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Session 2: Blockchain: Architecture and Platforms by Anndy Lian

Session 2: Blockchain: Architecture and Platforms by Anndy Lian

Anndy Lian, a renowned business strategist and blockchain expert, led a captivating training session for the Asian Productivity Organization (APO) and the National Productivity Centre (NPCC). For his session, he wanted to demystify the complex world of blockchain architecture, platforms, and their integration with other cutting-edge technologies.

Lian began by breaking down the fundamental building blocks of blockchain architecture. He explained how individual computers or devices, known as nodes, form the backbone of the network, each meticulously maintaining a copy of the blockchain and working collaboratively to validate transactions. He delved into the concept of the blockchain protocol, a set of rules and procedures that dictate the network’s operation, including the crucial consensus mechanisms that ensure all nodes agree on the blockchain’s state.

He then ventured into the different types of blockchains, each with unique characteristics and applications. Public blockchains, like Bitcoin and Ethereum, are open to anyone, operating in a decentralized and transparent manner. Private blockchains, on the other hand, are permissioned networks accessible only to a select group, often favored by organizations prioritizing efficiency and control. Lastly, hybrid blockchains combine elements of both, offering flexibility and scalability by controlling data visibility.

To illustrate blockchain’s real-world impact, Lian presented a compelling case study involving IBM and Maersk’s TradeLens platform. This innovative platform leverages blockchain to revolutionize global trade by digitizing and streamlining processes, addressing the challenges posed by traditional manual systems. TradeLens creates a transparent and tamper-proof system for tracking shipments and managing documentation, paving the way for a more efficient and secure global trade network.

Lian emphasized that blockchain’s potential is unlocked when integrated with other emerging technologies. He highlighted its synergy with Artificial Intelligence (AI) and Machine Learning, where blockchain can enhance AI models by securing data sharing for training and enabling the creation of decentralized AI systems. He also explored its role in the Internet of Things (IoT), where blockchain enhances security, transparency, and decentralized management of connected devices and data.

Looking towards the future, Lian discussed how blockchain can strengthen security and enable efficient device authentication in the rapidly evolving domains of 5G and Edge Computing. He also touched upon its potential in Augmented Reality (AR) and Virtual Reality (VR), where blockchain can enhance security and ownership of digital assets.

For government officials considering blockchain adoption, Lian offered practical advice. He encouraged starting small with a simple project to gain a practical understanding of the technology and its potential. He stressed the importance of clearly defining objectives, identifying the specific problem blockchain will solve, and understanding the data involved. Choosing the right platform is crucial, considering factors like security, scalability, support, and long-term viability. Finally, he emphasized prioritizing data security and privacy, implementing robust measures to protect sensitive information.

The session concluded with an engaging Q&A, where participants sought Lian’s insights on various aspects of blockchain technology. He addressed questions on consensus mechanisms, mining, 51% attacks, the proliferation of blockchain platforms, and interoperability challenges. Lian stressed the importance of choosing reputable platforms with solid backing and comprehensive documentation, advising participants to seek expert guidance for complex integrations.

Anndy Lian’s session provided invaluable insights into the transformative potential of blockchain technology. He demystified its complexities, offered practical guidance for implementation, and ignited the imagination of participants by showcasing its potential to revolutionize various sectors. As blockchain continues to evolve, its integration with other emerging technologies promises to unlock unprecedented opportunities for innovation and efficiency across industries and government services alike.

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Hong Kong introduces regulatory measures for crypto trading platforms to enhance security

Hong Kong introduces regulatory measures for crypto trading platforms to enhance security

As the global crypto industry continues to grapple with increasing regulatory scrutiny and clampdowns, new hubs for the virtual asset industry are emerging. One such emerging hub is Hong Kong, which recently proposed rules allowing retail investors to trade certain “large-cap tokens” on licensed exchanges, contrasting mainland China’s outright ban on crypto-related transactions.

Based on what I know, The Securities and Futures Commission of Hong Kong has not yet specified which large tokens would be allowed. Still, industry insiders speculate it would likely be Bitcoin and Ether, two of the biggest digital assets by market value.

While China’s clampdown on crypto trading was intended to protect individual investors from speculative activity, the increasing number of bankruptcies and layoffs in the global crypto industry may have justified their actions.

Nevertheless, the crypto industry continues to attract talent and investment, making it hard to imagine Beijing sitting idly while the rest of the world develops new building blocks that could potentially spark a new wave of innovation as big as the current internet itself.

