Global security breaches are on the rise and no one or country is safe. The acceleration of certain technologies has been rapid since the pandemic engulfed the world last year. But unfortunately, we’ve also become slack in the process.
Once again, it has become apparent just how ‘at-risk’ our data is.
Data hacks have been frantic and are now getting major press attention. It’s hard to know who each unwanted visitor is in each case but fingers are being pointed in perhaps familiar directions.
Russian invaders back at it again
In fact, throughout June, Russians have been blamed for a slew of hacks around the world.
Microsoft in late May said a wave of Russian cyber-attacks had targeted government agencies and human rights groups in 24 countries, mostly in the US.
It claimed that around 3000 email accounts of more than 150 different organizations, some of them international, were attacked in just one week.
Allegedly, the group responsible was the same one that carried out 2020’s SolarWinds attacks, which the Russian Foreign Intelligence Service (SVR) was accused of orchestrating.
But the Kremlin denied having any knowledge or anything to do with any cyber-attacks. It challenged Microsoft to how these attacks were linked to the European attacks.
Nevertheless, authorities are now aggressively investigating cybercrime. In the first week of June, the US Justice Department recovered around $2.3m in cryptocurrency ransom money.
This was part of the funds paid by the Colonial Pipeline Company to Russian hackers in the most disruptive cyberattack on record in the country.
The US deputy attorney general Lisa Monaco said investigators had seized 63.7 Bitcoins which was paid by the company after its systems were hacked, leading to massive shortages of petrol along the US’s East Coast. The department said it founded and recaptured the majority of the ransom.
The hackers are believed to be a group called DarkSide, whose menace caused a multi-day shutdown in certain petrol stations and a spike in gas prices.
The attack made international news and prompted the US’s White House to encourage business executives to improve security measures to avoid future cyberattacks whatever their nature, ransomware or otherwise.
The FBI said DarkSide had also disrupted operations at a meatpacking company. As no one tends to be spared in the spillover effects, it is always a good idea to protect your company’s digital assets as a preventative measure.
Not so sophisticated
The attackers rather proved to be quite ‘amatuerish’ because they sent the Bitcoins to an online platform to convert it to fiat money – and that is how they got nabbed. Server-hosted (Online) crypto exchanges are obliged to keep customer data for compliance and anti-money laundering practices. So while your Crypto digital wallet does not reveal your identity, pairing it with an exchange will link it to all the other particulars you needed to provide to use the exchange.
As long as you need cash to pay for things you will always need to switch your crypto in some way or another – unless your recipient agreed to take payment in Crypto as well. Keeping your digital assets on a hard-wallet or on your hard-drive keeps them “off-the-grid”. But also means you can’t actually spend them.
Although the initial cyberattack was a smart manuever, the attackers proved to be rookies at the robbing game in the end.
On a positive note: the ability to retrieve Bitcoins actually reinforces the need for a Blockchain-based financial system. This made it easier for the authorities to track movements of the ‘ransom-paid’ Bitcoins.
Cuban for a bruising
But politicians aren’t the only people who are urging businesses, civil society organizations, and other groups to improve security systems and be cognisant of an often-dark future.
US Dollar billionaire Mark Cuban has also called for stricter cryptocurrency regulations.
The owner of the Dallas Mavericks who has been investing in trading Bitcoin and other cryptocurrencies such as Ethereum said the world was in dire need of regulation for the burgeoning decentralized finance (DeFi) space.
Cuban said in an interview with Bloomberg that there “should be regulation to define what a Stablecoin is” in order for DeFi to be reliable and to prevent total collapses in investments.
This comes after he saw his investments in a particular Stablecoin ‘went to zero’. Cuban claimed he had been scammed.
Stablecoins are a type of cryptocurrency that is pegged to an underlying asset, or currency – usually the US dollar. They are the earliest forms of DeFi and the largest Stablecoin, Tether, is currently worth more than $62bn.
DeFi has helped the price of Ethereum, the blockchain on which most DeFi projects are built, to also soar. But they can be highly risky investments.
Investors try to create arbitrage opportunities and liquidity between coins but such a scheme collapsed for Cuban.
“There should be regulation to define what a stable coin is and what collateralization is acceptable,” he said.
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Strong words of caution
Cuban hasn’t revealed how much money he lost but told a fellow DeFi investor via Twitter that regulation must be implemented- and quickly.
It had been suggested that Cuban was “rugged” which refers to when a project’s liquidity dries up and investors cannot withdraw their cash.
Mark Cuban is alleged to have 60% of his crypto holdings in Bitcoin, 30% in Ethereum, and 10% held in other coins. He likes to experiment with new financial tech investments.
He added further in a recent blog post that banks should be scared of unregulated DeFi technology.
All crypto-based investments remain highly risky as the technology around them develops. But there certainly needs to be global laws to prevent people from losing hefty amounts of their wealth/investment. Cryptocurrency is without a doubt a very lucrative investment vehicle that could make you an overnight millionaire. But that also makes it a perfect vehicle for scammers to clone projects to make away with your hard-earned cash.
You must, therefore, be extra vigilant and scrutinize offers for instant riches. But more so, you would be quite negligent these days to navigate the Internet without any form of cyber-protection.
The pandemic has thrown us into a state of flux and some tech entrepreneurs have found opportunities in the funk. One major trend involves playing with blockchain technology.
Even though most people you come across pretend to understand blockchain, many don’t actually understand its full capabilities. Some clever Trevors, however, are making it work for them.
DeFi (Decentralised Finance)
For centuries, our money has been controlled by central banks. But this has given too much power to certain authorities. Now cryptocurrencies are set to help us shake the game up.
Enter DeFi or Decentralised Finance – an umbrella term that refers to a variety of financial applications in cryptocurrency. These DApps are geared toward changing the roles of financial intermediaries or removing them altogether.
Essentially, DeFi is a financial system built on public blockchains such as Binance Chain, PolkaDot, and Ethereum.
It is a relatively new project which started later than Bitcoin in 2014. It was brought into the limelight in 2020 by a little-known South African called Andre Cronje. Cronje created the now almost billion-dollar DeFi-protocol called Yearn Finance (YFI).
DeFi is an alternative to what people feel is an outdated, clunky financial system that is inefficient and prone to abuse. The idea is that DeFi will be a new digital-only and fully automated financial system which exists separately from our enormous, interlinked financial system.
When you swipe your card, the institution has control over your transaction and retains the authority to record it in its private ledger, stop or pause it.
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They also control financial all matters like insurance, loans, and alternative investments like derivatives, crowdfunding, and gambling. All this while literally owning all your data. They can use or share them with their stakeholders as they wish.
Functionality
DeFi aims to create an open-source, permissionless, and transparent financial service system. The yields you get from borrowing and lending digital assets on these platforms also put those offered by traditional banks to shame. This system is also relatively safe because lenders are certain to get their assets back because you need collateral (other cryptos) to borrow in the first place.
