2018 brought digital assets to those who paid attention. 2019 will bring it to the rest.

That’s right everyone. The dots for connecting digital assets with real world use cases are growing in number. It reminds me of when as a child, I would connect dots on paper to get a final picture. Sometimes the dots were so few that you could not really visualize what the image would be, but there were also those pictures with so many dots, you could immediately see what was going to present itself.

The picture has been adding dots and a perfect example is the DTCC partnering with a multitude of tech firms in the distributed ledger technology (DLT) and digital asset sphere.

Look around at the mainstream traction that digital assets have been gaining. Brad Garlinghouse, CEO of Ripple just had an interview on CNN explaining the way their native cryptocurrency XRP functions in the banking world. Watch the interview here.

It is highly likely that the digital asset world will shed many of the participants in the coming months as regulators begin determining how best to allow these technologies to function parallel to the existing currency frameworks of global economies.

France, along with other governments, fear the affect of projects such as Facebook’s Libra. Ultimately, national governments are concerned of the threat to their monetary sovereignty with the creation of digital currencies that are designed to compete with, replace, or even coexist with the fiat of the nation. BBC has an article of interest to explain their stance on the Facebook Libra project.

Words and opinions are my own. This is for entertainment purposes and to share my own opinions. This is not financial advice.

#digitalasset #cryptocurrency #digitalfuture #ripple #monetarysovreignty #futureofmoney

What if smart contracts become more intelligent when necessary?

Blockchain is undoubtedly a topic worth knowing about. With a seemingly endless number of use cases, it is always good practice to understand where a technology can be applied in a specific use. By narrowing our focus and applying any number of proposed blockchain use cases to an industry, we can begin to imagine how this technology can be used to create certain enhancements and reforms.

Let’s start with the smart contract and the construction industry. Specifically, we will look at where the technology of a smart contract stops and how it can be reinforced to adapt to more fluid transaction environments that do not, or even should not, always follow the same transaction methodology.

It is important to note that a smart contract is not a contract in and of itself, but rather an automated system on the blockchain that performs unalterable functions to execute an agreement. In essence, it forces the agreement to function.

The construction industry has a number of moving parts that impact the bottom line for all parties involved. There are owners, GC’s (general contractors), engineering firms, inspectors, sub-contractors, insurance companies, public agencies, and communities involved in the process. Many, or all, are often external stakeholders to one another. The number of participants and individual interests in a large scale private or public project can often lead to deflection of risk, miscommunication, and substantial extra cost.

As an aside to the focus of this article on blockchain, I recommend reading UK Construction Industry estimates loss of up to £13 billion in construction projects due to poor communication between parties, written by Susan Pettit, Director of Client Management at UK research firm, Client Confident. The article focuses on the cost of miscommunication (as the title suggests).

How might blockchain begin to mitigate and streamline the construction process? A developer or project owner wants to build a project and mitigate all risk, but should the risk associated with the project owner’s ambitions be pushed down the line on smaller and smaller companies? The legal issues, time, and expenses that may come as result of a contract disagreement can cost a small company its existence.

Smart contracts extend the idea of maximizing fair play throughout a project life-cycle. In the current language of many Prime Contracts, any subcontractor can become involved with any number of claims during and after their time on the job. This can range from labor disputes, delay of job clauses, and retainage of payment for issues that arise outside the scope of the subcontractor’s control costing time, legal fees, and productivity. The contract language is written specifically enough to make you a party, but vaguely enough in defining parameters, keeping the specifics of why a clause may be enacted undefined. This may adversely affects a subcontractor that has otherwise performed their work accordingly. Essentially, the contract world is not as fair as it could be.

If industry standards can be formalized, while simultaneously accounting for variables in the process, owners of large and complex projects can issue RFPs to the open market under a standardized smart contract for the particular subcontractor skills or vendors to bid on. Terms are predefined based on necessity of the outcomes and favor both the owner and bidding party accounting for each organization’s needs and understanding of potential variables.

A subcontractor, unless otherwise involved in the construction process, should have access to a contract or agreement that fairly represents their scope of work within the entire project.

The rules written in the smart contract may not contain all possible scenarios that a transaction, or series of transactions may encounter. It is likely that a smart contract be in addition to the actual agreement, more of a system to speed up and execute aspects of the agreement in a timely and trusted manner.

The construction industry is an excellent example of transactional volatility due to the multi-layered construction process in a single project. As mentioned before, there are potential variables with every hired contractor and subcontractor that cannot be taken into account when designing a blanket contract. In this scenario, we would employ off-chain logic that uses third party validation for the variable scenarios that arise outside of the standard permissioned smart contract language (IBM Developer, Desrosiers and Olivieri, 2018). IBM Operational Decision Manager (ODM) is a third party system that engages answers from each party involved in the transaction, specifically applying a determination based on answers provided by the parties involved in the transaction.

The technology and applications for increasing business intelligence, openness, and accountability are quite remarkable. How far can technology propel integrity and omission of human error in enterprise, free market or otherwise? Will smart contracts become legally binding in the court of law?

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. 

The bulls have it, the bears want it. Will crypto pull from a market correction?

