First Look: Elon Musk Teases SpaceX’s Bold New Raptor Rocket

Elon Musk posted four tweets last night demonstrating the new Raptor rocket engine. SpaceX engineers have been hard at work finalizing the next-generation rocket technology that will eventually power trips for the exploration of Mars.

Musk Tweets Proof of Rocketry

While most of America was focused on the Super Bowl, Musk was in Texas at the SpaceX testing site. The rockets had recently been shipped from California to the testing site near McGregor, Texas. Musk and his team were up late preparing for the first test late Sunday night. A few hours later, the first video went live on Twitter.

Viewed more than a million times by press time, the 4-second video shows an extremely long flame shooting out of the Raptor. A second video went shortly thereafter, twice as long and loud:

Local Civilian Spots Reusable Rocket Test at SpaceX Facility

A Central Texas local reportedly noticed what was going on at SpaceX and tweeted about it:

Intended to be reusable, the engines use cryogenic liquid methane and liquid oxygen. Previous SpaceX rockets used RP-1 Kerosene and liquid oxygen. Developing the rockets in-house was part of Musk’s business plan from the start, according to an early SpaceX investor.

When the rockets were first shipped from California to Texas, Musk noted that the company is working hard to get a moon-worthy rocket to ready. The ultimate goal of the Raptor rockets is still for Mars exploration. The Raptor is intended to replace existing rockets already in production, the Falcon 9, Falcon Heavy, and Dragon.

The Raptor product is currently on track. Musk has previously tweeted that the company will attempt a moon trip first.

SpaceX: Mars Exploration is the Goal

While SpaceX keeps its eyes on human exploration of Mars, heavily developing the Raptor, it is under financial pressure to actually develop revenues. The company is good at winning open contracts from governments and large companies around the world, but recently suffered a spate of layoffs. Musk blamed these layoffs on the “absolutely insane”  Starlink global high-speed internet project as well as a co-existing Mars rocket project.

Musk says the company needs to be “spartan” in its expenditures. The revamped approach to Raptor appears to be an attempt to cut costs by developing the rocket in stages. First it will go to the Moon and potentially function as an orbiting product around Earth. Later it will be further developed and upgraded into a rocket with the potential to explore Mars.

While Musk believes that layoffs at his day job — electric carmaker Tesla — were necessary in order to keep the company’s products relatively affordable, he thinks the SpaceX research projects are costing too much and seems to regret the SpaceX layoffs. He reportedly said during an investor call last week:

“And so, SpaceX has to be incredibly spartan with expenditures until those programs reach fruition.”

When Musk says “insane,” he doesn’t necessarily mean it in a negative way. As a businessman, he’s referring to the fact that his company is engaged in services once only provided by governments with virtually unlimited resources. When SpaceX eventually develops a space highway to Mars for mankind, they will either be the only company doing it or the only one doing it well. Untold fortunes await SpaceX at that point.

SpaceX IPO: Will It Ever Happen?

Still, SpaceX has yet to reach out for public money via an IPO. In 2017, rumors rocked the investor community: SpaceX would be launching an IPO that year. A year later, the company went for more venture capital funding, selling some shares at $135 to Fidelity. Its valuation at that time was $27.5 billion.

While SpaceX could focus on more terrestrial projects like competitive satellites, which they are also into, the company’s true mission is deep space exploration. The potential for profit from space exploration is an unknown quantity, but it could easily go into the trillions. As profit goes, one potential area of investment would be minerals acquisition. The quantities of gold, platinum, and other rare materials in space by definition outsize supplies on earth. Developing a profitable method of extraction from foreign planets and space rocks is but one way that SpaceX could, in the long run, become the most profitable company in history.

Tesla Opens A Chaotic Trading Day After SpaceX Tweets

As for Tesla, trading early this morning showed a big sell-off. Buy orders kicked in and kicked it up momentarily. After an hour or so of trading, things were on a recovery path.

While SpaceX is a separate company from Tesla, its fate is very much tied to Tesla. Good news about SpaceX can reflect well on Tesla, and vice versa.

