Dr. Werner & Partner attend conference: ‘My Blockchain: A Practical Approach’

Dr. Werner & Partner attend conference: ‘My Blockchain: A Practical Approach’.

Dr. Wern­er & Part­ner attend­ed a con­fer­ence per­tain­ing to the prac­ti­cal aspect of the Blockchain at the ‘Le Meri­di­en’ Hotel in St. Julian’s.  It was seen how the ‘Blockchain’ phe­nom­e­non enables decen­tral­iza­tion on a glob­al lev­el which can cer­tain­ly facil­i­tate smart con­tracts and busi­ness trans­ac­tions.

Adopting Blockchain to Insurance Schemes.

A very inter­est­ing and prac­ti­cal exam­ple regard­ing Smart Con­tracts in Insur­ance schemes was giv­en. Not­ing that the process of buy­ing insur­ance schemes is usu­al­ly a cum­ber­some pro­ce­dure for the client, the speak­er not­ed that Ger­many suf­fers from 4 bil­lion Euros a year in insur­ance fraud. In this con­nec­tion, Ger­man entre­pre­neurs are com­ing up with nov­el ideas to min­imise this fraud risk.

Apply­ing Blockchain to the Insur­ance process can work won­ders. A clas­sic exam­ple involves flight delays and loss of poten­tial earnings/business oppor­tu­ni­ties. Through this nov­el sys­tem, users will be able to enter their flight details in a flight track­er sys­tem. Cus­tomers will be able to get imme­di­ate pay-outs in case of delays as the pro­gramme will auto­mat­i­cal­ly deter­mine the delay-time for the client. The funds will be reim­bursed to the client via a data pro­gramme which will be imme­di­ate­ly trans­ferred to his/her cryp­to-wal­let.

There­fore, when the data is trans­ferred to a smart con­tract on the Blockchain, min­ers will col­lect and trans­fer the mon­ey and per­form the nec­es­sary mon­e­tary cal­cu­la­tions. Once the client then opens his cryp­to wal­let [depend­ing on the vol­ume of data traf­fic] funds can be trans­ferred imme­di­ate­ly avoid­ing all for­mal­i­ties involved when deal­ing with Insur­ance Com­pa­nies.

To be not­ed that in this sce­nario, the trans­ac­tion tak­ing place is sole­ly between the cus­tomer and the insur­ance com­pa­ny reg­u­lat­ed on a Blockchain. The biggest advan­tage in this regard is that there is no claims process as often hap­pens in Insur­ance pro­ce­dures. There is no end­less wait­ing and unnces­sary meet­ings and the cus­tomer can thus imme­di­ate­ly obtain a spe­cif­ic cer­tifi­cate of insur­ance. The trans­fer of funds can be done via FIAT or Vir­tu­al Cur­ren­cies.

Blockchain ‘Ingredients’.

As seen in the above men­tioned exam­ple, the three things need­ed to start oper­at­ing the tech­nol­o­gy via the Blockchain will be:

  • The Blockchain infra­struc­ture itself– which is need­ed to cre­ate and gen­er­ate the smart con­tracts. Every­thing built on the Blockchain will be ‘open source’.
  • Risk Cap­i­tal – this would be need­ed for the insur­ance scheme. (The gen­er­a­tion of cap­i­tal can be done through Tokens to fundraise the project like a Token gen­er­at­ing event. The tokens will be then trans­ferred into a ‘foun­da­tion’ which can­not be sold there­by guar­an­tee­ing its immutabil­i­ty, per­ma­nence and secu­ri­ty).
  • Licens­ing and Reg­u­la­tion. (Reg­u­la­to­ry and coher­ent frame­works are need­ed for the con­sumers to ensure the utmost pro­tec­tion).

Mal­ta offers clients the lux­u­ry & envi­ron­ment to build a decen­tralised struc­ture and this can be done through Secu­ri­ti­sa­tion Cell Com­pa­nies. More­over, Token Gen­er­at­ing events are in full com­pli­ance with strict Anti-Mon­ey Laun­der­ing pro­ceed­ings and full KYC pro­ce­dures. Pri­va­cy rights are also GDPR [Gen­er­al Data Pri­va­cy Reg­u­la­tion] com­pli­ant. The most essen­tial ele­ment for cus­tomers is to appre­ci­ate that in the Pub­lic Blockchain, it is the Cus­tomer that becomes the: ‘sov­er­eign’ of his own data. He is in oth­er words, the mas­ter of his own finan­cial fate.

Tracking the ‘Identity of Things’.

A case study on the Iden­ti­ty of ‘Things’ was also giv­en by oth­er keynote speak­ers. In an age beset by end­less coun­ter­feit­ing of prod­ucts, the Blockchain can be used to ensure that things are both authen­tic and ver­i­fied.

Iden­ti­ty com­po­nents can be installed in prod­ucts con­tain­ing cryp­to­graph­ic keys full of data. These com­po­nents will con­tain many secu­ri­ty fea­tures. There could be what is known as an NFC inlay [a sim­ple stick­er which is phys­i­cal­ly installed in the prod­uct] and main­tains com­mu­ni­ca­tion via cell phones. Anoth­er pos­si­bil­i­ty is a BLE inlay – which is sim­i­lar but is very long-range and Cryp­to-seal – which tracks doc­u­ments of high val­ue ensur­ing the authen­tic­i­ty of doc­u­ments. All data is thus stored in the Blockchain so if any­one tam­pers with the prod­uct, this will be per­ma­nent­ly record­ed in the Blockchain as evi­dence.

Understanding Bitcoins.

