Can Bitcoin Be Regulated?

One of the attractions of Bitcoin and other cryptocurrencies is the idea that they are not regulated by a central banking authority. It has led to some spectacular jumps in the price of Bitcoin, which is controlled by a relatively small number of global investors. The volatility in the market was even more obvious this summer with the price of Bitcoin rising more than 50% since the start of August, and hitting an all-time high on August 15th before crashing by more than 13% shortly thereafter. The heightened interest in the cryptocurrency has been driven by an agreement reached to finally update the rules governing the software. With the new rules in place, transactions over the network should now run much faster.

This incident shows that Bitcoin is in fact “governed”, if not by a central authority, then by a small group of developers. Further, those who govern the market are insiders who know ahead of time when a change will happen.

This is not how a regulated currency is supposed to work, and can inevitably lead to problems. For example, one of the largest cryptocurrency exchanges – BTCe – has now gone down in flames. For those unfamiliar with the ongoing scams and thefts, it appears that many of them, including the stunning theft of 800,000 Bitcoins via the now defunct Mt Gox exchange, used the BTCe exchange to launder their stolen Bitcoins. The indictment of BTCe’s founder appears to show that he was responsible for most of the largest thefts of Bitcoins globally for most of this decade. As you can imagine, regulators are now taking a serious and ongoing look at Bitcoin. And so as Bitcoin establishes itself as a globally recognized currency, or taxable asset, it is slowly becoming more and more regulated.

Most Bitcoins are regulated in some way – and for a very simple reason. It is necessary to have access to conventional money, via an online bank account, in order to buy cryptocurrency in the first place.

Recognition of Cryptocurrency

Is a cryptocurrency like Bitcoin a “currency” or is it really an “asset” that can gain or lose value? Or is it both? Nobody is sure and the uncertainty is likely to continue for some time. Cryptocurrencies are currently being defined and recognised on a country-by-country and sometimes regional basis.

Australian senators have recently called for Bitcoin to be recognized as a currency in the country. They are not the only ones. In the EU, Bitcoins may be used to buy goods and services, and are designated as a “digital presentation of the value not confirmed by the central bank”. Similarly, Japan has also legalized Bitcoin as a payment method. Other countries take a different view. Israel and the U.S. generally treat Bitcoin as a taxable asset subject to capital gains tax. In China, Bitcoin is also generally treated as a taxable asset.

Concerns about what can be bought with cryptocurrency is on the mind of regulators and politicians in many jurisdictions. One of the places this is currently showing up is in locations where cannabis is being legalized, particularly in the United States. The reason is that the U.S. banking industry is still subject to federal rules on financial transactions relating to the sale or purchase of marijuana. Buying weed using Bitcoin is a logical alternative, and a number of branded sub-currencies like Potcoin have stepped into the breach. However, this is being blocked in places like Washington State due to concerns around financial transparency and money laundering. Legislators are considering banning the purchase of cannabis with any cryptocurrency.

Given all of these developments, it is clear that while cryptocurrency may not be regulated by old fashioned means – with value calculations being performed by a central authority – governments are in fact beginning to find ways to regulate this “currency” by controlling how it should be used, taxed, and what products people can buy with it.

No matter what else it may be, this clearly amounts to “regulation” of the market. Even if in its first and earliest stages.

Marguerite Arnold is the founder of MedPayRx, a blockchain healthcare startup in Frankfurt. She is also an author, journalist and has just obtained her EMBA from the Frankfurt School of Finance and Management.

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Blockchain as Monetized Infrastructure

 

For those struggling to understand blockchain, think of it this way. It will be the digital connection between people as well as between machines – starting with your cell phone.

It will be used to tell your washing machine when to run. It will also be used to bill you for the electricity and water it uses. In turn, it could also deduct that amount from your solar positive mortgage.

Blockchain tends to be easier to understand if you think of it as a piece of infrastructure than as the backend ledger for all cryptocurrency. However, questions about payments are always present when talking about blockchain. In particular, blockchain is a system which enables micro-payments, in some cases in increments of less than a penny.

Why is this important?

Basically, in an Artificial Intelligence and Internet-of-things world, the transfer of digital tokens is what will make the system go. Machine processing does not happen in a vacuum. There are costs involved. Who pays and how is a fascinating part of the banking system, which will very soon incorporate blockchain.