The general feeling of continued market stability is coming under question. Some have proposed severe market downturns. The inevitable will happen, but when?

Whether you believe that someone has the crystal ball on market forecasting is entirely up to you. I am a student of history and history does repeat itself, though not entirely in the same manner or breadth each time, the overall cycle does come full-circle. I like to be prepared.

Will cryptocurrencies become a new hedge against market corrections? Will they replace, compete, or partner with precious metals and other traditional bear market safe havens?

As we near the decision of whether the SEC will permit Bitcoin ETFs (delayed until September 30, 2018), I believe that we will see a shift into this new asset class by large investors, banks, family trusts, and eventually, the individual investor. VanEck has proposed a $200k minimum to ensure that investors are in fact accredited and fractional shares will not be available.

Volatility will continue due to uncertainty in the news and various other sources about which cryptocurrencies will be the best bet in both the short and long term. For the up-to-date investor, that is anyone’s game. Regulatory frameworks are well under way, though likely out of sight to the average investor. As regulatory frameworks are developed, the landscape will change. Lobbyist groups, such as the Blockchain Association, are currently leading the charge across the political landscape representing companies like Coinbase, Polychain Capital, and others.

The end of Q3 and all of Q4 should have some very interesting action that I believe will give a little more perspective to the digital asset sphere. Particularly, the SEC review for the Blockchain ETFs and certain work in the blockchain/crypto sphere that is expected to go live, affecting the use of particular cryptocurrencies.

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.

How XLM fits with IBM.

XLM, Stellar Lumens and IBM:
According to the Stellar website, there have been 8,143,934,276 Lumens (XLM) distributed at the time of writing this article. You say, “great, what the heck does that mean for me?”

Lumens XLM

The principal behind the Stellar network, and the XLM token in particular, is to move money across borders for a fraction of a penny. It costs institutions money to move money. Whether it is USD to GBP, or CDN to YEN, there is a cost to facilitate the exchange of one currency to another.
This is where tokens such as XLM step in. They act as a “bridge currency” to the underlying fiat currencies. Through the Stellar network, the transfer of USD to GBP goes through XLM. USD is first converted to XLM, then converted to GBP in a matter of seconds and at a mere fraction of the current cost to traditional exchange rates.
The Stellar network is decentralized, meaning that it is not controlled by a single entity. The settlement time using XLM is 2 – 5 seconds. Money has not transferred that quickly, ever. There are similar coins in the Stellar Lumens space, specifically, XRP. Both are worth looking at due to their current low cost of ownership and the use case that each provide. XLM is focused on a direct peer-to-peer system that cuts banks and XRP out of the equation. It could be argued that each will have a place in the money transfer sphere as the banking system has a long history of being involved in the economies of the world.
Partnerships that Steller has developed:
IBM, Stripe, Wipro, Deloitte, and Mifos to name a few. The full list can be found on Stellar.org.
Yes, Stellar is a .org as they are a non-profit organization.
You can purchase XLM on a variety of exchanges.

DISCLAIMER: As the domain name of this site suggests, the content of my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. I hold XRP and XLM.

Cryptocurrency Investing is Surrounded by Powerful Information.

Let’s take a look at the hiring statistics for Coinbase:

Coinbase is arguably the fundamental route for cryptocurrency new-comers to get into the market. That is not to say that other options do not exist, perhaps better options. Options that spread more of the cryptocurrency universe at your fingertips. Remember, Coinbase currently hosts only four currencies so far: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).

With the investment world still largely focused on technology firms such as Amazon and Apple, which have tremendous market capitalizations, expansion, and hiring trends, I think it wise to look at the growth of companies and industries surrounding the cryptocurrency market.

The hiring data from Coinbase as it is available on Linkedin.

Coinbase Hiring - Linkedin Stats

Certainly, we can look at this exponential growth as an indicator that this market segment is growing…quickly. In July of 2016, Coinbase employed just under 211. In two years’ time, they have grown at a rate of 170% to a current total of 570 employees.
As an investor looking for cues and educational instruments regarding the growth and stabilizing of an emerging market, employment data of leading companies in the sphere is a good place to start. This is not to say that it is the crystal ball, as we know that companies rise and fall with the times.

Let’s take a look at BlackRock’s CEO, Larry Fink:

Do bankers lie and what motive might they have to keep people misinformed?

This is a July 16, 2018 video clip from an interview with BlackRock’s Chairman and CEO, Larry Fink.

https://www.bloomberg.com/news/videos/2018-07-16/blackrock-s-fink-says-clients-aren-t-looking-to-buy-cryptocurrency-video

After being asked by Bloomberg interviewer Erik Schatzker, Mr. Fink says that none of his clients have expressed any interest in crypto. Meanwhile Schatzker states that Goldman Sachs, JP Morgan, and Morgan Stanley are building out crypto trading desks.
Mr. Fink again states that he has not heard from any clients that they want to be in crypto. You can develop your own conclusion with what he says, but I believe that he may not be showing all of his cards.

The Elephant in the Room: Insurance for Crypto Assets:

Bloomberg published an article recently uncovering the quite side of insurance for cryptocurrency storage. AIG, Chubb, XL, and Aon are a few of the tycoons quietly, and quickly, building their portfolios for insuring the cryptocurrency markets. Read the full article on Bloomberg.