Impor­tant infor­ma­tion was then also dis­sem­i­nat­ed on Vir­tu­al Cur­ren­cies specif­i­cal­ly Bit­coins. Speak­ers high­light­ed the impor­tance of cus­tomers pro­tect­ing their pri­vate keys whilst also gaz­ing towards the philo­soph­i­cal approach of Cryp­tocur­ren­cies argu­ing that the role of VCs is to ensure that the peo­ple not banks are in effec­tive con­trol of their own mon­ey. How­ev­er, invest­ing in Bit­coin is still risky as hack­ers might attempt to steal Cryp­to wal­lets which is why Back-up is always essen­tial.

Obtaining Bitcoins.

The process of obtain­ing Bit­coin was also explained. The best option of obtain­ing Bit­coin was evi­dent­ly through Exchanges [plat­forms to obtain Vir­tu­al Cur­ren­cy] such as: Bit­stamp, C-EX and Krak­en. Strict KYC rules apply, fol­low­ing which the pay­ment method is ver­i­fied, FIAT cur­ren­cy is deposit­ed and the order for Bit­coins is placed.

Decentralised Exchanges.

Since cur­rent cen­tralised exchanges are over­whelmed with orders, decen­tralised exchanges will even­tu­al­ly play a cru­cial role in 2018. The prob­lem pri­or to the year 2017 was the amount of trad­ing which was tak­ing place with­out any KYC pro­ce­dures in place. This ‘prob­lem’ now seems to be solved with enhanced due-dili­gence being per­formed by the Exchanges on all prospec­tive clients. Peo­ple need to also realise the risks entailed when using a smart­phone and wal­let in the sense that once hacked, there is no cur­rent insur­ance scheme which can pro­tect a customer’s cryp­to-invest­ment.


Alt­coins were also dis­cussed in some detail [the only non-Alt­coin is cur­rent­ly Bit­coin] and they can be described as dig­i­tal tokens — a by-prod­uct of cryp­to­graph­ic ver­i­fi­ca­tion in a decen­tralised ledger.

Tokens and alt­coins are the future but check­ing the vir­tu­al currency’s util­i­ty is also vital and users are encour­aged to always con­duct their own per­son­al research pri­or to pur­chas­ing any form of vir­tu­al cur­ren­cy. The major dif­fer­ence between Bit­coins and Alt­coins is that Bit­coins can be used to pur­chase the lat­ter [high­light­ing the inevitable ‘val­ue’ of the Bit­coin in today’s glob­al and diverse world].

At what stage will Bitcoin be classified as Money?

Mon­ey usu­al­ly is com­posed of three main ‘char­ac­ter­is­tics’ = stor­age, exchange and account­abil­i­ty. It goes with­out say­ing that the ‘stor­age’ ele­ment of Bit­coins has already been clas­si­fied. The chal­lenge Bit­coin will face is whether the world’s pop­u­la­tion will gen­er­al­ly accept it as a medi­um of exchange and whether it will pass the so called: ‘Account­abil­i­ty’ test. In essence, will peo­ple trust Bit­coin so much that they would pre­fer using it for their dai­ly trans­ac­tions over and above FIAT cur­ren­cies? Food for thought.


Blockchain is gain­ing a lot of trac­tion even world-wide and there are cur­rent­ly approx­i­mate­ly 24 coun­tries which are util­is­ing the Blockchain tech­nol­o­gy. Inter­na­tion­al patents involv­ing Blockchain tech­nol­o­gy have exceed­ed the 1,500-mark and 90 banks are already apply­ing Blockchain tech­nol­o­gy in their bank­ing sys­tem.

Reg­u­la­tion will essen­tial­ly pro­vide com­fort espe­cial­ly since Banks are gen­er­al­ly speak­ing very skep­ti­cal when deal­ing with vir­tu­al cur­ren­cies and more often than not attempt to block their usage due to anonymi­ty of users and trans­fer of funds with­out audit­ing.

On a very pos­i­tive note, what can cer­tain­ly be said is that Mal­ta is the ide­al place for any inno­v­a­tive busi­ness ven­ture as seen in the case of ‘ser­vice clus­ters’. In 1995, the coun­try only had one fund with one man­ag­er yet in 2017 there were over 150 MFSA licensed Asset-Man­agers. In this con­nec­tion, Mal­ta is there­fore the ide­al hub for peo­ple will­ing to present an inno­v­a­tive finan­cial project. A con­crete exam­ple relates to the Gam­ing Sec­tor where Mal­ta imple­ment­ed exem­plary reg­u­la­tions and this con­tributed to eco­nom­ic growth but only thanks to a good legal frame­work and even­tu­al­ly trust amongst clients and cor­po­ra­tions. Though busi­ness and entre­pre­neurs will always essen­tial­ly com­plain regard­ing over-reg­u­la­tion, cus­tomer pro­tec­tion and client sat­is­fac­tion will remain essen­tial ingre­di­ents in the fab­ric of the very sta­ble Mal­tese econ­o­my.

About Dr. Michael Calleja

Dr. Michael Calle­ja, born on the 07.01.1988, stud­ied law at the Uni­ver­si­ty of Mal­ta from 2006 till 2012. He grad­u­at­ed Bach­e­lor of Laws & Euro­pean Stud­ies in 2009 with a Sec­ond Class Upper Degree and grad­u­at­ed Notary Pub­lic in 2010. He suc­cess­ful­ly defend­ed his the­sis enti­tled: ‘Beyond the Bosman Rul­ing: Con­trac­tu­al Dis­putes in Foot­ball and the Spe­cif­ic Nature of Sport in the Euro­pean Union’ in 2012 and obtained his Doc­tor of Laws (LL.D) accord­ing­ly.

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