Fintech Review — Issue TWO by Mei Lin

ADHIVE

First AI-Controlled Influencer Marketing Platform

CHECKBOX

A Regulatory Framework or a Business Killer?

DFINITY

A New Era for Blockchain

SHIVOM

Empowering the Next Era of Genomics

T8EX

World First Purely Crypto-to-Crypto Digital Exchange

ZILLIQA

Next-Gen High Thoughuput Blockchain Platform

FINTECH ERA: BEGINNING OF THE END FOR BANKS?

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finance / technology / blockchain / investment

ISSUE TWO APRIL 2018

Editor in Chief Acqeel Ziyad

Associate Editor Levi Szallasi Director of Operations Michael Kitchener Business VP Leon Liu Director of Communications Stefan Sathianathen Creative Director Meiying Lin Hanmu Liu Marketing Director Samuel Jordan Technology Advisor Khal Achkar Business Advisor Kevin He Contributors Angela Guan, Aleksandar Svetski, Chris Li, Dion Biritz, Daniel Ong, Davin Park, Felix Lu Yang, David Samuel,Gerald Chan, Hongrui Shen, Kevin Kirchman, Mehreen Hamza, Michael Kitchener, Michael Kerrison, Stefan Sathianathen, Thomas Niven, William Tien, Fintech Review Community.

GENERAL DISCLOSURE/DISCLAIMER

This magazine is prepared Fintech Review. This magazine is solely intended for the clients of Fintech Review, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of Fintech Review. The research set out in this magazine is based on information obtained from sources believed to be reliable, but we (which collectively refers to Fintech Review, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this magazine. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. Fintech Review accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. Fintech Review, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. Fintech Review may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts,

ratings or risk assessments herein constitutes a judgment as of the date of this magazine, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this magazine and Fintech Review is under no obligation to update the information in this magazine. This publication has not been reviewed or authorized by any regulatory authority in Australia, New Zealand, or elsewhere. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this magazine were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by Fintech Review (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this magazine that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this magazine.

IN THIS ISSUE ISSUE TWO APRIL 2018

ANALYSIS 06 MedicalChain and the Many Use Cases of Blockchain 08 AdHive: First AI-Controlled Influencer Marketing Platform

50 Asset Management, Blockchain and Dcoin 52 Lamden: A Blockchain Platform Built for Developers

INTERVIEWS 12 LendingHome Interview 34 TiENPAY Interview

56 OriginTrail: Enchancing Supply-Chain and Improving Transparency

46 WorldFree: A New Stable Coin

FEATURE ARTICLES

OPINION PIECES

22 Simply Wall St, Quality Data and Analysis for the Public Investing Made Easy

10 Chinese Technology Giants Seek to Expand Competitive Mobile Payment Solutions Abroad

62 Browser-Based Mining: the Ups, the Downs, the Democratic

24 Dfinity, A New Era for Blockchain

17 Fintech Era: Beginning of the end for banks?

30 Coinvest and Increasing Accessibility to Cryptocurrency Investments

26 Ethereum With a Makeover: How These New Darlings of the Crypto Space are Looking to Change Blockchain Forever

14 Shivom: Empowering The Next Era Of Genomics 20 Coinbase: The Public’s Exchange

32 T8EX: World First Purely Crypto-to-Crypto Digital Exchange 38 ZILLIQA: Next-Gen High Thoughput Blockchain Platform 40 Checkbox, A Regulatory Framework or a Business Killer?

64 Blockchain’s Killer App: Money 68 A Mature Cryptocurrency Industry: Where We Are And Where We Need To Be 70 “Expert Opinions” vs Crypto

43 Robo-Advisors

72 Buzzwords: Be Aware

44 Blockchain Beyond Cryptocurrencies

74 The 4th industrial revolution

54 The Future Implications of the UK-Australia Fintech Bridge

TUTORIAL

58 Assessing Fintech’s Risks

60 Cryptocurrency Mining Abroad

MedicalChain and the Many Use Cases of Blockchain

MEDICALCHAIN AND THE MANY USE CASES OF BLOCKCHAIN W r i tten b y: Michael K i tc he ne r W ebsi te : www.medica l c hai n. c o m

“Blockchain for electronic health records.”

Telemedicine Platform

Medicalchain will provide immediate utilisation of health records by allowing patients to communicate directly with doctors and share their health records - for online consultations.

MedicalChain utilises the immutability of Blockchain to maintain a single, secure, and correct version of a patient’s medical records and thus eliminate the various hazards surrounding incorrect, or incomplete medical records. This project, led by a UK based team of both physicians and those with business backgrounds, illustrates some of the less obvious use-cases of Blockchain in a tech application, demonstrating how Blockchain lends itself to facilitating many interesting capabilities. SO WHY BLOCKCHAIN? Firstly, the primary benefit of Blockchain in such a platform is its immutability. The nature of a distributed record will ensure that there is only one, correct, version of a patient’s medical history. This is one of the core benefits of Blockchain technology and has been used in many other applications, but in this particular case, when used to ensure a patient’s medical history is correct, various health hazards and potential incorrect treatment of injury due to the split, and often incomplete, nature of records maintained on legacy systems may be avoided. Another benefit that MedicalChain will bring to patients is increased privacy, and authority over access to their medical records. MedicalChain returns control to the user and allows them to assign different levels

fintech review

MedicalChain and the Many Use Cases of Blockchain

of access to different agents, and, if a patient wishes, limited periods in which relevant parties may read and write data onto their record on Blockchain. In the interests of transparency (and thus in the spirit of Blockchain) users will also be able to access a log of everyone who has accessed their medical data. Blockchain makes this system of privacy and control possible and ensures that this data cannot be tampered with. From this feature the utility of a Blockchain based platform expands exponentially: Being hosted on the Blockchain will also allow these records to provide for more effective telemedicine communication. Telemedicine refers to online consultation with medical professionals via webcam and microphone. Currently, telemedicine is inhibited by the lack of access to health records – making it much harder for medical professionals to assess and help patients through such digital methods. However, through MedicalChain, patients may grant doctors permission to access their records as they see fit – facilitating far greater utility in telemedicine.

over their own records also brings opportunity for both patients and researchers by participating in a data market. MedicalChain allows for patients to realise the value of their medical data aby providing patients with the ability to sell data to medical research institutions. Naturally, this process will be transparent and, in most cases, the identity of the user behind the data will remain anonymous. Furthermore, through the use of Blockchain, patients who participate in this exchange will be rewarded with MedTokens – the coin behind the platform. Finally, being built on a Blockchain, MedicalChain lends itself to the creation of third-party applications that will interact with the data hosted on the Blockchain, providing services like medication assessment and dietary advice.

Additionally, The authority that MedicalChain confers patients

fintech review

AdHive: First AI-Controlled Influencer Marketing Platform

more transparent and clearly available to any influencer. AdHive uses new technologies such as their AI machine learning algorithms that can handle communications between advertisers and influencers.

FIRST AI-CONTROLLED INFLUENCER MARKETING PLATFORM W r i tten b y: Chris Li W ebsi te : www.a dhiv e . tv

P l atf o r m E t he re um P r e - s al e b o n u s D ay 1 - 3 ( J a n 3 1 – F eb 2) : 20 % Bonus D ay 4 - 7 ( F eb 3 – F eb 6) : 15 % Bonus To ken S a le (P h a s e 1 ) F e b ruary 21 , 20 1 8 To ken S u p p ly 4 5 0 0 0 0 00 0 A D H w i t h 30 % be i ng

The fastest growing industry in advertising is digital advertisement, it currently has the highest market share in terms of advertisement spending totalling $591 billion in 2017 (Statista 2018). This despite losing billions of dollars in potential revenue in the face of obstacles such as AdBlock. Online advertising is a steadily growing industry sector, and it seems to be only further increasing as newer generations spend more time on phones, computers and many other electronic devices. 7 out of 10 US internet users aged 18-70 use social media each month (IZEA 2018). According to AdWeek, 74% of internet users use social networking prior to making purchasing decisions online and 49% of users rely on purchase recommendations from influencers.

o f f e re d i n P h a s e 1 t o k en sa l e . Pha se 2 w il l b e c o n d u c t ed i n 20 1 9 wi th the o t he r 3 0 % t o k en s u p p l y. H ar d C ap $ 1 2 m i l l i o n fo r P h a s e 1 . Ju r i s d i c t io n s B a r r e d f r om P ar t i c i p a t in g O nly accr ed i t ed U . S . c i t i z e ns a r e a ll ow e d t o p a r t i c i p a t e. C h i ne se c it ize ns a r e b a n n ed .

fintech review

However, there are several issues in the standard digital advertising system. Influencers and advertisers spend too much time communicating and handling details, slowing down progress or even putting off potential influencers. Secondly, there is a large amount of uncertainty when discussing rates, many influencers don’t share the rates that they earn therefore making a fair deal is a much harder task. AdHive endeavours to remove all these barriers, making prices

ADVERTISERS The advertiser can choose the target audience with AdHive’s API, set the advertising task, create triggers, and request explanations of recognition modules. The advertisers do not need to choose a specific influencer, the AI controlled platform does it automatically, saving time and money for both the influencers and the advertisers. The length of the campaign is determined by the advertiser and not limited by the AI. It could last anywhere from 2-3 days to even a year. At the end of the campaign, the advertiser will receive a report with the number of contacts and target audience with links to a video of task execution. INFLUENCER The AI platform is designed to work with influencers such as video bloggers from YouTube, Instagram etc. Video recognition modules are included and will be deployed in 2017. All functionality for influencers will be available from the client cabinet with notifications via any channel chosen- email, SMS, messengers and app notifications. The wallet will provide the mechanics for convenient spending or saving of the tokens. The Security deposit is an AdHive Token (ADH) deposit which the influencer should make to ensure a proper task execution. The bigger the potential reward of the influencer, the bigger the Participation balance and Security deposit needed. PLATFORM The AdHive platform is a web service with integrated AI modules for video and speech recognition and trigger detection. The AI modules control the placement of advertising material on each channel where the channels are monitored daily for video updates. In order to make the platform accessible from the very beginning, the primary communications will be organized via chatbots integrated with new popular instant messengers. It will enable users to submit new proposals, receive notifications about proposals, and inquire about additional information.

AdHive: First AI-Controlled Influencer Marketing Platform

Co-founders of AdHive, Dmitry Malyanov and Vadim Budaev also worked on project Scorch. AI and Webvane. Scorch.AI is an AI which can use machine vision, speech and sound recognition as well as memory augmented classifiers and time metrics (Scorch.AI 2018). The experience and knowledge obtained from project Scorch.AI will be very useful for creating the AI modules of AdHive. As of February 2018 there are currently 18 team members listed on the AdHive website, including six advisors.