Some quick market research on cryptocurrency topics show that this asset class is quickly becoming an allure to not only the original crew of techies, but to the financial institutions that our economies rely on.

The Final Take:

There is an incredible amount of information and misinformation to be found with regard to cryptocurrencies. From where I stand, I prefer to look at the digital assets underlying use case. Where is the news around not only the coin, but the institutions that play a part in making it available? Even then, some digital currencies exist today, that may not exist in the future. Regulators may come down with one fell swoop and knock some (or many) coins/ICOs/tokens out of existence.

If you are reading blogs such as this, you are obviously intrigued with the idea that the cryptocurrency market is ripe for the picking. It is my intrigue with this new asset class that has me writing this blog and providing the insights that I find.

Read. A lot.

Look for information that allows you to place an educated bet. I can tell you that with the onslaught of new cryptocurrencies and ICOs (Initial Coin Offerings), there are many bogus attempts to lure people’s money into worthless coin purchases. Look at the structure of the crypto asset and use your reasoning to determine which tokens you want to get into.

CoinMarketCap provides an extensive listing of available coins. Currently, there are 1,656 coins listed and prices range from fractions of a cent to thousands of dollars. However, not each of the coins listed is available through the same platform. In some cases, you need to discover an exchange method for purchasing a specific coin. This could very likely mean buying a token on a platform like Coinbase and exchanging that coin for another coin, which you hold in a wallet. This is a major reason why people are finding it difficult to get in the crypto currency asset pool.

My approach to investing in crypto assets will likely be different from your approach. I would never tell someone to do something that they were uncomfortable with or that I would not do myself, so you need to rely on your own judgement when determining the level of investment risk that you are willing to expose yourself to, if any.

The cryptocurrency market is global, but regulated differently by the country you reside in. You may be able to set up some accounts in one country that you are unable to use in another.

For example, DX.Exchange is an institutional and individual trading platform sitting on NASDAQ’s technology. Though NASDAQ is based in NYC, DX.Exchange is based in Estonia and will be regulated by the Estonia Financial Supervision Authority. The regulatory issues keeps the US usability of this platform at zero, as of now.

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. 

In the Bit-ginning…

Photo by Moose Photos from Pexels

When I first heard about cryptocurrency, I had a gut feeling that it would somehow become something big. The problem was, I was uncertain about how to get possession of it in late 2010, early 2011 when Bitcoin moved to around $1.00.

Fast forward six years when I asked a good friend of mine who works in the tech industry what he thought about Bitcoin, and he said, “I looked into it about 3-4 years ago, but never ended buying into it.” In late December of 2016 when this conversation was had, Bitcoin was around $800.

Even more of a stinger, when I finally learned how to set up for proper investing in the cryptocurrency market, Bitcoin had just touched $17,900…per coin. Hindsight being 20/20, it is the risk-reward scenario that both entices investors and leaves others sitting on the sidelines. The other aspect of sitting on the sidelines is lack of information.

Those that got on board early enough to realize a price swing of $17K in under ten years are the exception. The rest of the investor community can decide to educate themselves and develop an investment strategy early, get into the game late, or not at all. I say set realistic expectations, educate yourself, know your limits, and if you decided to get in the game, go long.

The fact is, in 2011, very few people new how to enter the digital asset market. It was the wild-west of investing and it went square in the face of the regulated banking industry. Investment platforms were unknown, untested, and uncertain in the level of security they provided . Realistically, that was the perfect timing for a decentralized monetary system to come into the picture. Banks, big business, and governments across the world were sinking and when Bitcoin went live in 2008, it was making a statement in a huge way. A decentralized, peer-to-peer currency system. The belief in the banking system was at an all-time low and an opportunity to capitalize on the system’s failure was to be exploited.

We are ten years from the “Great Recession,” and have watched the stock markets rally to all-time highs. When the “whales” decide that they want to take their profits, the house of cards will fall swiftly. We have seen this with the meteoric rise and fall of crypto prices through 2017.

Simultaneously, we are witnessing the dawn of a new asset class: digital.
Remember how I said the early years of cryptocurrency were the wild-west and the digital asset community was standing square in the face of regulated banking? A decade later, we see a concerted effort to bring the digital asset community into the same system of regulation that fails at least once in a generation, if not more. That’s just how it goes. The US government is in play when it comes to the digital currency market with regulations, tax law, and policies. Many in the cryptocurrency world believe that a decentralized approach is best. Other minds see the regulating authorities as the appropriate method to bring economic stability

Fortunately, we are at the very beginning of instituting this new class of investment vehicles, and that can have long-term benefits. We may or may not see the hyper price increase that was seen with Bitcoin over the past ten years. Many would state that the prices were wildly manipulated to achieve such highs. Others, however, believe that we are just at the beginning and the coin market will see a “flippening” where Bitcoin (BTC) loses its current spot as the number one token. I suggest reading the following thoughts on the possibility of a Bitcoin ETF as the SEC prepares to approve or deny its listing in the next couple of months.

 

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.