You even, in DeFi, have mechanisms to maintain liquidity – just like Central Bank’s liquidity swaps. Some of them have ridiculous names like SushiSwap or PancakeSwap and perform these functions surprisingly well. this is possible because of their underlying computer-backed algorithmic technology.
The current centralized nature of the global financial system means wealth is only amassed by those that have access to financial services. This has created further inequalities in our societies.
Nevertheless, DeFi is a rapid technological innovation that is helping us to decentralize financial systems and foster financial inclusion. Cutting out the middleman also involves the use of Smart Contracts. Naturally prone to attach it is evolving but quickly gaining the acceptance of those ‘in the know’.
Smarter Contracts
According to Blockgeeks, a smart contract is a computer protocol intended digitally to facilitate, verify or enforce the negotiation or performance of a contract. They allow the performance of credible transactions without third parties.
For example, ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop Crypto into a vending machine-type structure (digital ledger), and your escrow, driver’s license, or whatever, drops into your account.
Courtesy: Law and Forensics.
Smart contracts define the rules and penalties around an agreement just like a traditional contract does. Additionally, they also automatically help you enforce those obligations.
Ethereum is the industry-leading Crypto company/platform that provides that functionality. It is, however, receiving strong competition from newcomer platforms such as Binance Smart Chain – which is actually a revised clone of Ethereum.
Non-Fungible Tokens(NFTs)
This is a technology that has been around for a few years but is enjoying new popularity. Fungibility refers to something that is easily interchangeable, such as the exchanging of a $50 note for five $10 notes.
But non-fungible tokens have been created with the opposite goal.
These are unique or scarce digital objects represented as tokens that cannot be replicated.
They are literally anything that can be digitalized to form a collectible item – just like your paintings, collectible cards, or stamps.
This is why they are infiltrating the auctioneering world. Digital content is tokenized through a process called minting.
Minting involves assigning a coin on a blockchain to any given work and you can assign as many copies as you so desire.
A key difference from authenticating other objects is that instead of a physical certificate of authentication, NFTs use blockchain technology as a verifiable digital ledger.
The NFTs created on Ethereum’s blockchain are immutable, so they cannot be altered. No one can undo your ownership of the NFT.
In 2017, a game called CryptoKitties was invented. This was a blockchain game that allowed players to adopt, raise, and trade virtual cats.
At one point, CryptoKitties were selling hundreds for thousands of euros. Since then, people have been pumping money into the NFT market which has more than quadrupled in value since the pandemic.
Investors saw the value of investing in a verified item of art that no one else possesses. As a result, many new digital (NFT) marketplaces such as OpenSea and SuperRare were established – and thriving. The NBA has also gotten in on the action. NBA Top Shot is a first-of-its-kind collectible website that allows you to collect, trade, and sell your favorite NBA highlights as digital tokens. One of the highest-selling NFTs there(only 2 minted) is one of a reverse dunk by LeBron James – which fetches a cool $210 000.
Rock band, Kings of Leon earlier in March 2021 became the first musical artist to sell its album as an NFT. Their eighth studio album, When You See Yourself, is being sold in standard digital and physical formats but also has an NFT.
Within a week, the album had made more than $2m. This includes around $500 000 which was donated to Live Nation’s Crew Nation, designed to support live music crews during the pandemic.
Enter the Dogecoin
The year 2021 wanted to add a bit of humor to the world whilst making some people rich. You may call them clever or maybe reckless – or both, but some people traded an invisible investment called Dogecoin and significantly pushed up its price.
Dogecoin was like a parody of Bitcoin symbolized by its face, the Doge meme. Entrepreneur Elon Musk punted the coin which was actually started as a joke in 2013. The price of dogecoin has exploded by more than 1,100% this year.
The cryptocurrency has gained increased attention from endorsements by Musk, who at one point was the world’s richest man on paper. Entrepreneur Mark Cuban, rapper Snoop Dogg, and musician Gene Simmons are also backers of the Crypto-coin.
Now Musk wants you to be able to trade Dogecoin using the Coinbase platform.
Musk’s Tesla motor car company had allegedly used the Cryptocurrency exchange to buy $1.5bn worth of Bitcoin in February.
The Gamestop effect
Also this year, online traders caused chaos among financial systems, showing big institutions that they can beat them at their own game.
A bunch of people got together on Reddit and discussed how they would pump up the price of Gamestop, a US rental games company. Gamestop saw its fortunes wane as people turned away from buying or renting disc versions of games in favor of downloads. The Reddit ‘movement’ was aided and abetted by a group called WallStreetbets.
The group has since pledged millions of dollars from the proceeds towards saving Gorillas – epic!
The price went through the roof as Gamestop became a gambling tool, with little underlying value in the company.
A number of people won big but others who got in late weren’t as lucky. The price later crashed, costing gamblers a lot.
It has since fluctuated wildly and is now on a downtrend. For every new multimillionaire, there has been someone who has lost their life savings.
Tread carefully with new technologies
It will take time for the use of these new technologies to settle in our society. You must, however, be skeptical even when Musk, who recently changed his designation from CEO of Tesla to ‘Technoking’ posts such things on a social platform.
Whenever he tweets something, people react. Musk convinced scores of people to buy Dogecoin and now he is quite excited about NFTs.
The Billionaire recently actually turned down a $1.1m offer to buy one of his tweets as an NFT after putting it up for sale, quoted saying: “it doesn’t feel quite right.”
Musk said that he was going to sell a tweet of a song about NFTs as an NFT. This was days after an NFT had sold for a record $69m. But it turned out he was joking around when he tweeted: “Actually, doesn’t feel quite right selling this. Will pass.”
Musk’s tweet was listed on the blockchain-backed auction platform valuables and has attracted a bid of $1.12m from a user called @sinaEstavi.
The tweet is of a techno song about NFTs, with the lyrics: “NFT, for your vanity, computers never sleep, it’s verified, it’s guaranteed.”
If you don’t believe how volatile these currencies are, just check out how Bitcoin lost more than 80% of its value from December 2017 to May 2018. It is currently hovering just below $60,000 after a low of around $3,500 only in March 2020.
If you decide to invest, do so knowing that rapid price fluctuations come with the territory.
Remember these new blockchain assets are highly volatile investments. Their values can swing literally like a yoyo, based on the jokes made by a multi-billionaire who wants to live in space.
In a few years from now, cash may no longer exist. Instead, we might be using microchips in our hands which will communicate with a digital currency system. As humans, we want things (and processes) to become more uncomplicated. That is how we measure progress.
Right now, technology facilitates economic activity but may soon supersede the need for faulty monetary policies (by creating more efficient economies) in the long run. Robert Solow was right all along. Despite this, we still use archaic paper currencies. This form of legal tender, however, in a decade or sooner, might be replaced by another official means of exchange of many nations – or at least be in heavy use.
Society needs a safer, easy-to-use means of exchange and incidentally, as you read this, digital currencies are being designed and studied at Universities and information technology ‘thinktank’ companies the world over.