Token sale participants Adhive founders

60%

18-months vesting schedule

Community grands & Bounties 6-months uniform vesting

3.5%

Network growth

16%

11.5%

Legal compliance

Reserce fund

Advisory board 6-months uniform vesting

Fig.1 Token distribution chart, AdHive Whitepaper 2018

Overall, there are minimal risks included in AdHive with huge growth potential. One of the key risks is that the AdHive AI may not capture the qualitative aspects of unique influencers. An example of this is a YouTuber who focuses on cryptocurrency is much more influential than a blogger with the same amount of views. But even with the minimal risk factors, AdHive has a solid and dedicated team with previous professional experience with Scorch.AI. This experience will serve

them well in the development of AI modules for AdHive. Software such as AdBlock and banner ads has resulted in advertisers moving towards influencer marketing. This has become the fastest growing sector of within the advertising industry which AdHive strives to capture. To conclude, AdHive has a great team of

professionals with experience to back up their ideas and visions. This project will be a unique first opportunity for an AI controlled environment, it holds great benefits for both users of the platform and holders of the ADH token. I’m very interested in this project and I know that it will capture the eyes of many investors, advertisers and potential influencers.

“ T h e most c u t t ing - e dge adv e rtisin g market .” Fig.2 Digital advertising market statistics

In 2017, the digital advertising market has surpassed TV

33%

35%

39%

Spending on native advertising is expected to double in three years

+67%

+113%

41%

38%

37%

36%

35%

2015

2016

2017

2018

Source: Magna Global

Video accounts for one half of digital advertising and is still expanding

Other Digital TV

2015

2017

2016

Source: IAB Video Ad Spending Study

2020

Source: AdYouLike.com

fintech review

Chinese Technology Giants Seek to Expand Competitive Mobile Payment Solutions Abroad

CHINESE TECHNOLOGY GIANTS SEEK TO EXPAND COMPETITIVE MOBILE PAYMENT SOLUTIONS ABROAD Writ t e n by: D i o n B i ri tz

Many consumers in the U.S., Canada, Australia, New Zealand and much of Europe are no doubt familiar with mobile payment technologies and digital wallets like Apple Pay; launched in October 2014 by Apple Inc., as well as other competing solutions like Samsung Pay or Google Wallet. But have you ever heard of Alipay – a major player in the Chinese mobile-payments market which seeks to accelerate consumers into a truly cashless society? Well if you haven’t, keep reading, because of Chinese Tech giants – like Alibaba who back Alipay and WeChat who are affiliates of Tenpay – are now aggressively focusing on European markets. Alipay is a unique mobile-payments technology operated by Ant

fintech review

Financial, an affiliate of the e-commerce giant Alibaba. Interestingly, it launched in 2004, a full 10 years before Apple Pay. And that was a full 12 years after Alipay entered the Chinese market. Alipay’s headquarters are located in Shanghai, China, and you guessed it, it was created by the legendary Jack Ma. As of January of this year, Alipay has over half a billion users registered (520 million to be exact), with 100 million active users using the platform daily. However, hot on Alipay’s heels is another mobile payment solution, Tenpay, a similar service buoyed by WeChat. By the final quarter of last year (Q4, 2017), Alipay had just over half of the Chinese market share when it came to third-party, mobile-payment providers, while Tenpay was just shy of 40%.

Chinese Technology Giants Seek to Expand Competitive Mobile Payment Solutions Abroad

“ By Q4 2 0 1 7 , Al ip ay h ad o ver half of Chinese market share w h e n i t came to th ird- p ar ty, mobile payment providers...” What is interesting and truly unique about Alipay and Tenpay’s payment solutions, is that rather than storing a digital copy of your credit or debit card on a mobile device, Alipay uses a QR code to make unique payment transactions and authentication possible. For example, when eating out, all a consumer needs to do is present their unique QR code generated on their mobile app, which can then be scanned by the store, and presto, your meal is paid for right there and then! No more having to carry about cash or cards, whether they are physically or digitally stored. Is it possible that we may see something like Alipay or Tenpay here in the not too distant future? Well, that is what both companies are hoping for. The Chinese Tech titans which are backing their mobile-payment platforms are looking to quickly expand into foreign markets, signing partnerships with merchants in Southeast Asia region as well as Europe. Their entry ticket? They are following Chinese shoppers aboard and hoping to capitalize on the promise of booming tourism. It is no secret that it has been difficult for western companies

to break into the heavily controlled and regulated Chinese market, which is undoubtedly why we see certain of these same technologies not making their way into these markets until much later, if even at all – think censorship and Facebook. Nevertheless, this might have its advantages when it comes to truly free, global and competitive market-place, with customers vying for the best products at the best prices, even if this only takes place largely outside China – for now. With the recent developments in cardless cash, NFC contactless payment and digital wallets, mobile-payment solutions clearly appear to be the future when it comes to instore, merchant transactions. And given that quarterly data is now showing that the transaction volume through mobile payments is forging into trillions of $USD, overtaking cash in many economies, it is clear that traditional companies in this space that we have all come to know and love – like Apple Pay, Android Pay, Google Wallet, Paypal Here, and others – may see new, cutting-edge, alternative technologies from the far-east rival them for customers in their own home markets in the near future.

fintech review

LendingHome Interview

LENDINGHOME INTERVIEW Inter vi ewe d b y: Stefa n S athi anathe n W ebsi te : www.lending ho m e . c o m

FR: What are your thoughts on the current state of the Fintech market growth?

Fintech Review (FR): How is LendingHome changing the way people access loans faster? Anonymous: LendingHome is reimaging the mortgage process from the ground up by combining innovative technology with an experienced team. This has allowed LendingHome to be able to approve a hardmoney loan in 5 business days! LendingHome’s goal is to create a seamless, transparent process for homebuyers, real estate professionals, and investors. LendingHome offers short-term hard money loans and home mortgage loans, and easy access to a portfolio of high-return real estate investments. FR: How does LendingHome differ from credit unions, and banks? Anonymous: LendingHome does not have a physical location that borrowers can walk into. This allows LendingHome to offer better rates and terms, and focus on developing our products. FR: What does your role as Senior Strategic Operations Analyst entail? Anonymous: My main job as a Sr. Strategic Operations analyst is to streamline process and procedures, so everything we do is both efficient and effective. I also, drive growth by providing analytical insights around business growth potential, program, product, and customer engagement strategies. I then communicate proposals to senior management to demonstrate the potential impact and secure executive support to implement strategies I define and manage the collation of metrics and analytical insights to measure process efficiency and Effectiveness. I also contributed to cross-functional projects as needed: testing new systems, procedures, credit policies, mentoring new hires, data and reporting.

fintech review

Anonymous: I believe that the Fintech industry is still in the growth phase. I believe that there will be a lot more fintech companies that will arise in the future. The financial industry is archaic, and it does not suit the lifestyle of the new generation of working individuals. Accessibility and ease of use are things that the new generation is looking for. They don’t want to get a loan by going into a bank, or learn how to invest to get into the stock market. Now, they won’t have to with the number of Fintech companies that allow them to do this from the comfort of their own home, and/ore having the information available to them at their fingertips when they need it. FR: What is a problem that you believe that is ripe for Fintech takeover? Anonymous: I believe that globalizing the financial technology world so that is available to everyone. I believe a lot of fintech firms have take steps towards this, but have not been able to solve this issue fully. FR: How do you believe that blockchain technology will disrupt the financial industry? Anonymous: I believe that the blockchain technology will allow the world to be on level playing field as cryptocurrency is a universal currency. I feel that this is also an idea that has made great progress, but will not be adopted universally. It has however, given birth to a new generation of individuals that have bought into the idea and are hoping this is the wave of the future. FR: What is another Fintech company beside LendingHome that you find interesting and why? Anonymous: I’m very interested in Robinhood. That are making the equity markets accessible to everyone universally with $0 dollars per trade.

WE’RE REVOLUTIONIZING THE WORLD OF MORTGAGES We’ll give you the tools and information you need to buy a new home or invest in real estate.

www.lendinghome.com

Shivom: Empowering The Next Era Of Genomics

W ri t t e n by: G e r a l d C h a n W eb s i t e : w w w . s h i v o m . i o

Shivom is building the largest genomic repository on the planet by leveraging blockchain technology. Giving the power back to individuals by allowing them to securely own and monetize their genetic data, the Shivom ecosystem will comprise of an open marketplace where healthcare providers can add their apps and services, providing genomic data analytics and personalized medicine. GENOMICS AND THE BLOCKCHAIN Genomics is a branch of molecular biology that is concerned with the structure, function and mapping of genomes. The study of such provides valuable information about susceptible diseases and allows the development of precision medicine. The first sequencing of a human genome took place in 2003, costing researchers a staggering $3 billion dollars over the span of 13 years. Fast forwarding to present times, the entire sequencing process can now be done in a matter of weeks at only a fraction of the cost. Technological advancements coupled with plummeting sequencing costs has resulted in the exponential growth of genomic data

fintech review

$100,000,000

$10,000,000

$1,000,000

End of 2014 ~228,000 human genomes sequenced to date

$100,000

2008 4 more genomes published

$10,000 Feb 2001 Draft of 2 human genome sequences

Oct 2004 1st human genome sequence published

Sept 2007 2nd human genome sequence published

$1,000 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

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2014

2015

Fig.1 DNA sequencing cost per genome

acquisition. This growth is further expedited by governments spearheading major genomic data projects, with countries like England and Saudi Arabia announcing plans to sequence 100 000 of their citizens. Amidst this rapid increase of information flow comes about the problem of safety and

privacy. With few laws regulating the privacy and security of genome sequencing, genetic testing companies routinely sell data to third parties, unbeknownst to the donors of the data. Without control over this sensitive data, pharmaceuticals and research institutions rake in millions in revenue whilst donors are not compensated at all.

Shivom: Shivom: Empowering The Next Era Of Genomics

“A uni que and empowering Project , Shivom will enable DNA data donors to collaborate with revolutionar y changemakers in biotechnology, healthcare industr y, and government-ordained research institutes and contribute to an unprecedented era of medical mar vels.”

Encrypt

Individual/ Patient

Genome Information

ho7ert83j/ ajsd83jk0,s $ksd00kdg

Public Key

Key Generation

Shivom proposes a decentralized blockchain where users can secure and own their genomic data completely. Users who choose to share their data are able to do so with full control over their own genome information. Encrypted on the blockchain, the genomic data is hashed so donors can protect their own privacy and anonymity. Users are able to share their genome information with a private key and can control which data is shared and with whom, receiving incentives for sharing their data with research companies. To encourage new donors to join the Shivom ecosystem, full genome tests will be offered at subsidized rates. This ecosystem is centered around the genomic repository with donors, pharmaceutical companies, developers and partner organizations interacting in a fully integrated and open community. Shivom envisions that this shared economy will pave the way for a collaborative and data-driven ecosystem that would lead to the development of cutting-edge precision medicine. THE TEAM The growing Shivom team is led by Dr Axel Schumacher who holds a PhD. in genetics and has over 20 years of experience in research and development in this field. He is the author of the “Blockchain and healthcare strategy guide” which is commonly used as a standard in the healthcare industry. He is assisted by chief technology officer Akash Garauv who is a blockchain expert that started India’s first blockchain company Auxesis Group; one of the most influential blockchain companies to date. Incidentally, the wallet utilised on the Shivom blockchain is a wallet developed by the Auxesis Group.

