SINGAPORE: The furore over the future of cryptocurrencies such as Bitcoin has reached ever more frenzied peaks since the start of the year.

Goldman Sachs recently predicted that most cryptocurrencies will inevitably crash to zero and the head of the World Bank has warned that most resemble Ponzi schemes.

Meanwhile internet entrepreneurs turned venture capitalists the Winklevoss twins have said they expect Bitcoin to soar to 40 times its current value.

But such feverish debate over valuations of cryptocurrencies like Bitcoin has obscured the real story: That blockchain – the underlying technology behind Bitcoin and other cryptocurrencies – is poised to revolutionise the way the world does business in much the same way email and the internet did.

But the trouble is there hasn’t been a high-profile use case that has shown how blockchain can fundamentally alter the way companies do business or touch a facet of life the man on the street can relate to.

THE POWER OF BLOCKCHAIN

The innovative power of blockchain is that it creates a platform allowing any two parties to digitally transact with each other using an immutable, continuously-updated, distributed ledger.

In the case of Bitcoin, with no central authority overseeing the system, the task of updating the ledger relies on miners (“competitive bookkeepers”) who verify transactions and get rewarded with Bitcoins.

On average, a new block on a blockchain gets verified every 10 minutes and carries a reward of 12.5 newly created Bitcoins as a form of incentive. The entire supply of Bitcoins – which will peak at 21 million in 2140 – is pre-programmed by Bitcoin’s original developers.

Just as the invention of the underlying technology behind email enabled the transfer of information from one user to another, blockchain enables the transfer of value from one user to another without the need for an intermediary like a bank.

This has huge implications for traditional intermediaries such as auditors, lawyers or public notaries, and without radical transformation, entire industries face a very real existential threat.

For example, most e-commerce currently relies almost exclusively on third parties such as Visa or PayPal to process electronic payments, charging transaction fees of up to 5 per cent. Overseas money transfer firms like Western Union and MoneyGram charge even more – often over 10 per cent.

These industries seem ripe for disruption and with the growth of blockchain the fate of financial remittance companies may resemble the demise of travel agents in the 1990s.

At a national level meanwhile, a growing number of countries are exploring how to put their currencies on blockchain. 

For example, the Monetary Authority of Singapore (MAS) recently partnered with a consortium of banks to develop Project Ubin, a pilot tokenised version of the Singapore dollar that replicated the existing financial payment system without a centralised clearing system.

It is now working on similar projects focused on fixed income securities trading and cross border payments.

It seems that certain banking functions, for instance payments and cross-border transactions may be put on a blockchain going forward, reducing infrastructure costs while enhancing transparency, traceability and security in the financial services sector.

But blockchain technology has applications well beyond the finance industry.

Indeed a recent Harvard Business Review article said blockchain “could change the very nature of economic, social, and political systems.” The article’s authors, both Harvard professors, said they foresee a world where “every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored and shared”.

By allowing businesses to control their own data, ensuring immutability and transparency, it offers transformational potential in areas such as inventory control, food safety and record management, including medical records.

In January, IBM and Danish shipping giant Maersk announced a joint venture to use blockchain in shipping supply chain. In a sector which handles around U$4 trillion of goods per year, the firms said they expected savings of up to 15 per cent of this amount, mostly by eliminating the bureaucracy and corruption risk in manual procedures.

Another area where blockchain shows significant promise is food safety.

Recently Walmart launched a pilot in China using blockchain to track and trace shipments of pork. Making food supply chains transparent and traceable brings a range of potential benefits – for example, while it normally takes days to recall a food product, blockchain can do it in seconds.

MINING INVOLVES A LOT OF ELECTRICITY

Before we become swept up in the excitement, it’s important to also bear in mind the challenges.

One often underreported downside of blockchain is the power consumption it accounts for. Mining Bitcoin alone, for example, has been estimated to account for 42 terawatt-hours per year – similar to the annual consumption of Hong Kong or New Zealand. This may potentially be alleviated by different mining processes, but these will likely raise different issues and challenges.

