusted professional information, then we could resolve this talent management paradox and get people to where we needed them, saving lives and starting jobs in the process.

5. Models to reward responsible behavior

People respond to incentives. That’s the consensus among behavioral economists and a theme of much public policy: How do we improve individual and business accountability during a crisis? What kinds of incentives do we need to manifest behaviors that will prevent viral outbreaks from rocketing into health problems or mitigate the damage that pandemics cause — without compromising privacy or liberty? Government must be aligned, too. How do we encourage policymakers, governments, businesses, and other institutions to prepare for the inevitable by keeping supplies on hand, designing a strategy for handling public health crises, or reserving funds for swift response? Cryptoeconomics can help with alignment: blockchain serves as a mechanism to synch up the incentives of stakeholder groups around issues and activities, changing patterns of behavior in the process.

Governments and public authorities

Governments must wake up to the blockchain opportunity. Every national government should create an emergency task force on medical data first to start planning and implementing blockchain initiatives. They can stimulate the development of technology firms working on the solutions described here. They can act as a model user of these important platforms and applications. They must focus on the supply side of the market for data, not just the demand side. That means passing legislation to mobilize stakeholders around creating personal identities and citizen-owned health records as a starter. They should pilot blockchain incentive systems for motivating people to behave responsibly. They should partner with medical professional associations and other players to implement blockchain credential systems. Governments have the world’s largest supply chains, many involved in producing critical medical provisions. They should rapidly pilot asset chains as described herein. Central banks should move swiftly to create a digital currency in their country and the International Monetary Fund should provide leadership in rolling these into a global, hegemonic, synthetic digital currency as an option. Data is perhaps the most powerful asset in fighting pandemics. If governments, clinicians, and citizens had access to data about a virus, they could take effective steps against it. We need data about what, where, when, how, who — how many people are infected, where are they located, when were they infected (and when did they recover), how were they infected, and who else did they contact? The countries with good access to such data — China, South Korea, and Singapore, for example — have had some measure of control over this coronavirus. Since they had experienced SARS or MERS, they were much faster to ban travel, impose quarantine, and enforce social distancing. Now Hubei province in China has lifted travel bans, and shopping malls in Wuhan are reopening under banners, “Wuhan is back!”. Countries with poor data — Italy, Spain, and now the United States — have fared much worse.

Nevertheless, getting good data these days comes at a high cost to privacy and individual rights. Chinese authorities impeded the spread of the virus through mass surveillance and big data analytics combined with propaganda. Let’s start with the surveillance. There are an estimated 170 million television cameras in China. These continually stream video into a centralized system that applies facial recognition software and other AI to identify people within their database and check their whereabouts against their identities — which is all the easier because it’s a real-name system, meaning that citizens must use their government-issued IDs to buy mobile SIM cards, open social media accounts and travel by air or rail. No pseudonyms. So if the Chinese lawfully buy SIM cards, the government can track citizens by their mobile devices. In Hangzhou, authorities deployed security staff wearing Rokid smart glasses with augmented reality. As they roamed the streets, security officers could check the temperatures of several hundred people in only a few minutes. During the total lockdown, people needed special permission to travel outside their immediate neighborhood. If they were caught on camera but didn’t have permission to be where they happened to be, then the police showed up. If they ventured beyond the nearest grocery store, they got a phone call from the police. Combined with a campaign of collective action and personal sacrifice, China managed to save countless lives and instill pride in its citizens for their unified response, compared to the seemingly impotent efforts of the West. Blockchain opens a new world of possibilities that shift control to individuals. In the city of Hangzhou in Zhejiang Province, VestChain Technology — a tech firm that develops open-source blockchain solutions on Ethereum in support of smart contracts and machine learning — has launched a decentralized application for identity management called Access Pass, the app integrates with WeChat to generate QR codes that enable residents only to enter their gated communities. According to VestChain, the app collects, encrypts, and stores users’ personal data in VestChain’s blockchain-based cloud servers; not even VestChain can access these data, and it has committed to deleting the data when the pandemic has run its course. This is important for the future of health, prosperity, and freedom because your medical information is a subset of your digital identity — the “virtual you.” The digital crumbs that you leave in daily life create a mirror image that knows more about you than you do. You probably can’t remember dozens of your personal identifiers: the numbers and other details of your driver’s license, passport, credit cards, marriage license, university, or corporate ID. Unless our brain works differently from ours, you definitely don’t recall your exact location a year ago, what you bought or how much money you spent and received that day, what you said online, and maybe which medications you took. Blockchain ledgers can remember for you. That’s just the beginning. In the future, the virtual you will contain detailed medical information like your heart rate, blood pressure, temperature, and myriad other real-time measures of what you do, how you function, where you are, and perhaps even how you feel. The trouble is that the virtual you are not owned by you. We can create the asset, but powerful companies and governments expropriate it for sure and without a doubt.

The crisis has shown to everyone that governments, strong and effective, are, in fact, critical to our society. So much for Ronald Reagan/Margaret Thatcher’s theory that “government is not the solution to our problem; government is the problem.” Libertarianism as an ideology is in deep trouble. In the United States, for example, people are looking to the Centers for Disease Control and Prevention (CDC) for up-to-date and accurate information and guidance, to the Food and Drug Administration for a vaccine, to the Army Corps of Engineers to set up hospital facilities, to Congress for financial relief, and to the Federal Reserve to lessen the inevitable recession. In some countries like China or Dubai, there is strong leadership to use this technology in transforming government and building an innovation economy. Governments should act now to help manage the crisis and create the conditions for controlling pandemics more effectively in the future:

· First, every national government should create an emergency task force on medical data to start planning and implementing blockchain initiatives. To implement this, we need new laws in many areas: our current legislative parameters use outdated frameworks that limit the ability to access and use data while protecting citizens’ rights. Governments must set the policies to ensure that the second era of the digital age actually serves people. By creating sensible legislation around privacy, security, and identity, policymakers can open up opportunities for blockchain innovation in.

· Second, governments can stimulate the development of technology companies working on the solutions outlined above. Many of these are early-stage companies that are critical but most vulnerable. This can be achieved not just through financial investments, but there are numerous other tax changes that can encourage investment in these companies. Securities legislation in most countries hampers the development of blockchain fundraising activities like token generation events, and entrepreneurs must deal with regulatory unclarity or outright regulatory hostility toward this technology and its leaders.

· Third, governments must pass legislation to mobilize stakeholders to create a sovereign health record and personal citizen identity. We need dedicated, speedy work on consent frameworks and legislation that confers ownership of data on the individual. Consent and data governance are key to unlocking this potential of blockchain and how the technology can better serve society’s needs.

· Fourth, governments have the biggest supply chains in the world, many of which are now involved in producing critical medical supplies and delivering services. The opportunities presented here for more proactive and flexible supply chains should be thought for officials who must manage not only shortages but the public’s faith in their systems

· Fifth, governments should move rapidly to implement national digital currencies. The International Monetary Fund can take important leadership in rolling this global basket of currencies into a synthetic hegemonic digital currency.

Private sector and business

Blockchain is already beginning to change many industries, including parts of the financial services industry, shipping, and global transportation logistics, upstream oil and gas, natural resource tracking and consumption, manufacturing, and segments of our global supply chain including food and electronics — many of which have been drastically hit by this crisis. That said, we are still in the very early days of this second era of the Internet, and deployment is still immature. Companies can act now, and benefit in the long term through understanding how blockchain can transform their businesses:

· First, large players in these industries affected by COVID-19 must still lead the way, starting today, by incorporating blockchain into their infrastructures. Building systems using blockchain will create a wider, more thorough data environment to mitigate future crises like this one.

· Second, firms must build blockchain consortia in the industries affected by the crisis. Businesses can provide useful solutions to help mitigate the crisis, as well as demonstrate the value of blockchain in the face of distorted supply chains and data opacity, planning an important role. We need coopetition among even the biggest competitors — especially in this time of crisis, as we all fight a common enemy. We need to challenge ourselves to move beyond our corporate boxes. We need to think about how we stitch together our solutions. We need to set aside our egos.

· Third, the private sector needs to continue its work to create pilots framed around all these opportunities: startups on medical records, credentialing systems, incentive structures, and other sovereign identity solutions. Implementing a sovereign digital personal identity that includes these aspects of identity will require cooperation with government.

· Fourth, when designing these test pilots, companies would do well to consider embedding incentive systems to mobilize their consumers to behave in a socially responsible way — whether that be sharing their data for health research and infection tracking or following government pandemic protocols. To achieve effective incentive systems, they will have to collaborate with the government.

Much of the innovation on public health will come from entrepreneurs; it is our hope that this initiative will wake up entrepreneurs around the world to seize the day.