Certainly the weekend’s activities demonstrate one thing about Musk: he is fully grounded. He understands that SpaceX needs to get realistic in its endeavors, and completion of rockets for near-term use (and potential sale to governments and others) is one of many ways they can do so. As for SpaceX engineers, this was likely not the first or last time they’ll be putting in long weekend hours in pursuit of a noble dream.


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Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock. Charts from Tradingview.

France’s Largest Bank BNP Paribas Loses $80 Million Due to Trader’s Pre-Vacation Snafu

According to multiple sources, BNP SA, known by many as the largest bank in France, reportedly made a loss of $80 million in derivative trades connected to the United States.

The sources confirmed that Antoine Lours, the Head of U.S index trading at BNP, is yet to return to his position at the bank. Lours has been away on vacation since Christmas when he initiated trades on the S&P 500 Index.

Increasing tensions between the United States and China over tariffs and trade disputes caused U.S stock prices to slump over the holiday. Although the stocks did regain their ground, the high volatility concerned many traders and investors, causing massive stock selloffs.

U.S. Trading Desk Shutdown

It hasn’t been the perfect start of 2019 for BNP Paribas. In addition to the $80 million lost over trades gone awry, the bank will close down its U.S. commodities derivatives desk. The commodities division consisted of 16 traders who traded commodities such as agricultural products, metals, and energy. The decision to close is in line with an earlier decision made by the bank to cease financing oil sands and shale projects.

According to an unnamed source, the decision indicates a series of adjustments made by the bank, aiming at protecting its profitability.

Jean Pierre Lambert, Analyst at London-based Keffe, Bruyette & Woods, said:

“The bank seems to be adopting enhanced discipline on costs and profitability at its markets activities.”

Opera Trading Desk

The bank will also be shutting down Opera Trading Capital, its proprietary trading division. The division, which makes risky bets with BNP’s capital, is being shut down after last year’s market volatility saw it struggle to make profits. The business is reportedly funded with over $600 million. The bank is reportedly closing it so its resources can be reallocated to client-focused businesses.

Major Banks Call Grim Results

BNP’s key trading business saw a 10% drop in revenue over three-quarters of 2018, while Citigroup Inc. also reported a 21% drop in trading fixed income, commodities and currency on Monday. JPMorgan Chase &Co. followed on Tuesday, claiming that its trading business was greatly affected by “challenging market conditions.”


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Author: Melanie Kramer
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Elon Musk’s Bad Week Gets Worse as SpaceX Lays off 600 People

SpaceX, the rocket company founded by Tesla billionaire Elon Musk, is laying off 10 percent of its 6,000-employee workforce. The layoffs are part of a move to streamline the business and cut costs.

“SpaceX must become a leaner company,” President Gwynne Shotwell wrote in a Friday email. The news was first reported by the Los Angeles Times.

‘Extraordinarily Difficult Challenges Ahead’

Shotwell explained:

This means we must part ways with some talented and hardworking members of our team. This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.

The company is providing a minimum of eight weeks’ pay and other benefits to the fired workers.

SpaceX is streamlining to prepare for “difficult challenges ahead.” (Twitter)

Investors Dazzled by SpaceX

Elon Musk — the billionaire founder of electric-car company Tesla — launched SpaceX in 2002 to make space travel accessible to everyday people. In addition, SpaceX’s goal is to colonize Mars.

Equidate’s Robert Hilmer says SpaceX is one of the most valuable private companies in the world, with the potential to raise an “unlimited amount” of capital.

“SpaceX is one of [the most] popular pre-IPO tech companies globally,” Hilmer told CNBC.

Everywhere I travel around the world, investors of all types — individuals, family offices, hedge funds, sovereign wealth funds or private equity — want to get into SpaceX.

Meanwhile, Musk is taking the downsizing in stride.

He has not commented on the layoffs, preferring instead to focus on upcoming space launches.

The South African business mogul is more concerned that SpaceX’s newest test flight rocket has a cool, aerodynamic design.