Another critical issue is security. Bitcoin is safe as long as honest nodes control more power than potential collaborating attackers. However, this can be undermined by the formation of mining syndicates since collusion among groups with more than 50 per cent of mining power could enable hacking of the system.

Scalability likewise needs to be urgently addressed as the reach and use of cryptocurrencies continue to grow. Bitcoin, for example, can currently only process roughly seven transactions per second whereas in contrast Visa can process more than 50,000 per second.

The most critical risk however comes from regulatory bodies and the response they take to this growing phenomenon.

Several governments including Bangladesh, Nepal and Vietnam have banned Bitcoin transactions outright. China and South Korea meanwhile have recently introduced strong regulatory measures such as restricting trading in cryptocurrencies.

Others like Hong Kong and Singapore have adopted a more measured approach – Singapore’s MAS announced that while it had no plans to regulate cryptocurrencies, it would come down hard on any money laundering and terrorist financing risks.

Perhaps one particularly significant sign came in recent testimony to a US Senate by J Christopher Giancarlo, Chairman of Commodity Futures Trading Commission.

His view, he told the panel, was that “distributed ledgers have the potential to enhance economic efficiency, mitigate centralised systemic risk, defend against fraudulent activity and improve data quality and governance.” As such, he added, the right regulatory approach to blockchain technology would be to “do no harm”.

This statement may go down as the moment that blockchain entered the mainstream.

Just like how people didn’t foresee the impact of e-commerce before Amazon arrived or that of social media before Facebook, it’s conceivable that blockchain may become the next big tech.

In fact, blockchain may have the potential to underwrite the very systems we depend on today for any sort of transaction.

So what does this mean for those investing in cryptocurrencies? Given their wild swings in price, the highly speculative environment and lack of pricing models, investing in specific cryptocurrencies such as Bitcoin or Ether remains a highly risky prospect for the vast majority of retail investors.

However, for a lot of businesses, investing in blockchain may be a prudent strategic investment.

Indeed, as the technology’s potential continues to grow, we will see the emergence of innovative companies with creative and disruptive applications that existing firms and industries cannot afford to ignore.

Emir Hrnjic is a visiting senior research fellow at the Centre for Asset Management and Research Investment at the National University of Singapore (NUS) Business School. 

SINGAPORE: Of the 238 students whose A-Level Chemistry scripts were stolen in the United Kingdom last year, 75 have opted to be re-examined for the affected paper, the Singapore Examinations and Assessment Board (SEAB) told Channel NewsAsia on Monday.

The students, who received their A-Level results on Feb 23, are from Anderson JC, Anglo-Chinese JC (ACJC), Hwa Chong Institution (HCI) and Nanyang JC (NYJC). The stolen scripts were for Paper 3, which consists of free-response questions and carries a weightage of 35 per cent of the entire H2 Chemistry examination.

The final A-Level grades of the affected students were derived through a projection. But given the “unique circumstances”, the affected students were given the option to re-sit the H2 Chemistry Paper 3 in April or November, and have the better of their two grades recorded in their A-Level result slip and certificate.

Those who wished to register for the re-examination had to do so by Friday (Mar 9). 

SEAB said that of the 75, there were 28 students each from AJC, and ACJC, seven from HCI and 12 from NYJC. 

Out of the total, 57 of the candidates registered for the re-examination in April, while 18 registered for the re-examination in November.

The scripts were stolen out of a locked courier’s van in the UK while in transit to the examiners for marking. Cambridge Assessment said it was reviewing their processes to ensure the security of examination papers and scripts, and “safeguard the integrity of our national examinations”.

SINGAPORE: Major-General (MG) Melvyn Ong has been appointed the Chief of Defence Force and Brigadier-General (BG) Goh Si Hou the Chief of Army, the Ministry of Defence (MINDEF) announced on Monday (Mar 12).