NGO and civil society

Experts recommend that privacy advocates turn away from focusing purely on laws and governmental regulation to protect privacy. Rather, it is time to advocate for a personal medical record and citizen identity to protect data privacy while also making it more easily accessible. As we have seen throughout this situation, this crisis stems from a crisis in data accessibility. Without transparent data records, politicians, healthcare providers, researchers, and citizens are not prepared to build proactive solutions. Citizens — the creators of this data — have a vital role to play in moving this dial forward. Professional associations like the American Medical Association, nurses’ associations, and others would benefit from exploring the personal patient record and becoming its strongest advocates. Blockchain can enable patients to provide rights easily to their medical data to scientists and clinicians for critical research and planning. These associations, along with schools, colleges, and universities should consider blockchain for medical licensing and accreditation. Everybody needs the right clinicians and practitioners at the right places in the right times and blockchain is the new platform for credentials and trust.

Resume

This pandemic has shown us the extent to which our current systems are not ready for the next age of our global economy and society. What makes anyone think we’re prepared for the next global crisis, the next transformation to our economy, or the next test in our life? A new era of transformative digital technologies is arriving. According to expert opinion, we haven’t realized the promise of the first era — the promise of a P2P empowered world. Instead, the economic and political benefits have accrued asymmetrically, with power and prosperity funneled to those who already have it. In pandemics, those hardest hit are the most vulnerable among us, in the poorest neighborhoods with the worst sanitation systems. Technology doesn’t create prosperity and the quality of healthcare — any more than it destroys privacy, property rights, and peace of mind. However, in this digital age, technology is at the heart of just about everything — good and bad. Let’s go to working toward the good within our operations and through our relationships with customers, employees, and supply chain partners. The opportunities described above ought not to be taken as one-time initiatives. Rather, they are integral to ongoing business and governmental concerns, opportunities that should pull us out of this crisis and prepare us for the next.

It appears that once again the technological genie has been unleashed from its bottle. Now at our service for another kick to transform the economic power and the old order of human affairs. You already can see all these transformations. Laws that would have taken months, if not years, to clear congress are passed in days. Businesses like Zoom, once used mostly by technology companies, have become important tools of daily life for community and business. Meanwhile, former titans of the Industrial Age like Boeing are asking for bailouts. Add to this mix the exponential properties of technologies like blockchain, and we’re setting ourselves up for a cataclysm of some kind.

One can anticipate a real crisis of leadership as the new digital only models of this next era conflict with the old industrial examples. Maybe this awful crisis will call forth a new generation of leaders who can help us finally get the digital age on track for a promise fulfilled? I hope so.

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Sergey Golubev (Сергей Голубев)

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business.

**Bit of theory
**

After the global economic crisis of 2008, the question of trust in the modern international financial system arose globally. The answer to this request was the emergence of the first decentralized Internet system — Bitcoin, which from “decentralized” money turned into a valuable financial asset by 2020. After that, other financial technologies on the blockchain began to appear and actively develop. Most of which are competing with traditional financial organizations and institutions.

DeFi (Decentralized Finance) is a decentralized finance industry, also called “affordable finance”. It has become one of the main drivers for using the Ethereum network. It became the basis of its capitalization and popularity. According to the DeFi principles, they are based on the creation of an innovative ecosystem of financial services, which is accessible to everyone without exception. However, it does not need permission from any central authority to access financial services and is not regulated from a single monitoring center. In addition, the main difference between the DeFi systems is that the user of decentralized financial services acts as the custodian of his money and completely controls his assets. You can also find this kind of definition:

“DeFi is all services in one form or another transferred from the ordinary financial world, but with fewer intermediaries, regulation, and also without the consensus that is used in traditional financial services. They are no different from other fintech applications on the blockchain. It’s just that the developers have introduced a new abstraction for classification and singled out as a separate area of their activity”

But despite this, according to the crypto-community of decentralized finance, developers in this area professes a number of principles:

• Products must be open source and compatible. Since this allows products to interact within the ecosystem from a technological point of view, which increases their practicality and popularity.

• DeFi-projects adhere to financial inclusion, that is, decentralized financial services can be available to absolutely everyone who has the Internet.

• Financial transparency is important: at the user level, all information must remain confidential, while within the market, all data must be transparent.

Therefore, in order for a project to become part of the DeFi community, it is necessary that the product is related to fintech, be developed on the blockchain, and adhere to common standards along with interoperability, that is, compatibility with other projects from the DeFi ecosystem. The beauty of the crypto industry is that there is no standardization. And we see a real market where financial services in an absolutely wild market must-win absolutely market competition with each other. This gives rise to opportunities for other businesses where a variety of tools is needed. In general, decentralized finance includes;

• DEX (decentralized exchanges)

• credit and insurance protocols

• derivatives

• payment channels

• stablecoins like Dai or USDC

• asset management funds based on smart contracts

• decentralized forecast markets

• other financial services based on the blockchain

But in order to realize the idea of ​​a financial system, all these products need to interact with each other, scale and independently exchange messages with each other. Since all the developments are based on Ethereum, the blockchain of which records the transactions of the entire crypto world, including operations from CryptoKitties and the casino, the issue of transfer processing speed and network scalability is still relevant. Moreover, one of the solutions to this problem is a number of products based on the Substrate blockchain and a number of others, which allows you to quickly conduct transactions and process them within one specific application, and not the entire decentralized universe.

In turn, the DeFi stablecoin in the Maker ecosystem, which allows anyone to issue Ethereum-based crypto-dollars, has become the cornerstone of DeFi. Stablecoin Maker DAO has become one of the key components of any financial protocol, contributing to an increase in the number of users, as it has reduced users’ concerns about the volatility of cryptocurrencies. Also, the DFi ecosystem includes the Dharma deposit and lending protocol, which is essentially one of the most important structures for the traditional capital market. In addition, there are more and more such practical examples, which emphasizes the relevance of the development of decentralized finance as a separate fintech industry and its prospects.

**DeFi position today
**

According to The Block’s analytics (https://www.theblockcrypto.com), approximately 49% of leading decentralized finance (DeFi) startups are located in the United States. This is not surprising, since the USA is an empire for centralized finance, so no one wants to lose ground in the decentralized version of services. Of the 73 industry firms tracked by experts, 12% are based in the UK, another 10% are based in Singapore. If you take into account the registration of these startups, then the ratio changes somewhat. 21% of them have different legal and actual addresses. Many prefer to register more friendly regulatory jurisdictions, such as Singapore, Switzerland, the Cayman Islands or the British Virgin Islands, notes The Block. Taking into account the legal registration, the share of the USA is reduced to 44%, in the UK and Singapore it is 10% each. In Switzerland, 8% of DeFi startups are registered, although only 3% work in the country. The largest number of industry companies is engaged in the asset management sector (27%), the second most popular area is liquidity providers and exchange providers (23%). Confidently developing in recent months, landing services are engaged in 14% of monitored startups. The largest number of companies (41) of the industry were registered in 2017. This is more than in other years combined (57%). One of the startups, the Forecast Foundation (Augur), appeared before the official launch of the Ethereum network, which became the basis of the DeFi industry. Statistics say that in February 2020, the cost of blocked funds on smart contracts of DeFi applications exceeded $ 1 billion. The startup platform dYdX reported that the total volume of loans issued for the year exceeded this figure, decentralized exchanges also noted an increase in trading volumes. All these data indicates development and claims to stability.

However, not everything is clear. Cryptocurrency lending could become the Achilles heel of DeFi. The innovative cryptocurrency market suddenly appeared against the backdrop of last year’s collapse in bitcoin prices and most other assets. Trying to avoid fixing losses, some hodlers in the midst of cryptowinter borrowed funds secured by digital assets, or deposited coins to get a small but passive income with minimal risk. Undoubtedly, the very young market is still tiny compared to the traditional counterpart. Statistics say that the volume of issued crypto loans compared to last year increased by 3.5 times. And DeFi here is at the epicenter of hype. Cryptocurrency loans include loans secured by digital assets. For centralized services like BlockFi and Crypto.com, bitcoin often plays the role of collateral, while for non-custodian DeFi applications it is Ethereum. The main range of products can be classified as follows:

• Cryptocurrency loans in fiat dollar to individual participants and companies with the transfer of funds directly to bank accounts

• Decentralized platforms for trading derivatives

• Cryptocurrency lending secured by other digital assets

• Non-custodial landing protocols (DeFi), using smart contracts on Ethereum to reduce counterparty risks and transaction costs

• Loan platforms with native token

• Continuous Securities Offering (CSO), where the essence of the model is to invest in the assumption that startups will consistently generate cash flows. Seeking to raise funds through CSO, the company undertakes to place part of its future income in escrow for a certain period. Investors through the platform can acquire claim rights to these funds.

