31 May 2015

Trust Decisions: Human-to-Human Open Transaction Systems...

"Let us not look back in anger, not forward in fear, but around us in awareness"
-James Thurber-

When you become independent of the core group and the impact of your own bias, a whole new world unfolds before you.  The truth is discovered and the true reality becomes clear.  How often does the Board of Directors convene an emergency meeting as a result of a surprise Operational Risk loss event?

When you start listening to the explanation and you hear words such as "complex" and "3rd parties" this should sound an alert.  From the "Boardroom to the Battlefield" executive management is still flying blind on many fronts.  They have become so risk adverse, that in many cases the automated machines have taken over group think with their sophisticated high technology sensors.

Trusted sources from a human perspective are still the basis for vital decision support and monetary transactions.  Human-to-human information transfer via a trusted chain of sources is still thriving.  Trust is at the center of systems for significant transfer of information and assets to this day:
Hawala or Hewala (Arabic: حِوالة‎, meaning transfer), also known as hundi, is an informal value transfer system based on the performance and honour of a huge network of money brokers, primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems.
Does the Hawala have an emerging digital variant?  Why is the understanding of a blockchain-enabled digital ledger important in this day and age?  The reason becomes more apparent as we study how it works and where it is being utilized and for what purpose:

Example A
Silk Road was an online black market, best known as a platform for selling illegal drugs. As part of the Dark Web,[7] it was operated as a Tor hidden service, such that online users were able to browse it anonymously and securely without potential traffic monitoring. The website was launched in February 2011; development had begun six months prior.[8][9] Initially there were a limited number of new seller accounts available; new sellers had to purchase an account in an auction. Later, a fixed fee was charged for each new seller account.[10][11]
 Example B
NEW YORK, May 11, 2015 (GLOBE NEWSWIRE) -- Nasdaq (Nasdaq:NDAQ) today announced plans to leverage blockchain technology as part of an enterprise-wide initiative. Nasdaq will initially leverage the Open Assets Protocol, a colored coin innovation built upon the blockchain. In its first application expected later this year, Nasdaq will launch blockchain-enabled digital ledger technology that will be used to expand and enhance the equity management capabilities offered by its Nasdaq Private Market platform.

Importantly, the creation of a securities distributed ledger function using blockchain technology will provide extensive integrity, audit ability, governance and transfer of ownership capabilities.

"Utilizing the blockchain is a natural digital evolution for managing physical securities," said Bob Greifeld, CEO, Nasdaq. "Once you cut the apron strings of need for the physical, the opportunities we can envision blockchain providing stand to benefit not only our clients, but the broader global capital markets."
 Whether the "Digital Hawala" continues to thrive in the years ahead will depend on several key market issues.  Transparency, accountability and documentation.  Accurate record keeping.

At the center of this evolving system are two key attributes.  Speed and trust.  That is why you now see the private equity and venture capital community investing in companies such as Ripple Labs:
Ripple Labs (formerly OpenCoin) developed the Ripple protocol. Its team of experienced cryptographers, security experts, distributed network developers, Silicon Valley and Wall Street veterans contributes code to the open-source software and works with financial institutions and payment networks to accelerate the growth of the protocol. The team shepherds a movement to evolve finance so that payment systems are open, secure, constructive and globally inclusive.
"Trust Decisions" are at the heart of the future of trading, decision support and the speed of human knowledge.  The fusion of ancient and modern protocols for global commerce and achieving digital trust are on our door step.  Let your awareness begin...

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