“Obv must be more pointy tho,” Musk tweeted, in reference to the tip of the rocket.

Musk is an unwitting media darling who generates countless headlines. In August 2018, Musk stirred a volcanic backlash from Tesla investors after tweeting that he might take his car company private.

Weeks later, the SEC sued Musk for securities fraud, claiming his errant tweet caused Tesla stock to spike 6 percent that day. Shareholders were enraged when Tesla shares abruptly tanked in the following days.

The debacle forced Musk to step down as chairman in September 2018 and pay a $20 million fine to the SEC.

Elon Musk: I am Not Satoshi Nakamoto

Despite being a technophile, Elon Musk does not own crypto, as CCN reported.

“I literally own zero cryptocurrency, apart from .25 BTC that a friend sent me many years ago,” Musk confessed on Twitter.

In November 2017, Musk denied speculation that he was Satoshi Nakamoto, the inventor of Bitcoin. A former SpaceX intern inadvertently started the rumor with a blog post.

Sahil Gupta wrote at Medium: “Satoshi is probably Elon.”

Elon is a self-taught polymath. He’s repeatedly innovated across fields by reading books on a subject and applying the knowledge.

It’s how he built rockets, invented the Hyperloop (which he released to the world as a paper), and could have invented Bitcoin.

Musk responded by denying that he invented Bitcoin. Meanwhile, the real identity of Satoshi Nakamoto has never been confirmed.


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Author: Joseph Young
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Apple is Not Learning From its Mistake: 3 iPhone Models in 2019

Apple could be en route to replicating the same mistakes it made in 2018 which ultimately led to a 10 percent stock price plunge on January 4.

According to a report released by The Wall Street Journal, Apple is planning to release three iPhone models in 2019. The problem is that many loyal customers of Apple are not compelled to upgrade to newer models because of the strong performance and specifications of previous models.

Is Apple in Trouble?

Apple has not officially disclosed its plans to release three new models in 2019. But, if it does pursue the development of new iPhone models, following a lackluster reception of the iPhone XS and XR, it may spell trouble for the already struggling $720 billion giant.

This week, Chinese retailers have started to sell the iPhone XR model with a 17.1 percent discount, slashing its price from $1,036 to $858, due to a lack of demand for newly released iPhone models.

While Tim Cook, the CEO of Apple, attributed the company’s poor performance in the fourth quarter of 2018 to the potential tension between China and the U.S., analysts have said that the trade war and the decline of the Chinese economy had minimal impact on the sales of iPhone.

Rather, local analysts have reported that the demand for cheaper alternatives such as Huawei that match the specifications of the iPhone has started to increase rapidly.

The magic of Apple in previous years was its ability to revolutionize design and technologies in mobile phones to manufacture next-generation smartphones. As the growth curve of the mobile phone sector plateaued, it has become challenging for mobile phone manufacturers to differentiate newer models from previous models and drive consumers.

As a prestigious Japanese institution Waseda University professor Atsushi Osanai said:

What we want from Apple is something that makes us emotional, even unconsciously—say, truly beautiful and sophisticated design that we can’t resist. Beefing up functional value, like expanding camera features, isn’t attractive because everyone else is doing the exact same thing.”

Immediately after the public letter of Tim Cook was released on January 2, The Verge social network columnist Casey Newton also added that as mobile phone companies reach a stalemate in technological development and the level of innovation companies can employ year after year declines, the desire for consumers to purchase new models on a yearly basis will naturally drop.

“This was the first year in five that I didn’t upgrade my iPhone. Two reasons: – iPhone X was really, really good, and battery life is still great – The 2018 models were functionally identical to the iPhone X,” Newton said.

Not Exclusive to Apple

Samsung, LG, and many major mobile phone manufacturers are struggling to deal with the same problem with Apple, and as competition in the likes of Huawei and Oppo continue to emerge by providing better value for money to consumers, key players in the mobile phone market could risk seeing a decline in dominance.

Price Charts from TradingView.


