Category: Blockchain

Gibraltar GSX is excited about Crypto

On By mehranmuslimiblogIn Blockchain, FintechLeave a comment

One of the prominent guests at BlockShow Asia 2017 was Nick Cowan, the managing director and founder of GSX, Gibraltar’s first regulated stock exchange. Cowan is an fervent supporter of the Fintech market so I was interested to discover what he said in the numerous interviews he gave following the show about his personal position and what this might mean for a financial centre like Gibraltar.

gibraltar

It is important to note that Cowan loves networking the crypto communities and admires their dynamism. As far as he can see there are two very important dynamics operating in the crypto market at the moment: the first is distributed ledger usage and the ways in which blockchain platforms can transform a range of businesses and second, the trade in cryptocurrencies. He told Cointelegraph that during one trip to one Asian country, he met about 500 people with an average age of 60 who were all cryptocurrency traders. Considering the perception is that the cryptocurrency market targets those in the 25-45 age range, it would seem that the traders are somewhat older, at least in Asia.

However, Cowan also pointed out that there are significant differences between jurisdictions. For example, in the next country he visited (he didn’t say which one) the focus was more on crypto fund management and institutional engagement with this emerging market. He also answered some questions about what are the drivers behind the interest in crypto. He said: “A lot of it is driven by regulation, in terms of the acceptance of the technology and cryptocurrencies in general.” But what impressed him most was the level of knowledge in each country he has visited.

As he said, and it is evident to anyone who is curious about this market, the interest in everything crypto is snowballing and the perception that it is going to go mainstream is growing. Cowan said: “You are seeing more and more companies, Fintechs that are looking to start their business or grow their business tapping into token sale space as a way of raising money.” He described the sector as being “on fire.”

Gibraltar GSX got involved in crypto about two years ago and the fact that it is a small jurisdiction enables it to be a bit more flexible than other stock exchanges. It got involved by launching a Bitcoin asset-backed security approved by the European Union. As Cowan, explained, when they started on the project Bitcoin was $300, but they knew little about it and the whole team had to dive in and find out everything possible about this whole new world.

The Gibraltar government is also interested in blockchain and has been talking to various communities globally about whether or not there should regulations for operators of blockchain-based financial services. As a result, Gibraltar is introducing regulations in January 2018. Cowan sees this as an opportunity and GSX is applying for a license so that it is in a position to explore the ICO token space to its fullest and use all the knowledge its team has acquired. In fact, watch this space because GSX is launching its own security token next year on its main exchange.

 

 

 

 

 

Global trade on the blockchain

On By mehranmuslimiblogIn Bitcoin, BlockchainLeave a comment

Blockchain-as-chain

The global supply chain moves $64 trillion annually. It’s an unbelievably complex network and even small businesses are reliant on the logistics of this chain operating smoothly. In reality, the global trade network is a challenge for every business, regardless of size and anything that makes it more efficient is to be welcomed. Not only would more efficiency help businesses and their customers, it would also help the environment.

You might think that the information aspect of the Internet would have contributed to simplifying the global trade network, but it hasn’t. Add in the fact that the network has a vast number of intermediaries who establish trust between vendors, but don’t add value to the network, and the fact that it is usually up to humans to identify weaknesses in the supply chain and you can see that there is a lot of inefficiency already. However, there is a solution to this – the blockchain!

Blockchain and AI

If you combine the blockchain with artificial intelligence (AI) it is possible to build an autonomous and decentralised supply chain that can ‘think’ for itself. It would be able to identify areas of inefficiency and correct them. Some think this could be one of the most important developments in blockchain usage and the Blockchain Research Institute has commissioned a research study into the intersection of blockchain and supply chain management.

Don Tapscott, a founder and executive director at the Blockchain Research Institute has commented on the research study “Introducing Asset Chains” on LinkedIn Pulse and shared some of the high level conclusions with readers. The key points is: “Assets all over the world are extracted, designed, combined, transported, and sold every day through the supply chains that underpin global commerce.“ This system has not been overhauled for years and blockchain has the potential to decentralise these traditional supply chains. Add in AI and the Internet of Things and we can have a completely new approach to scaling the network.

Logistics on the blockchain

This new network would have the ability to self-regulate and adjust to improve efficiency. It would also be able to establish “machine trust.” And asset chains are an essential element of machine trust. As Tapscott says: “Asset chains provide a framework for machines to participate autonomously in supply chains and the markets they serve. They allow us to unlock the trading capability of machines without human intermediaries.”

That’s why some of the largest supply chain logistics firms are looking at blockchain to transform their operations. This will of course, give birth to a new group of companies providing these blockchain solutions. Tapscott cites the example of Sweetbridge, an Arizona-based firm that is, “leveraging the value of stranded, underutilized assets within those networks – like trucks or shipping containers – into more liquid tokens.” This means that a supply chain can basically fund itself.

