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👉 Issue #59 of QX Snapshots is out!

Welcome to QX Snapshots - a weekly recap of the key news on emerging technologies. In this newsletter, you will get a "digest" of the latest info on Enterprise Blockchain, AI, Quantum Technology, and Metaverse. Hope it brings you value :)

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Every Friday we share key snapshot news on AI, Quantum Technologies, Metaverse, and Enterprise Blockchain/DLT.

Join our +300 trusted readers at U.S Bank, Eurasian Development Bank, EY, Morgan Stanley, BNY Mellon, Microsoft, Verizon, Facebook, ServiceNow, ConsenSys, Polygon Labs, Duke University, Sky, Informa, Freshfields Bruckhaus Deringer, Santander, and others.

[Blockchain] HSBC Introduces Tokenized Gold for Hong Kong Retail Investors; Global Legal Body Tackles Digital Asset Tokenization; UK Investment Association Advances Fund Tokenization. HSBC has launched a tokenized gold product for retail customers in Hong Kong, becoming the largest bank to offer such product. The HSBC Gold Token, available through online banking and mobile app, allows retail investors to access gold tokens backed by physical gold stored in HSBC's London vault. The offering, approved by Hong Kong's Securities and Futures Commission, comes as the government pushes for publicly accessible digital assets. HSBC acknowledges the rising demand for digital assets and aims to cater to customers' familiarity with gold investment. The tokens are issued via HSBC's Orion platform, built on Hyperledger Fabric. Meanwhile, the Hague Conference on Private International Law (HCCH) has launched a project to explore legal issues surrounding digital asset tokenization. The intergovernmental body aims to resolve uncertainty for cross-border businesses regarding applicable laws and recognition of legal decisions. The project will collate the taxonomy of digital instruments across jurisdictions, focusing on tokenized real-world assets, utility tokens, payment tokens, NFTs, stablecoins, and tokens representing certain claims. It excludes CBDCs, and carbon credits, which are the subjects of separate initiatives. Potential areas of investigation include tokenization of existing assets and custody rules. Also, the UK's Investment Association (IA) published a second report on fund tokenization, building on the first report from November 2023. The report examines the next stages of development, including on-chain fund settlement via digital money, funds holding tokenized assets, and expanding to public permissioned networks. The UK IA plans to continue to work on tokenization implementation and is inviting companies to express interest in collaborating on use cases such as money market fund tokens as collateral and tokenized fund buying tokenized securities by April 26, 2024. 

[AI] Amazon Invests $4 Billion in Anthropic for AI Advances, OpenAI Eyes Hollywood with AI Video Tech, Apple Partners with Baidu for AI in China? Amazon has deepened its commitment to advancing generative AI through a $4 billion investment in Anthropic and a strategic collaborative agreement. Anthropic will use AWS as its primary cloud provider, leveraging AWS Trainium and Inferentia chips for future model development. AWS customers worldwide will have access to future generations of Anthropic's foundation models on Amazon Bedrock. The Claude 3 family of models, now available on Amazon Bedrock, demonstrate advanced intelligence and outperform other models in reasoning, math, and coding. Global organizations across various industries are already using Amazon Bedrock with Anthropic's Claude AI to build generative AI applications. Meanwhile, OpenAI is reaching out to Hollywood studios, media executives, and talent agencies to form partnerships and encourage the integration of its new AI video generator, Sora, into filmmaking. The company has been demonstrating Sora's capabilities, which can generate realistic-looking videos based on text prompts. While AI is already used in pre-production and post-production, generative AI services have raised concerns about their impact on the livelihoods of industry professionals. OpenAI is courting Hollywood as it competes with other tech giants and startups in the text-to-video market. The company aims to collaborate with the industry to ensure safe implementation and provide a glimpse into the future of AI in entertainment. Also, Apple has reportedly chosen Baidu as its generative AI partner for iPhone and Mac in China. The decision was made to comply with China's regulations requiring prior approval for the public use of generative AI models. Baidu's Ernie Bot, similar to ChatGPT and Google Gemini, has already been approved, allowing Apple to offer AI services without additional compliance hurdles. The partnership is expected to be limited to mainland China, with Apple relying on its own AI work and potentially licensing Google Gemini in other countries. 

