BTC is the new silver

 

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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

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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.

 

 

 

 

 

 

 

 

 

 

Crypto adoption booms in November 2017

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The last weekend of November 2017 may prove to be an historical point on the cryptocurrrency timeline. It is too early to say just yet how important it will prove to be, as we have seen a number of spikes in investor activity with Bitcoin since it appeared. However, this felt like an important moment and I’m not the only person watching cryptocurrency and other blockchain products who felt the same way.

Jon Buck, one of the expert commentators who I follow, wrote that this period of November signposts the fact that adoption of cryptocurrencie is increasing massively. He even goes so far as to say, “trading numbers from last weekend indicate that the volume of cryptocurrency trades exceeds that of many US equities trading markets.” And, the volume of Bitcoin traded exceeded $5 billion, which was more than business on the Chicago Stock Exchange as well as other exchanges.

It has been quite a dramatic month all round with the “will they, won’t they” situation with Segwit2X, which eventually didn’t happen and then the clash between Bitcoin and Bitcoin Cash. It looked like Bitcoin was going to be the loser, but it came back with some force to inspire renewed confidence in prediction that it will reach $10,000 by the end of the year.

That alone produced a spike in Google search volumes for ‘Bitcoin’ and the exchange Coinbase added another 100,000 users. The increased adoption we are witnessing is placing Bitcoin, Ethereum and Litecoin, which also traded very strongly at the weekend to reach milestone values, even more firmly in the spotlight. Jon Buck commented that it was surprising that the other altcoins had done so well, because a bull run on Bitcoin usually takes money away from the other altcoins and makes their prices drop. Instead we are seeing them growing together and this indicates that new money is flowing into digital currency.

Finally, news just on from Japan reveals that Bitcon has just broken through the 1,000,000 Yen price point. Like the $10,000 in the U.S., this level represents the breaking of a psychological price barrier. Some even believe that the weekend’s BTC bull market started in Japan and reports state that the yen is responsible for an impressive 59.6% of all Bitcoin trades worldwide. The Japanese government exempted BTC from an 8% consumption tax on BTC trading and this has made it very popular with the Japanese people who are now keen to own Bitcoin. Watch Japan, because its behaviour is influencing the global BTC economy. Their bullishness is encouraging others and a $10,000 BTC for Christmas—or even this coming weekend — is pretty much inevitable.

 

 

 

 

Europe’s Insurance Brokers Adopt Blockchain

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Every day there is some news about another sector of the mainstream financial world adopting blockchain. In the last few days news has come out that 14 of Europe’s largest insurance brokers have joined forces with Deloitte to operate a blockchain system that will simplify the transfer procedure for clients who want to move to another broker during the first year of taking out a policy. This move will enable insurers to comply with the Hamon Law, which states that insurance companies must make transfers easy for their customers.

Why have they chosen the blockchain? Because it will provide the most secure storage system for customer data. It is more secure than any existing database storage system and it will also allow these insurers to comply with a new EU directive on General Data Protection Regulations (GDPR), which is coming into force in 2018. And this won’t only affect Europe. If you plan to sell anything to an EU citizen, then you must comply with the upcoming General Data Protection Regulation (GDPR) standards (even if you don’t have operations in the EU).

The blockchain can overcome the challenges company’s face in complying with a range of regulations. It can provide a means of cost-effectively producing and sharing information with regulators whilst also reducing the burden of “report exhaustion” many organisations are facing. Furthermore, two of the key properties the blockchain can help with include provenance of assets and a chain of custody for operations on assets.

Companies that don’t adequately protect consumer data face large fines, so now is the time to turn to the blockchain as this group of insurance brokers have. The blockchain platform uses ‘Proof of Process’ technology that secures user data in a shared data storage system. It will limit data release to the absolute minimum for processing transactions.

AIG, another massive insurer has already started issuing policies on the blockchain. It is offer multinational smart contract-based policies in partnership with Standard Chartered Bank and IBM. According to AIG, the insurance sector is seen to vastly benefit from the blockchain technology. It will help cut down the processes that most insurance providers usually face with paperwork and filing of all the requirements.

As Adam Perlow, Founder and CEO of Zen Protocol told Jon Buck, writing for CoinTelegraph: “If the insurer sets some money in a smart contract, and the contract pays out based on the occurrence of an event as determined by an objective actuary/oracle, then there is no need for novel incentive schemes, the insurer simply cannot avoid the payout. In the long run, as one insurance company uses smart contracts to gain the public trust, others will be forced to follow suit.”