Decrypt

Private Key

Genome Information

Researcher

Fig.2 Proof of concept, courtesy of Shivom’s pitch deck

The Shivom team also consists of an innovation council with notable members like Dr Jay Sanders, the father of telemedicine and Antanas Guoga, the Lithuanian representative in the European Parliament. More recently, the former prime minister of Estonia, Taavi Rõivas also joined this innovation council. PARTNERSHIPS A memorandum of understanding between Shivom and the Indian state of Andhra Pradesh was signed. This partnership is aimed at revamping the health-care system of Andhra Pradesh by providing more personalized care following a major pilot of the Shivom platform (Cryptoland PR, 2018). Another great partnership was formed with Genetics Technologies Limited, an ASX listed company that specializes in molecular diagnostics. CLOSING THOUGHTS Shivom has a revolutionary idea to create a disruptive genomics ecosystem where the data is owned by the donors themselves. By exploiting the transparent and immutable nature of the blockchain, Shivom allows individuals to have full control of their data and be compensated by doing so. As the first company in this industry to utilize the blockchain for genomics, they have the first movers advantage. With the scale and quality of their project, facilitated by a team deeply experienced in both the blockchain and medical sector, Shivom has the means to be competitive and realize this idea by democratizing the current state of the data market.

fintech review

Section Title

Decentralised Organisations On The Blockchain

eInc Organisation can Issue Shares

Issue Voting Rights

Manage Employees

Name Service

Pass Proposals Raise Funds

Setup and run eInc Organisation

We are live fintech review

Pay Salaries

QR CODE OR

einc.io

Fintech Era: Beginning of the end for banks?

FINTECH ERA: BEGINNING OF THE END FOR BANKS? W r i tt e n b y: D a vin P ark and D ani e l O ng

“ N o rth Am erica n ba nk s face t h e p o te nt ia l of a 3 4 pe rce n t loss i n revenu es from such fi n te c h d isru pt ions.” The fintech revolution is here, and it is here to stay! Pretty much anything today can be done over the phone and digitally. You can withdraw cash from the ATM without a card, one of your local takeaway restaurants are now accepting Bitcoin and other digital currencies as payment, what’s next?

Particularly in some of the banks’ most highly profitable sectors (small business and personal lending), we see that there has been a dramatic shift in the number of partnerships and investments by financial institutions and the involvement of venture capital funds in recent years.

According to the Global Fintech Report by PwC in 2017, disruptive and emerging technologies are shaping the change in the role of finance is (is instead of in) becoming more of an ‘enabler’ rather than a ‘provider’ of financial products and services. Financial decisions in the near future such as managing one’s personal finances and even providing advice on investment decisions will be based on a combination of contextual data analytics, artificial intelligence and machine learning bots. Fintech applications are very much relevant on a day-to-day basis, and consumers will be increasingly attracted to the products which provide them with the smoothest and most engaging customer service. As a result, financial institutions are increasing their efforts to embrace the nature of fintech or risk losing business to innovators.

To understand why there have been significant developments in this industry, it is important to understand the small business lending and personal lending industry. Previously, a significant proportion of small businesses and personal borrowers were not given approval for loans by banks. Moreover, these loans were still difficult for customers to access, with long processing times of up to eight weeks just to receive a response to their application. For those who were able to access new loans with banks, the loans tended to carry high-interest rates and fees due to the higher likelihood of default and absence of security. Banks were also able to continue to ‘squeeze’ small businesses to the penny because of the highly concentrated market and the lack of flexibility to move between lenders. Hence, interest rates on such loans were not competitive.

Given such a non-competitive market, this is what allowed fintech to have huge potential in disrupting the Australian small business and personal lending market. According to the Financial Times, in the United States, peerto-peer (P2P) lenders such as Lending Club and Funding Circle have been successful in disrupting and profiting from the loan market. Furthermore, North American banks face the potential of a 34 percent loss in revenues from such fintech disruptions. Back in Australia, fintech lenders such as Prospa and Society One have entered the Australian market and are ready to take profits from the banks. There are several categories of companies in the fintech lending sector. According to 2017 fintech report by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), in the fintech lending space, fintech companies can broadly be categorized into either balance sheet lenders or peer-to-peer (P2P) lenders. Balance sheet lenders provide loans which appear as assets on the lender’s balance sheets, sourced from debt or equity funds. These lenders are also entitled to principal and interest payments from the borrowers, whilst financing arrangements from their debt and equity stakeholders are made separately. On the other hand, investors are not in direct risk of delinquency for their loans but may incur risks where the loan portfolio by the lender fails to perform. Whereas with P2P lenders, they approach the system in two different ways: either through a direct economic relationship between an investor and borrower/s or through a trust structure, dependent on the online marketplace. Investors in this case, however, face a direct risk of delinquency unlike with balance sheet lenders. From all lenders and platforms for lending, algorithms are utilized by these fintech companies to assess an applicant’s creditworthiness by reviewing contextual data on the applicant. This technology has been able to contribute to significant improvements in a small business’s or personal applicant’s lending experience, where quotes are able to be quoted on the spot at personalized rates rather than the standard rates, loan applications can be processed by the hour and deposits can be processed in three to four business days. This has been a significant improvement for small business and personal loans, as opposed to the process when applying for a loan from banks.

fintech review

Fintech Era: Beginning of the end for banks?

ISSUE 1: INVESTMENTS BUT A QUESTION OF DELIVERING BENEFIT TO THE CONSUMER IN THE LONG RUN As an overall trend, banks and other financial institutions realize the usefulness and potential of fintech and are increasing their investments in fintech companies and intellectual property to diversify, grow and expand their range of financial products and services offered. According to the Financial Times, IT investments by Australian banks have grown by 2.5 percentage points as a percentage of total operating expenses since 2009. WBC’s reinvestment fund has been increasing investment targets in fintech start-up companies and the small business and personal lending market. NAB has recently acquired Wave, which delivers cloud-based financial management software with integrated financial services, targeted at small businesses. From 2010, Wave has been successful in securing over three million customers worldwide. As we can see the improvement in financial products and services through fintech applications, the market for small business and personal lending has never looked more promising. Despite the growing trend in investments and acquisitions showing the acceptance of fintech, for banks to stay relevant and remain a global

fintech review

leader in financial services in the long run, it is important for them to continue to be proactive in developing innovations. Ultimately by delivering this benefit, small businesses and personal borrowers will be able to take advantage of this to the fullest extent. ISSUE 2: VARIETY OF CHOICES AND TOO MANY OPTIONS FOR BORROWERS As stated in the fintech report by ASBFEO, “[w]ith the rapid growth in the number of lenders and the variation of fintech products, it becomes more difficult for SMEs to make informed decisions about which products and lenders best suit their circumstances”. ASBFEO’s survey showed that approximately half of those surveyed thought that the fintech lending sector had adequate transparency and disclosure, with one hundred percent of P2P lenders deeming it ‘less than adequate’. Whilst the need for transparency and more accessible information is recognized, the report highlights the deficiencies in the current offerings of fintech. There are a number of ideas for greater consistency and self-regulation of the fintech lending sector, with the utilization of standard definitions of fees being the most supported along with SmartBox and APRs. The general

consensus, however, appears to support systems of greater ease that can be implemented by all fintech lenders. “How credibility and trust will be built for the fintech sector in the long term” will depend on the regulations developed in the future and the responsible lending practices that the wide range of fintech personal and business lenders are able to maintain. As the sector continues to evolve, it is likely that change will be made towards improving these areas that are currently underdeveloped. The result will be clearer options and readily available information with consistency throughout the field to make more informed decisions. ISSUE 3: REGULATION AROUND FINTECH COMPANIES To be able to provide a financial product or provide financial services, one has to be eligible for a financial services licence, which involves taking necessary steps to maintain and comply with ASIC’s requirements including fraud prevention, anti-money laundering and Know Your Customer (KYC) compliance. In light of the rising developments in fintech, ASIC’s response and approach has been to foster innovation in this sector through their Innovation Hub. From ASIC’s Innovation Hub webpage, steps to lodging

Fintech Era: Beginning of the end for banks?

an application for a financial services licence have never been easier, with some companies able to receive “waivers from the law” subject to certain conditions. This means that some fintech start-ups are even able to test their financial services product without actually being eligible for a financial services licence or an authorized representative of a licence holder (Kollmorgen, Choice, 2017). The stance ASIC holds has its implications, with consumers needing to be well aware of the risks of using fintech products out in the market, which may only be using customers as subjects (ASIC, 2018).

match what the investors financing the loans considered acceptable. The money was returned to the investors, and LendingClub’s share price plummeted.” (Williams-Grut, Business Insider, 2016). From the current outlook of the market, banks and other financial institutions are still reaping the profits whilst disruption is yet to be fully realized, as there is no incentive to improve in the short term from an objective point of view.

It is also important to distinguish between the consumers behind the market. Many small business owners and personal loan borrowers might not be as well-informed in this particular area. Such consumers would tend to resort to banks and financial institutions, who offer the option of banking with the ease-of-mind, removing any uncertainties with technology and the infrastructure to be a one-stop shop in processing loans alongside simple banking such as withdrawals and deposits. Banks also have the reputation and the insurance which many fintech companies may not offer. “In 2016, it was reported that market-leading US Fintech lender, LendingClub, had sold about $30m worth of loans at a risk level that didn’t

While financial institutions are often a target of hacks, fintech firms are often more vulnerable to hackers. These firms obtain their competitive advantage through coding and algorithms to automate the decision-making process. The more connected the different systems of these firms are, the more susceptible they are to getting hacked. An example of this is the Bangladeshi central bank being compromised, due to their internal connection to the Swift network. In general, the greater use of technology and digital solutions expands the range of entry points for hackers. All it takes is a weak link to compromise the entire system. Additionally, most fintech firms are leanly staffed and are not equipped to deal with such attacks.

ISSUE 4: ATTACKS

SUSCEPTIBILITY

CYBER

Fintech is still a relatively new form of technology and has only been tested under a limited set of circumstances. There have been instances where such technology was built on a platform with inherent design flaws. Such flaws are not apparent at first glance and it is often too late to remedy when such vulnerabilities are exploited. This was illustrated when an investment fund, which raised funds on the Ethereum blockchain, was hacked for US$50 million, forcing it to shut down. This rapid evolution of fintech may cause the premature adoption of new technologies that have not undergone sufficient testing. It would be prudent to encourage cooperation between fintech firms to tackle such problems at its inception so that the undesirable effects of these attacks can be minimized. As such, regulators such as the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) will need to be proactive in redefining and shaping regulations around fintech companies and the complex technological processes and operations which come with the early stages of fintech. ASIC currently has a publicly available regulatory guide for Future of Financial Advice (FOFA) reforms, and while the sky’s the limit, it will be important to keep an eye out for key developments in this area.

fintech review

Coinbase: The Public’s Exchange

COINBASE: THE PUBLIC’S EXCHANGE Wr i tten by: Stefa n Sathi anathe n Webs i te : www.co inba s e . c o m

“T h e w or ld ’s mos t p op u la r way to b uy a nd sell b i tco i n , ethe re u m , a n d lite coi n .” fintech review

Coinbase is a United States based digital currency exchange company that has made buying and managing cryptocurrency easier and more accessible to the general public. Founded in July 2011 by Brian Armstrong and Fred Ehrsam, the company’s services were launched in October 2012. The services of the company are focused on cryptocurrency storage and transactions. By using Coinbase, one can securely purchase, store, and use their cryptocurrency with ease. At first, Coinbase only supported Bitcoin, though it has now developed its sphere to support other digital currencies, including Ethereum and Litecoin. Today, Coinbase has expanded thoroughly on the international level, providing buying and selling services for digital currency in 32 countries and a cryptocurrency wallet, which is used to store cryptocurrency, in 190 countries. Coinbase’s business is built on the simplicity of buying cryptocurrency on its exchange. On its exchange users can buy cryptocurrency similar to buying everyday products from Amazon. All users have to do is select a cryptocurrency and the funding method for the purchase before exchanging fiat money for cryptocurrency. The easy process to purchase cryptocurrency using fiat gives Coinbase their competitive edge, enticing new cryptocurrency investors to use the exchange.