It is not strange, but all of the above-decentralized services are growing in popularity in countries with expensive bank interest (like Argentina). Decentralized landing protocols not only minimize counterparty risk, but also provide transparent access to borrowed funds 24/7. It is likely that the development of cryptocredit and DeFi will trigger an increase in demand for coins used as collateral. Most likely, those who urgently need money, but have no desire to sell digital assets at a low price, will be most actively borrowing through such services. These are, first, residents and companies from countries with high bank interest rates, cryptocurrency traders, as well as those who are trying to hide their financial activity from the ubiquitous state eye. Almost a five-billion-dollar industry came out of nowhere just two years ago and the number of lending platforms continued to grow until the end of 2019. But the beginning of 2020 shows different dynamics. As expected, the coronavirus pandemic, which hit traditional finance, has also affected DeFi. A sharp drop in the market triggered a wave of liquidations secured by a pledge of debt positions (CDP). According to experts, during the period of volatility, DeFi users were motivated to pay higher commissions in order to carry out the necessary actions in time, for example, to increase collateral to avoid the elimination of CDP. This has led to an increase in fees on the Ethereum network. This, in turn, in March 2020 led to the collapse of the market at the largest Ethereum landing services MakerDAO and Compound, where there were many liquidations of debt positions. In April, the same trend is going on — a decrease in activity in DeFi. Nevertheless, this segment is still underdeveloped and not so large. Its advantages over the traditional banking system with expensive loans and low-yield deposits are undeniable. This means that there is a potential for market growth, and considerable hype.

**Prospects
**

Today, finance plays a major role in the global economy, but it is not an open system. After all, even if you have a bank account, you can be refused in loan for a new business and be left without financing. DeFi has to change that. With it, to interact with the system, the main tool of our time is enough — a smartphone. In addition, anyone can become a part of it. This is the main point for DeFi. With decentralized finance, users will have two incredible advantages over a modern system:

• The ability to fully control assets and access to them. You no longer need to trust intermediaries who charge interest for their services. Everyone can get access to the service, while the system does not have a single control body;

• All protocols running DeFi operate on open source. Accordingly, anyone can create a financial product based on it and come up with a new form of added value. This will accelerate the development of innovations and enhance the network effect, because with each new product more and more users and developers will switch to such platforms. Although for this, you need to have programming knowledge. An ordinary person without such experience is unlikely to be able to expand the capabilities of DeFi. If he is not an investor, of course!

DeFi means that people retain ownership of their assets and have full autonomy over them, rather than transferring them to the central system, allowing them to make decisions on your behalf. Considering this, in the future, DeFi will solve the fundamental problem associated with the traditional financial industry, while increasing its efficiency. In addition, there are many advantages to using DeFi as:

• Decentralization helps counter censorship,

• Freedom of participation regardless of social status or income

• Relatively fast and inexpensive transactions

• Users remain in private key ownership

• Enhanced ecosystem transparency to improve market efficiency

Undoubtedly, all these advantages will make DeFi the trend for decades and the center of attention for venture capital. To understand how the DeFi theme has a global future, it is worth paying attention to the expert opinion of venture capital. They wouldn’t have started financing DeFi projects so intensively if they hadn’t seen the point and sense. In its report, “Mapping Decentralized Finance (DeFi),” Outlier Ventures, a venture capital firm, outlines five characteristics of DeFi that are advantages over other financial ideas:

1. Resistance to censorship. Storage, transfer and exchange of tokens cannot be limited to a narrow group of players responsible for network maintenance.

2. Software assets. The assets that make up a DeFi product must have the attributes of standard decentralized network tokens.

3. The pseudonymity. DeFi applications must use Web 3.0 standards to validate operations and identification. This means that users use only a private access key, with which they sign their transactions and confirm the ownership of assets by analogy with Bitcoin. Additional user identity verification (KYC / AML) is not required.

4. Transparency and reliability. The holder of a DeFi asset can be found and verified using the blockchain. A DeFi service should not store user funds on large centralized wallets of cryptocurrency exchanges. The operations involve independent electronic wallets like Trust Wallet, imToken and Coinbase Wallet, as well as smart contracts.

5. No permission. Users can issue, trade and own DeFi assets without the approval of a bank regulator.

6. DeFi-applications do not need intermediaries and courts. The code determines the resolution of each possible dispute, and users, in turn, control all their means. This reduces the cost of providing and using products, and allows you to create a more trouble-free financial system.

7. Since the deployment of software of a new type of financial services is carried out over blockchain networks, the existence of a single point of failure in the operation of the system is excluded. Data is recorded on the blockchain and distributed among thousands of nodes, which virtually eliminates censorship or shutdown. Due to the fact that the framework allows you to create DeFi-applications in advance, their development and deployment becomes less complicated and more secure.

Decentralized finance takes familiar banking products and makes them freer. DeFi develops the advantages of cryptocurrencies and offer new tools for self-regulation of the financial market. This model increases the risks of fraud, but erases the boundaries between financial market participants. The issuer and seller of a decentralized financial asset is a technology entrepreneur, not a bank. Under these conditions, the host country of the parties to the transaction and local regulation no longer matter.

**Threats
**

What problems do DeFi face?

• Low productivity. Blockchains are slower in nature than their centralized counterparts, which leads to the creation of additional applications. DeFi application developers must consider these limitations and optimize their products accordingly.

• High risk of user error. DeFi applications transfer responsibility from intermediaries to the user. This can be a negative aspect for many. Developing products that minimize the risk of user error is a particularly difficult task when products are deployed over immutable blockchain networks.

• Poor user experience. Currently, the use of DeFi applications requires additional efforts on the part of the user. For these applications to be a key element of the global financial system, they must provide tangible benefits that will affect users’ desire to abandon the traditional system.

• The erosion of the ecosystem. Finding the most suitable application can be quite a challenge, along with this; users must have a certain skill in order to choose the best option. Also, the problem consists not only in creating applications, but also in thinking about how ideally they can approach a large ecosystem of decentralized finance.

Additionally, in its current state, DeFi is vulnerable to attacks and crashes, as can be seen from the attacks on bZx flash loans in February 2020. Moreover, most of the DeFi projects on the Ethereum platform are not very suitable for high-frequency trading, since they are limited in terms of computing speed. In addition, there is a problem of user acceptance. The lack of awareness and knowledge among the public, compounded by the fact that most DeFi applications have complex and confusing user interfaces, means that adoption can drag on for years. The concept of decentralized finance is amazing, but there are a number of risks that are hindering its global rapid advancement. Here are some of them:

• The risk of a smart contract. These systems are new; it takes time to test them in practice. When protocols interact with each other, the risks of smart contracts are multiplied. If a critical error is present in one protocol, this can lead to a general system vulnerability. Therefore, do not rush to place large funds in such systems.

• Collateral risk and volatility risk. Some forms of collateral for securing loans involve certain risks. Excessive collateral reduces the risk of volatility, but if the price of an asset falls too quickly, this requirement does not guarantee full coverage of the loan amount. A controversial point is the volatility of interest rates on many DeFi platforms, which casts doubt on the meaning of participating in them. Most likely, there will be agreements on replacing the floating interest rate with a fixed one, or other methods of fixing rates for an additional fee, but this introduces difficulties in the process

• Regulatory risk. DeFi platforms have varying degrees of decentralization, and we have not yet come up with lawsuits for claims. It is worth seeing if they will be, and how they will be decided.

There is a decentralized insurance area within DeFi that provides the ability to manage some of the above risks (Nexus Mutual, Convexity). There are also prediction markets like Augur, which allow users to bet on the likelihood of errors in the smart contracts of the protocols used. It is clear that the above risk management methods are just beginning to develop and introduce the risks of their own smart contracts into the process. But the logic of development confirms that they will justify themselves. And if decentralized finance systems become popular, traditional insurance companies will probably offer their services.

Additionally, at the end of 2019, one began to talk more and more often that DeFi itself would threaten the security and stability of the Ethereum network. DeFi, one of the most promising uses of the Ethereum, will become a serious threat to network security after the transition to the Proof-of-Stake (PoS) consensus algorithm. It is argued that the work of the DeFi protocols runs counter to the PoS algorithm for securing the network. The PoS consensus mechanism assumes that the owners of crypto assets participate in the net management through staking, while receiving a reward. The more users doing this, the more decentralized and secure the network. The problem is that funds blocked in DeFi lending do not participate in staking and security. Further development of DeFi and asset transfers will make the Ethereum 2.0 PoS Consensus Protocol weak and vulnerable to attack. In order to attack a blockchain network with PoS consensus algorithm, it is enough to own 1/3 of the assets participating in the stake. To prevent potential security issues, Ethereum 2.0 should offer competitive remuneration rates that are not yet available.

**Summary
**

The concept of decentralized finance aims to build financial services that are separate from traditional financial and political systems. This will create a more open financial system and possibly eliminate censorship and discrimination around the world. This idea looks quite tempting and mystical, but not in all cases, decentralization can be useful. The search for use cases that are most suitable for the characteristics of blockchains is crucial for creating a useful stack of open financial products. If successful, DeFi will take power from large centralized organizations and transfer it to the free software community. However, at the moment it is not known exactly how effective this financial system will be, and even more so when decentralized finances become mainstream and are accepted globally by the society. So far, the concept for the world of global DeFi looks mystical and unstable.

Join the chat — https://t.me/joinchat/AAAAAE84vCXg5PK-VpHADg

**Sergey Golubev (Сергей Голубев)
**

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business.