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Author: P.H. Madore 
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Eight Tips Every Cryptocurrency Investor Must Know

The Eightfold Path to Enlightened Crypto Investing

 

As a new cryptocurrency investor, kicking off your shoes and taking your first steps along the Path of The Blockchain, you’ve probably found yourself asking the following questions: did the bitcoin bubble really burst, is it too late to get started, and what are the best tips to be successful in this newly emergent investment space?

While you’ve been asking yourself these questions, along with many others, you’ve probably noticed the prolonged bear market cryptocurrencies have been facing the past year, with just last month being the worst month for Bitcoin since 2011. Taking a more historical view, we see this is only the most recent bear market, of which there have been many before. Likewise, for every bear market, there is a bull market; an endless cycle of perpetual balance, akin to the Taoist yin and yang. Thus, despite the recent significant drops, cryptocurrencies are far from being finished, and the path to cryptocurrency investing nirvana stands stronger than ever.

In fact, the securities platform SharesPost reported that 72 percent of cryptocurrency investors are planning to buy more holdings in the next 12 months. You should therefore expect some traffic on your journey and pack your bags accordingly. As with any successful trip, it’s best to be as prepared as possible. In this article, we’ll give you the necessary eight tips to help reach your desired state of cryptocurrency investing enlightenment.

1. Ignore the “noise”

Many naysayers in the media and financial sectors may preach that cryptocurrency is simply a fad, over-hyped speculation, or even a pyramid scheme. On the other hand, a growing population increasingly embraces the financial prospects and practical applications of cryptocurrency assets. Both sides have loud voices and like to make a lot of noise.

This noise level is only expected to increase, as Satis Group predicted cryptocurrency trading activity for personal investors will increase by 50% in 2019. To be a successful investor in this space, it is best to just buy and hold what you believe in (see tip 4!) while ignoring all the noise around you.

2. Expect the unexpected

However, significant volatility does exist in cryptocurrency markets which cannot be ignored. Experienced cryptocurrency investors are accustomed to huge price swings that you often don’t find in traditional markets. By mentally preparing for these unfavorable, and occasionally terrifying, investment performances, the intelligent crypto investor will be able to act rationally instead of emotionally in times of unexpected price drops.

3. Avoid a bad trade or investment strategy

A common mistake for beginner cryptocurrency investors is joining what is known as a “pump and dump” group. Certain social media communities or ‘gurus’ may even promise investment tips regarding a particular coin. You should avoid these types of places at all costs; when travelers go down these roads, they don’t often come back.

The problem is that since derivatives trading is a zero-sum game, there is always a winner, but more importantly a loser. Unless a solid trading or investment strategy is in place, heedlessly following such advice is the fast track to losing your money to modern-day snake oil salesmen.

4. Perform your due diligence

In this modern digital age, there is even wifi on the path to crypto investing enlightenment, hence there is no excuse to make an investment with little to no understanding of the underlying asset. Almost every single coin has easily accessible whitepapers online. And just like having maps in the car, the savvy traveler must be prepared.

From the heavily traded to the most niche, resources such as the All Crypto Whitepapers will help any individual brush up their knowledge on potential future investments. If it is impossible to tell how the coin operates and more importantly, makes money, then it would be wise to seek another investment opportunity. From the biggest initial coin offerings (ICOs) to the most niche altcoins, this site will have you covered.

5. Don’t place all your crypto-coins in one basket

Common investment wisdom prevails when it comes to cryptocurrency investment: diversification is key. Just as financial advisors recommend taking positions in multiple types of stocks and other investments, diversification is also essential for any healthy cryptocurrency portfolio.

You’ve done your research, so now seize the opportunity to invest in multiple coins. As one example, you can invest across different sectors which serve different use cases. Just like it’s always safer to travel as a group then as a single person when you’re in unfamiliar territory, establishing a diversified portfolio will help you along your path toward realizing potential future cryptocurrency gains.