Coinbase: The Public’s Exchange

Coinbase competes with every cryptocurrency exchange, but in terms of similar business models and target markets, Coinbase competes directly with Kraken, Gemini and Robinhood Crypto. Unlike Coinbase that has continuously focused on expanding their user base, doing this by making their platform available in 32 different countries; Kraken has focused on building a secure exchange for its users. Bloomberg New reported that Jesse Powell said, “It was clear after that hack at Mt. Gox, when they were down for like a week, that the exchange is really the most critical piece of the ecosystem...I wanted there to be another one to take its place, if Mt. Gox failed.” Kraken has worked towards building an exchange that users can use knowing that their cryptocurrency is safe. Gemini, is another US-based Coinbase competitor who is focused on attracting users and institutional accounts to their exchange. Gemini is currently the exchange that the Cboe Global Markets uses to determine the daily settlement price for Bitcoin futures. Robinhood Crypto is a relative newcomer to the cryptocurrency exchange game, they focus are currently building out their platform with the focus of no added fees for users transacting on their platform. Coinbase, Kraken, and Gemini have all recently suffered scaling

issues during the December 2017 Bitcoin bull run. All of these exchanges with the exception of Robinhood Crypto, were adding an excess of 50,000 users a day, a promising number since these businesses are a key factor for growth in the cryptocurrency market. Coinbase has positioned itself to become a great business in the future. They currently are one of the biggest exchanges with an average trade volume of $350,000,000 a day. Coinbase has a long road ahead of itself if it wants to become the leading cryptocurrency exchange. To reach this they have to continue to add stellar cryptocurrency offerings to their platform so users have a wide variety of cryptocurrencies to trade. Other than attracting new users through the introduction of other cryptocurrencies Coinbase’s introduction of cryptocurrency payments for online transactions will give the exchange a competitive advantage over other exchanges as more people begin trading cryptocurrency. For Coinbase to continue to grow they will need to introduce more tradeable cryptocurrencies or add new features to attract users.

fintech review

Section Title

Become a Better Investor

fintech review

Simply Wall St, Quality Data and Analysis for the Public Investing Made Easy

SIMPLE WALL ST

QUALITY DATA AND ANALYSIS FOR THE PUBLIC INVESTING MADE EASY W r i tte n by: S tefa n S athi anathe n W ebsit e : www.simpl yw al l .s t

Data, the key to making better decisions. When investing in the stock market, a single piece of data could mean that a stock rises 10% or falls and wipes an investors gains. Institutional investors pay hundreds of analysts and put hours of research into ideas before they become investments. Unlike Institutional who have deep pockets to spend money on quality research, the public does not have the time to do the same kind of analysis while finding investments to cover for the time investment put into the researching all the ideas. This is where Simply Wall St comes in; they provide institutional quality data and analysis presented visually for the public. Simply Wall St aims to make all of their customers better investors. They want people to make investment decisions that are good long-term investments that are non-emotional. Simply Wall St wants to do the fundamental research for you. Simply Wall St does this by putting all the necessary information need for a right decision into an infographic. The brain more easily processes infographics. Unlike large pieces of text, the brain can process visual information 60,000 times faster. By analyzing the knowledge that they put into infographics, investors will be able to make faster more through decisions that will help them in the long run.

https://www.schusterman.org/blogs/rella-kaplowitz/using-data-make-better-decisions http://www.yourarticlelibrary.com/investment/portfolio-s e -

Simply Wall St has been acknowledged for their work in this industry. They have continued to build their platform. Currently, they analyze over 15,000 stocks over three different continents every 6 hours. Looking at over 1,000 data points per company before the companies snowflake is calculated. A snowflake is an instant snapshot of a company. The snowflake calculation is one of the many infographics that Simply Wall St provides to investors to make decisions that no longer require hours of research.

lection/investors-kinds-portfolios-and-cut-off-rate/82830 https://rhdeepexploration.wordpress.com/2011/12/ 05/visuals-60000-times-faster/ http://www.t-sciences.com/news/humans-process-visual-data-better https://tax.thomsonreuters.com/blog/the-importance-of-visual-content-marketing-infographic-2/

Simply Wall St is an app to consider checking out. Its infographics are full of data and analysis that is worth using when making decisions. For those new investors just beginning to invest in the market, Simply Wall St has build functionality that will help ease those investors in the stock analysis to prevent overwhelming them. Simply Wall St will help shorten the time for the public to find good investment as ideas take too much time to research.

http://www.getfiredasap.com/2016/12/13/simply-wall-streview-i-talk-to-ceo-al-bentley-about-this-clever-stock-researching-tool/ https://www.canstar.com.au/wealthbricks-news/simplywall-sts-unique-approach-to-stock-analysis/

fintech review

Dfinity, A New Era for Blockchain

DFINITY, A NEW ERA FOR BLOCKCHAIN W r i tten b y: S tefa n Sathi anathe n W ebsi te : www.dfinity. o rg

“Dfinity will disrup t the cr ypto ecosystem with a n etwork that scales from Day 1.” Dfinity could be one of the first of many projects aiming to improve the already powerful Ethereum infrastructure. Since being invented, blockchain has been used to create virtual currencies, with the goal of wiping out financial institutions as the middleman. As businesses attempt to adopt blockchain into their business model in order to cut costs and increase efficiency, they need to be assured that the blockchain they adopt will be able to scale and meet all present and future business needs. Bitcoin’s technology is seen as the root of all blockchain applications, but it lacks the scalability to meet the fundamental requirements of all business. Ethereum can scale marginally better and its applications outside of a currency are limitless. This is where Dfinity comes to save the day. As business applications move from being traditional desktop applications to cloud solutions, the ability to scale becomes a tremendous task. Dfinity accomplishes this by redesigning the Ethereum network protocol to produce a network that can be scaled easier. Since Dfinity is primarily restructuring the Ethereum network, it is conceived as an extension of the Ethereum ecosystem.

J an 2 0 1 4 - P e b b le P r o je ct CC f or m i c r o p a y m e n ts Cus t om B F T c o n s en s u s s yste m s J an 2 0 1 5 - D F I N IT Y P r o ject Infi ni te b l o c kc h a i n c o m pu ter N e w id e a : a p p l y “ r a n d o mne ss” J u l y 2 0 1 6 - D F I N IT Y S t if tu n g I n cu b at io n by S tr i n g L a b s O rg aniza t i o n a l b u i l d -o u t F e b 2 0 1 7 - S e e d F u n d r a isi n g $ 2 5 M n e w f u n ds f o r R a n d D B uil d re s ea r c h S V a n d Z ur i c h Aug 2 0 1 7 - T e c h De m o n strati on s C op p er R e l e a se f e a tu r e s Se e ing i s b el i evi n g ! S e p 2 0 1 7 - M a in F u n d r a isi n g Es t . 5 0 M + C HF T he n ne t w o r k l a u n c h …

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For Dfinity to improve the Ethereum network they focused on three ideas: security, speed, and scale; otherwise known as Crypto:3. The core approach is counterintuitive as it revolves around random numbers. The network leverages the use of a top-level Threshold Relay chain that produces randomness and progresses with minimal “reorganizations” while resolving the “selfish mining” and “nothing at stake” problems. To make it easier for new miners to enter the network the chain records a single root hash that anchors all the data stored in the virtual computer, no matter how large it gets.

The key challenge that decentralized networks face is computing problems quickly. Current blockchain computations become final after a few minutes making it tougher for developers to reassure financial institutions that transactions will happen in a tamperproof fashion. By adopting the Threshold Relay chain, Dfinity allows transactions to occur faster without the loss of security. Network

Confirms

Finality

Variance

Bitcoin

6 0 m i ns

Ve r y h i g h

Ethereum

1 0 m i ns

High

Dfinity

5- 10s e c

Low

Similar to Ethereum’s DAO, Dfinity introduces a decentralised decision-making system called the “Blockchain Nervous System” (BNS). This “superuser” will be able to solve problems otherwise intractable without human intermediaries. The BNS will accept proposals from users for a fee. The BNS would then decide on proposals using votes made by users, “neutrons”. The BNS would learn to make better decisions as neutrons respond to different stimuli and feedback. The ability for the BNS to learn to only adopt proposals that are in user’s best interest will aid in enhancing the scalability of Dfinity.

Dfinity, A New Era for Blockchain

Proposal Processing Proposal Processing Proposal Processing

BNS BNS BNS

2. BNS evaluates proposal BNS evaluates proposal -2.Process is type dependent --2.Process is type dependent BNS evaluates Output is adopt proposal | reject -- Output is adopt | reject Process is type dependent - Output is adopt | reject 1. Submit proposal Submit proposal -1. Standard types of proposal --1. Standard types of proposal Submit A fee is proposal paid in dfinities - Standard A fee is paid in dfinities types of on proposal -- Deposit refunded adoption -- A Deposit refunded on adoption fee is paid in dfinities

3. Voting triggers decision Voting triggers decision -3.Exec. privileged EVM op codes --3.Exec. privileged EVM optokens codes Voting contracts, triggers decision Freeze move - Freeze contracts, move tokens Exec.arbitrary privileged EVM opcode codes -- Run privileged --- Run arbitrary privileged code Freeze contracts, move tokens Change economic parameters Change economic parameters Run arbitrary privileged code --- Upgrade the protocol -- Upgrade the protocol Change economic parameters -

Deposit refunded on adoption

Upgrade the protocol

Since Dfinity is building a new chain that will be able to scale while still ensuring a fast transaction times, the likelihood of businesses building on top of their chain is exceptionally high. The ability for miners to be able to mine within minutes of setting up hardware is enticing to a miner as they won’t have to download the whole chain. In addition, the Blockchain Nervous System will be highly regarded by business as they will be assured that significant changes to the chain will happen only when it has been determined to be in the best interest of the users. As a result, businesses will be able to build applications that store their data, make transactions and settle contracts knowing that Dfinity will be able to meet their requirements long into the future. Dfinity is still building their network, with their beta network (Copper network) to be released towards the end of Q1 2018. The expectation is that the Copper network will launch at the

end of Q2 2018. The initial Copper network will provide dramatic gains without implementing the crypto:3 scale-out systems scheduled to start appearing in later releases. The Dfinity team will be able to deliver a project that meets the needs of business’ so they can run their software on the cloud. The team brings years of development experience and deep theoretical knowledge in various fields that will benefit while building the platform. Dfinity has a group of members from École Polytechnique Fédérale de Lausanne (EPFL) working full time on the project at any given moment. With their extensive knowledge in cryptography, Dfinity will be able to create a new standard for cryptocurrencies. Dfinity is currently funded by String Labs, a Silicon Valley investor, incubator and studio focused on open protocol crypto projects. They held a private sale in 2017 raising an undisclosed amount of money. They are currently in the process of putting together the details for

their public crowd sale. Dfinity is one of those projects that if adopted will disrupt the crypto ecosystem. The technological advantages they will provide will aid them in becoming a crypto superpower. With recent network congestions due to increased transactions, faster blocktimes will only be a temporary solution as the network continues to scale. Dfinity’s network will be able to scale from day one while continuing to provide a quick and secure platform for decentralized apps to build upon. Dfinity is a project that should be watched very closely in 2018 as it releases its network.