Why it is necessary and useful

The insurance industry is a huge market. In the United States, in 2019, the volume of paid insurance premiums amounted to a trillion dollars. However, despite such volumes, the industry is experiencing great difficulties, because of which insurance companies are losing more than $100 billion every year. Most of the problems are fraud, poor-quality data, or lack thereof, as well as the general inefficiency of business processes. Blockchain allows to open new opportunities in insurance, solve some of the problems listed, and significantly modernize the industry:

• The effectiveness of blockchain solutions will make the industry decentralized, transparent and more secure, reduce the processing time of requests and the cost of interactions and money transactions

• Reducing the number of intermediaries and full transparency of public platforms will significantly accelerate business processes, reduce their cost and increase confidence in the system and the industry as a whole

• Smart contracts automate administration, payments, reduce fraud risks, the amount of low-quality data (errors, inaccuracies, gaps) and improve the quality of customer service

• New types of insurance will appear as parametric insurance, peer-to-peer (P2P) insurance, microinsurance, and others

• The availability of insurance services will increase

Blockchain — a continuous chain of blocks with information and related to each other. Editing or deleting a chain is not possible; in addition, all information from it can be duplicated to other servers and computers. Thus, this is a special case of distributed ledger technology. This means that the use of DLT and the analysis of big data will soon be indispensable in insurance: this way companies will simplify the calculation of losses, select an individual approach to the client and protect financial information. Digital transformation is fundamentally changing the process of doing business: new products and services are emerging, a new infrastructure is growing, new principles for communicating with customers, and working with partners are being developed. These trends are also characteristic of the insurance market. Its development directly depends on the perception of new technologies, primarily the blockchain.

From the insurer’s point of view, blockchain can provide a secure and at the same time safe way to track transactions and store information, integrate partner ecosystems into your business and develop completely new products for the client. Experts identify four areas in which the use of blockchain can give a new impetus to the insurance business:

1. Financial Security

Blockchain will minimize the human factor in doing business — both errors or negligence, and outright fraud. A decentralized digital database will allow independent and impartial assessment of customers, without the possibility of intervention. A potentially dangerous area is instant cross-border transactions, including in different currencies. The blockchain system allows you to monitor risks in this area. An independent database will help reduce health insurance fraud to zero. Also, the blockchain will be able to reduce the number of errors in processing large amounts of data, which is especially important for the reinsurance market.

2. Work with reimbursement claims

Blockchain and digital technologies as a whole simplify and accelerate the dialogue with the client in case of an insured event. The easiest way — a remote assessment of damage by a specialist through the camera of a mobile phone. Data comes to the insurance company much faster, which saves the time of the client and the insurer and, ultimately, the money. Further, when it comes to natural disasters, you can combine the use of mobile technology with satellite imagery to; for example, help send a rescue team to hard-to-reach areas. Farmers who have lost crops due to bad weather receive compensation, the size of which depends on the analysis of weather information. The insurer receiving data from weather stations using the blockchain will allow calculating compensation more fairly. The use of blockchain technologies in the exchange of information with partners will help establish predictive analysis, that is, predict market trends and develop a clear business development vector.

3. New methods of distribution

Car insurance is an inexhaustible source of data for introducing innovations and creating new offers for existing customers. It’s not enough to put “smart” sensors in the machine, it is still important to quickly and accurately analyze the information coming from them, with which the blockchain will help. Processing large amounts of data will help to offer customers personalized policies for a set of services. The use of blockchain will also stimulate growth in the microinsurance market and microfinance companies. By using blockchain, insurers are developing the concept of mobile wallets. The number of tools will limit their content, but the client will be able to use them anytime, anywhere. The analysis of big data and the use of blockchain will allow insurers to more deeply and more accurately determine consumer behavior and look for some new interesting market niches for development.

4. Cybersecurity

The electronic network of the company is a single system of switches, routers, event logs, and much more. Blockchain technologies will allow the security service to monitor this entire system as a whole, moreover, in real-time. Insurance is a multi-trillion industry that suffers from opacity and fraud. Insurance is supposed to be designed to help and recover from unforeseen events. Nevertheless, when an unforeseen event occurs, insurers often have to fight and prove the legitimacy of their insurance claims to companies whose profit depends on the amount of payments in different currencies. By ensuring the transparency of an opaque industry and democratizing data for policyholders, insurance platforms that have implemented or built a business on blockchain technology are aimed at eliminating the shortcomings that traditional insurance companies have, respectively, such companies have a competitive advantage.

Details of the competitive advantage of insurance blockchain companies

The most acute problems of classic insurance:

Opacity: insurance is an opaque industry. There are several studies that examine the lack of transparency in the insurance industry. Insurance often goes into the gray zone, from limited disclosure to complete non-compliance with consumer protection laws. An opaque and complex process of insurance claims, backed up by a lack of desire on the part of insurance companies to help clients with claims, is detrimental to policyholders and is beneficial to insurers.

Data collection: in the classic insurance industry, the data of the insured is collected for the application and is constantly stored by the insurance broker — even after the expiration of the insurance policy. Brokers are the dominant distributors of insurance products on behalf of insurance companies, taking advantage of the situation, they greatly benefit from the opacity of the system. In 2017, three top brokers generated about 40% of the revenue among the top 50 US brokers. The billions of dollars in revenue generated by them allow them to collect huge amounts of data and information.

Fraud: More than $40 billion is lost annually due to insurance fraud — and that’s not even counting the health insurance industry. One of the most common types of fraud is double counting. Double billing is when a practitioner submits an invoice to an insurance company several times for a procedure that happens only once.

The technology for solving the above problems through the blockchain:

Transparency: a transparent distributed registry, in theory, can allow anyone to check several levels of the value chain of insurance. Any contributions paid by policyholders are also recorded in the blockchain for control by the policyholder. Immutable digital certificates can establish ownership of the insurance policy, which will allow policyholders to make quick claims.

Data Ownership: Decentralized insurance platforms allow users to control data exchange with insurance companies and deny access to data after the expiration of the policy. Users can sell their data to insurance brokers on a decentralized platform. Transparency and data accessibility allow small companies to compete with their larger counterparties, and these large counterparties will no longer have advantages.

Fraud prevention: nodes on blockchain platforms, checking transactions, will help prevent double-spending. In the case of insurance, this may prevent policyholders from processing several claims in one accident, as the nodes can check if the claim has already been processed by the network. In addition, digital immutable certificates of ownership can also prevent falsification of ownership of an insurance claim.

In addition to these technical advantages, there are a number of economic issues. There are clear advantages to using the blockchain that open up new growth opportunities for insurance companies: improving customer interest, offering new, cost-effective products for emerging markets, and developing insurance products related to the IoT. The key to success lies in creating based on new technology, a reliable distributed platform for direct work of clients with their personal data, collective insurance policies, and smart contracts:

• Increasing customer interest. An important tool for influencing customers will be to take advantage of the blockchain to work with their personal information. Fear of customers to lose control over personal data at the time of their transfer to the company and dissatisfaction with the need to answer the same questions can be eliminated using a separate blockchain to verify customer data directly managed by them.

• Another way to improve the indicator of customer interest is to increase transparency, as well as providing consumer-friendly tariff-setting schemes and insurance payment mechanisms.

• Despite the fact that collective insurance as a business model has long been widely adopted and implemented using standard technologies, blockchain will make it even more transparent and understandable to consumers. As for insurance providers, the benefit of the blockchain lies in the automation of work processes.

• Regardless of the context of the use of smart contracts, in conjunction with the blockchain, it offers a number of advantages: allow to automate the satisfaction of insurance claims, offer a reliable and transparent payment arrangement mechanism for all parties, and can be used to customize the conditions of each individual contract.

Blockchain can be useful for reducing administrative costs due to automated verification of the policyholder’s identity and validity of the agreement with it, registration of claims for insurance payments, verification of data received from 3 persons using the payment infrastructure based on blockchain and smart contracts.

The power of blockchain insurance showcases

Insurers are exploring the blockchain as they see vast potential in this new technology, most common research topics being: travel insurance and crop insurance. With crop insurance: If the bad weather causes any damage to the crops then a smart contract can confirm the loss using weather data and pay claims automatically. Similarly, in case of travel insurance, if the flights get cancelled by the airline due to a covered reason, then a smart contract built using blockchain technology could automatically enact payment to those with insurance. These examples showcase a blockchain’s ability to lower costs, thereby allowing consumers to realize savings.

· Blockchains can improve access to underserved segments, enable instant policy issuance, and increase transparency in peer-to-peer insurance.

· Blockchains can automate claims processing using smart contracts, improve assessment using past claims data, and combat fraud.

· Personal auto insurers could save $21 billion a year through lower costs, which can be realized through application of blockchain-enabled smart contracts.

· According to the survey by Market Force, Pegasystems, and Cognizant, 12 percent of insurance executives expect the use of the IoT, blockchain technology, and smart contracts to be mainstream within two years, and 74 percent expect it to be mainstream by 2030

· Adopting a common blockchain across the sector could create a step-change in value in the insurance industry: claims handling could become more efficient and streamlined, resulting in improved customer experience. Such an approach could also help to reduce further, if not entirely prevent, fraud if identity management was also enforced on the blockchain — meaning that criminals could no longer crash for cash.