[Quantum Technology] IBM Unveils 'Gross Code' for Quantum Efficiency, Nu Quantum and SoftwareQ Eye Fault-Tolerant Quantum Computing, and the Economist Sets Stage for Quantum Summit.  IBM has published a landmark paper detailing a new quantum error-correcting code called the "gross code," which is about 10 times more efficient than previous methods. This breakthrough brings quantum error correction within reach and paves the way for running quantum circuits with billions of gates on IBM's superconducting transmon qubit hardware. The gross code is part of IBM's broader strategy to bring useful quantum computing to the world and continuously improve the complexity of quantum circuits that can be run on their hardware, transitioning from 15,000 gates to 100 million or even 1 billion gates. Meanwhile, Nu Quantum, a Cambridge University spin-out, and softwareQ, an Ontario-based innovator, have announced a new project aiming to build the theoretical framework for the first fault-tolerant quantum computer and propose practical architectural solutions to tackle scaling challenges. By combining Nu Quantum's hardware and softwareQ's advanced compiler technology, the partners will quantify the impact of various factors on a distributed quantum computer. The project, funded by Innovate UK and NRC IRAP, will identify promising architectures and set performance targets for systems that can provide proof of concept and be further developed towards a fault-tolerant quantum computer. Also, the Economist will host the 3rd Annual Commercialising Quantum Global Summit in London on June 5-6, 2024. The event brings together enterprise end-users, academics, and quantum technology pioneers to discuss the commercialization of quantum technologies. The summit will explore the applications of quantum sensing, simulation, cryptography, and photonics across various sectors. The agenda features over 100 speakers and includes a photonics focus day. The event aims to foster collaboration, gain insights into industry progress, and chart the path forward for quantum and photonics technologies. The winner of the Institute of Physics Quantum Business and Innovation Growth prize will also be announced.

[Digital Twins] NVIDIA Showcases Digital Twin Innovation, Hewlett Packard Launches Digital Twin as a Service, and Nemetschek Group Partners with Hexagon. NVIDIA released a new video video showcasing how developers can use digital twins to develop, test, and refine real-time AI for industrial automation. The demo features a digital twin of a warehouse with digital workers, AMRs, vision AI agents, and sensors. Metropolis created a centralized map of worker activity, while cuOpt calculated optimal AMR routes. This simulation-first approach enables AI agents and AMRs to adapt to real-world unpredictability, streamlining human-robot collaboration and minimizing downtime. Meanwhile, Hewlett Packard Enterprise (HPE) has introduced a Digital Twin as a Service (DTaaS) platform to help enterprise clients adopt spatial data and simulation services. The platform utilizes NVIDIA's Omniverse software to create and connect XR work environments, assets, and tools, while HPE manages the computing, storage, and networking infrastructure. HPE's professional services assist clients in identifying use cases, establishing roadmaps, and providing proof of concept and deployment services. The manufacturing sector has shown significant interest in digital twins for product prototyping and optimizing manufacturing processes, while the retail sector uses computer vision technology to optimize checkouts and traffic. Also, Nemetschek Group and Hexagon's Geosystems division have formed a strategic partnership to accelerate the digital transformation of the AEC/O industry by promoting the adoption of digital twins. The partnership combines Nemetschek's dTwin platform, which fuses all building data sources into one overarching view, with Hexagon's reality capture and Scan2BIM solutions to create accurate and real-time digital twins. This collaboration aims to provide customers with an end-to-end digital twin workflow, enabling data-driven decision making and Building Lifecycle Intelligence. The partnership seeks to address efficient and sustainable building operations, as well as smart renovation, retrofit, and revitalization projects. Hexagon operates in 50 countries with approximately 24,500 employees. 