Blockchain as a form of infrastructure has become a serious topic in a world filled with cybercurrencies and fundraising networks. One example of a company making interesting choices in this area is a Dutch innovator called Quantoz. They got their start as experts in decentralized energy and transportation. They have subsequently branched out in several intriguing directions, winning not only recognition for their innovations but also industrial clients.

Quantoz has developed their own cryptocurrency exchange called happycoins. However, they are absolutely not interested in cryptocurrency speculation, nor are they aiming to raise vast sums via a crowdfunding sale – known as an Initial Coin Offering. Their sights instead are set on a part of the market that is still coming into its own but where blockchain and cyber currency are likely to have their biggest influence.

Digital Payment Networks

Quantoz recently launched a new consortium to create something they are calling QPN. The Quasar Payment Network is intended to enable a peer-to-peer micro transaction network between consumers, enterprises and IoT. In other words, the firm is using blockchain not to become a traditional bank but to build a payment gateway that enables enterprise.

QPN creates a gateway between traditional bank accounts and digital wallets required for interacting with blockchain controlled systems.

It means that there is a direct two way exchange between traditional cash and the tokens that power the network. For example, an automobile could pay a sensor to understand current driving conditions. This information could then be used by the car to help the driver handle the road better. In turn, this safety feature and the driver’s use of it could be factored into insurance premiums, even if you are only renting a shared automobile.

In this kind of scenario, the digital tokens that are being transferred in the system are valued by the cost of machine time, which itself depends on the cost of electricity. They are a kind of currency, although the best way to understand them is as digital tokens.

Automated, controlled environments are coming fast. By looking beyond short term speculation, and understanding blockchain as an enabling infrastructure for a connected world, firms like Quantoz will have an important role to play.

Marguerite Arnold is the founder of MedPayRx, a blockchain healthcare startup in Frankfurt. She is also an author, journalist and has just obtained her EMBA from the Frankfurt School of Finance and Management.

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Lest We Forget

This past week we saw violent protests in Charlottesville, USA. They deserve our attention.

A rally called “Unite the Right” had formed to prevent a statue of Robert E. Lee from being torn down. Lee was a General during the American Civil War who fought for the Confederacy, a collection of southern states that supported the continued existence of slavery.

Racial tension remains an ongoing issue within America, and in that context some have called for visible public symbols, like Confederate statues, which call to mind past conflicts and fan the flames of ongoing tensions be moved to museums or elsewhere.

Some would say this is the wrong thing to do because where do you draw the line? When do you stop removing statues? George Washington, the first President of the United States, was a slave owner. Should all of Washington’s statues also be moved to museums?  Obviously this is a nonsense argument, since the American Founding Fathers are central to America’s identity. Although, it does highlight some key questions. Is it appropriate to pull down statues? And, what is the best way to reduce racial tensions?

On its face, removing a statue might be seen as erasing history, destroying cultural heritage, or censoring ideas. Clearly it is not something that should be done lightly. However, it would seem appropriate in certain circumstances, for example if a statue is being used as a rallying point by racists, bigots, or extremists. It might be argued that pulling down a statue will in time help people to forget past conflicts and thus move forwards together. However, it is worth remembering that removing statues does not by itself remove social tensions. Ultimately, the only antidote to conflict is not collective amnesia but community forgiveness and reconciliation. It is not necessary to forget the past in order to forgive others and move forwards, and it may not even be sufficient. Research suggests that animosities can linger on long after the original facts that caused hard feelings are forgotten.

Unfortunately, these issues are highly politicised, and moving forwards together is not what most people engaged in the issue are focused on right now. The Washington Post reported that at the Charlottesville protest “[a] lone figure stood inside Emancipation Park, offering water and holding a sign that said, “Free Hugs.” Tyler Lloyd said he came hoping for a peaceful solution. The rallygoers accepted his water but declined the hugs.”

Shortly after the protests, President Trump poured gasoline on the fire by failing to clearly denounce hate speech (including pro-Nazi, anti-black, and anti-Semitic slogans) chanted by many of the protesters. In his initial address he condemned “hatred, bigotry, and violence on many sides.” While pulling down statues may not be the solution to racial tensions, it is hard to see how this amounts to hatred or bigotry when its intent is the opposite. And so, what Trump was actually doing was drawing a moral equivalence between the protesters engaging in hate speech and the counter-protesters opposing them. In response to Trump’s comments, David Duke, former Imperial Wizard of the Ku Klux Klan, tweeted “[t]hank you President Trump for your honesty & courage to tell the truth about #Charlottesville…” As if being endorsed by the KKK weren’t bad enough, a dozen CEOs also stepped down from Trump’s advisory councils in protest. As a result, the Strategy & Policy Forum and the Manufacturing Council are to be disbanded.