· In another report, McKinsey & Company found sixty-four different use cases for blockchain technology. The report found that the insurance industry accounts for the most nonbitcoin blockchain uses (22 percent of the total), distantly followed by the payments industry (13 percent).

· Another recommendation is to “identify a group of firms willing to join a consortium to investigate the business case for at least one of the potential use cases. Recommending that the industry “work with consortia, technology experts and startups, regulators, and other market participants to identify the challenges around blockchain’s open and decentralized nature. Among these challenges are technology limitations as well as market, legal/regulatory, and operational requirements regarding, for example, data protection and standardization

The blockchain technology speaks to all of these priorities, as it addresses automation, improved third — party integration, increased trust, more extensive market reach, and greater efficiency — thereby offering greater satisfaction among insureds and opportunities for growth by insurers.

These are a few major themes expressed by insureds (From the Perspective of the Insured):

· Insured wished for an improved customer experience

A recent survey confirmed that customer satisfaction in this area is low and hence, insurers can utilize this solid opportunity by creating efficiencies through means such as blockchain. Customer with the need to complete complex questionnaires and maintain physical receipts has expressed extreme dissatisfaction. With new technology, the insureds expect a seamless solution with minimal delay

· Scrutiny regarding affordability

Consumer groups and organizations like the Federal Insurance Office have started to scrutinize auto insurers. This step comes after auto insurers kept premium increases in line with income growth. Consumers always want lower premiums, but if loss frequency and severity increase, lowering premiums while maintaining solvency becomes increasingly difficult

· Innovation of product

Innovation and insurance were not well connected. However, there has been introduction of new technologies in the industries, such as ridesharing services, the IoT, driverless cars, and drones

· Faster entry into emerging markets

It has been very costly for insurers to enter into the emerging markets. Although the potential of the market continues to grow. Insurers may take the first-mover advantage with the blockchain technology and deliver efficient service. Blockchain will be invaluable in this area.

The environment is getting competitive with low ROI and low-interest rates. The insurers have adjusted accordingly (From the Perspective of the Insurer):

· Decreasing costs

In this industry, the record-keeping costs are high. The process of insurance involves the insurers to collect and identify data and documents such as identity, contract, registration of claims, and loss payouts. In fact, organizations involve 3rd parties such as service providers and other intermediaries to handle the processes. Blockchain can help create efficiencies for all by lowering costs and turnaround times.

· Easing data retrieval

93 percent of insurance CEOs consider data mining and analytics to be strategically important, as

reported by PwC. This proportion is larger than the rest of the financial services industry. Implementing the same has several difficulties because the insurers may have to depend on third-party providers. And the process manual, that implies that data cannot be offered in real-time.

· Simplifying processes

According to Capgemini, personal auto insurers could save $21 billion a year by using smart contracts. As to process claims, loss adjusters review claims, ensure completeness, request additional information when necessary, confirm coverage, determine liability, and calculate loss amounts

· Protecting from fraud

Insurance Research Council reports, fraud, including build-up, adds up to about $7 billion in excess payments for auto injury claims — in the U.S. alone. Fraud makes insurance more expensive for insurers and insureds alike. So it stands to reason that by effectively combatting it, expenses for both groups could decrease.

Products, Pricing, and Distribution

The blockchain could help with parametric insurance by expanding parametric applications in insurance and automating the entire process. Instead of indemnifying on pure loss, insurers would agree to pay a certain amount upon occurrence of triggers within present smart contracts. As mentioned earlier, blockchain-related research is already underway in flight insurance and crop insurance, but could easily be extended to niche coverages, catastrophe swaps, and other areas.

· Underwriting and Risk Management

Processing of data could be optimized by blockchain and processes related to information flow across can also be optimized across the entire value chain but particularly related to risk. Insurance-related parties may share data and register risk through a consortium chain.

· Policyholder Acquisition and Servicing

Blockchain may improve record keeping by providing access to contract documentation only via keys. Only necessary parties like underwriters and broker may be allowed to get access to the keys, allowing appropriate access to the documentation and updates that are reflected across the board. In this way, a blockchain can help ensure consistency among various parties and dramatically cut administrative costs.

· Claims Management

Through blockchain technology, insurers could share certain fraud-related data through an insurer-only network while maintaining appropriate anonymity. Moreover, blockchain technology has the ability to generate a digital history of assets, which may help fight fraud and other crimes. A blockchain-enabled fraud register could quite possibly become part of a new blockchain-enabled claims process. Blockchain-enabled smart contracts can be embedded throughout the claims experience. These smart contracts can establish rules to enforce policy terms and pay claims without requiring manual administration or having loss adjusters review every claim.

· Finance, Payments, and Accounts

For example, if Company A owes $100,000 to Company B, Company B should have $100,00 in accounts receivable in its books, and Company A should have $100,000 in accounts payable. Generally, these transactions are managed through invoices, and this process requires staffing and

Approval and this may require additional paperwork, approval, costs etc. Nevertheless, with the help of blockchain, both the companies are able to access the same shared ledger rather than individual ledgers and conclude the transaction more efficiently. Blockchain technology can also help accelerate transactions because blocks are confirmed every ten minutes. Finally, groups of transactions could be netted.

The amount of money exchanged in cross-border payments is staggering. Money moves from one bank (in other words, a middleman) to the next. Each intermediary takes a slice of the funds before forwarding them along the chain, contributing to payment-processing delays, expensive customer fees, and risk related to weaker banking standards. A blockchain, which does not face the same geographic hurdles and can bypass middlemen, could change this approach, leading to lower fees

and faster transactions. For insurers, this could mean that less administrative support would be necessary; fees would go down because fewer intermediaries would be involved, and money would change hands quicker.

· Regulation and Compliance

As a proof, one can show that he or she has valid insurance is by putting their paper card (by the insurance company that lists policy information and effective dates) on the table. E-insurance cards have been termed as a valid proof of insurance in as many as thirty states. Regardless of the type, proof of insurance is issued for every vehicle with liability coverage — but costs accompany this proof. For example, if a policyholder wants to update the information in this life cycle, then he/she has to go through additional costs, both direct and indirect. In addition, insurers, regulators, and policymakers seek to understand the uninsured, which make up a remarkable 13 percent of U.S. drivers. The blockchain can help. It can allow for electronic safekeeping and updating of information across the board. And smart contracts could be used to alert insurers and other parties to suspicion of uninsured motorists.

Possible blockchain insurance issues

Capital efficiency: in contrast to traditional insurance companies, blockchain-based insurance products are designed to prevent insolvency in the event of force majeure by accepting additional security in the form of increased premiums. Force Majeure is an event that deviates from the usual expectation of the situation, and it is extremely difficult to predict. Traditional insurance companies usually invest payouts to generate investment income. In theory, investment income from this should help maintain high insurance benefits. Decentralized insurance platforms capture payments in smart contracts, effectively preventing the transformation of capital into value-generating assets. Thus, a decentralized insurance platform will have to charge a higher premium than its centralized partners do in order to ensure that claims are properly paid accordingly

Volatility: Since a volatile asset usually pays for decentralized insurance products, the dollar value of the policyholder’s insurance premium may fall below the basic value of the insurance policy. In this case, a decentralized insurance company will be forced to increase insurance premiums paid by their insurers. Instability of the size of insurance payments may hamper the introduction of a decentralized insurance product

Limitations of Insurance Fraud: A transparent DLT can prevent digital fraud but cannot prevent physical fraud. Traditional insurance companies often hire auditors to confirm physically the insurance claim. For example, an insurance company might send auditors to a burned-out restaurant to make sure it was not burned intentionally. A decentralized insurance platform will not be able to cover claims requiring a physical audit. This limits the range of insurance products that a decentralized platform can offer.

Blockchain insurance development forecasts

In general, the blockchain in its modern form is quite suitable for study and research by insurance companies. However, its full operation is still far away. This is because blockchain is a distributed system, and therefore its value largely depends on the effective cooperation of players with competitors, suppliers, and other third parties. In fact, the blockchain represents an investment in IT with the prospect of fully realizing all its advantages over five years. In some applications that do not have such an acute need for distributed mechanisms, there are alternative solutions that can provide similar benefits much faster. On the other hand, even despite the absence of reference examples of technology implementation, the blockchain opens unique prospects for those industry players who can satisfy the needs of emerging markets through collective microcredit, develop solutions for the IoT market or participate productively in exchanging data with other interested parties to improve fraud detection or automate claims processing. However, the market is full of promising startups in the field of insurance on blockchain, which is focused on solving many of the above issues. For example:

In the area of fraud prevention

• Everledger — A distributed ledger that records diamond transaction histories for each individual stone, producer, reseller, and buyer. Among other things, the platform allows you to check information about current and previous insurance claims. This helps to detect and prevent fraud, as well as to counter it.