6. Opt for an alternative personal email

Using a regular email account places an investor at an unnecessary risk of exposure for a data breach. To overcome this risk, it is recommended to create a unique account just for trading, especially with added two-factor authentication password security. No matter what, ensure that two-factor authentication is utilized for every service that offers it (for example both your email account and your exchange account should require two-factor authorization to access). Likewise, make sure to use a dedicated two-factor application (such as Google authenticator, or Authy) as opposed to using text messages for two-factor authorization (these are susceptible to social engineering hacks).

Additionally, when setting up your accounts, be sure to select a unique username and password that has no personally identifiable information that would-be hackers could trace back to you.

7. Understand the uses for both cold and hot wallets

Cryptocurrency can be stored via an offline “cold” wallet or an online “hot” wallet. Ease of access makes hot wallets a more desirable option for the beginner investor. However, as convenient as hot wallets are, they are susceptible to being hacked, whereas cold wallets are not able to be hacked (if prepared properly). Ideally, it’s best to store cryptocurrency you plan on saving for a long time in a cold wallet, and keep only a small amount that you might use on a daily basis in a hot wallet.

Additionally, one common mistake made by many new investors is mistaking exchanges for wallets. Although it might seem convenient keeping everything online at an exchange, a common mantra you might hear others chanting goes like ‘if you don’t own your keys, then you don’t own your bitcoin’. And when you keep your digital assets on exchanges, you don’t own the keys. This can become important when exchanges go down, get hacked, or both (for example, the famous Mt. Gox incident from a few years back). Take the time to research different wallet providers. There are lots of great options available today, and you can start learning more by clicking here.

8. Remain careful around mobile wallets

Trading or storing large sums of any cryptocurrency via mobile phone is simply too great a risk. Mobile phones are more prone to being compromised electronically or physically. Although convenient, convenience should not  surpass the security concerns that abound with executing trades or storing assets on mobile devices.

Hopefully, these eight tips will help give you solid footing on the road toward crypto-investing nirvana. Looking for more tips? For more information about security practices, investment strategies or other best practices in the cryptocurrency trading space, visit Blockforce Capital.


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Author: Eric Ervin
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How To Invest – Basic Investing Strategies

Investors now have a plethora of options to choose from, steering them onto the path of financial freedom

 

As we move towards generational parity, there has been a substantial shift in ideology and perception towards savings and long-term financial planning. The millennials are getting their feet wet, delving into investments for greater financial freedom, while the baby boomers and Generation X target wealth maximization and preservation, thus altering their investment strategies.

Understanding the risks involved before investing, and how to mitigate losses could fast-track the process of achieving your investment goals. This is only possible through a proper investment strategy which guides you through the investment journey. An investment strategy acts as a manual, enabling you to choose and opt for the best investment plan depending on your profit objectives and timeframes, and provides you with the risk-reward potential of your investments.

Author: Anmol Gupta

Don’t Be Your Own Worst Enemy When Investing

Looking for someone to blame for the not-so-stellar performance of your investment portfolio? Try checking the mirror.

 

Decisions about money aren’t always rational, even when we think we’re acting logically. Common tendencies that make us our own worst enemies when investing include: selling winning investments too soon or holding onto losers for too long, loading up on too-similar assets or failing to assess the future implications of today’s decisions.

Researchers have found dozens of unconscious biases that can drive people to make money decisions they later regret. These behavioral economics concepts include things like “anchoring” — when a specific and perhaps arbitrary number you have in mind sways your decision-making, such as selling Apple just because the company’s stock hit a round number, like $200 a share. Or, the “endowment effect” can cause you to overvalue something simply because you own it, leading you to cling to a stock that’s tanking.

Here are some common human errors in investing, with strategies to overcome them.

Pursuing past predilections

Financial institutions remind us that past performance doesn’t guarantee future results. We don’t always listen.

It’s tempting to look at a stock’s (or the broader market’s) recent performance and conclude gains will persist in the near term, says Victor Ricciardi, a finance professor at Goucher College and co-editor of the books “Investor Behavior” and “Financial Behavior.” “People take a very small sample of data and draw a major conclusion, and that’s a pretty bad pitfall,” Ricciardi says.