fintech review

Ethereum With a Makeover: How These New Darlings of the Crypto Space are Looking to Change Blockchain Forever

ETHEREUM WITH A MAKEOVER How these new darlings of the crypto space are looking to change blockchain forever

fintech review

Ethereum With a Makeover: How These New Darlings of the Crypto Space are Looking to Change Blockchain Forever

“... i f the netw o rk i s no t ab l e to harness the transacti o ns made o n buyi ng w e i rd i nte rnet cats, ho w w o u l d i t play out i f actual b usi ne sse s ta ke upo n the i de a o f the b l o ckchai n?” W ri tten b y : A ng e l a G u a n

In the era of the blockchain, Ethereum’s creation is perhaps one of the most significant of its generation. While Satoshi initially brought the idea of the peer to peer network to the public eye, it is Ethereum that truly provided the fuel for crypto to take off. Before the creation of Ethereum, the crypto space was mostly limited to projects that were developed exclusively for the use as cryptocurrencies. Ethereum provided developers with a platform where anyone can build an application without having to establish an entirely new blockchain. This gave birth to the time of the Initial Coin Offerings (ICOs) where thousands of projects are able to utilise the Ethereum platform and smart contracts to decentralise a project with simple measures. In just the span of a few months, the crypto space exploded with ICOs. Along in the pool with meaningless ICOs looking to propagandise the average Joe into handing in his hard earned cash, are actually amazing projects that have opened up the horizons of the crypto space. With the industries and places that these daring ideas are attempting to reach, what seems to be the case is that the technology behind it is simply not yet up to speed. Shortfalls of the network that once remained hidden now stand conspicuous as real life applications are looking to be applied. Right now, the market cap of Ethereum run projects and tokens rocks up to an approximately 88% of the cryptocurrency market. The strain that the transactions of these ERC20 tokens can have on the blockchain proves to be very significant. As one might remember, just a few months ago, a virtual cat collection game nearly crashed the Ethereum Network, by clogging up the blockchain and causing gas

fees to spiral upwards out of control. What was learned from this bizarre event is that firstly, people really made a lot of money during the ICO frenzy to be spending a fortune on buying virtual cats with strange moustaches and upside down hats. Secondly, if the network is not able to harness the transactions made on buying weird internet cats, this raises the question of how would it play out if actual businesses take upon the idea of the blockchain and millions of transactions would have to be processed on a daily basis. It doesn’t make sense to be piling on gas fees simply to compete with the lady behind you for your morning Starbucks. SCALABILITY AND TPS I think one of the most cardinal issues that the broader blockchain is facing right now is the scalability of the network. One thing that should be noted is that CryptoKitties are not even entirely decentralised, as most of the game’s logic runs on the Cryptokitties’ servers and not in the ethereum smart contacts. If this partially decentralised application is able to congest the Network, it says a lot about how much progress that really needs to be made. “For Ethereum to compete with more mainstream systems like Visa and Paypal,” BlockGeeks writes, “they need to seriously step up their game when it comes to transaction times. While PayPal manages 193 transactions per second and Visa manages 1,667 transactions per second, Ethereum does only 20 transactions per second.” It’s understandable that the crypto community has reached a consensus here towards tackling the scaling problem that the Ethereum blockchain is facing. One of the more significant efforts to date is Raiden Network.

fintech review

Ethereum With a Makeover: How These New Darlings of the Crypto Space are Looking to Change Blockchain Forever

ERC 20

BALANCE PROOF A

ERC 20

BALANCE PROOF B

Raiden.network. (2018). What is the Raiden Network?. [online] Available at: https://raiden.network/101.html

Raiden uses off-chain technology to increase the network capacity. Operating as an infrastructure layer over the Ethereum Blockchain, Raiden will do this by “leveraging a network of payment channels which allow a secure transfer of value off-chain, i.e without involving the blockchain for every transfer”. Removing the need for a global consensus for every transaction. Previously, every participant needed to learn about every single update to the shared ledger. The hardware and bandwidth constraints setting a limit to the number of updates per second that can be shared on the decentralised network. Raiden’s vision is to eliminate this bottleneck and allow transactions by privately exchanging messages without involving the global consensus protocol. By acting like an off chain credit system, no actual transactions are actually processed until the very end. All the information is kept track off chain by opening a payment channel between the two participants. In this case, the number of transactions can theoretically scale infinitely. The only ‘on-chain’ transaction would be when the channel between the payer and payee closes and the net tally is exchanged.

fintech review

Once the Raiden Network expands, the efficiency of this system will also increase exponentially. Not every transaction will need to open a direct payment channel. If a route exists through the network of channels that connect the two parties, this will allow for the routing and interlocking of channel transfers; increased transaction speed. Raiden is also ERC20 compatible, as for the almost 90% of the tokens currently circulating the market are now able to exploit the scalability of the network. One of the other more recent progress is the Loom Network. This project differentiates from Raiden as instead of off-chain protocols, Loom adopts ‘dappchain’ technology; which are essentially mini blockchains. Loom Network attaches the side chain of specific projects to the main Ethereum blockchain. These dapp-chains are different in the respect that they are specific to tackle the scaling issue of the Ethereum Network, lifting the traffic from the main net.

Ethereum With a Makeover: How These New Darlings of the Crypto Space are Looking to Change Blockchain Forever

This sounds like there’s some kind of scalability trilemma at play. What is this trilemma and can we break throught it? The trilemma claims that blockchain systems can only at most have two of the following three properties: Decentralization (defined as the system being able to run in a scenario where each participant only has access to O(c) resources, ie. a regular laptop or small VPS) Scalability (defined as being able to process O(n) > O(c) transactions) Security (defined as being secure against attackers with up to O(n) resources)

GitHub. (2018). ethereum/wiki. [online] Available at: https://github.com/ethereum/wiki/wiki/Sharding-FAQ.

One of the problems that Loom Network does face is its level of privacy. Indeed, Loom admits “it’s not going to have the same level of security that the main Ethereum network will have.” As the Scalability Trilemma by the creator of the ether, Vitalik Buterin proposes, the scalability of the blockchain ought to have its tradeoffs. Although using dappchains alongside with the main Ethereum blockchain will release much of the stress over the main chain. These side chains are ultimately centralised under Loom Network’s control. As for the actions that are deemed not ‘worthy’ of being sent over the Ethereum blockchain will be kept tracked of by Loom. PRIVACY In tandem with our previous case, it is not only the ‘centralisation’ of the blockchain that may inflict harm to the level of privacy we are entitled to; the decentralised blockchain, alike, also has its downfalls. Indeed, the public blockchain’s highlighted strengths are its transparency, audibility and immutability, attracting many established companies and big banks to the idea of incorporating blockchain technology to their services. However, due to the very nature of the distributed ledger technology, current

blockchain use unavoidably allows close to full transparency. Every transaction over the public blockchain has to reach a global consensus. Hence, your data is really not so private as every minor detail is before the public eye. For blockchain to truly go mainstream, it is essential that some information can not be accessible by just anyone. “As seductive as a blockchain’s other advantages are, neither companies or individuals are particularly keen on publishing all of their information onto a public database that can be arbitrarily read without any restrictions by one’s own government, foreign governments, family members, coworkers and business competitors” - Vitalik Buterin, co-founder of Ethereum One of the notable complementary tech to Ethereum that attempts to provide an answer to this impediment is Keep Network. Keep Network’s proposal is to use private enclaves ; namely, the ‘Keep’, to store private information by operating away from the public blockchain. By doing so, the Keep allows smart contracts to use and manage private data without having

to be online, exposing to the public blockchain. Off-chain containers as such will be encrypted and secured using multi-party computation, storing private data hidden from the Network. A part of this system, each individual is allowed to access a small portion of the private data that is encrypted. Therefore, the only way to share that information is to gather the output from all the individuals and decrypted by the user’s private key. Private information can then now be published on the public blockchain with the safety of the encryptions by the keep’s public key; the information is hidden even from the keep itself.

CLOSING THOUGHTS Ethereum’s creation opened up a world of opportunities and innovation from the crypto community alike. We are living through a time where a technology is able to push the boundaries of our imagination and challenge our habitual tendency of conforming to established norms and what already works best. As time goes on, only robust dapps based on Ethereum will survive and advance, while others will become obsolete for real world use cases.

fintech review

Coinvest and Increasing Accessibility to Cryptocurrency Investments

COINVEST AND INCREASING ACCESSIBILITY TO CRYPTOCURRENCY INVESTMENTS W r i t t e n by: M i c h a e l K it chener W e bs i t e : w w w . coinve.st

Trading Rewards

Super Trader

Index Fund Management

Value Appreciation

Accumulate COIN rewards with every trade on the Coinvest platform.

Make profit from trades in your virtual investment portfolio.

Collect 50% trading fee revenue from users that invest in your personal index fund

Platform adoption, transaction volume, and buybacks increase COIN Value

Cryptocurrencies are an attractive alternative class of assets for investors worldwide. The high ROI, high volatility and cutting-edge technology make for a fast-paced, and exciting market. Furthermore, low correlations with the performance of traditional asset classes (like stocks and bonds) make cryptos a prime candidate for diversification, meaning they can be used to cultivate a healthy, dynamic portfolio.

time, knowledge and specialised expertise, making it difficult for people to effectively manage their own investments in cryptos.

Given the highly attractive returns that have existed thus far in this market it follows that many elite asset management funds have been created to allow investors to grab a slice of the greater-than1000-percent ROI pie. The issue with such institutional investors is that it is, in a way, extraordinarily opposed to the crypto ethos of decentralisation. Often there are very high minimum buy-ins to such funds, and the requirements for investments rule out the vast majority of people. Furthermore, investors often lack the

“1) Provide mechanisms for consumers to seamlessly, securely, and safely invest and use cryptocurrencies

fintech review

Coinvest, a Blockchain project holding an ICO, plan to remedy this lack of access through a decentralised investment market. Coinvest’s mission to democratise access to cryptocurrency investments should be achieved by the creation of tools that:

2) Empower anyone to create investment vehicles for a personally curated index of cryptonized assets using one platform, one wallet, and one coin” - Coinvest Whitepaper

Coinvest and Increasing Accessibility to Cryptocurrency Investments

“The world’s first decentralized investment trading market for cr yptocurrenacies.” The ability to create an index-like portfolio consisting of a large number of cryptos that can be sold and purchased in a single trade is of great value. This feature allows for far lower costs when making these investments than if the various elements in the portfolio were purchased individually. More importantly, it provides much needed accessibility to this unique class of investments.

transactions – meaning large transactions can lead to excessively (though proportional) large fees. Ultimately, it will be interesting to see the extent to which Coinvest can empower more regular investors and fuel the continued adoption of cryptocurrencies.