[General technology]  Ransomware Threatens NHS Patient Data, US DoD Unveils Cybersecurity Strategy, and Cisco's 2024 Cybersecurity Readiness Index Highlights Global Unpreparedness. A ransomware group called INC Ransom has threatened to publish three terabytes of stolen UK National Heath Service (NHS) data unless their demands are met. The hackers have already published a "proof pack" containing confidential patient information. The health board is working with various agencies to prevent further attacks and will contact affected patients. While the stolen data appears to be years old and not highly valuable to cyber criminals, the threat of publication remains concerning for staff and patients. The Scottish government is taking steps to help protect against cyber attacks and prevent the release of the stolen data. Meanwhile, US the Department of Defense (DoD) has released its Defense Industrial Base Cybersecurity Strategy, a three-year plan to enhance cybersecurity collaboration between the DoD and the U.S. defense industrial base (DIB). The strategy aims to strengthen the DoD's governance structure, improve the DIB's cybersecurity posture, preserve the resilience of critical defense capabilities, and foster better collaboration between the DoD and DIB. It aligns with the 2022 National Defense Strategy, the 2023 National Cybersecurity Strategy, and the National Defense Industrial Strategy. The plan emphasizes the importance of teamwork between the DoD and DIB to remain resilient against adversarial cyberattacks and defend the nation. Also, Cisco has released its 2024 Cybersecurity Readiness Index, based on a survey of over 8,000 business and cybersecurity leaders across 30 global markets. It assesses organizations' preparedness to face current cybersecurity risks. The study evaluates readiness based on five pillars: Identity Intelligence, Network Resilience, Machine Trustworthiness, Cloud Reinforcement, and AI Fortification. The 2024 edition reveals that very few organizations are adequately prepared to defend against the rapidly evolving threat landscape.

👉QX Insights #10 is now available: here.

In this episode of QX Insights, we explored decentralized finance (DeFi) risks and how to identify, assess, and mitigate them with Chaals Nevile, Director of Technical Programs at the Enterprise Ethereum Alliance (EEA), and Jerome Ostorero, Director of Research and Risk at Coinchange Financials.

We discussed:

✅ The Enterprise Ethereum Alliance's (EEA) DeFi Risk Assessment Guidelines - a framework for evaluating risks across DeFi protocols, smart contracts, data protocols, and more. These guidelines were developed through extensive collaboration between over 35 industry leaders from organizations including Consensys, DTCC, EY, SAP, OpenZeppelin, Hacken, and DeFi Safety, who contributed hundreds of hours of expertise. 

✅ The benefits of developing an in-house risk assessment framework aligned with the Enterprise Ethereum Alliance guidelines 

✅ The process of creating risk risk-finding summary with asset allocation recommendations for asset management teams.

💡Access the Enterprise Ethereum Alliance's (EEA) DeFi Risk Assessment Guidelines here:

FEATURED: SoK: Security and Privacy of Blockchain Interoperability

By: André Augusto , Rafael Belchior , Miguel Correia , André Vasconcelos , Luyao Zhang , Thomas Hardjono 

"Recent years have witnessed significant advancements in cross-chain technology. However, the field faces two pressing challenges when it comes to security and privacy. Hacks on cross-chain bridges have led to monetary losses of around 3 billion USD, highlighting flaws in security models governing interoperability mechanisms (IMs) and the ineffectiveness of incident response frameworks. Additionally, the exploration of privacy within cross-chain scenarios remains relatively unexplored. Hackers benefit from extensive privacy, whereas users and bridge operators experience restricted privacy, thereby broadening the potential attack surface for adversaries.

In this paper, we present the most comprehensive study to date on the security and privacy of blockchain interoperability. Our study employs a rigorous systematic literature review, yielding a corpus of 178 relevant documents, including 58 academic papers and 120 gray literature documents, out of a pool of 531. We systematically categorize 56 interoperability solutions based on a newly created taxonomy focusing on security and privacy considerations. Our dataset, comprising academic research, disclosures from bug bounty programs, and audit reports, exposes 45 cross-chain vulnerabilities, 25 theoretical attacks, and 88 mitigation strategies. Leveraging this data, we analyze 14 notable bridge hacks accounting for over USD 2.9 billion in losses, mapping them to the identified vulnerabilities.

Our findings reveal that a substantial portion (65.8\%) of stolen funds originates from projects secured by permissioned intermediary networks with unsecured cryptographic key operations. Regarding privacy, we demonstrate that achieving unlinkability in cross-chain transactions is contingent on the underlying ledgers providing some form of confidentiality.

In conclusion, our study offers critical insights into the challenges and vulnerabilities within the realm of cross-chain interoperability. We pinpoint promising directions for future research that can guide both industry practitioners and academics toward substantial advancements in this field. Our work underscores the urgency of enhancing security and privacy measures in cross-chain technology to mitigate the substantial financial risks associated with bridge hacks and to foster user trust in the blockchain ecosystem."

Read the full paper: here.


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