How to overcome it: Don’t base investing decisions solely on what’s happened in the past; think about what will drive gains in the future. When investing for the long term, prioritize selecting companies with solid long-term potential.

Diversification that’s not diverse

You may interpret diversification to mean more is better. That’s only half the story; what’s important is owning a variety of assets (both stocks and bonds) with exposure to various industries, companies and geographies.

Sometimes investors exhibit “naive diversification” by owning too-similar assets, which does little to reduce risk, says Dan Egan, director of behavioral finance and investments at robo-advisor Betterment: “People will have three or four different S&P 500 funds and think they’re diversified but don’t look at how correlated they all are.”

Similarly, many investors invest only in companies they know, which results in over-concentration in certain industries, Ricciardi says. That may mean underexposure to “the unknown” — like international stocks — which they perceive to be risky, he adds.

How to overcome it: Invest in a wide range of assets. This can easily be accomplished with a simple portfolio constructed of just a few mutual funds or exchange-traded funds.

Making emotional decisions

When money’s on the line, it’s hard not to let emotions creep into your decisions.

Prior to the 2016 presidential election, many professional investors expressed concerns about a market slump if Donald Trump won. Betterment data suggested that investors who supported Hillary Clinton might let politics shape their investment strategy — and cash out following the election, Egan says. So after the election, the robo-advisor messaged investors with information about the importance of staying invested for the long haul, he says.

On a stock-specific basis, we often let emotions dictate when to sell — not wanting to admit we made a losing bet. “People tend to sell winners too quickly when they go up and, on the downside, they hold on to losing investments too long,” Ricciardi says.

How to overcome it: Think about individual investments in the context of your entire portfolio and craft a plan for when you’ll sell that’s not triggered by short-term factors (like emotions) alone.

Focusing on today

It can be difficult to see the value of saving money for tomorrow when there’s so much to spend it on today. That myopia can make investors either too active or too passive.

If you’re too passive, you may avoid regular check-ins on financial health and stick with a status quo that doesn’t properly prepare for the future, Ricciardi says. Meanwhile, being too active can drive up trading expenses, resulting in lower returns, he adds.

How to overcome it: Let the numbers do the talking. Sit down with a retirement calculator when charting your investing journey. Make sure you fully understand the tax implications and costs associated with selling investments.


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Author: Anna-Louise Jackson
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How Psychology Affects Consumers’ Use of Cryptocurrency

Despite benefits, early consumer adoption is in gambling and other niche areas.

Along with a steep decline in the value of the most popular cryptocurrencies like Bitcoin, Litecoin, and ether, the hype surrounding them has died down considerably in recent months. Yet cryptocurrency remains the most innovative and potentially transformative form of digital money. It has the potential to move us towards an entirely cashless existence as consumers in the not-too-distant future.

But what about the present? To what extent have consumers adopted cryptocurrency as money, not as a speculative investment?  What is its value to consumers? And how are the early adopters using it?

The blockchain technology behind cryptocurrency has been widely discussed and explained. So have the various risks associated with owning cryptocurrency.  These topics are beyond the scope of this post. Here, I want to specifically consider the influence of cryptocurrency on consumer behavior as of late 2018.

As a form of money, cryptocurrency has notable benefits for consumers

You may have heard news about cryptocurrency theft, like the bitcoins getting stolen from Apple’s founder Steve Wozniak. But there’s another side to the story. When compared with other forms of money, cryptocurrency has significant advantages. Because it is entirely digital, using it for making purchases incurs dramatically lower transaction costs, than, say, using a credit card or cash. If and when enough shoppers use cryptocurrency regularly, sellers may save 2%, 3%, or even more, and pass some of those cost savings on. What’s more, when using cryptocurrency, financial institutions are usually disintermediated or bypassed, increasing the user’s accountability and privacy, and reducing the likelihood of identity theft. Just consider how many customer data breaches have occurred at major retailers like Target and service providers like British Airways within the past five years. The result is a loss of trust, anxiety, and considerable inconvenience for those affected. (However, the anonymity afforded by cryptocurrency does make it susceptible to illicit uses such as money laundering). Cryptocurrency can be readily used anywhere in the world, reducing the costs and inconveniences associated with exchanging one national currency to another.