• OpenIDL (Open Insurance Data Link) — A network built on the basis of IBM Blockchain, which provides efficient, secure, and permission-based statistics collection and exchange. It offers a secure and reliable blockchain environment for data storage and selective exchange with the American Association of Insurance Services (AAIS) as an advisory organization and authorized statistical agent.

In claims management

• Insurwave. Platform for insurance of freights. It uses smart contracts to accompany all documents related to the support of ship and cargo insurance processes. Insurwave was developed by Guardtime with the participation of EY, AP Møller-Maersk, Microsoft and insurance industry leaders XL Catlin, Willis Towers Watson, ACORD and MS Amlin

In the KYC identification

• Prototype PwC and Z / Yen. A solution to speed up the process of user identification. The network keeps records of customer documents and evidence of verification by the authority that issued them. It speeds up the procedure and enables the client to maintain control over personal data.

• IBM Blockchain Trusted Identity. Hyperledger Indy DLT-based platform for personal identification in accordance with the Decentralized Identity Foundation (DIF) and World Wide Web (W3C) standards.

In the field of reinsurance

• iXLedger — A solution developed by the iX Technology Group for effective collaboration and data exchange between insurance providers and insurance agent networks throughout the insurance life cycle.

• B3i Services AG. Consortium owned by 16 insurance companies. B3i develops standards, protocols, and network to eliminate friction when transferring risks during reinsurance

In the field of micro insurance

• PAL Network. A startup from Singapore, created to provide insurance coverage to people outside the first world countries, to narrow the gap between consumers and insurance providers. The desktop version can be downloaded on Github, the PAL Wallet mobile app

• VouchForMe (formerly InsurePal). A social insurance platform that provides discounts to customers of insurance companies if there are guarantors. This is a combination of traditional insurance and P2P approval, backed by social proof of financial security.

In the field of P2P insurance

• Teambrella. The insurance platform, where community members, based on the results of open voting, decide about new members, determine the level of risk and the size of contributions for them, confirm the occurrence of insurance events and approve payments.

• Friendsurance. The platform provides the possibility of peer-to-peer insurance of cars, housing, legal expenses and private liability. 40% cashback is declared in the absence of serious insurance payments in the community.

• insChain. The platform allows the use of IoT technology to automate decisions about the occurrence of an insurance event. There is also the possibility of using AI for underwriting and making decisions on payments

In the field of index insurance

• Etherisc. Ethereum-based DLT for developing and deploying decentralized applications for the insurance industry.

All these examples are only the beginning and it is promising for the usefulness of using blockchain technology despite skepticism and criticism.

Join the chat — https://t.me/joinchat/AAAAAE84vCXg5PK-VpHADg

Sergey Golubev (Сергей Голубев)

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business.

Media strategy is a medium-term communication plan that taking into account the marketing tasks of your brand. The main objectives of the media strategy is to make a fundamental choice of communication channels and marketing promotion of the brand products and assess the estimated costs of its implementation. Media strategy is also the answer to three main questions: when, where and how to promote in order to achieve your goals. The media strategy is first a plan to promote, taking into account the identified marketing challenges. The development of a media strategy pursues the following goals: selecting the most effective communication channels and assessing the estimated costs of brand promotion. Media strategy is one of the most important elements in the formation of a successful brand story. A well-designed scheme serves as a guarantee of the success of an advertising campaign. Creating a media strategy is a complex process consisting of several carefully thought-out steps.

1. Definition of the target audience.

An insufficiently thorough approach to this stage threatens the failure of the entire advertising campaign. The target audience should be determined very accurately. It depends on how effective the tactics of action will be. And additional differentiation of the target audience into target groups will help to direct the advertising campaign even more precisely.

2. Analysis.

At this stage, competitor strategies, market conditions and consumer behavior are analyzed. However, it should be understood that it is not always possible to obtain such information. Sometimes it’s extremely difficult to guess how a competitor or a consumer acts. As a result, either an incomplete or a not entirely relevant picture is formed. But research in this area allows you to adjust the media strategy taking into account the behavior of the main players in the market.

3. The place of the advertising campaign, or the choice of communication channels.

The choice of a communication channel for an advertising should take into account the following factors:

· weaknesses and strengths of a particular channel;

· possibilities of a communication channel for solving tasks;

· features and specifics of the promoted product or service;

· budget size

It’s not easy to choose from the variety of channels those that most closely meet your goal. For this, there is not always all the necessary data.

4. Budget management for the implementation of the media strategy.

The formation of a media strategy should be built in strict accordance with the funds allocated for promotion. In this case, it is necessary to select from possible methods those that are able to convey information to consumers most effectively.

Media strategy should be part of the brand’s overall communication strategy. The main goal is to maximize audience coverage within the budget allocated for advertising. The choice of channel for the distribution of advertising should be based on five factors:

· Pros and cons of a particular channel;

· Consumer audience by age, gender, social status, geography of residence;

· Advertising strategy of competitors;

· Strengths and weaknesses of the promoted product;

· Budget allocated to an advertising company

But even after studying all these nuances, a number of significant questions remain:

1. What advertising channels to focus on?

2. Is it worth to pay attention to advertising in major cities or regions?

3. When to start advertising to achieve the desired coverage, but at the same time save the budget?

It often happens that a new company enters the market and “loads” the consumer with a large number of advertising messages from the start, gradually reducing the amount of “media weight” over time. This is an effective system, but it does not work with every product. There can be a great variety of options for launching an advertising campaign, starting with classic ones and ending with a creative individual approach. To do this, you need to deal with all the nuances listed above.

Only 3–5% of all media actions affect possible profits. We call such actions “money making”. The ability to attract “money making” actions and manage all your instruments for this is one of the key marketing preferable values. A marketing plan is an operational document that outlines an advertising strategy that an organization will implement to generate leads and reach its target market. Any strategy answers three main questions:

1. What should I do?

What actions or changes need to be done in order to start getting followers, subscribers, users, investments and profits? For example, to distance from rivals, make pivot, ICO, IEO or STO, start advertising, PR campaign and so on.

2. How should I do?

What tools, instruments and methods to use. For example, targeted advertising, context, promotions, special offers and more.

3. In what way to implement?

How to construct correctly a sequence of actions. For example, first — to study the market, then — competitors, then — products of competitors and so on. Only with a clear and deep understanding how to stand out from competitors, how to object the target audience, how to find and convert it, you will grow your profits, and not your marketing budget. Strategy as a document consists of two main parts: the analysis and the product marketing kit. The analysis includes:

· market analysis

• competitors analysis

• target group analysis, that is, the project audience key factor segmentation.

The product marketing kit describes:

• Positioning — information about how we differ from our competitors, what customer problem we solve and how we talk about it

• Marketing instructions. It should be a detailed plan on how to run advertising campaigns, tell the campaign message we are addressing so that any team member can implement it

Using a multi-channel approach to marketing strategies always has great results. Since consumer’s attention is divided into different communication channels, if a marketer wants to optimize his chances of reaching out and interacting with his audience, it makes sense to use different channels and ways of communication.

Inside the marketing plan, we have to prescribe the structure of the plan performers:

• who will be involved in the implementation of the strategy

• who is responsible for what

• Who has what KPI?

A company’s marketing goals should be consistent with the core business mission and long-term goals of its existence. Then we check the hypotheses, adjust the media plans and promotion tools, and finish the USP (Unique selling proposition). Then we are scaling our targets. Learn more from the Crynet team:

• How to make a promotion strategy.

• At what stages of project cycle the marketing strategy is useful

• How to analyze the market and competitors in effective way

• An example of a portrait of your targeted audience

Media strategy is also a basic element of the successful development of your crypto or blockchain project. Why does the crypto industry need a media strategy?

1. Independent opinion. Information about your product will be better accepted by users if they do not read about it on the project website, but when a third party speaks about it in the face of the media and journalists, social networks and bloggers.

2. Communication tool. It takes few months by institutional investors to decide to invest in your project from the moment of the first meeting. To maintain a dialogue and reminder about yourself, a great option is to write to large investors, referring to your interview in a specialized publication or place a link to an article about your project. Remember that ordinary investors also read such publications and collect information about projects.

3. Etiquette rules. It’s better to have the Press or About Us section on the main page of your promising startup site. And the more business and blockchain media logos it contains, the better is your position. The more publications and press releases in the media you have — the better is indexation

4. Use someone else’s popularity. Sometimes, a startup takes as the CEO or adviser a person with a name. The fact that such people are in the leadership is an element of the media strategy that must be used 100%.

The media strategy of a crypto or blockchain project is the same as for any other business or startup. The strategy algorithm is:

• development of PR or communication strategy

• development of information events and content plan, targeting media

• development of brand recognition through social networks, opinion leaders, the use of traditional marketing tools (banner advertising, retargeting, and so on)

• Communication through conferences, forums, road shows

In this case, the algorithm will be consistent if all channels of influence on public opinion are used:

• Crypto, business and professional (about your project) media

• Corporate blog (Medium, website, Steemit, Golos, etc.)