China’s crackdown on crypto trading has led many of its web3 startups to look abroad, with many of them setting up new bases in more crypto-friendly locations like Singapore and Dubai. However, with Hong Kong’s introduction of a more relaxed regulatory environment for cryptocurrencies, some Chinese-founded web3 companies in exile may consider returning home to Hong Kong.

Hong Kong has a long history as a financial hub and can potentially be a laboratory for China’s policymakers to test out blockchain’s potential with some buffer for the nation’s one billion netizens. The city’s proposal stipulates that all centralised virtual currency exchanges operating in the city or marketing services to the territory’s investors must obtain licenses from the securities and futures authority.

The proposed requirements cover key areas such as safe custody of assets, know-your-client, conflicts of interest, cybersecurity, accounting and auditing, risk management, anti-money laundering/counter-financing of terrorism, and prevention of market misconduct.

In addition to ensuring suitability in onboarding clients and token admission, the other key proposals relate to token due diligence, governance, and disclosures.

In other words, centralised crypto exchanges must ban Hong Kong IP addresses until they obtain the relevant permits to operate in the city. The regulatory requirements are currently open for consultation until March 31, and the new licensing regime will take effect on June 1.

This move by Hong Kong is strategic, and it can attract crypto companies and investments to the city. Implementing clear regulatory frameworks would help the industry gain mainstream adoption and bring in more institutional investors.

The crypto industry has come a long way since the inception of Bitcoin over a decade ago. With the emergence of DeFi (Decentralised Finance) and NFTs (Non-Fungible Tokens), the industry has grown significantly, and this growth is expected to continue. However, to achieve its full potential, it needs to address its regulatory concerns.

The introduction of clear regulatory frameworks can help crypto companies gain mainstream acceptance, bring in more institutional investors, and pave the way for new and innovative use cases for blockchain technology. Hong Kong’s move towards a more relaxed regulatory environment for cryptocurrencies is a significant step in the right direction, and I hope that other countries will follow suit.

AML crypto regulations in Hong Kong

The Legislative Council passed the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 (AML/CTF Amendment Bill 2022) on December 7, 2022. This bill introduced a licensing regime for virtual asset service providers (VASPs) and imposed anti-money laundering (AML), counter-terrorism financing (CTF), and investor protection obligations upon these actors.

VASPs that are licensed in Hong Kong are subject to a number of AML, CTF, and investor protection obligations. These include:

  • Customer Due Diligence (CDD): VASPs must conduct CDD on their customers, which includes identifying and verifying the identity of the customer, the beneficial owner, and any other person who exercises control over the customer. VASPs must also assess and understand the nature and purpose of the business relationship with the customer.
  • Ongoing monitoring: VASPs must monitor their customers’ transactions on an ongoing basis to ensure that they are consistent with their knowledge of the customer, the customer’s business, and the risks associated with the customer.
  • Record-keeping: VASPs must maintain adequate records of their customers, their transactions, and their risk assessments. These records must be kept for a period of at least five years.
  • Reporting: VASPs are required to report suspicious transactions to the Joint Financial Intelligence Unit (JFIU) of Hong Kong. Suspicious transactions include those that are inconsistent with the customer’s profile, those that have no apparent economic or lawful purpose, or those that involve the proceeds of crime.
  • Investor protection: VASPs must also put in place measures to protect their customers’ assets. This includes measures such as segregation of customer assets from the VASP’s own assets and insurance against losses.
  • Penalties for non-compliance: VASPs that fail to comply with the new regulations are subject to a range of penalties, including fines, suspension or revocation of their license, and criminal liability. Individuals who are found guilty of money laundering or terrorist financing may face imprisonment of up to 14 years and fines of up to HK$5 million.

The new regulations also provide for the imposition of sanctions by the United Nations Security Council or by Hong Kong in respect of breaches of international sanctions.

Licensing and registration requirements for VASPs in Hong Kong

Anyone who engages in a virtual asset exchange business in Hong Kong must apply for a license with the SFC. The AML/CTF Amendment Bill 2022 also introduced regulations for VASPs to comply with the Crypto travel rule.

The HKMA will only grant licenses to VASPs that meet certain criteria, including:

  • The company must be incorporated in Hong Kong.
  • The company must have a permanent place of business in Hong Kong.
  • The company must have adequate financial resources.
  • The company must have appropriate AML/CTF systems and controls in place.
  • The company must have a compliance officer responsible for ensuring the company’s compliance with the new regulations.

VASPs that fail to obtain a license will be prohibited from providing virtual asset services in Hong Kong.

Complying with the crypto travel rule in Hong Kong

The crypto travel rule will be effective in Hong Kong as of June 1, 2023. The new regulatory regime will provide industries with a grace period to prepare for compliance until that date. In Hong Kong, Travel Rule requirements apply regardless of the transaction amount.