One strength that lies in Coinvest’s use of Blockchain is that all transactions and funds are managed by smart contracts and code – thus making the system trustless, and not dependant on the reliability of any third party. Coinvest’s revenue is derived from a flat $4.99 trading fee from all orders, bestowing a competitive edge against competing cryptocurrency exchanges where fees are a percentage cut of

fintech review

T8EX: World First Purely Crypto-to-Crypto Digital Exchange

T8EX: WORLD FIRST PURELY CRYPTO-TOCRYPTO DIGITAL EXCHANGE Wr i tten by: Stefa n Sathi anathe n Webs i te : www.t8 ex .co m

T8EX is TiENPAY’s cryptocurrency project aiming to solve multiple issues that crypto-exchanges face. Issues from currency storage on exchanges to difficulties for users in daily cryptocurrency transactions. T8EX won’t be starting from scratch for most of their solution. The projects parent company TiENPAY is already a major payment processor in the Asian market. They currently have a mobile wallet service that is available in and compliant with multiple countries, giving T8EX a considerable head start against other applications. With its unique solutions, T8EX may be the project that solves considerable issues that cryptocurrencies face.

“T 8 E X e mpow ers u se rs w i th PrePa id Deb i t Ca rd s, P OS Mac h i ne , NFC Ca rd & Al l - I n- One App.” fintech review

Like most exchanges, T8EX will provide users with the ability to trade cryptocurrency to cryptocurrency. Beyond that, T8EX is a new era for cryptocurrency exchanges. The issues that they are attempting to solve will make liquidating from cryptocurrency easier for investors. Unlike TenX and other cryptocurrency cards that must connect to other exchanges to dispose of cryptocurrency assets and convert to fiat at time of the transaction; T8EX will be using their own exchange for conversions. In addition, unlike most cryptocurrency cards, T8EX will be able to use their parent company TiENPAY to form connections to exclusively brand or co-brand prepaid cryptocurrency cards. These cards would allow users to sell their crypto assets within a minute using the T8EX exchange. By integrating fiat purchases with cryptocurrency, T8EX will be able to attract a larger user base due, to cryptocurrency holders wanting to use their money in more every day settings. By using TiENPAY’s payment connections, T8EX users can be assured that

T8EX: World First Purely Crypto-to-Crypto Digital Exchange

T8EX

Tokens for Everything, Tokens for Everyone.

their debit cards will be accepted at most and maybe all point of sale systems. The integration of a debit card that relies on the exchange will help T8EX assure users that the exchange will also have some liquidity. The new external features are great, but the additions to the core technology of the exchange may be the greatest improvement T8EX has done. With the rise of exchange hackings and users losing tokens due to poor exchange security it’s about time that an exchange addressed these issues by increasing the security while still continuing to provide users with a stable exchange to trade on. T8EX is planning to use multi-signature cold storage wallets and is going continue to upgrade its already enhanced security as the technology develops further. In addition, T8EX will require users to enable two-factor authentication to use the exchange and its vast features. T8EX introduces a new, more secure exchange where users can expect to survive well into the future. These steps may be a pain for many users to get used to, but in the long run, will help keep all their crypto-assets safe. Adopting a security standard equivalent to the industry standard reassures users that the exchange is using the best security precautions available. These new security precautions will keep user assets safe and will help set a new industry standard. Beyond the T8EX’s exchange, they will also become a payment processor. By creating a point of sale machine, T8EX brings their

value beyond an exchange. Long term adoption and use of this point of sale system in franchise type businesses will prove useful for the business as they would be able to benefit from the tokenization model. Since this POS machine will be able to accept cryptocurrencies as a form of payment, this would help maximize the access to the token. With a POS machine, the T8EX project will be able to reach new bounds for the cryptoecosystem. Allowing cryptocurrency to be accepted as a form of payment without having to be converted to fiat money will help mass adoption of the cryptocurrency. This would allow businesses to create their own tokens for reward systems which users can earn by doing tasks and then use towards purchases at that business. A POS machine will allow T8EX to be a leader in cryptocurrency adoption in the market. T8EX is a quality project built by industry experts. Unlike many projects in the market, where founders have little experience the industry that they are disrupting, T8EX is led by people who have been in the fintech space since the 1990’s. They have led other successful companies that have listed on the Australian Stock Exchange. In addition, they have experience and connections in payment industry due to their long careers in the space. T8EX is a project bound to bring good necessary improvements to the crypto to crypto liquidity while enabling users to make everyday purchases with cryptocurrency without complication.

fintech review

TiENPAY Interview

TIENPAY INTERVIEW I n terv i ewed by: S t e f a n S a t h i a n a t h e n W eb s i t e : w w w . t i e n p a y . c o m

Following their presentation at Blockchain Centre in Melbourne, we sat down with Will and Trevor to talk about their upcoming exchange T8EX which will be launched in Australia soon.

Fintech Review (FR): How is T8EX Related to TiENPAY and what is T8EX Coin used for? William Tien (WT): T8EX is related to TiENPAY in the fact that the T8EX Exchange is, in part, owned by TiENPAY Limited and it is clearly mentioned in the T8EX White Paper that TiENPAY Limited provides all the hardware and software tools which facilitate the flow of cryptocurrency tokens to and from the T8EX Crypto-to-Crypto Exchange. The T8EX Token itself is aimed to be used as a form of ‘gas’ and a reward mechanism for anyone taking part inside the T8EX Exchange and to incentivize other investors to take part in coming onto the T8EX Exchange Platform. FR: We’re quite fascinated about T8Coin’s use in the online movie industry. How are the T8Coin movie investments decided? WT: The T8Coin was a small-scale ICO carried out by TiENPAY’s Mainland China Team in the Summer of 2017. The conditions for ICOs at this time were adverse and challenging. T8Coin is currently wrapping up filming for the first few films and the T8Coin investments are evenly divided between making future films and seeking out new advertisement partners and the related costs coordinating and collaborating with our sponsors who are interested in advertising inside our movies using our patented Xtopp technology. FR: T8Coin may be viewed as a security by some legal authorities. What precautions

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has T8Coin taken to prepare for impending regulations?

WT: T8Coin is targeted to provide utility. We have been advised by a diverse range of legal experts and our focus is on growing and building relationships with those companies wishing to advertise. By keeping our focus on providing utility and by working as a close partner in movie media matters, we hope that we can serve a small niche market where traditional and forward thinking companies can have a platform to advertise by utilizing a patented technology and a strong logistical partner that we can provide for.

FR: Where are the majority of TiENPAY users from? And why do you believe that users from these countries are adopting mobile payments? WT: Without a doubt, the majority of TiENPAY users were originally targeted to be Mainland Chinese who are looking for alternative payment solutions as they travel abroad. The numbers and statistics for Chinese tourism abroad are staggering and unstoppable and we want to stay in from of this mounting trend. The roll-out strategy for TiENPAY will be in SE Asia, Africa, and other regions where a young and dynamic population is easily malleable in their payment habits and do not hold onto preformed psychological habits about what exactly a payment consists of, such as fiat, cards, or other traditional payment actions. FR: What advantages do users have by making payments through TiENPAY over other payment applications like PayPal? WT: TiENPAY very much function like some large

global rivals in the fact that we are also seeking to ultimately have individual corporate entities in each country in which we operate. The traditional payment companies are still very much stuck inside the world of fiat and all the red tape that comes along with that. Given our Company’s Top Management background, we are big believers in trends and market indicators. We are firmly positioning ourselves on an emerging trend that will soon achieve mass adoption and will upend the old generation of companies who refuse to innovate and adopt the new technology. It is because of our aggressive push forward that we are able to be noticed in the market and encourage even our competitors to take the next step forward as we all see immense potential looking forward. FR: Based on the amount of transactions occurring on the TiENPAY platform, what are the majority of transaction types occurring? (P2P, C2M, M2M) Why do you believe your users are using TiENPAY for this purpose? WT: Without a doubt the top two revenue streams will derive from our PrePaid Debit Cards and our Exchange activity. We are targeting the most average user that has the option to choose between several hardware tools. Each region presents different opportunities. We know that we have a growing list of partners that are very proactive in distributing our PrePaid Debit Cards to their user base which further provides traffic into our exchanges on the back end. We hope to use a healthy percent of our revenue to actively promote our POS Machine and find corporate partners that need a retail strategy to promote their own tokens and cryptocurrencies via numerous payment terminals. We simultaneously

TiENPAY Interview

believe that we are both following and creating the trends and therefore we have not settled yet on a one-size-fits all strategy or market logic for what works beset because everything is still very much in flux for discovering overarching trends, macro trends. FR: Is TiENPAY more centred towards mobile payments or positioned towards the online payments industry? Why? WT: TiENPAY is very much focused on mobile payments. Online payments are a mature and well established field, and the competition is well in place. Mobile payments are in their very nature, evolving and always in flux. TiENPAY is seeking to serve as a platform for numerous spending habit types, across the globe. We are steadily putting in place the framework for the average traveller and retail shopper to have the freedom to transition between their cryptocurrency and fiat by means of using our exchanges, across the globe. We are developing further the hardware and software tools so that our visiion for tokenization can take shape and build the momentum for mass adoption of token utilization via mobile phone, across the globe. This is our vision and forecast. FR: Why did TiENPAY decide to integrate Bitcoin and Ethereum into their Platform?

WT: TiENPAY made the decision to focus on Bitcoin, Ethereum and by extension all Cryptocurrencies and tokens several years back, as it became clear that Bitcoin was going to be a store of value. In the bigger picture, Our Team sees the fundamental utility in the underlying technology and smart contract functions. Tokens will continue to come and some will really disrupt certain parts of the traditional payment marketplace. Given that there are less barriers to entry in crypto versus working with fiat across the globe, it became much easier for our firm to focus increasing amount of time and resources into this emerging field. FR: What future additions does TiENPAY plan to integrate into their platform? WT: Currenlty, TiENPAY is carrying out a Roadshow across the globe, now passing thru Australia, and we are giving a show-and-tell about our hardware and software tools and our vision for the future. We are focusing on signing up payment partners. Our number one priority at this point in time is to work with payment service providers who are interested in expanding their service offerings by teaming up with us. We have a vision for where we will be in the coming months and we need some key partners signed up so we will have all the necessary framework set up in order to scale up our on boarding and adoption rate. We plan

to partner with all the larger companies such as WeChat, Alipay, etc as there are synergies and they can see us as a way to outsource their needs for dealing with cryptocurrency on a wholesale, settlement-based solutions provider relationship. FR: What are your thoughts on the current outlook and accomplishments of the Fintech industry, as well as the cryptocurrency space specifically? WT: Currenlty, TiENPAY is carrying out a Roadshow across the globe, now passing thru Australia, and we are giving a show-and-tell about our hardware and software tools and our vision for the future. We are focusing on signing up payment partners. Our number one priority at this point in time is to work with payment service providers who are interested in expanding their service offerings by teaming up with us. We have a vision for where we will be in the coming months and we need some key partners signed up so we will have all the necessary framework set up in order to scale up our on boarding and adoption rate. We plan to partner with all the larger companies such as WeChat, Alipay, etc as there are synergies and they can see us as a way to outsource their needs for dealing with cryptocurrency on a wholesale, settlement-based solutions provider relationship.