Yet the usefulness of cryptocurrency to the average consumer today is minimal

In the mainstream consumer domain, so far cryptocurrency has almost entirely been used for speculative investment purposes, not as currency. A 2016 study found that less than 1 percent of Americans owned or used any cryptocurrency. More recent estimates put the number of adopters at 5-8 percent. However, almost all of these individuals are trading cryptocurrency, not using it as money.

Why is the adoption of cryptocurrency as digital money so low and so slow?

The first reason is the lack of standards. At present, there are dozens of different cryptocurrencies, each with its own protocols and potential market. These currencies compete with each other, and new currencies continue to be launched every month. Furthermore, because of the possibility of “hard forks” or divergent development, there is always the risk that new variants of even established cryptocurrencies may be formed. No one knows which currency will dominate or if all the currencies that exist currently will survive. Consumer psychology research shows that when a market lacks one standard, consumers are slow to adopt the innovation because of the uncertainty.

Just as problematic for consumer adoption is the dramatic fluctuation in its value. In the past one year alone, bitcoin has ranged in value from $5,857 to $18,343. Just imagine, if you used bitcoin as money and wanted to spend one BTC to buy a car, you’d have been able to purchase anything from a Honda hatchback to a BMW sports utility vehicle (both used) depending on when you purchased the vehicle. This degree of variability is not desirable for any form of money that serves as a medium of exchange. It is supposed to maintain its value.

The third significant limitation for consumers is that almost no retailers or service providers accept cryptocurrency at present. Among major retailers, Overstock.com is the only one that has consistently accepted bitcoin. And even in its case, things haven’t always gone smoothly. Earlier this year, it confused bitcoin with bitcoin cash, a much cheaper currency, and ended up selling products to some shoppers for steeply discounted prices.

The classic chicken and egg problem is at play here. Until enough shoppers clamor to spend cryptocurrency, companies won’t accept them. And because few companies accept cryptocurrency, consumers won’t really bother with it. For shoppers, cash, credit cards, and mobile payment services like Paypal and Venmo fueled by dollars are good enough for now.

How are consumers using cryptocurrency?

Despite the fact that cryptocurrency hasn’t yet caught on as digital money, there are some niche consumer areas where it has made some headway within the past year. Not surprisingly, one application is sports gambling. Introduced at this past summer’s (2018) FIFA World Cup tournament, Cryptocup is a way of betting on particular sports outcomes using ether. It has since expanded to NFL football.

Cryptocurrency has also been used in a handful of real-estate transactions in Florida and California, either to generate social media buzz because of the novelty, to target the property to successful cryptocurrency traders looking to diversify their wealth or to attract wealthy foreign buyers. A third interesting application is in art where consumers can buy shares in iconic artworks using cryptocurrency or digital tokens from a blockchain themselves become art (in the artist’s blood, no less).

These exceptions underscore the rule. As consumers, we’re still a ways away from using cryptocurrency to pay for an oil change or buy a gallon of milk.


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Author: Utpal Dholakia
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While Major Crypto Exchanges Flourish, Minor Platforms Struggle in Bear Market

The world’s largest crypto brokerage Coinbase is reportedly close to finalizing a $500 million funding round at a valuation of $8 billion, and Binance has started to become more active in the investment sector, funding blockchain startups internationally.

While major cryptocurrency exchanges like Coinbase, Binance, and BitMEX are seeing their businesses flourish with lucrative business models and high profit margins, minor exchanges are struggling in the bear market.

This week, the UK’s oldest exchange, Coinfloor, has slashed the number of its employees after recording a decline in its revenues as a consequence of the drop in daily trading volume of major cryptocurrencies and the emergence of many cryptocurrency exchanges in the local market.