It would require a monumental shift in thinking for people to stop using cash at all. At a human level, it seems simple. Paper money is (literally and figuratively speaking), dirty and it takes up space. It’s also possible for cash to cause stress as when you have it – you have a target on your back.
So, what could replace cash?
Central Bank Digital Currencies (CBDCs) are currently in hypothetical planning stages with some countries conducting proof of concept programmes. CBDCs are a means of monetary exchange (by a Central Bank) that exist in a digital state on a server in a cloud.
The idea of using a CBDC was prompted by the emergence and prevalence of Bitcoin and other cryptocurrencies. Believers in the mass use of CBDCs want the world to use less cash. They believe people are safer if they do not have money at hand, which can be stolen, and that commerce can be more efficient in a cashless society.
We could say that the history of money is a story of its gradual dematerialization from tangible objects to intangible computer code. Programming code is written for and used to facilitate many facets of our lives, so why not with money?
An ETA is sooner than you think
Over time, what has been used as money has changed, starting from trading large objects which were seen as a basic store of value. Gradually people started shrinking those objects into paper and then turning paper (IOUs) into a special paper. Later, they formalized the process by setting up a financial system to support it – Lo and Behold – the adoption and use of cash was borne.
Some progressive nations have shown genuine and committed interest in testing the viability of CBDCs. Seven Central Banks in October issued a statement in which they said they were studying common principles and salient features needed for a viable CBDC.
The Central Banks in Canada, Britain, the European Union, Japan, Switzerland, Sweden, and the United States now believe there is a threat that private digital currencies pose to the control of monetary policy.
More specifically, they are also competing with China, who they purposefully excluded from their group. They plan to have a viable digital currency system to prevent a case in which China gets the first-mover advantage.
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Advantages of CBDCs
We want to create a more efficient payment system. Managing cash can cost money mostly because of securing the safe use of it. We can include more people in a financial system as there is no need for consumers to have a bank account to hold a CBDC.
Safety is, therefore, a huge “positive” to having a cashless society. This is especially in emerging countries where many people still use cash as opposed to cards and electronic transfers (ETFs). Cash is trusted while banks aren’t necessarily trusted at all. Consumers also might not want to pay fees to keep their bank accounts open.
One salient case for a contactless (digital) payment system would is due to the advent of the Covid-19 virus. This has awakened us to the potential emergence and spreading of potential viruses in the future.
CBDC might also make micropayments cheaper which would allow for new services and business models. So, one can enable the efficient sale parts of products and services, such as individual news articles or television series episodes for a few cents rather than relying on subscription models.
A CBDC may also reduce friction between payment systems and increase the speed of transactions while ensuring their finality. This can be achieved by achieving delivery versus payment in securities transactions.
Interest-bearing retail CBDC might boost monetary policy efficiency. CBDC can provide a Central Bank with an additional financial instrument – the rate of interest it carries. CBDCs would provide competition to stable coin exchanges such as Bitcoin and Facebook’s Libra.
Issues with digital currencies & CBDCs
Cryptocurrencies currently exhibit huge swings in value (volatility) as people use them as a speculative asset. This could change if they were somehow monitored and administered by Central Banks.
The disintermediation of commercial banks would occur if consumers move money from bank accounts into CBDC. This could start a vicious cycle as banks raise deposit rates to attract more money and less bank credit will be extended at these higher interest rates.
A Central Bank could need to provide additional liquidity to banks and hence take on credit risk. There could be an increased reputational risk for Central Banks. Digital systems need to be protected and the system’s staff monitored.
Many questions remain unanswered
Cross border transactions will also create new paradigms for central banks. There are risks of a type of dollarisation for economies with volatile exchange ranges and high inflation.
‘Dollarization‘ is when a country replaces its currency with the US dollar because the dollar is so stable and widely used. In the foreseeable future countries may then opt to replace paper money with the best (continental) CBDC available – like a digital Euro for the EU.
The future depends on the goals of the CBDC. It would grant the public access to the state’s balance sheet when, right now, cash is the only way for private individuals to hold central bank money. All other types of money holdings are based on centralized/private money creation systems. These are still prone to manipulation and abuse by central banks themselves or their subsidiaries.
This year may have felt like it was dominated by political shenanigans, but technology also had its wild ride.
The USA vs Huawei
A story that has persisted throughout the year is the heat around Huawei in the US. The Americans have stopped Huawei phones from being sold in their country because they say the Chinese mobile phone maker has stolen technology from American companies and has spied on them.
The tussle began in 2018 but kicked into gear in 2019. Nevertheless, some American companies and organisations are still doing business with Huawei despite the ban by US President Trump’s government.
The President of Microsoft, Brad Smith, also wants to the US government to offer more evidence to back up its Huawei ban.
The core issue with Huawei has been around concerns with Huawei’s close relationship with the Chinese government and fears that its equipment could be used to spy on other countries and companies.
Huawei has also hit back at US ‘bandwagon followers’ and recently threatened to boycott Germany’s Auto industry if the European powerhouse banned them from offering 5G (broadband) in the country.
Not a great year for big tech
Big technological companies like Facebook, Alphabet, Google and Uber have faced a barrage of probes in 2019 be it around anti-competitive behaviour, spying on customers or their staff abusing customers. We also haven’t seen many new companies graduate to super-size status.
After a long drought of big-name tech IPO (initial public offerings), 2019 promised to be a banner year. A crop of highly anticipated, highly valued tech companies — with hot marquee names such as Lyft, Uber, Pinterest, and Slack listed on the public markets. The idea was to allow you to take a stake in their business.
Their reception, however, was truly tough. These companies’ stocks have not gained momentum and being listed has attracted greater public scrutiny.
Artificial Intelligence (AI) – We’ve been talking about this for decades since Terminator came out but scientists are managing to harness the technology especially in manufacturing and medical fields.
Most of the top tech companies (Microsoft, IBM, Amazon, and Google) have already embraced AI. Many tout it as one of the main distinguishing features to set them apart competitively.
A little of this tech has gone into robotics with much fanfare and fear over their capabilities and propensity to ‘initiate a judgement day’. Check out Boston Dynamics
Bitcoin
Blockchain – Bitcoin may be highly volatile and not the get rich quick scheme people thought it could be, but it is still out there. Clever people are finding ways of making commerce more efficient.
Robotic Process Automation (RPA)– this is a technology that could explode in 2020. Right now, only large enterprises are using RPA but it could become more affordable and workable for smaller businesses in 2020. RPA is the process of automating mundane tasks such as taking data from one file and entering it into a business application like CRM software.
It’s about computerizing repetitive tasks that are an inefficient use of time, so it makes our lives more efficient.
RPA is not a physical robot. It is also an approach to working across multiple business applications and entering, maintaining, migrating, integrating, mining and testing data on spreadsheets.
These tasks are prone to human error which is why computerizing them makes so much sense.
Virtual Reality and Augmented Reality – VR made strong progress in 2019. This was most useful in gaming, real estate companies, pornographic entertainment and for people with disabilities.
