Nouriel Roubini’s Project Crypto Fear

On By mehranmuslimiblogIn Bitcoin, BlockchainLeave a comment

There have been some voices in the banking community that are determined to undermine the legitimacy of cryptocurrencies; Jamie Dimon is one, but the loudest voice is that of Nouriel Roubini. This American economist, who made his name on the back of accurately predicting the global financial crisis of 2008 has been making sure that US government senators listen to his dire warnings about digital assets if they are adopted.

Roubini claims that crypto is all about greed; for him there is no case for democracy and decentralisation according to him. His actual words were: “Crypto is the mother or father of all scams and bubbles.” That is what he told the US Senate Committee on Banking, Housing and Community Affairs.

His criticism of the industry is founded in some truth. Yes, there have been scams and some crypto assets will turn out to be worthless, but not all. Still, since when has everybody unilaterally agreed about everything? There is a point to debating the case, because it enables us to come to a clearer conclusion about the potential of the new technology.

Roubini is also an economist who likes to shout pretty loudly about it all being a ‘bubble’. Of course, he wasn’t alone in going on about the Dutch tulip fever of several hundred years ago. He said the bubble would burst, and some might think it has, because in 2018 the market hasn’t lived up to the hype of 2017. But what is happening now isn’t necessarily a bubble bursting; in the future we may look back and see that it was more a case of the market finding its own level before moving forward again. And, Roubini has ignored the potential of stablecoins, which could protect us from the kind of crash we experienced in 2008.

The mainstream media has supported Nouriel Roubini’s view. Crypto sceptics are more regularly interviewed than crypto supporters, and these anti-crypto talking heads fan the flames of the anti-crypto propaganda. But they may have egg on their face when crypto ETFs make their debut.

Roubini told CNBC, which gives him a lot of air time: “Folks with zero financial literacy — individuals who could not tell the difference between stocks and bonds — went into a literal manic frenzy of Bitcoin and Crypto buying.” Well, yes, because not everyone can invest in Wall Street! But this doesn’t make it a scam, or a bubble, or something to be feared.

Give crypto, blockchain and all the attendant new tech tools, such as AI, a chance, because it might deliver something unexpectedly good.

What blockchain is and what it isn’t

On By mehranmuslimiblogIn Bitcoin, Blockchain, EthereumLeave a comment

The ‘blockchain’ word has been in popular use since 2017 and it has come to mean anything from the technology that will change to world to a digital form of snake oil. It was also going to make every investor in it very rich.

Part of the blockchain legend has been based on all the hype around cryptocurrencies, and it is fair to say that its powers have been inflated to the point where some people have come to believe it is capable of delivering things that it most likely can’t. After all, it is just a database with new features.

Jack Dossman writes at Hackernoon defines it thus: “It allows multiple parties to record and share information on a database in real time, and not need to trust each other, as they are incentivised to do the right thing through tokens/coins.”

As he says, blockchain has a certain specificity that only makes it useful in certain circumstances. It’s great for cryptocurrencies and for faster, cheaper cross-border payments services, but it isn’t a solution for absolutely everything.

It has some flaws: for example, the proof-of-work mechanism uses extraordinary amounts of electricity. But, we must also remember that we are still in the early days of blockchain and to dismiss it now would be the equivalent of saying in 1995 that the Internet would never work.

It isn’t a ponzi scheme and it isn’t a way of making a company’s share price rocket simply by adding ‘blockcian’ to a company name; especially when there is no blockchain involved. Neither is it a tool exclusively used by scammers as some would like you to think. That’s just a side effect of the technology, not its ultimate purpose. Plenty of scammers use email and social media channels, but that doesn’t stop us from using the Internet.

It won’t revolutionise you business, unless your company really needs blockchain technology to grow — so don’t add it in just for the sake of it. Plus, you’ve probably heard that it’s a ‘disruptor’; well, it probably won’t disrupt every industry sector, because it isn’t needed everywhere.

So what is blockchain?

It is technology that provides:

· A shared, add-only database

· Removes need for intermediaries

· It’s trustless

· It offers consensus and validation

This makes it perfect for cryptocurrencies and the finance world. There may be other mass-market cases for blockchain use that will come to light in the future, but just don’t believe absolutely everything you hear about what blockchain can do.