Are we living in base level reality, or is this one of Elon Musk’s distopian simulations?

The events surrounding Charlottesville give us a glimpse into the way Donald Trump thinks. He did not clearly denounce hate speech in his initial address, and while some have taken this to mean that Trump is a Nazi sympathiser it seems unlikely. He denounced the KKK and neo-Nazis as ‘repugnant’ two days later. However, he later defended his original morally ambiguous comments.

Trump’s willingness to spin on a dime and play fast and loose with tightly held American values highlights what many people already knew: Trump is a narcissist. He is more interested in his own agenda than what anyone else thinks. This means he is willing to tacitly support those who support him (remember that the alt-right was part of his support base during the election), and will viciously attack anyone who attacks him (CNN, the Washington Post, and other ‘fake’ news organisations). Trump’s narcissism is dangerous not because he intends to hurt others, but because he is casually indifferent to the agenda of anyone who is not Trump. What this means is that there is no way to understand or predict his behaviour, expect by knowing that he will at each step along the way reliably do what suits him best at a given point in time.

So where does that leave us?

The world finds itself at a delicate moment in history when the President of the most powerful country in the world clearly prefers expediency to morality, and has publicly demonstrated a casual indifference towards overt prejudice and discrimination.

In a heartening show of resistance, during the week a video released by the US War Department in 1943 went viral. It encourages Americans not to fall for the fascist rhetoric of prejudice and division. It is a positive message and if you haven’t already watched it, I encourage you to take a look. Lest we forget.

What a Business Financial Statement Can Tell You About the Health of Your Business

When you run your own small business, it can be difficult to keep an objective distance from what you do.

Bills come in, sales go out, you have your day-to-day goals and you watch the curvy line of profit and loss make its inexorable progress throughout the financial year. You have your big one-year and five-year plans, and it takes a serious upheaval for you to reconsider them.

Even if things take a surprising turn – a rough patch or an unexpected boom period – it is human nature to swallow these changes and rationalize the impossibility of them changing the business plan on which you worked so hard. Maybe you assure yourself that things will work out anyway, or that this is no time to take a risk by deviating from your roadmap.

If you alone are responsible for this business plan and for keeping your company afloat, there might not be anyone else around to challenge your views. This is just one reason why maintaining your company’s financial statement is wise business practice. It also means you have a document ready to present to potential investors or collaborators, and that you’ll only need to give it a tune up when the time comes to approach your bank for a loan to take your business to the next level.

But while it’s always pleasant to look at a sheet of healthy, blossoming figures, even when business is booming the actual process of putting your financial statement together can be intimidating. If you started your company because there was a service you were keen to provide, or an idea for a product you were excited to build and sell, then sitting in front of Excel trying to make the numbers add up probably seems difficult – and definitely not a lot of fun.

When you break the document down into its three component parts, however, it starts to seem more straightforward. And once you’ve created your first one, you’ve done most of the hard work – and all that remains is to update it every quarter, or when you are faced with an investment opportunity.

So what are those three components all about?

The first section is your balance sheet, which gives a birds-eye view of your company’s position. The left hand side of this sheet should show your assets – the cash value of the stock and property owned by the company. This is broken down into ‘current’ assets, meaning those that are likely to be converted to cash within the next twelve months, and ‘non-current’ assets, indicating those you’ll hang on to for longer, such as office furniture or vehicles. The right hand side of the balance sheet is your liabilities – the debts you need to pay. Again these are divided into current liabilities (such as a small loan that you will repay within a year) and non-current ones (your mortgage, for example.)

The balance of this section (your assets minus your liabilities) is represented as the ‘shareholder’s equity’ – what you would be left with if you sold off your assets and settled your debts right now.

The remaining two sections provide different ways to look at the current profitability of your business. Section two, your Income Statement, pits your revenues and gains (including sales, service charges, and any interest you might be earning on your business account) against all expenses and losses (equipment, salaries, rent etc.) for a given period, most commonly the past quarter. This gives an indication of the general health and profitability of your business as it stands.