For you gamers – it is best to buy an Oculus Quest for your PC. Sony’s VR headset is still the best and only gaming set.
Look after my data – or not!
The first fines around the General Data Protection Regulation (GDPR) were lodged in parts of the EU. The GDPR was promulgated in 2016. It is a regulation in EU law on data protection and privacy for all individual citizens of the EU and the European Economic Area.
It also addresses the transfer of personal data outside the EU and EEA areas. GDPR was enforced because of concerns about data breaches and attacks on privacy by the likes of Facebook and Google.
Then there were concerns our banks, insurance, and other data keepers were selling or losing our data to dangerous entities.
The types of personal data exposed included your names, addresses, phone numbers, email addresses, and even passport numbers.
Lessons learned
The Marriott hotel group’s data breach of 2018 resulted in the exposure of 339-million customer records. Around 30-million of the records belonged to European Union citizens, and therefore they were subjected to a GDPR fine.
Back home in Berlin, on October 30th the Berlin Commissioner for Data Protection and Freedom of Information issued a €14.5m fine on a German real estate group, die Deutsche Wohnen SE. This was the highest German GDPR fine yet. The infraction related to the over retention of personal data.
Despite the turbulent year for tech companies and consumers, we look to 2020 with breathless anticipation. We also ponder on which of the mentioned technologies will stick out and make a positive impact on our lives.
Did you know that there are still more than 700 million people in the world who live in extreme poverty? These people must scrimp, starve, and struggle to survive off less than $1.90 per day.
By 2030, the World Bank estimates that more than 90 percent of those people will be concentrated in Sub-Saharan Africa.
This is perhaps one of the greatest developmental failures of the modern world. Despite the continent’s expansive natural resources and increasing connectivity, foreign actors still feel it’s too risky to heavily invest in their markets.
Blockchain could be the key!
Bitcoin and “Blockchain” were created in the mass wave of distrust in banks after the 2008 financial crisis. Therefore, the technology enables individual, distributed data storage that could become the perfect evidence (trust) base and financial infrastructure for a developing country.
With the right implementation, Blockchain holds the potential to completely revolutionize and revitalize such economies, especially in Sub-Saharan Africa.
So, what is this Blockchain?
Blockchain is essentially a kind of decentralized database that allows you to have a safe, secure way to handle their data without the need for third parties.
For example, you could with Bitcoin, make or accept payments in real-time without needing a centralized bank.
“[It is] a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer,” said software entrepreneur Marc Andreessen.
“The consequences of this breakthrough are hard to overstate.”
Historic background
Until the mid-twentieth century, most of Africa was ruled under a colonial system meant to exploit the people and their natural resources for European benefit. Africans, in addition, were rushed into development according to European standards rather than homegrown ones.
The legacy of rapid development, distrust and corruption left behind an economic system failing to recover in the 21st century.
While the World Bank celebrates a decrease in global poverty levels, the number is expected to remain stagnant in Africa. Today’s poorest people are living in places with the least economic growth.
Sadly enough, poverty and lack of investment in many developing countries stem from how they were integrated into the world system.
The land was cut into countries according to European treaties and agreements, rather than by traditional and tribal land divisions. This situation worsened upon the handover of colonial power to so-called “democracies.” Power often shifted to the ethnic groups that former colonizers favoured.
Corruption multiplied in the form of bribes, political persecution, rigged elections, and a massive wealth gap. All of this still affects the wealth distribution and investment potentials of many developing countries.
Of course, this created a lack of trust in banks and government throughout much of Sub-Saharan Africa.
The perfect fit for Africa
During a 2012 study conducted in rural Western Kenya, Stanford University researchers waived the costs of opening basic savings accounts for a number of unbanked individuals.
While 63 percent of the subjects opened an account, only 18 percent of them used the accounts. This was likely due to three factors: a lack of trust in banks, unreliable service and prohibitive withdrawal fees.
Unfortunately, the prevalence of unbanked individuals in the informal sectors scares off foreign investors, who heavily rely on transactional evidence to make investments. Otherwise, pouring money into markets is too risky. That’s where Blockchain comes in.
How would it work?
Blockchain can host an entire evidence base of transactions, loan repayments, and asset titles. The technology is also decentralized and requires individual confirmation, creating an element of trust and transparency beyond traditional banking systems.
According to Victor Olorunfemi, Director of Products for Pan-African tech and crypto-exchange, KuBitX, Blockchain’s major benefits lie in “frictionless P2P and cross-border payments, transparent elections, land registry management [and] transparent crowdfunding.”
Let’s look at some of the different ways Blockchain could benefit developing economies, especially in Sub-Saharan Africa.
1. Creating financial infrastructure and accountability
According to a study by the Milken Institute, viable financial markets require consistent, accurate data on assets and credit histories. Luckily, Blockchain may fulfil these needs.
The use of Smart Contracts technology is ideal in areas lacking accountability, such as the real estate or land/agricultural sectors. In Africa, a lack of record-keeping practices often leads to “missing” or non-existent title deeds. In some cases, this is intentional.
Title deeds “go missing,” only to end up in the hands of benefactors other than the rightful owners. Smart Contracts could eradicate these issues through the use of special tokens that cannot be duplicated, changed or removed. See the article on tokenization.
Likewise, Bitland, a company in Ghana, currently helps individuals record deeds and land surveys. By resolving land disputes, Bitland creates more stability while accurately recording land asset data.
“There’s a massive number of people in the informal sector, but there’s not much data being collected on them right now.”
Merit Webster, co-president of the MIT Sloan Africa Business Club.
“That means you don’t have that credit history or payment history for them. If you have a decentralized approach to collecting data, you end up with more malleable data. [This] is very valuable for creating credit histories.” The agricultural industry also has the potential to thrive using Blockchain.
“Blockchain could be used to track goods around the world. This allows farmers to earn a fair wage for their goods.”
Also, farmers could use record-keeping technology to streamline the supply chain and document resources. This would lead to better efficiency, lower transactional costs, and improved logistics.
2. Security in banking
According to the World Bank, there were 1.7 billion people with no bank account in 2017. This situation is worst in developing countries, especially African ones. For example, over 62 million of these people lived in Nigeria.
Besides, data from Google Trends reveal that Lagos, one of Nigeria’s biggest cities, ranks globally as the number one city based on the volume of online searches for Bitcoin (BTC). Clearly, for the city’s 21 million-odd people, there an immense interest in some form of an accessible payment system.
Of course, it’s unrealistic to expect bank branches to magically appear in every remote corner of the world. However, a digital database using Blockchain technologies has the potential to reach far beyond physical banks.
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Many Africans value trust and transparency. In developing countries, this lack of trust goes beyond the Internet. Developing countries with less industrialization tend to have higher levels of corruption.
This reduces national investment opportunities in the public sector and instills a lack of trust in centralized oligarchs handling an international investment.