EU Copyright Rules could silence us all

On By mehranmuslimiblogIn Digital MarketingLeave a comment

On 25 May 2018 the General Data Protection Regulation (GDPR) came into force in Europe. It introduced a set of online privacy rules that could lead to a drastic change in the European law on copyright.

The Copyright in the Digital Single Market Directive has been debated for some time and is intended to update the copyright directive of 2001. However, in the intervening years, there have been quite a number of changes in the copyright field that the new directive is supposed to fix in one single go. It has never been considered a controversial piece of legislation until May when German politician Axel Voss inserted two new rules into the draft legislation, and they are controversial.

First, there is Article 11: under this rule, “commercial” “links” with “snippets” from “news sites” would only be permitted if the platform hosting the link had a paid licence from the news site. Furthermore, quoting more than a single word constitutes a “snippet”, which has to be paid for. With no real definition given to the terms “commercial” or “link”, there will be arguments.

Second, there is Article 13: this rule says that any public communications platform is required to ensure that nothing copyrighted is ever posted without permission, even for a brief moment.

Germany tried applying Article 11 before, but Google found ways to circumvent the ‘Link Tax’ idea — it boycotted any sites demanding payment. So newspapers ended up giving Google free licences.

Article 13 is equally, or even more difficult to apply. There is a ContentID tool available on YouTube, but the people who own copyright say it doesn’t catch enough of those infringing copyright. Plus, the system tends to capture videos that aren’t guilty of any copyright infringements. Users don’t like it either, because their favourite videos get blocked.

There is concern that Article 13 will make this situation worse, not better for content creators and users. As Cory Doctorow writes: “Article 13 would expand the filter to consider text, music, video, still photos, software code, game mods, 3D printing files, and anything else that might be copyrighted.”

Unfortunately, both these Articles got passed in the draft regulations, but the debate is not over, as the EU talks to each Member State. These talks are usually secret, but such is the strong feeling about this Directive that the European Court of Justice has ruled that all Europeans should know what happens in these negotiations.

The aim may have been to exert more control over Facebook, Twitter, Google and the other big tech companies but they have the financial resources to follow the rules; it is the smaller companies that don’t. And that means the giants won’t have any competition.

And, although it is an EU regulation it could affect the rest of the world, with platforms having to block EU users, or censor the Internet globally. This regulation will affect many areas, not just online entertainment: it will affect education, social and political communications and more. If the Directive is passed it will be an abuse of regulatory practice — we need to hear and know more about it, as the ECJ has decreed.

Trust your gut when trading crypto

On By mehranmuslimiblogIn Bitcoin, Blockchain, EthereumLeave a comment

As with just about everything else, the Internet offers a mountain of advice about trading cryptocurrency. There are trading experts with their own websites, YouTube channels where you can pick up tips in and plenty of other ways in which you’ll be bombarded with ideas if you do a Google search that says something like ‘How to trade crytpocurrency’.

You might find yourself following one or two of these ‘experts’, which may also mean you follow their trade strategies and this makes you feel safer and more expert yourself. But, is this rally the best way to go about it? In my experience it’s the wrong way, because it doesn’t encourage people to rely on their gut feelings and their personal view of the market.

By listening to your gut, I don’t mean basing your decisions on emotions. It’s not a case of waking up and thinking, ‘I feel good today, I think I’ll buy some bitcoin, sell some ethereum’; it is about using your intuition.

Analysing the market, which is extremely complex, will never bring you to the perfect trading sweet spot. Looking for patterns to base your trades on will eventually become self-defeating. Instead, simply gain experience and while you are doing that, your subconscious mind is storing away knowledge about the patterns that provide you with good results. Your intuition has access to this knowledge, whereas your conscious mind is blocked from directly accessing the subconscious.

But, using your intuition requires practice. Therefore, do trades on your own using your strategy, not one that has come from an expert you found online. In this way you’ll be able to follow where you’re right and wrong in your trading. You’ll also have a much greater feeling of achievement, because it was you who made a successful trade based on your own knowledge, not that of someone else.

I’d also add that making your own decisions keeps you closer to an assessment of risk that is right for you. Another person may have a completely different set of life circumstances, which means they assess risk differently. If you are going to take advice from others, be sure to follow channels that are more educational than directive, so you can learn the common patterns and indicators for yourself.

Finally, once you start a trading strategy, it pays to stick with it, because your first instinct is based on your intuition, so don’t second-guess yourself; that’s when trouble begins.