From left to right, Victor Chow (Co-Founder and COO), William Tien (Co-Founder and CEO) and Trevor (Business VP).

fintech review

Decentralization of Our Economy in the 21st Century

DECENTRALIZATION OF OUR ECONOMY IN THE 21ST CENTURY Wr i tten by: Ger ald Chan

In this new digital era, many emerging technologies are threatening the current financial system. We now live in a world where lending and borrowing can exist without banks; one where ideas can be financed by crowds without financial institutions; one where peer-to-peer transactions can occur without the need of a bank’s clearance. In theory, blockchain technology is poised to disrupt the financial system by reducing transaction costs significantly and replacing various aspects of legacy technology. In reality, the path to mass adoption is fraught with difficulties, with ever tightening regulations and the extreme volatility of cryptocurrencies serving as major obstacles. DRAWBACKS OF A DECENTRALIZED SYSTEM While blockchain technology is indeed revolutionary and does provide better security and privacy features, it does come with its downsides. That is, the performance of such a system is likely to be impaired. In a decentralized system, participants will rely on a set of rules to reach a consensus, which is a lengthy process due to information having to propagate across the entire network. In the case of Bitcoin, the first currency to utilize blockchain, a proof-of-work algorithm is used to reach a consensus. This is a time-consuming and energy-intensive process that only rewards users that can afford powerful machines to run the network. Lengthy settlement times for transactions and costly transaction fees are just some complaints of Bitcoin and in general, blockchain. While there has been attempts to address these issues, reaching a consensus has proven to be difficult, especially with more controversial updates. This is in complete contrast to a central authority that often has more developmental resources and can easily coordinate change. Another drawback stems from the immutable nature of blockchain. The immutability of blockchain eludes to the near impossibility of manipulating transactions and creating false entries. However, should the user make a mistake, whether careless or negligent, the loss of funds will be irreversible. Should a malicious individual gain access to your funds, those funds are as good as gone. An example of this is Ian Balina, a man who recently got hacked of over US$2 million dollars. Had this happened to him on PayPal,

fintech review

he would have had a much easier time recovering his funds. Like the internet in the ‘90s, blockchain is still in its infancy. Users and businesses need more time to understand the underlying technology and its benefits. In accordance with the adage “if it ain’t broke, don’t fix it”, many individuals and businesses would not adopt a new system if their current payment solution is working fine. Blockchain with its slightly perceived advantage is not attractive enough for the majority to forgo the status quo and adopt this new technology. That is because the increase in security and privacy features does not reap benefits of greater value than the costs associated with the increase in transaction fees or the lengthy settlement time. THE CATALYSTS While the above points paint a grim scenario where the mass adoption of blockchain is not likely anytime soon, there might be potential causes that accelerate the mass adoption process. The first is the issue of privacy, a contentious point going into the 21st century. The recent debacle regarding Cambridge Analytica misusing personal data for political purposes highlight the importance of privacy. With over 50 million Facebook users affected, the question is whether or not this is enough of a catalyst for users to jump on-board the blockchain bandwagon. As more and more users join the internet, the need to store personal data securely and privately will lead users to look for more secure channels. The finance industry is likely to be one of the first to be affected by this since much of the financial services industry is based upon sensitive information. Another potential catalyst could be the rapid increase in technological advancements. The idea of automated cars ten years ago was ludicrous yet here we are with Tesla’s autopilot cars roaming our streets. With the migration of top talent from banks and technological companies to the fintech industry, it is likely blockchain will progress at rapid speeds. If the aforementioned problems could be solved and combined with an easy-to-use interface, mass adoption could occur sooner than we think. The ideology of Bitcoin was born with libertarian roots and was made popular after the 2008 financial crisis. Is there a need for another financial crisis before there is a shift towards an alternative decentralized system? Let’s hope not.

ZILLIQA: Next-Gen High Thoughput Blockchain Platform

NEXT-GEN HIGH THROUGHPUT BLOCKCHAIN PLATFORM W ri tte n by: G e r a l d C h a n W eb s it e : w w w . zi l l i q a . c o m

Zilliqa is a high-throughput public blockchain platform designed to tackle one of the major problems plaguing blockchain which is scalability. Zilliqa is implementing sharding, a novel protocol that increases transaction rates as its networks expand. SHARDING At the cornerstone of Zilliqa is the idea of sharding, which is the division of the network into several smaller groups, called shards, each capable of processing transactions in parallel. Each shard processes its assigned transactions into a microblock and the final results from all the other shards are merged into a full block that is added to the blockchain. Unlike other platforms which have an inverse relationship between the speed of transactions and network size, Zilliqa is faster the larger the mining network. This is achieved through a linear scaling approach where the data travels in parallel across shards, instead of being broadcast to all the new nodes. The recent release of it’s testnet v1.0 codenamed Red Prawn has demonstrated that it can achieve 2000 – 3000 transactions per second¹. This is an order of magnitude faster than Bitcoin at ~5 TPS and Ethereum at ~15 TPS. TEAM Zilliqa has a stacked team comprising of many candidates who have their PhDs in computer science. They are led by CEO Dong Xinshu, who has an extensive experience working on blockchain security and scalability. As lead engineer of Anquan, a secure blockchain deployed for financial and

fintech review

e-commerce applications, he led the development of Anquan’s public and private blockchain infrastructure. He is assisted by Chief Scientific Advisor Prateek Saxena, an esteemed professor at the National University of Singapore and a recipient of the Top 10 Innovators under 35 award (MIT TR35 Asia) in 2017. Other notable members are Loi Luu and Evan Cheng, who both function as official advisors. Loi Luu is the CEO of Kyber Network while Evan Cheng is an engineering director of Facebook. PARTNERSHIPS/ASSOCIATIONS Last year, Zilliqa announced that they have partnered up with Mindshare, a global marketing and advertising company that aims to test whether the Zilliqa is able to address pervasive media industry challenges². The project comprises of members who have strong corporate and financial presence, with notable institutional investors like Bitcoin Suisse and FBG Capital. More recently, NEO Global Capital, the investing arm of NEO revealed that they have invested in the Zilliqa project. Their CEO Weiyu Ju cites that Zilliqa has the potential to be the building block of the blockchain revolution³. Additionally, Zilliqa announced that they have collaborated with Bluzelle to provide an integrated solution such that users building dApps on the Zilliqa blockchain can utilise Bluzelle for its decentralized data storage capabilities⁴.

ZILLIQA: Next-Gen High Thoughput Blockchain Platform

FINAL THOUGHTS The explosion of popularity in blockchain resulted in transactions on the blockchain growing exponentially over the past year. The more popular blockchains have faced congestion issues in the past and it is unlikely either blockchain is ready for mainstream use in the foreseeable future. Case in point: The Ethereum’s network being so congested with only a few thousand people playing CryptoKitties that exchanges had to halt withdrawals. Scalability will be a central subject moving forward and Zilliqa is definitely a frontrunner in its efforts to tackle this issue.

1. Jia, Y. Zilliqa T estnet v1.0 Release: C odename Red Pr awn . 2018; A vailable

from:

https://blog.zilliqa.com/zilliqa-tes t n et -v 1-0-r e-

lease-codename-red-prawn-27974ca46ecb. 2. Staff. Mindshare partners up with blockchain firm Z i l l i qa. 2017; A vailable

from:

http://www.marketing-interactiv e. c o m / m i n d -

share-partners-up-with-blockchain-firm-zilliqa/.

While there are other blockchain protocols like EOS or NEO that aims to solve this scalability issue, Zilliqa is the only one to solve this issue while maintaining decentralization and security. So far, Zilliqa is the only blockchain with a working implementation of sharding. In comparison, Ethereum is only researching into sharding and has it scheduled to be implemented after its Casper hard fork. Unlike most whitepaper projects, Zilliqa already has a working testnet and is years ahead of the competition. With the flood of dApps set to launch this year and the need of a high throughput blockchain, Zilliqa is poised to gain substantial network value and has the potential to be one of the most promising projects of 2018.

3. ; Available from: https://www.youtube.com/watch ?v =_ yQ G HF Iaqhg#t=12m54s. 4. Bains, P. Bluzelle First Wave O f C ollaborations. 20 18; Av ai l abl e from:

https://blog.bluzelle.com/bluzelle-first-wave- o f-c o l l abo r a-

tions-efb2bd0cf33d. 5.

XI NSHU,

PL AT FO RM.

2018;

GEN

Available

HI GH-T HRO UGHPUT from:

B LO CK CHAI N

https://docs.zil l i qa. c o m / z i l-

liqa-slides-updated.pdf.

“ Unl ike other pla tfor ms wh ic h h ave an in ve rse re latio n shi p b et we e n speed of tra nsa ctio n s an d netwo rk size , Zilliq a is fa s te r the la rger th e m ining n etwo rk .” 5

fintech review

Checkbox, A Regulatory Framework or a Business Killer?

CHECKBOX, A REGULATORY FRAMEWORK OR A BUSINESS KILLER? Wr i tten by: Tho mas Ni ve n Webs i te : www.checkb o x. ai

“A multi-award winning platform that transforms regulation into software to automate expert decision making, documentation and analytics.” fintech review

Checkbox is a relatively new technology company that is trying to make waves in the automation scene. They have built a drag-and-drop software development platform designed around regulatory frameworks.It allows its customers to create electronic forms, similar to the kind used for electronic submissions, without the use of a professional software developer. Checkbox already has clients in the professional services, mainly auditing, legal, and tax, however they say that they are “industry agnostic”, and that their software can serve many different kinds of clients. These are some notable clients too, listing the big our advisory firms, the big four banks and leading Australian law firms as clients. Checkbox is presently trying to expand from their Australian home ground into countries like the US, Hong Kong and Singapore. At the head of Checkbox is the CEO, Evan Wong, a serial entrepreneur who also founded Hero Education; an academic support service for students in the state of New South Wales taking their final year exams. He started Checkbox back in 2016 with his friend James Han, now the CTO of the company, who has a background in engineering and design. Their Chair and Commercial Director is Paul Wenck, an Oxford alumnus who has founded several companies over the years and is surely giving the young Mr Wong and Mr Han some experienced guidance.

Checkbox, A Regulatory Framework or a Business Killer?

The 2017 StartCon Pitch Competition Winners, Checkbox, with their trophy and prize. Source: Starcon.