The scope of data to be exchanged varies depending on the threshold of the transaction. For virtual assets that amount to HK$8,000 or more, the following information needs to be shared: name, account number, and address of the originator, as well as the beneficiary’s name and account number. For virtual assets that amount to less than HK$8,000, only the name and account number of the originator and beneficiary are required.

There are no differences in customer personally identifiable information (PII) requirements for cross-border transfers and transfers within Hong Kong. However, for wire transfers, the information recorded must include the number of the originator’s account or a unique reference number assigned to the wire transfer by the financial institution.

Non-custodial or self-hosted wallet transactions do not have any specific requirements in Hong Kong. The AML/CTF Amendment Bill 2022 defines virtual asset transfers subject to Crypto Travel Rule requirements as transactions for transferring virtual assets carried out by an institution on behalf of an originator, with a view to making the virtual assets available to the originator or another person at an institution, which may be the ordering institution or another institution.

In conclusion, Hong Kong’s proposal to allow retail investors to trade large-cap tokens on licensed exchanges is a significant development for the global crypto industry.

While China’s crackdown on crypto trading was aimed at protecting individual investors from speculative activity, the regulatory framework proposed by Hong Kong is more relaxed and can potentially attract more crypto companies and investments to the city. The implementation of clear regulatory frameworks would help the industry gain mainstream adoption and bring in more institutional investors.

I am looking forward to seeing a striking balance between the both.

Source: https://e27.co/hong-kong-introduces-regulatory-measures-for-crypto-trading-platforms-to-enhance-security-20230320/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Does content moderation on platforms like OpenSea amount to censorship?

Does content moderation on platforms like OpenSea amount to censorship?

What are the responsibilities of blockchain companies when it comes to freedom of expression? A controversial cartoonist finds out the boundaries.

“I would describe myself as a transgressive artist,” the conservative cartoonist who calls himself Stonetoss, told Forkast.News. On Nov. 20, Stonetoss released 5,000 non-fungible tokens based on characters found in his work, listing them on Rarible and OpenSea NFT marketplaces. Calling his cartoon characters “Flurks,” Stonetoss said the sale was a huge success, selling out in just over 20 minutes for a total of 420 ETH worth US$1.8 million.

But hours later, both Rarible and OpenSea pulled the Flurks series from their listings without offering an explanation why, adding fuel to the debate over content moderation in the growing NFT marketplace.

Stonetoss is no stranger to controversy — he says he has received death threats in the past — which is why he only wished to be identified by his artist name. His cartoons often depict right-wing interpretations of issues regarding race, LGBT+ rights and vaccine mandates. While the Flurks themselves do not contain any explicit commentary, they do contain imagery relating to these themes, such as Confederate flags and red MAGA hats that are popular with Donald Trump supporters. Stonetoss believes his art was delisted due to the politics that he is associated with, rather than based on the actual content of his NFTs.

But is getting kicked off OpenSea and Rarible a troubling form of “censorship” and an infringement of artistic freedom, as Stonetoss says, or is it within these companies’ right to include only content that they like? With OpenSea alone controlling over 98% of the Ethereum trading volume market share, according to DuneAnalytics, do these blockchain marketplaces have a moral obligation to do more to defend freedom of expression, even if the views may be odious to a majority of its users — especially for a blockchain-powered industry that often champions decentralization as a safeguard to censorship?

Industry leaders themselves seem divided on these issues, and the extent of obligation and responsibilities of blockchain companies when it comes to freedom of expression.

“Whenever we talk about decentralization, it’s not about a cowboy town where you could just come in with anything,” Anndy Lian, founding member of NFT creative studio Influxo, told Forkast.News. “You have to follow the rules.”

Just as a physical gallery has the right to decide what art they wish to exhibit, Lian says NFT platforms are no different — and just because an expression exists as an NFT does not excuse it from the cultural consequence of its message.

“If the artist or the artwork is subjective, there is a chance that it will be removed,” Lian said. “This has nothing to do with [whether it’s an] NFT or not. This happens in the art world, in galleries too. This is surely not about decentralization and decentralization is not about just freedom.”

But others say that’s not really a choice when dealing with centralized systems like OpenSea or Rarible, when combined they effectively control the NFT marketplace — until better systems come along.

“If a company makes a decision that a user doesn’t like, they have the option to leave,” says said Corey Petty, chief security officer at decentralized messaging app and Web3.0 browser, Status, in an interview with Forkast.News. “If you don’t have that option, then companies can do whatever they want and you just can’t do anything about it. Which leads us to where we are today. [They] made a decision. What are you going to do? Leave? There are no other options.”