• Corporate Social Media (SMM)

• E-mail newsletter

• Bitcointalk, Reddit and so on

• Professional and blockchain conferences

• Opinion leaders on YouTube, Twitter, etc.

• And other tools and channels

Budgets for implementing media strategies can be different. Everything is individual here and the size of the budget depends on:

• The complexity of the project and the tasks that it must solve

• Retargeting and remarketing goals (audience and countries)

• The general budget for the development of the project (including the costs of technical implementation, legal support and administration)

The main thing is an efficient and competent distribution of budget funds. The principle applies: In the right place at the right time. Media strategy and KPI tools should be used to:

• Growth brand awareness;

• Confidence in the project;

• Targeting key points of USP (unique selling proposition) of your project product

• Other media strategy goals mentioned above

Team of the digital agency Crynet Marketing Solution will help you understand all the tricks of creating an effective media strategy.

Our contacts:

www.crynet.io

https://www.linkedin.com/company/crynetio

@id013 (telegram)

ads@crynet.io

Industries and governments are continuously seeking ways to optimize the movement of goods, data, and currencies across global supply chains. Global growth needs a jumpstart. In 2019, the world’s GDP rose by roughly 2.2 percent. And in 2020, we are seeing the impact of unprecedented global events tied to the COVID-19 pandemic and resulting economic storms. To ease economic barriers in trade, we need improving visible frictions such as tariffs and quotas, with most outcomes focused on reducing cost. The World Trade Organization (WTO) expects that new technology will help to further reduce trade costs. And as a result of those falling trade costs, global trade could grow by 31 to 34 percent over 15 years. The 2017 Trade Facilitation Agreement (TFA), signed by over 160 World Trade Organization (WTO) member countries, projects the achievement of significant cost reductions by improving nonvisible frictions in trade such as paperwork, procedures, and administrative formalities. Entering blockchain technology has the potential to diminish these nonvisible frictions in global business, reduce cost, and save time while also mitigating risk and creating new business models. Early adopter organizations have been working with partners—and even competitors—to improve existing, shared processes. As they continue to collaborate in nontraditional ways, they recognize that blockchain brings a level of trust both among participants and in data shared. This could include dealing with customs paperwork, cross-border payments, or contracts for a service. But for global trade to see the full range of benefits from blockchain, trusted data needs to be shared and value exchanged both on blockchain and non-blockchain networks—not just among participants in a single network, but across interconnected networks in digital marketplaces. As a neutral agent for trust, a “network of networks” economy could help companies build greater flexibility and resilience into operational and supply chain management—both essential attributes in times of crisis.

A blockchain-enabled marketplace highlights the importance of transparency and insights within the global economy. The movement of data across these digital marketplaces presents new challenges. Interconnected networks require validation of the data being exchanged—think of digital contracts and signatures that need legal validation, and border and custom processes. To achieve data sovereignty, organizations must also navigate a regulatory environment related to digital trade, with factors such as the EU’s General Data Protection Regulation (GDPR) to consider. With network validation and enhanced data security, blockchain can help maintain data source integrity while protecting data privacy. When it comes to unlocking the global value of digitized trade, governments, regulators, and even trade associations are assuming more active roles. For example, the ICC Digital Trade Standards Initiative (DSI) builds on previous initiatives through the development of open trade standards. DSI will continue to drive technical interoperability among blockchain-based networks and technology platforms that have entered the trade space over the past two years. Even in the age of COVID-19, organizations invested or interested in global trade will still seek to optimize digital transformation efforts. They’ll evaluate shifting priorities and market conditions and correct their initiatives accordingly.

Organizations are interested in blockchain for more than outright profitability. Blockchain adoption has steadily increased, with 41 percent of organizations reporting a positive return on investment (ROI). For example, customer satisfaction ranks first among surveyed organizations as a measure of operational success across blockchain networks. To succeed in the global marketplace enabled by blockchain, organizations need to understand when to share data—and when not to. Eight in ten organizations surveyed by experts say trusted data is important to their organization. Yet only five in ten of those organizations are willing to share data or offer value in exchange for data. This can inhibit their global competitiveness. For global marketplaces to gain widespread participation, they’ll need trusted, neutral governance. Doing business globally requires trust, an abundance of it. The good news: blockchain actually becomes that custodian of trust, no intermediaries required. This neutral entity can help drive fair, open governance and standards—a critical foundation to unleashing the value from blockchain driven marketplaces in global trade.

Experts identified three distinct types of organizations based on the primary roles each plays within a blockchain network, as well as their governance priorities. Each type—Network Joiners, Network Builders, and Network Expanders—has different expectations of blockchain’s value, and is driven by distinct motivations and challenges. On a practical note, as blockchain matures and organizations better understand the potential of blockchain, these roles could evolve from one type to another. Organizations could also decide to play different roles on different networks:

1. Joiners, almost a third of respondents, are likely to join existing or new blockchain networks. They primarily seek efficiency, compared to other organizations that prioritize revenue growth and cost reduction from blockchain. The appeal of efficiency also means that joining more than one network—with multiple protocols and a lack of uniform governance standards—challenges them. Motivations? To cite several: accessing new markets, perhaps globally; complying with regulatory and government directives; and at times, joining their partners or customers already on the blockchain network.

2. Builders form the smallest group, with just 18 percent of respondents. They create blockchain networks within their industries that provide new services and new value. As well, they require communication standards for open movement of data among networks—standards that are critical to promoting broad participation. In keeping with their standing as market leaders (defined as achieving higher revenue growth and profitability in their industries), Builders are furthest along in adopting blockchain. In fact, when compared to Joiners and Expanders, Builders report twice as often that they already have a roadmap to optimize shared processes across ecosystems.

3. Expanders form the largest group of organizations with 51 percent of respondents. They stand ready to build industry or cross-industry networks or even to join other blockchain networks, all in order to grow not just market share, but overall market size. Their main objective: to drive innovation by co-creating services and apps that augment or expand the value of the network, and put consumers in control of their data. For example, a cross-industry network could offer services such as payment systems or customs processing that would benefit diverse organizations. Like Builders, Expanders require communication standards for open movement of data among networks.

Blockchain value is driven by purpose. While all three groups of organizations prioritize blockchain for billing and settlement and payments, they seek out blockchain for different purposes, depending on their role. Because Joiners expect to consume services on multiple blockchain networks, they also prioritize data sharing and consumer insights. Builders struggle with scaling the platforms they create, and so additionally focus their blockchain efforts on global fraud and compliance issues, such as GDPR. Meanwhile, Expanders also create innovative blockchain applications to share, reconcile, and manage data spanning cross-industry ecosystems—and ultimately grow market size. Across the board, organizations acknowledge that network roles heavily influence distribution of revenues generated on blockchain platforms, with Builders expecting to earn a lion’s share for their setup work and costs incurred. That’s because today, networks are primarily monetized based on the value and volume of the transactions generated on these networks. For example, a network might charge 0.1 percent of a transaction on a global payment platform. At the same time, Builders and Expanders anticipate providing blockchain services via apps much more than Joiners. These apps or services could include processes and procedures involved in global trade—for instance, monetizing a track and trace service by charging a monthly subscription fee. Another monetization model could involve charging based on the degree of insights provided, with insights increasing in value along with their complexity.

One of the showcase scenario: TradeLens, a blockchain industry platform that helps participants to digitally connect, share information, and collaborate across the shipping supply chain. Insights provided on this platform vary in their depth. For example, data on a container’s movement door to door is more complex than its port-to-port status—and the charge for that data would increase. But over time, network value can dramatically redistribute. This is because, as blockchain networks mature, their cutting edge services become mainstream. The Joiner, as the consumer of services, now has the power to choose from competing networks. In short, if Builders want to drive market size, not just market share, they need to provide more value through more services.

Organizations should prepare to participate in multiple ways. The nature of blockchain is fluid—you often begin again, even as you’ve simultaneously joined and established multiple networks. Here are three paths:

1. Connect expeditiously. Score initial success by joining an existing network. Joiner organizations expect at least 18 percent ROI on their blockchain investments in four to five years. Examine your business processes to determine the greatest potential efficiencies and what blockchain services could address them. When competing networks offer similar services, analyze how candidate blockchain is governed and monetized—and how your data will be managed.

2. Build ambitiously. Can your organization alleviate an unmet need in your industry? Consider building. But aim for scalability, because building a static network won’t provide long-term value. You may plan to offer cutting-edge services, but they—or something similar—could eventually be adopted and added across other networks, becoming business as usual. You’ll need to continually innovate, developing services that appeal to multiple blockchain networks and industries.

3. Expand collaboratively. You’re looking at expanding not just market share, but market size. Don’t expect the blockchain network that you build or join to exist as a standalone. In the next three years, 85 percent of organizations anticipate working with more than one blockchain technology. Actively seek and plan for governance and standards for interconnectivity and interoperability. Another option: if you are looking to innovate, consider co-creating on an existing network.