The final section, your cash-flow statement, is a more specific version of the same thing. Here, your profits and losses should only refer to the cash that’s come in or gone out over the same period. It is a more tangible picture of the current state of your business, not taking into account non-cash elements such as depreciation.

To give you a clearer look of just how it functions, you may be interested to take a look at this handy new visual guide – a kind of dissection of the business financial statement. Get your first statement out of the way, and you’ll find you have a much clearer perspective on the current health of your business – and what you need to do to make the next great leap.

G. John Cole is a digital nomad and freelance writer. Specialising in leadership, digital media and personal growth, his passions include world cinema and biscuits. A native Englishman, he is always on the move, but can most commonly be spotted in Norway, the UK and the Balkans.

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Tips for Landing Your First Job at a Digital Agency

Every year, recruiters get hit with waves of resumes from newly graduated college students looking for internships or starting positions at top firms. In order to make an impact with your potential employer, your resume has to stand out. To help you do this, we made a helpful guide on applying to and landing jobs in digital fields. (This advice is equally relevant for graduates looking for management consulting jobs.) After reading this, you will be able to conduct a successful job search for either an internship or part-time position. So, what are you waiting for? Let’s jump right in. Your job search journey begins with networking!

1. Networking

Landing a job at a digital agency is all about who you know. You have to increase your personal brand to network with industry leaders. One of the easiest ways to do this is to create a LinkedIn profile. Even better, attend conventions pertaining to your industry. There you will be able to meet and connect with new faces who can help advance your career.

2. Use Social Media

Although millennials are familiar with social media platforms, these tools can help you land your dream job. You can use social media tools such as Facebook, Twitter, LinkedIn, and Instagram to help you get to know your employer, as well as the company they represent. You can also use these platforms to promote your professional brand.

3. Do Your Research

A necessary step towards landing your first job is to research the companies and graduate programs that interest you, and any recruiters that can help you land your first role. Be sure to use your social media platforms to their full potential. The more knowledge you have about the company that you’re apply to, the more likely you are to be successful.

4. Create Custom Resumes

Every firm will be different, and have slightly different requirements, that’s why it’s important to alter your resume to fit the job you’re applying for. You should highlight skills and experiences which demonstrate the qualities the company is specifically looking for.

5. Have an Awesome Personal Website

Whether you’re a coder, designer, writer, or aspiring consultant your personal website has to look amazing since it portrays not only who you are, but also the style and quality of work you do. Employers and recruiters will pay attention to every detail. If you leave any stone unturned, it may cost you an interview or a job offer.

6. Follow Directions

When you are applying for jobs, read all of the instructions and follow them carefully. Applications that do not follow the firm’s criteria may not even be looked at.

7. Ask For Advice

Don’t be nervous to talk to the recruiter or company you want to work for. Often they will be happy to provide you with advice on how to apply, and answer any questions you may have about the process or the firm. If you have any contacts who work at the firm, ask them if you can buy them a cup of coffee and ask them a few questions about the organization. Even if the company is not currently hiring, doing something like this can help you make a great first impression, and be in a better position to land your dream job in the future.

8. Be Passionate

If working for a web design agency is what you want, then make sure the firm knows how much you want it. You can stand out from all the other applicants by demonstrating your passion for and commitment to your industry. Having a genuine interest in what you do can make up for a lack of work experience.

9. Don’t Be Afraid To Ask Questions

At the end of the interview, the interviewer will likely ask you if you have any questions. Even if you think you have the answer, ask a question anyway. This shows the interviewer that you are truly interested in the position and the company.

10. Show Your Appreciation

This is one of the best and easiest interview tips to follow. After the interview is over, send a thank you email to everyone you met. This will not only exhibit your appreciation but also your interest in working with the company.

Finding your first real job may seem like an anxiety-inducing task, but with a little preparation, it can be done. All you need is a little dedication, effort, and patience and in no time at all, you will have a foot in the door.

With these ten tips in mind, your job search will be much easier and less stressful to complete.

Do you have any advice for first-time job seekers? Please share your thoughts in the forum!

Wassana Lampech is a medical technology graduate and a freelance writer. She has been writing since her college days, and has been a freelance writer for the past 4 years. You can follow her on Twitter here.

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