Hard to Deal With Competition

As CCN reported, on Sept. 6, Coinbase integrated the British pound sterling into its exchange, officially expanding into the UK cryptocurrency market.

Coinbase entered the local cryptocurrency exchange market of the UK, which has stagnated over the years due to the lack of infrastructure and user demand, by eliminating exchange rates and appealing to local users that have been awaiting a reliable cryptocurrency exchange in the region.

Coinbase UK CEO Zeeshan Feroz told CCN in an interview:

“We have been working to introduce Faster Payments for as long as we’ve been operating in the UK. Customers not only benefit from increased speed, but reduced cost as well. By no longer having to convert funds from Pound Sterling to Euros and vice versa to add and remove funds, there will be no more exchange rates. This will make crypto easily accessible to most people in the UK.”

This week, possibly due to the increase in competition in the UK market fueled by the entrance of Coinbase and, reportedly, Bithumb, Obi Nwosu, chief executive at Coinfloor, announced that it is reducing its employee count in the weeks to come.

The significance of Coinfloor’s cut of its employee count cannot be dismissed, particularly because of the strategic partners and investors the UK based exchange has secured over the years.

TransferWise founder Taavet Hinrikus, venture capital firm Passion Capital, and Adam Knight, a former managing director at Goldman Sachs and Credit Suisse, invested in and supported the exchange since its launch.

Yet, despite the involvement of high profile investors and venture capital firms, Coinfloor has not been able to face stiff competition and is undergoing restructuring.

“Coinfloor is currently undergoing a business restructure to focus on our competitive advantages in the marketplace and to best serve our clients. As part of this restructure, we are making some staff changes and redundancies,” Coinfloor CEO Obi Nwosu said.

Possibly a Good Sign

Perhaps the establishment of large-scale exchanges and companies in the cryptocurrency sector is beneficial for the long-term growth of the cryptocurrency market, as it allows the strengthening of infrastructure.

In South Korea, for instance, cryptocurrency exchange backed by the country’s biggest commercial banks, Internet conglomerates, and technology corporations including Upbit, Gopax, and Korbit have imposed dominance over the local market throughout the past two years.

The fact that even an exchange in the magnitude of Coinfloor cannot sustain high-cost operations demonstrates that, for startups to compete in the market, they need strong infrastructure and backing from major investors and conglomerates.


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Author: Joseph Young
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Coinbase Will Achieve $8 Billion Valuation Following Hedge Fund Investment: Report

Tiger Global, a U.K. hedge fund that invests mainly in global consumer brands, is reportedly considering a $500 million investment in Coinbase, which would boost the startup’s valuation close to $8 billion and strengthen the cryptocurrency market’s legitimacy, according to sources that spoke to Recode. The investment would make Coinbase one of the highest valued U.S. startups.

The investment in part would buy out existing shareholders, although the specific numbers have not been determined.

Valuation More Than Quadrupling

Last summer, Coinbase was valued at close to $1.5 billion. The valuation came right before a spike in consumer interest in cryptocurrencies at the end of 2017. Since then, the company’s business has weakened due to a decline in cryptocurrency prices. Coinbase CEO Brian Armstrong and others have been quick to point out that they do not focus on short-term trading volume as much as opening the financial system up for the world.

Coinbase claims it is profitable and, per the report, has been negotiating with investors for most of the year concerning a secondary stock sale to allow them to cash out without forcing the company to raise new funds. The company warned people at one point to stop soliciting shareholders, and an agreement was never reached. The company declined to answer Recode’s questions on the topic.

Also read: Binance, Coinbase on hiring spree despite bear market, sign of rapid growth

Possible IPO?

Coinbase reportedly tried to value itself at $8 billion in its acquisition of Earn.com this year, its largest to date, and is said to have been scaling for a possible IPO.

The cryptocurrency industry giant recently named Chris Dodd of Charles Schwab to its board, having lost Facebook’s David Marcus as an independent director over the summer. The company also recently hired Michael Li, a senior executive and head of analytics and data science at LinkedIn, as its new vice president of data.


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Author: Lester Coleman
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