MG Ong, 43, is also the outgoing Chief of Army. He assumed the post in August 2015 from fellow guardsman Lieutenant-General Perry Lim. MG Ong was previously also Chief Guards Officer and in 2011 led the SAF’s earthquake relief efforts in New Zealand.

He was awarded the Public Administration Medal (Silver) (Military) in 2012. From 2013 to 2014, through a dual-career scheme, MG Ong served as Deputy CEO of the Early Childhood Development Agency (ECDA). In addition to setting up the agency, he crafted policies and worked to raise the quality, accessibility and affordability of early childhood services.

BG Goh, 40, now succeeds MG Ong as the new Chief of Army.

MG Ong takes over from LG Lim, who held the Chief of Defence Force post since August 2015 after the retirement of current Minister for Education (Schools) Ng Chee Meng.

LG Lim, 46, was awarded the Public Administration Medal (Gold) (Military) in 2016, and the same year was conferred the Most Exalted Order of Paduka Keberanian Laila Terbilang (First Class) (Brunei) and the Bintang Kartika Eka Paksi Utama (Indonesia).

According to the Defence Ministry’s website, he was seconded to the Ministry of Education from 2006 to 2008 to serve as Director of Higher Education. There he was responsible for formulating policies, planning and funding for the local university and technical education sectors, and regulating the private education sector.

He now sits on the boards of Singapore Technologies (ST) Engineering, Defence Science and Technology Agency (DSTA), and JTC Corp.

SINGAPORE: Tagore Avenue along Yio Chu Kang road was named after Rabindranath Tagore – the first Asian Nobel Literature laureate. He also composed the Bangladesh national anthem.

His works continue to bring generations of Singaporeans and Bangladeshis together through an appreciation of a shared cultural heritage.

The relations between both countries will be further strengthened as the Bangladeshi Prime Minister Sheikh Hasina is in Singapore for her first official visit, said Prime Minister Lee Hsien Loong on Monday (Mar 12) as he hosted Madam Hasina for lunch at the Istana.

Both leaders also witnessed the signing of two memoranda of understandings (MOUs) which will help businesses and improve bilateral relations.

These include the Singapore-Bangladesh Air Services Agreement, signed between the Civil Aviation Authority of Singapore and the Bangladesh Civil Aviation Authority Board, which will allow passenger and cargo services between both countries to be expanded.

The other is an MOU on public-private partnership, signed by IE Singapore and the Public Private Partnership Authority of Bangladesh, aimed at helping Singapore companies, including SMEs, enter the fast-growing market.

Mr Lee said: “Singapore is a maritime nation situated between the Indian Ocean and the Pacific Ocean. Therefore we should do more together. Singapore-based companies are keen on the growing Bangladesh market. The MOU on public-private partnership will facilitate more investments by Singapore companies in Bangladesh, particularly in the power, connectivity and infrastructure sectors. 

“Sembcorp is one of the largest investors in the energy sector with over US$1.1 billion invested in power plants while PSA is interested to explore opportunities in Chittagong port.”

In her speech, Mdm Hasina spoke about the friendly ties Bangladesh and Singapore have enjoyed since the establishment of diplomatic relations in February 1972 and said she is happy to see a growing interest and engagement of Singaporean companies in Bangladesh today.

“Bangladesh and Singapore belong to different levels of development. But we can complement each other in our economic pursuit,” she said. 

“In Singapore, you have capital, advanced technology and know-how while in Bangladesh, we have a large workforce. Moreover, a large section of our population is young and educated. These comparative advantages may be harnessed to our mutual benefit.”

She added that Singapore continues to be a favourite destination for Bangladeshi workers and hopes that Singapore will continue to provide them with a decent work atmosphere.

Mdm Hasina is expected to attend the Bangladesh-Singapore Business Forum and a business roundtable on Tuesday and will stay in Singapore until Wednesday.