This is an exciting way forward for the global trade network, and it is one in which human intermediaries will have fewer functions, making the entire supply chain less expensive, faster and more trustworthy thanks to cryptography and clever coding.

 

 

 

BTC is the new silver

On By mehranmuslimiblogIn Bitcoin, BlockchainLeave a comment

 

1

You have probably read many articles saying that Bitcoin is the new gold. However, while this may yet prove to be true, at the moment it actually has more similarities with the silver market in the 1970s and 80s. This was a period that saw an extraordinary spike in silver trading for reasons that are remarkably like the activity around Bitcoin and a few other crypto currencies.

Forty years ago, the price of silver made it accessible to the average man on the street. Added to this, it didn’t have the kind of Wall St. or City of London elitism attached to it in the same way that gold has. These two situations encouraged the small investor to get into the silver market.

At least one experienced investor believes this is the same situation with the Bitcoin market. Mark Fisher, a renowned trader, says: “The reason people are so attracted to Bitcoin is because people want something that’s actually moved dramatically, that there’s no Wall Street to it. It’s the thing that every cab driver is talking about all day long.”

As he says, Bitcoin has attracted people who might not normally invest at all, partly because you can put in small, manageable amounts and because it is completely disconnected from big institutions and conventional investing. Anyone can get into it, from teens to grannies.

The decentralised nature of Bitcoin and all the other crypto currencies is what really appeals to many people. They like the fact that it doesn’t have any bureaucracy or rules surrounding it. Like silver in the 70s and 80s, Bitcoin feels like it was made for the people, not for the benefit of banks and other financial institutions.

And of course, the more popular Bitcoin becomes, the higher its price rises. In the last month or two we have seen phenomenal gains, much of this powered by mass adoption of Bitcoin in Asia. Now we are waiting to see what the big investors will do–they call them the ‘Wall St. Whales’ in Cointelegraph. Fisher predicts that when these guys get involved in the Bitcoin futures markets, which open next week, it is going to resemble the Wild West at the start. We will undoubtedly see some hugely volatile movements, but as long as there is movement, we know Bitcoin still lives and as investors we must hope the only way is up!

 

 

The emergence of Neobanks and Cryptobanks

On By mehranmuslimiblogIn Bitcoin, Blockchain, ICOLeave a comment

60266854 - stack of bitcoins with swiss franc bills. 3d illustration.

There is a neobank called Revolut, which is adding 3,500 people daily to its digital bank because it provides a store for Bitcoin. It doesn’t have a banking licence yet, but that isn’t stopping customers from joining and it has around one million accounts already.

What is a neobank?

A neobank is a concept that blends online banking, mobile apps, digital lending and personal financial management. They are consumer focused, have chatbots and replicate the conventional model of savings, lending and transfers. They don’t need to have a banking licence, nor do they need them, which some may find surprising. According to futurist and Fintech entrepreneur Lex Sokolin, tech statups can build user experiences and API those into financial backends from firms providing bank-as-a-service. He also points out that is exactly what Apple and Intuit did using Green Dot’s bank-as-a-service.

Then came the cryptobanks

The neobanks have been joined by cryptobanks. These replicate the functions of the traditional bank for customers and investors with crypto assets. Sokolin believes that the neobank and cryptobanks will soon blend together. Examples of cryptobanks, which are all retail banks, include Flinu and BABB in the UK, 2gether Bank in Spain and Change Bank in Estonia.

Both the neobanks and cryptobanks have raised money thorugh ICOs. Monza, a neobank poster child, raised €71 million and the cryptobanks are set to raise $150 million this year if some industry predictions prove correct. If the trajectory follows ICO funding in general, we will see the exponential rise in financial institutions dedicated to crypto continue.

Europe is first mover

When you look at the rise of these challenger banks, one noticeable aspect becomes clear; most of them are based in Europe. In fact, the majority have their HQs in the UK. That’s where you’ll find Revolut, Monzo, Pockit, Monese, Atom, Starling Bank and Tandem. The reason that Europe seems to be hosting so many neobanks and cryptobanks, rather than the USA, which might seem the more likely home for them, is that international money transfer in Europe can be priced at nearly zero by the digital banks. This gives these challenger banks an advantage over the conventional banking community. This matter more in Europe than it does in the USA, because markups on credit card use and foreign exchange make travel expensive for Europeans. This doesn’t affect the American consumer to anywhere near the same extent, as the dollar is used throughout the USA, whereas Europe has a greater range of currencies, so neobank and cryptobank services don’t have the same appeal for Americans, who are more focused on personal financial management.

Where next?

Where will they emerge next? It is likely that failing third-world economies will see a rise in the presence of cryptobanks. We have already seen in the last week in Zimbabwe, during the fall of Mugabe, that the people flocked to digital currency because the country’s currency is in such bad shape. It is not the only example of the growing adoption of cryptocurrencies in weaker economies, and we can expect to see much more movement towards crypto in the coming year, with an accompanying demand for institutions that can service customers with crypto assets.