Because its power lies within the community of users, Blockchain can combat these trust issues. All data logs and amendments must pass through this community and identification confirmation tests.
Blockchain technology also secures your data incredibly. Hacking and data breaches are all too common nowadays. In 2017, for example, around 3 billion Yahoo user accounts were stolen.
When information is stored in the same place, hackers have one, easy target. In contrast, Blockchain is a distributed entity. This dissemination of data leaves it far less vulnerable to cyberattacks.
3. Fostering Entrepreneurship
Coupled with the Internet, Blockchain technology could be the perfect platform for aspiring African developers. Because the ‘source code’ is free of charge, skilled coders can adapt, create, and configure special applications, called DApps.
These are available on Crypto platforms and provided by companies like Ethereum, and a South African firm specializing in what they called the Keto-Coin.
Rather than waiting for governments to drag their feet trying to create jobs—individuals on the continent can form small firms that build and sell Crypto-based Apps locally or abroad.
“Despite the frictions and impediments mentioned,” said Olorunfemi. “Blockchain can still provide an avenue for promising African tech projects to access capital (FDI) via token offerings on digital assets exchanges.”
Many courses are even readily available online to quickly learn about new technology. Microsoft, for instance, offers a platform via Azure for you to build and learn about the Blockchain.
One-man shops in countries with unfavourable economic systems, like Zimbabwe, can also adopt smaller, stable, Cryptocurrencies to facilitate or payments. In cases of rampant inflation, they can temporarily act as a store of value or help you pay for things until your currency stabilizes.
As with the Venezuelan hyperinflation case study, Cryptocurrency intervention could help many developing countries troubled with economic instability.
There is also the option of Crypto-mining. But before you pull out the ‘high-consumption energy’ argument – think outside the box for a moment. What about energy sources that are free and available nearly 24/7? Like water and the sun!
The African continent is full of capable scientists and mechanical engineers. One could build special solar-powered energy centers to power Bitcoin-mining.
And without the expertise, governments or private companies could alternatively just invite Crypto companies with abundant financial resources to mine (cleanly) for a special tax/fee while creating jobs for the locals.
4. Elections
In addition to the financial side of things, Blockchain technology could help eliminate some forms of corruption. For example, many African countries’ elections are incredibly vulnerable to the social scourge. In some extreme cases, some officials change or forge written ballot votes to rig elections.
To combat this, Blockchain databases could record votes. This makes it nearly impossible to tamper with using Smart Contract technology. Having fair elections improves infrastructure, which then increases development and economic dependability.
While some might see Africa’s economy as underdeveloped, others might see it as a blank canvas well-suited for a large-scale implementation of Blockchain. Economic and governmental systems are shifting and slightly shaky in many Sub-Saharan African nations.
The challenge is to foster a rigid economic system to implement Blockchain.
Don’t just take our word for it—African nations have often implemented new, practical technologies before the Western world. Let’s look at the example of M-Pesa. Back in 2014, Americans and Europeans were amazed by Apple Pay’s launch.
However, this mobile payment system wasn’t exactly “new.” By that time, Kenyans had used M-Pesa, a very similar technology, for years.
“There’s a lot of opportunity to leapfrog the way the West developed and have these more unique African solutions, but it needs to come from within,” said Webster.
“It needs to come from entrepreneurs in the continent who want to implement these solutions. It’s important to engage people very early on. Systems incubated in the West don’t stand as great of a chance to work as African ones do.”
Concluding remarks
With the possibility of an experimental, large-scale takeover of Blockchain technology to improve African infrastructure, the nations there could leapfrog in development and growth.
This must begin internally. According to Olorunfemi, “Education—of policymakers and other stakeholders—which is often ignored has to be a critical factor in paving the way for the acceptance and adoption of new technologies and the accompanying investment.”
The results in Sub-Saharan African countries could help eliminate much of the world’s poverty. It would also remove remnants of mistrust and corruption left behind by the days of colonial exploitation.
While there are some obstacles to large-scale Blockchain implementation, we can’t think of a better benefactor than there. The possibilities for business using the Blockchain are endless!
To learn more about how to get started with Cryptocurrency mining or purchasing, visit our resources page for useful links and guides.
Additional input by Bobby Quarshie (BQ).
Citations: Christopher Lee and Jackson Mueller.
Swan, Melanie. “Anticipating the Economic Benefits of Blockchain.” Technology Innovation Management Review 7.10. Oct. 2017.
Bitcoin Lessons from Venezuela, Where Hyperinflation Reigns. Online Source: https://www.lathropgage.com/newsletter-237.html
It’s 2019, and the Cloud is everywhere—from the apps we use every day to the infrastructure of global tech giants.
According to researchers at Gartner, revenue generated from public cloud services is projected to grow 17.5 percent in 2019. This amounts to a total of $214.3 billion, up from $182.4 billion in 2018.
More than a third of organizations surveyed by Gartner saw cloud investments as a top three investment priority. With this kind of growth, tech organizations are racing to get on board with cloud-only software and platforms.
Here are some of the trends to look out for this year:
Hybrid Cloud, Multi-Cloud and Mergers
IBM announced its purchase of Red Hat last October, calling it the “most significant tech acquisition of 2018.” This combined Red Hat’s extensive network of open-source clouds with IBM’s Hybrid Cloud team.
Mergers like these are likely to become a trend this year, as companies see the benefit of using multiple clouds across all sectors of their organization.
Furthermore, this system will dominate in the future, as businesses find public clouds inadequate to meet every one of their requirements.
As a more flexible and functional solution, many organizations will shift to a network of multiple private, public and hybrid clouds in the future.
Serverless Cloud
Serverless computing is a young market in technology, but it will continue growing in 2019. It isn’t actually “serverless.” Instead, it is a cloud-computing model in which the cloud provider itself runs the server on a dynamic, as-used basis (FaaS).
Rather than buying server space, developers can use a back-end cloud service to code. They will only then pay for the server space they actually use.
As this relatively new technology develops, we can expect to see more companies providing and expanding their “serverless” offerings.
Artificial Intelligence
Although cloud technologies are growing exponentially, artificial intelligence (AI) could prove an even greater economic driving force. According to Accenture, the impact of AI could double economic growth rates by 2035 in developed countries.
Around 80 percent of large companies have adopted some form of AI, according to the Harvard Business Review.
Amazon, Twilio and Nvidia, to name a few, are thus, incorporating AI with cloud computing, next-gen GPUs and the Internet of Things (IoT). This has led to the developing of applications with “smart assistants,” and voice-to-text technologies.
Such a combination of AI and the cloud provides an extremely powerful and unconstrained computing network.
Security
Digital transformation is already underway, with Gartner also projecting that 83 percent of all workloads will shift to the cloud by 2020. However, this movement presents issues of cybersecurity.
Many businesses have not properly secured their cloud-stored data. For example, marketing and data aggregation firm Exactis left around 340 million records exposed on its cloud servers. This was uncovered in a data breach last year.
