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What is the Future of Bitcoin?

 4 min read / 

Bitcoin is a digital asset and a payment system created by a software developer who calls himself Satoshi Nakamoto. No one has ever met him, and it is not clear if he is one person or several people. The system used is peer-to-peer; users can transact directly without intermediaries. Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. Bitcoin is used as a unit of account. What is relevant to highlight is that this system works without a Central Bank, which has led the U.S. Treasury to categorise bitcoins as a decentralised virtual currency. Bitcoin is also well known as the first cryptocurrency, although prior systems existed. Another interesting thing is that since bitcoins are not issued by a Central Bank, because as I mentioned before there is not one that has control over them, there are three primary ways to obtain them. The first one is to buy bitcoins on an exchange, which acts perfectly as the stock exchange, in this exchange there even buyers or seller that buy or sell bitcoins. The second way is accepting them for goods and services, and the third one and probably the most interesting is that you can create this virtual currency with your computer, in technical language is described as mining the bitcoins because “mining” is lingo for the discovery of new bitcoins just like finding gold.

While it may appear that the number of bitcoins is unlimited, Satoshi Nakamoto set a finite limit on the number of bitcoins that will ever exist: 21 million. Currently, more than 12 million are in circulation. That means that a little less than 9 million bitcoins are waiting to be discovered.

Along with the rise of Internet and the great use of it worldwide, bitcoin as a form of payment for products and services has grown. What are the advantages of using this system? Probably the main important driver that leads to use bitcoin as a form of payment is because of its cheaper fees. Fees are lower than the 2-3% typically imposed by credit card processors but unlike credit cards, the purchaser, not by the vendor, pays any fees. However, there are also a lot of disadvantages that threaten its existence. Bitcoin, by its nature, being digital means that if could be used by terrorists and drug dealers. As reports bitcoins  have become

“The currency of choice for people online buying drugs or other illicit activities”

For example, the Silk Road was the major online market that used bitcoins to sell illegal drugs. It was shut down in 2014 by U.S. regulators. In recent days, ISIS used bitcoins to buy weapons, which were used during the terroristic attacks in Paris and Bruxelles. In fact, the European Union is considering tightening its hold on virtual currencies like bitcoin and prepaid cards. The multinational bloc wants to bring increased regulation in play starting June 2016. The EU admits that these new financial tools such as virtual currencies create new challenges regarding combatting terrorist financing. Highly versatile criminals are quick to switch to new channels if existing ones become too risky.

Along this inconvenient use, many people have been debating whether bitcoin was experiencing a speculative bubble or not. Jesse Colombo explains, in his articles on Forbes, that the parabolic bitcoin surge reminded himself too much of silver’s bubble, which occurred in late 2010 and early 2011. Indeed, in both cases, well-meaning amateur economists and investors who were too fearful of an imminent currency crisis or currency regime change, and were therefore too early in hedging against this scenario drove the initial surges. Eventually, greed became the dominant driver of these markets as speculators clamored in to take advantage of the price mania. He concludes,

“No matter how virtuous the underlying market is, greed-driven manias always end the same way – with a price implosion.”


What will be the future of bitcoin? Is it a currency that offers excellent opportunities or not? Perhaps there is still have a high potential of the cryptocurrency, despite the potential for engaging in illicit activities with the currency. One thing is for sure; it will be a disruptive force in the FinTech space.

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Whatsapp Launches New Venture Aimed at Businesses

 1 min read / 

whatsapp business

Whatsapp has launched a new app targeted at businesses, called the Whatsapp Business App, which they claim will enable companies to “communicate more efficiently” with present and potential customers.

This forms part of Whatsapp’s wider strategy to branch out into the corporate world. It plans to use the app to generate new revenue by charging businesses for using the extra communication tools that will enable them to better connect with their customers.

Although the app is set for worldwide release, at present it will only be available in Indonesia, Italy, Mexico, the UK and US. It includes a feature which indicates a business is authentic with a green tick badge next to their name.

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Amex: Troubled Credit Card Company Reports $1.2bn Net Loss

 2 min read / 

Amex annual report

On Thursday, American Express, or Amex, reported a net loss of $1,197m in the fourth quarter, the first net loss the company has experienced for 26 years.

Although the company stated that revenue from interest expenses was up 10% to $8.8bn, Amex said recent reforms to the US tax code meant the company incurred extra costs, including a repatriation cost on its foreign assets as well as a devaluation of its deferred tax assets. It estimates total costs amounted to $2.6m.

For the full year, net income was $2.7bn compared with $5.4bn the company earned in 2017. However, even with the estimated $2.6m the company claims it incurred from the recent tax charge, net earnings were still $5.3bn, $100m lower compared to last year.

In New York, American Express shares (AXP) took a near 1% tumble at the beginning of trade with shares finishing the day on $99.90.  JPMorgan Chase and Goldman Sachs anticipate greater earnings for 2018.

“Overall, we believe the Tax Act will be a positive development for both the U.S. economy and American Express” said CEO and chairman Kenneth Chenault. Chenault also said he will be leaving Amex in “very strong hands” when his successor, Steve Squeri takes over next month.

American Express has suffered from an ever-reducing share in the credit card market and ended its 14-year relationship with American warehouse chain Costco who in 2016 made an agreement with the market leader, Visa.

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Tencent Extends Facebook Lead

Tencent Facebook

Tencent has shot past Facebook to become the world’s most valuable social network.

Editor’s Remarks: Although Tencent briefly overtook Facebook in terms of market cap in November, the recent selloff of Facebook shares prompted the Chinese tech titan to regain the lead. Facebook investors responded negatively to news that Mark Zuckerberg’s plans to highlight family and friend-based content on the newsfeed would reduce the amount of time people spent on the site. Shares in Facebook have fallen 5% since that announcement, enabling Tencent to gain a $19bn lead over the US company. Tencent’s growth has been spurred on by its diversification away from its flagship messaging app, WeChat, and into video games.

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