Consider the intense volume of data collected, analyzed, and made actionable across organizations today through IoT, analytics, and AI. As blockchain networks organize, a shared, trusted pool of data and resulting insights become their most valued assets. Blockchain can help validate identity of parties at the right time, facilitating the trusted transfer of data, goods, services, and money. A blockchain-based marketplace extends the concept of a single decentralized, distributed ledger to commercial transactions across multiple networks. It’s a peer-to-peer environment that can both reduce reliance on intermediaries and connect consumers and producers. In fact, a blockchain marketplace has much in common with other online platforms. Producers provide product or service information, including certificates of origin, verified service level agreement details, and shipping details, such as bills of lading. Consumers and retailers shop for merchandise and services, and make purchases. It’s a sandbox in which all parties interact by rules they’ve established together in the form of data governance, with no third-party oversight or regulation required.

The blockchain marketplace evokes a range of reactions, depending on the role an organization plays. Today, Builders conduct about 14 percent of their business on blockchain, double that of the Joiners. This makes sense, given that Builders are further along in their relationship with blockchain and are also focused on an industry they know well—their own. As networks mature over the next three years, Joiners expect their business on blockchain to increase by 60 percent. Organizations across all roles recount using blockchain to exchange data as an asset more than to exchange physical or financial assets or services. Still, the willingness to share data in exchange for value varies, even as more than 75 percent of organizations say having trusted data is important to their organization. This lack of trust in sharing could stem from concerns over both security and privacy, as well as the asymmetry in monetizing data in an equitable manner. Joiners may need to fully grasp the negative competitive impact caused by keeping too tight a grip on their data. This, in turn, could prompt a more nuanced approach. A blockchain marketplace’s emphasis on transparency, data integrity, and network validation—as well as not requiring personal information—could hold increasing appeal for roles that value data privacy, whether Joiners, Builders, or Expanders.

By the very nature of blockchain networks, members are already part of designing and creating the marketplace and have a stake in its success. There is a collective optimism, rather than just the Builders’ belief that their new product, service, network, or marketplace will succeed. And as many networks interconnect across marketplaces, organizations are evaluating metrics portfolios that extend beyond their own profitability. One example of the technology’s influence. The US Department of Homeland Security cited blockchain managers in agricultural and food distribution as “critical infrastructure workers” during the COVID-19 crisis. Organizations across all groups report that a majority of their business operations are within their own country. For large and small companies alike, taking their goods and services across borders could seem daunting, given the nonvisible frictions that persist such as paperwork, procedures, administrative formalities, and more. But as blockchain adoption grows, that wariness may ease.

Data is gold, but that doesn’t mean you hoard it. Reap the benefits of sharing data when appropriate, but also hold back when warranted. Here are concrete steps to creating a robust blockchain data strategy:

1. Consider what portfolio assets can be digitized and traded in a trusted environment. Sharing data on a blockchain marketplace can create competitive advantage—as long as proprietary information remains strictly off limits. Assets that are otherwise difficult to trade lend themselves well to being tokenized and offered on a blockchain marketplace. Design a nuanced approach that protects data when needed and gleans value from data when warranted.

2. Evaluate which markets you could access through participation and data sharing in a global blockchain network. Whether offering new services, digitizing assets, or influencing consumer behavior, determine the best path to value from a trusted marketplace. Model alternate revenue streams based on increased market reach and transaction volumes. Identify new ways to collaborate and explore accelerating blockchain solutions with emerging technologies like AI and IoT.

3. Transcend profitability metrics. Investigate how information exchanged on a blockchain marketplace can drive greater customer satisfaction and more. For example, customers can have confidence in their food source and the authenticity of consumer goods. Additionally, investigate how blockchain can help you drive partner profitability, shareholder value, and community engagement—all priorities for Builders, Expanders, and Joiners respectively.

Doing business globally requires trust—an abundance of it. Here’s the good news: blockchain actually becomes that custodian of trust—no intermediaries required. In our pursuit of trade digitization, we never imagined that the inability to connect ‘digital islands’ would be a concern for the millions of people who need to process the billions of physical pieces of paper in trade. While we have seen digital ‘hacks’ to get us through, this comes with increased risk. Post crisis, it is going to be critical for governments, companies, and industry actors to enable the system to be natively digital. Blockchain is going to play a hugely important role in making this a reality. Consider this: launching an online business once involved planning the technical aspects of website hosting and data transfers. These are now standardized globally through domain name registries, freeing companies to focus on demographics and other marketing strategies. A similar parallel is happening with blockchain. While less than half of all surveyed organizations (46 percent) are working with multiple blockchain technologies today, the vast majority (85 percent) plan to do so over the next three years. Organizations are gearing up to conduct more business across a marketplace of blockchain networks that, ideally, will have the appropriate technical infrastructure to span multiple ecosystems.

While 63 percent of Joiners, Builders, and Expanders alike are on single public or private blockchain networks today, they plan to increasingly work on multiple interconnected blockchain networks in the next three years. As organizations navigate this complex framework, they expect some synergy in the form of common services. For example, organizations report that basic services such as inventory management, asset management, and supplier certification are important criteria for joining a blockchain network, because they contribute to operational and cost efficiencies. Other services like Know Your Customer (KYC) and digital identity are typically seen as part of the onboarding package and need to be accounted for as well. For instance, blockchain-enabled marketplaces could help bridge some of the USD 1.5 trillion trade finance gap resulting from KYC issues by providing detailed transaction histories to help assess risk. What’s more, as cloud adoption continues to rise, over the next three years organizations anticipate their blockchain environment will comprise a hybrid mix of cloud services—and will do so at more than 3.5 times their rate today. These are all developments that bode well for adapting and scaling to global marketplaces and their complexities. Overall, blockchain networks are better positioned for success in global trade if they can accommodate future interconnectedness and interoperability.

Overall, market leaders, regulators, and industry bodies such as trade groups are expected to play an important role in establishing trusted blockchain-enabled marketplaces. Joiners, Builders, and Expanders alike agree that to thrive and facilitate creative exchange, these marketplaces need open governance and standards in addition to common services. So it’s no surprise that they’re all looking to regulators and governments, as well as standards bodies, for this purpose. To nurture a growing marketplace, it’s critical to drive interoperability across the various systems that allow transactions to flow, whether on or off blockchain. By its very nature, blockchain promotes decentralization. However, organizations still expect some oversight to help promote equitability and build trust. Especially as marketplaces expand to new geographies and industries, blockchain networks need to accommodate many more regulatory and cross-border challenges. A neutral entity can help drive fair, open governance and, in the absence of “absolute” standards, begin the journey to standardization—a critical foundation to unleashing the value from blockchain-driven marketplaces in global trade.

You may begin by joining one blockchain, but that’s not the way of the future. Eventually, you’ll want to plug and play across multiple networks, and you’ll need astute governance and standards to do so.

Here is some advice to take you forward:

1. Remember the “three I’s”: integrate, interconnect, interoperate. Think broadly and develop strategies that can eventually scale to a wider set of blockchain technologies. Without governance and standards, you risk multiple blockchain networks that duplicate one another, fail to span industry and global boundaries, and are limited to a single technology.

2. Envision networks and value chains that are matrixed, not linear. Designing for the “three I’s” means that no matter what your network role, you can connect to a neutral “network of networks”–or help build it. Determine realms of expertise that you can benefit from, contribute to, or create. Be alert to common services that you can develop or transactions that you can track. Investigate what insights you can deliver—and monetize.

3. To achieve the greatest impact on global trade, aggregate activities at a cross-industry level. Yes, industry-specific activities have their benefits. But as you connect across multiple blockchains, determine what synergies matter most. Incorporate them into your network as common, easily adaptable services. Engage with regulators, government bodies, industry working groups, and trade organizations to drive interoperability across networks and facilitate cross-industry adoption, thus increasing chances of marketplace success.

An effective way to define a neutral entity is by illustrating potential services that it could offer:

– A global trade directory service could be the trusted authority for buyers or sellers—or importers or exporters—seeking trade counterparties that are onboarded and receive a verified digital identity.

– A global trade services platform could provide common trade services that cost-effectively enable the exchange and provenance verification of goods and services, which are tracked while being transported among parties.

– A marketplace offering global trade intelligent insights could provide trusted “smart services” that yield insights into global trade patterns, perhaps as a pure “search and discover” platform through a Trusted Data Repository Service.

Far from exhaustive, these examples show how a trusted neutral entity levels the playing field. The very processes that created nonvisible frictions now become common services required by blockchain stakeholders. Think asset management, claims and customs processing, supplier certification, inventory management, and digitization and automation of trade finance processes. Invisible trade busting frictions are no longer an option. And, as trade processes are digitized, organizations also see their assets being digitized, tokenized, and traded with equal fervor as their original goods. Blockchain-enabled marketplaces empower. An organization no longer needs to be a multinational conglomerate with a sophisticated infrastructure of international contacts and services to compete in the global market. As Emmanuelle Ganne of the WTO observes, “Blockchain could well become the future of trade infrastructure and the biggest disruptor to the

shipping industry and international trade since the invention of the container’’.

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Sergey Golubev (Сергей Голубев)

EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management, comprehensive support for business.