Mitigating factors
The implementation of the General Data Practice Regulations (GDPR) makes this even trickier. It affects cloud security, and IT companies will likely struggle to comply with these new laws while protecting sensitive information.
Cloud computing services are progressing exponentially, as are their new developments. The year 2019 will surely be filled with businesses pouring investment into enterprise solutions. This while expanding, securing, and implementing cloud technologies to their fullest extent.
Bridget is a freelance writer and editor, and the founder of Lost Bridge Blog, where she writes about traveling as a Millennial woman on a budget. When not writing, you can find her traveling, drinking inhuman amounts of caffeine and scrolling through the latest tech & political news.
It’s not often that we readily endorse a product or company. However, when the nature of work they engage in is considered ground-breaking and has a positive impact on our lives – it most certainly warrants a mention.
The rationale for considering such tech-driven projects as highly significant is neither due to ‘gut feeling’. Nor that it is simply because it is fascinating and therefore must be an excellent product. This project actually has a value proposition for you!
We are indeed well into the information age and while we have written extensively about data, its importance to marketers, and its fragility when used and abused by unscrupulous third-parties for their financial gain.
The issue of data security is, however, quite a serious one. You just need to pay attention to the news to become even more aware.
Data breach incidents
In Europe, where security is supposedly more advanced, we have seen the likes of renowned airline British Airways, being hacked. Several hundreds of thousands of customers’ personal data compromised.
These were followed by hacks on other major airlines such as Cathay Pacific. Aside from airlines, other business outfits have suffered a similar fate.
The perpetrators are getting a lot more brazen and very recently, a cable car, used as public transport in Moscow was hacked. This left vulnerable passengers terrified and stuck high up in the air. And all this happened probably to the amusement of the pranksters (hackers).
Can you imagine the chaos and commotion that would be caused if their control systems of driverless cars were to be hacked?
The digital intrusion gets even more sophisticated...
This time affecting the very wealthy: private yachts are now being hacked and taken into the pirate waters, all via uniquely coded signals, reading data from their antennas!
Data security
On the issue of data security, you often hear about extra protection but not just anti-virus and anti-phishing software. The more secure and heavily encrypted Blockchain technology is, however, making waves in the digital sphere.
It is mainly for the escalation of its once shining star by-product designed for discreet transacting – Bitcoin.
Blockchain technology has also triggered several other technologies based on its digital cryptology technology. The aim is to ensure that your information is kept safe from prying eyes while stored, used, or transferred online.
Blockchain products such as cryptocurrencies, however, are not completely safe from hackers.
A solution
The company we chose to highlight uses a unique vault system and is called Zortrex. It has adopted one of such Blockchain technologies dubbed tokenization. It will be using it to ensure that your highly sensitive data online is kept safe.
“Our tokenised solution would have protected their customers’ personal identification information (PII) details. Instead the hackers ran off with the date of birth; passport numbers; financial data etc,” says Susan Brown, Chairperson of Zortrex – relating to the British Airways incident.
Tokenization is the process of converting rights to real-world assets into a digital token on a blockchain.
Brown’s background in data privacy systems as well as her devoted passion for the protection of PII, financial and healthcare data led her to start up and chair Zortrex.
The law on data
Thanks to new laws like the European GDPR law, which enforces the protection of data, breaches are now met with hefty financial penalties.
“Companies have disrespected your data for over 25 years, and if left unattended, there will be nothing left to protect,” Browns says.
Companies now have to think twice about getting your consent and how to use and share your data digitally. But is it enough? The simple answer is no.
The authorities just do not have the resources to investigate every complaint nor to actively enforce all data breaches.
We have ingeniously invented systems that automatically align with financial messaging, payments and securing information. All of which require data.
“However, we need to go a step further to secure all the PII details with tokenization. This is so that in the event of a hack, the cookies and trackers will only be following a ‘useless’ token will be no real identification on it,” Brown explains.
Zortrex would naturally like to tokenize all healthcare data. This way, vulnerable those of you living outside of major cities can also feel assured that your privacy is protected.
Using Blockchain
The application of the all-powerful blockchain is not limited to use in the financial sector and will be applied via the supply chain to all industries that deal with your data – especially the most sensitive ones.
A business angel or any investor for that matter looking to get onto the next best thing since Amazon would therefore be unwise to pass up the opportunity to back the Zortrex venture given its scope.
Furthermore, regulations are currently being implemented primarily in the pharmaceutical sector.
A tokenized supply chain such as what Zortrex offers would be ideal for this new law which is planned to be implemented by 2023. A judiciary blockchain, for instance, would allow the police to “talk” to the prison service. They, in turn, will communicate with the legal sector or public health institutions (NHS).
Forensic evidence would in such instances be tokenized and kept secure (away from tampering) during legal hearings. In another practical scenario, Smart Contracts(which could replace some lawyers) can spark off legal aid assistance to you.
Your court cases will be heard quicker and be more efficient. Protection registers can also be guarded using tokenization – rendering them more secure.
Blockchain technology offers quality assurance making sure that no shortcuts are taken.
This will enable the monitoring and tracking if any of your data is shared with third parties once tokenized. The third-party apps would only gain access to your data once the trigger has been activated.
Like other pioneers and visionaries, Brown’s futuristic hope that every child being born will have their name, date of birth, blood type data being tokenized, might seem far-fetched.
Zortrex wants to use its technology to put the hackers out of business!
Tokenisation cannot be mathematically reversed and thus it will least it will keep the hackers busy for a while.
Scalability
For such high ambitions, the creators of Zortrex’s software have adequately ensured that the technology used is fully scalable. One stumbling block many Blockchain projects now face is what is referred to as scalability. This is the ability of a network or software to grow and manage increased usage.
Cryptocurrencies like Bitcoin and Ethereum specifically – which is used to build a lot of Distributed Applications, however, have massive scalability issues.
The growth in demand for DApps is also crippling (slowing down) those systems. They need to investigate the incorporation of alternative technologies, upgrade or split their platforms to cope with such high demand.
Someone must take the first step in securing this data forever. You should be able to purchase what you want without being harassed by trackers and cookies.
The need for tokenization is endless and further, down the line, celebrities and government official’s PII can be secured by it to protect them from damaging schemes, ‘bad press’, and scandals.
In a previous blog, we “prophesized” that data is the new commodity – like gold or oil. However, the actual value with that data will lie in its privacy, the ability to store it securely and unlock it only with legal permission by its rightful owner.
It’s not often that we readily endorse a product or company. However, when the type of work they engage in is considered groundbreaking – and one with the potential to have a massively, positive impact on our livelihoods, it most certainly warrants a mention.
The rationale for considering such tech-driven projects as highly significant is neither due to ‘gut feeling’ nor that it is cutting-edge/fascinating and therefore must be an excellent product – it actually has a value proposition for everyday people!
We are indeed well into the information age and while we have written extensively about data, its importance to marketers and its fragility when used and abused by unscrupulous third-parties for their financial gain, the issue of data security is quite a serious issue – we must just pay attention to the news to become even more aware.