Stonetoss says he feels singled out by the right-wing politics usually associated with his brand rather than individual Flurks being offensive. The NFTs that got delisted from OpenSea and Rarible also contain symbols associated with the left, such as the rainbow pride flag and the communist hammer and sickle.“If I was a no-name artist, this would not have been the controversy or it would have not have received the reaction that it did,” Stonetoss said in a Zoom audio interview with Forkast.News with the camera turned off.

According to Rarible staff, the platform does not de-list items based on political affiliation. According to OpenSea’s terms of service, OpenSea will delist NFTs if they are determined to incite hate or violence against others.

“The delisting of my NFTs on Rarible and OpenSea was probably the result of a mass report because this is the technique [campaigners] have tried to use many times. The NFTs themselves, I maintain, are benign.”

But least one Twitter user spoke out about the inclusion of some of those symbols on NFTs hosted on the platforms, who said they are anything but benign: “I am losing followers for calling out a project blatantly using confederate flags in their NFTs. I am a racial minority, I grew up in the south, and my uncle was murdered because of the color of his skin.”

Another user in the same thread summarized the debate surrounding the use of the Confederate flag — which represented the slavery-defending states of America’s South, which lost the nation’s Civil War over 150 years ago but is still clung to with nostalgia by some Whites in America — by replying: “Sorry to hear this, I’m from the South and don’t know the pains of dealing with being a minority, I also know people that love the south who don’t look at the confederate flag as racist, I guess it’s hard to know people’s hearts and perspective, we can all learn and grow and show love.”

Neither OpenSea of Rarible had contacted Stonetoss to notify him of the delisting by the time he spoke with Forkast.News. At least one Flurk displayed on the homepage of Stonetoss’s website is wearing a cowboy hat and carrying a Confederate flag.

Rarible and OpenSea did not respond to Forkast.News inquiries for comment.

Will Stone decentralized Web3.0

As the world enters the realm of Web 3.0, Stonetoss’ story represents the glaring need — or cautionary tale, depending on your perspective — of how a decentralized version of the internet built around blockchain technology can dramatically change the gate-keeping powers and kind of content of public platforms.

“What we have is an emergent property of how the internet was built in the first place, that is the client-server model,” said Petty, of Status.”When you aggregate data and pool things like this, it’s inevitable that the people who are custodians of that information will take advantage of it” — including trying to control it in a way to maximize profits.

“That’s where we are today,” Petty added. “We build applications, they aggregate data. They then learn they can monetize that data; they optimize the application for monetization, not the end user.”

With a total trading volume of over US$13 billion, according to DappRadar, OpenSea might be the most important venue for digital artists to find buyers for their NFTs. Stonetoss says his delisting from the OpenSea NFT marketplace was not only a blow to him financially but also might have chilled creators of other controversial art. While Flurks holders are still able to transact peer-to-peer — his NFTs are de-listed but not deleted from the Ethereum blockchain — the infrastructure and culture is not yet available to allow the community to trade with the same ease as they would on a platform like OpenSea.

While the Flurks are not locked out of being traded — Stonetoss also sells them through his own website — OpenSea and Rarible have such an outsized influence on the market that any NFT collection that is not listed on one of these platforms is at a significant market disadvantage.

If the decision-making power to list or not list NFTs for sale were decentralized, would Stonetoss’s Flurks have suffered the same fate?

The moderating voice

In August this year, a series of 7,000 NFTs based around the popular meme Pepe the Frog — a mascot of Hong Kong’s pro-democracy movement in 2019 as well as a symbol championed by America’s far-right —  was removed from the OpenSea NFT marketplace after the character’s original creator filed a notice of copyright infringement with the platform.

OpenSea was quick to remove the content on copyright infringement grounds, but investors were left holding millions of dollars worth of NFTs with no significant marketplace left to trade them.

But when a collection of NFTs that look a lot like Flurks went up on OpenSea, the unauthorized copycat series remains listed on the site.

But should Stonetoss one day decide he wants to enforce his copyright, a truly decentralized platform is likely not going to act on user complaints.

“There is a long history of art that is transgressive and there should be a place for it,” Stonetoss said, admitting he would have trouble finding a physical gallery to display his work, which is why his medium has always been online.

“Those sorts of avenues are even more susceptible to people complaining about having a particular piece of art up,” Stonetoss said. “So, on the whole, I’m actually very optimistic; the whole de-listing event has been a little disappointing in that regard, but I guess it’s part of the growing pains of this sort of technology.”

Original Source: https://forkast.news/does-opensea-censor-nft-content/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j