In Europe, the where security is supposedly more advanced, we have seen the likes of renowned airline British Airways, being hacked – with several hundreds of thousands of customers’ personal data compromised. This was followed by hacks on other major airlines such as Cathay Pacific. Aside from airlines, other business outfits have suffered a similar fate.
The perpetrators are getting a lot more brazen and very recently, a cable car, used as public transport in Moscow was hacked, leaving vulnerable passengers terrified and stuck high up in the air – probably to the amusement of the pranksters (hackers). We all know about driverless buses and cars coming to the market soon.
Can you imagine the chaos and commotion that would be caused if their control systems were to be hacked? The hacks get even more sophisticated: this time, affecting the very wealthy – private yachts are being hacked and taken into the pirate waters, all via uniquely coded signals, reading data from their antennas!
On the issue of data security (with almost full anonymity); we have also heard about extra protection (and not just anti-virus and anti-phishing software) but the more secure and heavily encrypted Blockchain technology that is making waves in the digital sphere. Mainly for the escalation of its once shining star by-product designed for discreet transacting – the Bitcoin.
It has also triggered several other technologies based on its digital cryptology technology to ensure that information is kept safe from prying eyes while stored, used or transferred online.
The company we chose to highlight uses a unique vault system and is called Zortrex. It has adopted one of such Blockchain technologies dubbed tokenization – and will be using it to initially ensure that highly sensitive data online is kept safe.
“Our tokenised solution would have protected their customers’ personal identification information (PII) details, instead the hackers ran off with the date of birth, passport numbers, financial data etc,” says Susan Brown, Chairperson of Zortrex – relating to the British Airways incident.
“Tokenization is the process of converting rights to real-world assets into a digital token on a blockchain.”
The establishment of this start-up company was due to Brown’s background in data privacy systems as well as her devoted passion for the protection of PII and financial/healthcare data. In her view, companies have disrespected their customer data for over 25 years, and if left unattended, there will be nothing left to protect.
Thanks to new laws like the European GDPR law which is now imposing the data protection; data breaches and abuse of customer data is now met with hefty financial penalties. Companies now think twice about consent and how to use and share customer’s data digitally – but is it enough? The simple answer is a no. The authorities just do not have the resources to investigate every complaint nor to actively enforce all data breaches – yet.
“We have ingeniously invented systems that automatically align with financial messaging, payments and securing information, all of which require data. However, we should and need to go a step further to secure all the PII details with tokenisation so that in the event of a hack, the cookies and trackers will only be following a useless token as there is no real identification on it,” Brown explains.
Zortrex would naturally like to tokenise all healthcare data so that vulnerable people living outside of major cities can also feel assured that their privacy is protected. In a previous blog, we wrote about the new Internet of things (IoT). For all those devices being built for it, their IP addresses and the serial numbers can be tokenised to avoid the terrifying thought of the whole Internet being compromised.
The application of the all-powerful Blockchain is not limited to use in the financial sector and will be applied via the supply chain to all industries that deal with customer data – especially the most sensitive ones.
An angel investor or any investor for that matter looking to get onto the next best thing since Amazon would therefore be unwise to pass up the opportunity to back the Zortrex venture given its scope!
Furthermore, regulations are currently being implemented primarily in the pharmaceutical sector and a tokenised supply chain such as what Zortrex offers would be ideal for this new law which is planned to be implemented by 2023. A judiciary blockchain, for instance, would enable the police to “talk” to the prison service, who in turn, will communicate with the legal sector and public health institutions such as the UK’s NHS.
Forensic evidence would in such instances be tokenised and kept secure (away from tampering) during legal hearings. In another practical scenario, Smart Contracts(which are touted to replace lawyers) can spark off legal aid assistance, so that court cases can be heard quicker, more efficient than currently pertains. Protection registers can also be protected with tokenisation rendering it more secure.
Blockchain technology offers quality assurance with every process being undertaken making sure that no shortcuts happen; as the smart contracts trigger any possible malfeasance. This will enable the monitoring/tracking of any data sharing to third parties once it is tokenised. The third party apps would only gain access to the data once the trigger has been activated.
The company will be providing numerous business blockchain platforms; Asset Chain, Supply Chain, Accountancy Chain, Debt Chain, Life Cycle Management Chain, Outsourced Worker Chain; the list is endless, and all will be adequately secured.
Like other pioneers and visionaries, Brown’s futuristic hope that every child being born will have their name, date of birth, blood type data being tokenised, might seem farfetched – but may we remind you of the need for data protection taking into consideration the growth rate of massive data breaches.
Zortrex is aiming high and wants to use their technology to put the hackers out of business! Tokenisation cannot be mathematically reversed and thus it will least it will stop the hackers for a while.
Brown explains further that as they move with their education; other information can be added on to the token, as with all their healthcare; any allergies tokenised; what injections they have had right through their life cycle until the day no more data can be tokenised.
For such high ambitions, the creators of Zortrex’s software have adequately ensured that the technology used is fully scalable. One stumbling block many Blockchain projects now face is what is referred to as scalability – which in tech terms, is the ability of a network or software to grow and manage increased demand.
Cryptocurrencies like Bitcoin and Ethereum specifically – which is used to build a lot of Distributed Applications, has massive scalability issues. The growth in demand for DApps is crippling those systems and they are having to investigate the incorporation of alternative technologies, upgrade or split their platforms and accompanying cryptocurrencies to cope with such high demand.
Someone must take the first step in securing this data forever. Citizens should be able to purchase what they want without being harassed by trackers and cookies. The need for tokenisation is endless and further, down the line, celebrities and government official’s PII can also be secured to protect them from damaging schemes, ‘bad press’ and scandals.
In another previous blog, we “prophesized” that data is the new commodity – like gold or oil. However, the actual value with that data will lie in its privacy, the ability to store it securely and unlock it only with legal permission by its rightful owner.
We have barely scratched the surface with the Internet (from the early eighties) and it is already seemingly being threatened with the competition. A possible replacement by a new phenomenon.
Well, for lack of a better word, “replaced” has connotations of a dying Internet. This is far from accurate. This new phenomenon – fostered by blockchain technology, will change the way we use and consume the Internet as a service.
So, what is this new Internet-like system creating waves online? And why is it making online marketers quiver at the prospect of them losing out on the exponential revenues they have previously enjoyed?
Before we delve further into its meaning and use in the cyber world, perhaps some background context is required.
The way we use online or mobile applications software or “Apps” has changed how we consume products and services online. Companies jumped onto the bandwagon when they discovered that we mostly use Smartphones for the Internet.
App developers were then subsequently sought after to create mobile Apps for practically anything. What started as something mainly for gamers moved quickly onto applications for practically any commercial activity.
We now use Apps for our shopping; fitness; traveling; online bookings and banking. Developers now create customized software to help us with practically, anything.
In addition, we now have App stores for every significant tech provider – Microsoft, Google, and Apple to mention a few. This has naturally fattened the pockets of software companies and created an additional stream of income for them.
The ‘catch’ for using mobile apps is that even though it costs you nothing to download, using them still requires you to register with your personal details. You can also do this by linkingyour existing social media accounts.
The benefit to App providers
These Apps, which are integrated with social media services, create a data goldmine for marketers to study and track browsing habits. Through them, marketers can gain valuable insights into your interests and then customize their products/services to sell to you.
The impetus behind a distributed application system is that it serves to distribute plow some of the wealth garnered from your data via application providers back to you.
Data mining has become more lucrative and accessible because of Artificial Intelligence (AI) and Machine Learning. Do you ever notice how after browsing online or having a conversation or a chat application like WhatsApp or Facebook Messenger? You go online later, and you see Ads displaying the items you discussed? Creepy isn’t it? Well, that is the future of Web 4.0 for you!
Staying ‘woke’
Luckily for us, there is a school of knowledgeable and security-conscious programmers who are not ‘giving in’. They help us understand how the Internet has become a cesspool for marketers to harvest our data. Social media platforms, search engine providers, and mobile application providers facilitate them immensely with this.
Imagine getting paid to surf the web for hours. The way you get paid for taking on a survey, partaking in a social experiment, donating an organ or sperm?
This is the way distributed apps are touted to work. They reward you for the use of specific applications (in a peer-to-peer review setting) with cashable tokens. Seems only fair right?
Now you can imagine how companies like Cambridge Analytica would react to having to pay you for their use of your data. They would surely be reluctant and that’s why they preferred to work clandestinely. But if they could pay companies like Facebook for the use of data, why not pay us directly?
Early adoption
Joining the ‘DApps revolution’ is a no-brainer. Those at the forefront of building and supporting DApps will end up with a more substantial chunk of the market.
DApps primarily provide you with the use of payment systems. These are specifically known as Smart Contracts and Proof of Work systems.
For instance, you are rewarded in cashable tokens to surf the net over applications like Google Chrome, or Mozilla Firefox.
It is only a matter of time that this form of Internet-browsing and use of applications becomes the norm.
The Internet revolutionized the way we communicate, socialize, learn, shop, and do business online. DApps however, will determine the way you get compensated for doing the things you love to do online.
The latest abbreviation in the finance and crypto-world is ‘ICO’. This word, however, gives global financial authorities like the U.S. Securities and Exchange Commission (SEC) nightmares for several reasons.
Not to be confused with Initial Public Offering (IPO) which is used by firms to raise cash through the issuing of shares to the public. An ICO (Initial Coin Offering) works like crowdfunding, but for digital currency and tokens.
We recently covered a feature on raising funds and capital for a business but missed out on one relatively new method. Many companies are using ICOs to raise capital for their businesses.
Why ICOs?
The concept of an ICO works similarly to how a company raises capital through shares in that it is all based on contrived value.
Funding raising in effect boils down to sales! If your actual product or service has nothing substantial or intrinsic to offer a client base, then it is nothing more than a scam.
Launching an ICO is quite easy, and to an extent, many tech companies are now catching onto it.
An ICO is the cryptocurrency space’s rough equivalent to an IPO in the investment world. ICOs act as fundraisers of sorts; a company looking to create a new coin, app, or service launches an ICO.
The alarming spurt rate of ICOs often brings with it a scourge of potential scammers. The SEC and other institutions have to step in to monitor and regulate them.
Social media platforms like Facebook and Google – which house a bounty of users (potential investors) have banned ICOs ads due to possible prey on unsuspecting investors; exposing them to con artists.
Basically, the scammers use fancy websites, laden with impressive figures and terminology to con users into buying into their coins or tokens.
Though the tokens barely even cost a cent, it adds up if they have millions of people buying in. Once they have reached a certain amount in funding – they close shop and disappear!
To create a new digital coin:
Create a product conceptor Business Plan for the coin or what is called a Whitepaper. This describes in great detail what the coin or token aims to do; the core technologies behind it; the team and their qualifications; the product’s lifecycle/growth path etc.
Once completed and water-tight, the whitepaper would besubmitted along with an application to one of the best Cryptocurrency Exchanges for review.
Naturally, you would need some initial working capital for liquidity. Some of this is raised through your savings and others through institutions (via loans etc).
You must then assure your investors of a solid return on investment (ROI) and deliver – which goes back to sales. Unless your offering is a scam, you actually need to do some work!
This assurance comes via regular updates (marketing campaigns can have a tremendous or adverse impact on the uptake and price) on milestones reached.
The updates are also necessary to keep your investors abreast with progress and might convince them to increase funding.
Growing interest and the addition of more funds create demand for the coin/ token which, in turn, drives up the price and market capitalization.
Known as “China’s Ethereum”, and backed by Microsoft, Alibaba and the Chinese government, NEO uses smart contract applications. It does so, however, with the addition of decentralized commerce, digitized assets and identification. It enjoyed a considerable hike in token value from $0.03 to $88.20, NEO has big things coming with a 294,000% ROI.
Unlike Bitcoin, the second-most valuable cryptocurrency in the world has more functionality than just being a coin. Its ledger technology is used to build and deploy decentralized applications a.k.a. “smart contract” technology. Ethereum’s ROI has been nothing short of jaw-dropping at 230,000%. Having sold its tokens at $0.31, an Ether token now sits at a whopping $713, second in value only to Bitcoin.
The “premier privacy-focused cryptocurrency” enables users to send and receive currency worldwide with total anonymity. It is currencies like SpectreCoin that have most government tax offices quaking in their boots. If you had repurchased a token in November 2016, that puny $0.001 would be worth $0.64 today, or an ROI of 64,000%.
With Ark, collaboration is the name of the game. The platform’s SmartBridge is a lightning-fast ecosystem designed to integrate other cryptocurrencies into its blockchain. Investors were eager as any to buy in, and they have made a 35,400% gain given today’s token price of $3.54.
DGD, which stands for Digix Decentralized Autonomous Organization, is a self-governing community. It gives out grants to different projects which will promote the growth of the DGX network. At a current value of $346.88 per token, this gives them a return of 10,722%.
QTUM is an open-source value transfer platform which focuses on mobile decentralized apps or Dapps. QTUM is the world’s first proof-of-stake smart contracts platform. They hosted a highly successful ICO in March 2017, and since that time has seen an ROI of 6,400%.
The prospect can be daunting for a cryptocurrency investor looking to make money off new investment opportunities while remaining cushioned from fraudulent ICOs and dodgy coins and tokens.
As there is no guarantee that any cryptocurrency or blockchain-related start-up will be genuine or successful.
You simply need to be vigilant and take steps such as getting to know the core team, poring over the whitepaper with a big magnifying glass. Naturally, you should be monitoring the progress of the token sales.
Most importantly, you must just use common sense to gauge just how feasible the project is to ensure that you’re not falling for a scam.
Remember, if it’s too good to be true, then it isn’t true!
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