Checkbox has already achieved major success entering into start-up competitions. They won the 2017 Westpac Innovation Challenge, beating out heavy competitors such as Blenktech, a contract negotiation software solution, and Nod, an on demand financial advisory platform. They also succeeded at StartCon 2017, a start-up conference based in Sydney, winning their Pitchub and Software as a Service (SaaS) Startup awards. In 2018, they went to Fintech Finals in Hong Kong and won the Next Money and Visa grand finals, a good sign for their offshore ambitions. Beyond winning awards, Checkbox is apparently in no shortage of clients. Founder Evan Wong has stated that one of their largest challenges have been keeping up with the growth of their client pool. This has caused them to have to establish pricing, security, training and support for their clients quite quickly. When dealing with the types of clients they are, there is a high degree of professionalism expected, with a lot of pressure to deliver quality solutions. Time will tell if these quick fixes are sustainable.

has had trouble finding the right talent to join the team. When the company culture and direction are still being established, who you have on your team is paramount, and can either make or break the business. Checkbox currently has 12 members on its team, and Mr Wong says that every single one of them will have a huge impact on the success of the company. Clearly, there is a lot of potential in Checkbox. It is a software solution designed to aid in the digitization of previously physical systems, an industry that isn’t going anywhere anytime soon. It has won many awards, a clear sign of endorsement from already established brands and individuals. It has high profile clients and seems to be in no struggle for more. By all measures, Checkbox is a successful start-up in a cutting-edge field, and it will be interesting to see how far they can push their already meteoric success.

Of course, getting a larger client pool is no problem if you can grow your team with them. As with any start up though, Checkbox

fintech review

CELESTIAL INTELLECT CYBERNETICS Automating Data Science with Human-Level AI

CYPHER

Low Cost, Scalable, Business Friendly Cryptographic Token Technology With Enhanced Security

TOKEN PRE-SALE BEGINS: JUNE 15 Present cryptocurrency technology has high transaction cost due to expensive algorithms for securing the network, scales to a small number of transactions, requires mining which wastes energy, and results in wealth disparity. We address these problems by introducing Cypher token t e c h n o l o g y, w h i c h e m p l o y s a n e w Delegated Byzantine Fault Tolerance consensus protocol and modifications to blockchain to ensure transaction integrity with low hash-rate, 10-second blocks. Efficiency is radically improved due to lack of mining. Improved data distribution results in better scalability; bitcoin replicates the whole transaction history which cannot scale. Security is improved by

consensus that does not depend on mere computing power. Efficient fraud detection protocol avoids double spending. Cypher is business friendly, since identities are managed by the network. Users can issue utility, and security tokens. Enhanced account security features MFA; dongle, and hardware wallet are planned. Other security features include secure data store, private transactions, fine-grain privacy control, and auditing for B2B transactions. Cypher nodes will work on mobile and earn fees for users. System upgrades are decided by selfgovernance through voting. We are looking for Pre-ICO investors to boost the development of Cypher next-generation crypto-token technology.

celestialintellect.com

Robo-Advisors

ROBO-ADVISORS W ri tten b y : M e hre e n H am z a

Robo Advisors are viewed by many participants in the financial services industry as the most powerful technology, impacting the sector now and in the next 5 years, according to CFA Institute FinTech Survey Report (CFA Institute, 2016). Robo - advisors have emerged as an attractive low cost, automated investment tool especially for people with low financial literacy levels. Wealthfront and Betterment are two of the most popular robo-advisors in the United States (Business Insider, 2018). This technology makes use of a detailed questionnaire at the onset, allowing investors to specify their risk tolerance levels and investment goals. Once Robo-advisors get the information related to investor’s preferences, it makes use of algorithms to kick start the investor’s financial journey. Many big Banks and wealth management firms around the world have started incorporating Robo-advisors in their traditional business models, resulting in “hybrid model” (i.e. drawing upon the expertise of both robo-advisors and wealth managers). Some of them are developing the technology in-house and many are collaborating with the Robo-advisory firms to leverage the benefits of the technology to improve their customer services. ASSET ALLOCATION, INVESTMENT STRATEGIES AND REBALANCING Exchange traded funds (ETFs) comprising of stocks, bonds, currency, commodities etc. are the main investment instrument for Robo-Advisors. Once an appropriate ETF is selected, Robo-Advisor allocates the assets with the help of algorithms and use mean-variance optimization of various asset classes for input parameters and therefore calculate market return. The most critical function performed by Roboadvisor is the monitoring and rebalancing of customer’s portfolio. This is being done by the threshold-based strategies where the portfolio is immediately brought back to the initial asset allocation levels if any asset drifts beyond the predetermined minimum percentage level. IMPACT ON FINANCIAL SERVICES INDUSTRY With millennials taking over the labor force in most parts of the world, many amongst them are going to become potential investors. These young people prefer digitally agile solutions which offer automation, control and transparency. Robo Advisors provide exactly that; therefore, this technology may bring a huge influx of young people in the financial services industry as investors in the coming years, which

were previously deterred by high costs, low accessibility and less transparent models of traditional wealth management industry. S&P Global (2016) indicates that Asset under Management (AUM) and the total number of retail accounts at Robo Advisors increased at Compound Annual Growth Rate (CAGR) of 124% and 639% respectively from 2012-2015 in the United States. This upward trend puts enormous pressure on the incumbents in the wealth management industry to innovate and come up with low cost solutions for the investors. Wealth managers will have to step up their performance to improve customer experience or they will lose out to robotic platforms. Moreover, the inclination of investors for passive investment as opposed to active investment, post global financial crisis of 2007-09, makes technology like Robo-advisor more pertinent. In a nutshell, Robo Advisor (as a standalone service or as a part of a hybrid model) is a promising technology that will increase competition in the wealth management industry. It will enable revamping of business delivery and revenue model of traditional asset management services, which ultimately improves customer’s financial journey. Critics point towards the unproved performance of the standalone technology of robo advisors during recession periods, since it was developed post global financial crises. This along with other issues like lack of human touch, one size fits all questionnaire etc. make many people skeptical about the prospects of the technology in the coming years. Therefore, the expectation that Robo-advisors would eventually replace the existing business model of wealth management industry is yet not realistic, but this technology does look promising and most certainly provides complementary solutions to the nature of existing business in the industry. The increased collaboration of Robo advisory firms with traditional wealth managers (B2B model) ensures cost effective ways of portfolio management, with decreased human touch in the future. Working in close tandem with traditional wealth managers would also improve prospects of the technology becoming more sophisticated over the coming years.Since it is an emerging technology in the financial services industry, therefore, the B2C model of robo advisory firms are yet to achieve popularity within the masses. This can be expedited by creating more awareness within youth and keeping the technology up to the mark of providing low cost investment advice with greater accessibility and transparency.

fintech review

Blockchain Beyond Cryptocurrencies

BLOCKCHAIN BEYOND CRYPTO CURRENCIES W r i tten b y: Ger ald Chan

“The technology is commonly associated with currencies and financial services but can be applied to a wide range of other purposes, including transforming the healthcare sector and improving the supply chain.” fintech review

Mishkov, Documentarytube, 2018

2017 saw the rise in cryptocurrencies as the mainstream media shined a spotlight on them. Bitcoin led the charge, in terms of market dominance and market capitalization. Drawn by the allure of huge returns, many investors threw their money at this new asset class, many with little understanding of the underlying blockchain technology. The frenzy continued with absurd predictions over the price of Bitcoin, most notably with John McAfee predicting a price of $1 million for one bitcoin by the end of 2020. The price of a single Bitcoin peaked at $20 000 before this “bubble” seemingly popped and reached a low of about $6 000. The buzz around cryptocurrencies died down as market sentiments turned bearish. Talks of a blanket ban on cryptocurrencies began as legitimate attempts were made to ban Bitcoin. Amidst all this doom and gloom, the underlying blockchain technology stood strong and continued to evolve. In simple terms, blockchain is a distributed ledger that records transactions or information in chronological order. Though the technology is commonly associated with currencies and financial services, it also has a vast range of further applications in the healthcare sector and the improvement of the supply chain. HEALTHCARE A practical application of blockchain technology is in the healthcare industry. One problem is the security and data transmission aspect of a patient’s data. The data is often siloed between patient, healthcare providers and third-party services. A majority of health records are on paper and hospitals do not have shared access to this data. This is inconvenient and time-consuming for both the patient and doctors.

Blockchain Beyond Cryptocurrencies

The blockchain can and will be used to store digitised health records, with the data shared and distributed across hospitals. Insurance claims, drug development and supply chain integrity are some aspects of the healthcare industry that the blockchain technology aims to streamline. The independent structure of blockchain sets the foundation by removing the need to trust any incumbents. The complex and distributed nature of traditional health systems means that the continuous tracking of the flow of services and money can be time and cost consuming. Disputes inevitably arise regarding what services were provided and which patient received it. With the blockchain, a single verified version of the health record is securely stored, with patients having full control of this data. Additionally, it can be used to unify records from different healthcare providers and organizations, so healthcare providers would have a complete picture of the patient’s medical history. This allows for better diagnosis and treatments for patients and reduces lengthy processing times. SUPPLY CHAIN Depending on the product, the supply chain can span over hundreds of stages, multiple geographical locations and involve countless intermediaries (Marr, Forbes, 2018). The resulting friction in the supply chain leads to an increase in both cost and processing times. Supply chains that require contracts need to be handled by lawyers and bankers, which incurs additional costs.

The lack of transparency of our current supply chain system means that it is extremely difficult to investigate when there are suspicions of illegal practices or counterfeits. Blockchain, with its immutable nature, would help tackle the aforementioned problems. As a distributed ledger, it is highly transparent and can record every transaction along the supply chain. The ledger is secured by cryptography, with each block of transaction being linked back to previous blocks, thus making tampering almost impossible. Companies like Walmart and Nestle are already implementing blockchain technology to keep track of perishable goods; from the tracking of its origin, the processes it has undergone and finally to its storage. Smart contracts are also being tested and likely to be adopted soon. CONCLUSION The power and potential of blockchain technology should not be underestimated. While this article covered only two industries that blockchain will disrupt, there are countless other examples of blockchain being implemented in various industries. As this technology matures, there is no doubt that it will change how we go about our daily routines. Just like how the internet has transformed our lives, blockchain could have a large impact on a global scale. With countless industry leaders embracing this new technology, 2018 will likely see less focus on cryptocurrencies and more on the underlying technology. Blockchain will be in the spotlight with its many uses highlighted to the world.

fintech review

WorldFree: A New Stable Coin

WORLDFREE: A NEW STABLE COIN Inter vi ewe d b y: Stefa n S athi anathe n T r ans crib e by: D a vid S am ue l W ebsi te : www.wo r ldfre e .c o m

“Challenging

Fintech Review (FR): What did you do prior to starting World Free?

the blockchain

Kevin Kirchman (KK): father’s company the Kirchman Corporation, which had 400 employees at one point. This allowed me to learn the software business over many years with roles throughout his company, as well as spending about 6 months working in all areas at a medium-size bank, as a guest of its president. I have degrees in computer science and mechanical/aerospace engineering, and while at Cornell University as a grad student caught the AI bug. While working on my thesis in AI applications in engineering, I reasoned that we needed a science of knowledge before we could build successful language understanding systems. I spent many years independently developing a new perspective, including new theories of deduction (reasoning) and lexicology (meaning) among others, before returning and starting Worldfree to do Natural Language Reasoning (NLR).

paradigm.”

Kevin Kirchman CEO of Worldfree

The early Worldfree had commercial clients such as Proctor and Gamble and Baxter Healthcare, using software developed with these theories, and the company grew to 30+ people. Later, seeking consumer markets for the AI tech, I explored the cryptocurrency space, because of my background in Fintech. After reading most of the major papers in the field, I felt that storing everyone’s transactions for all time was wasteful and a security threat, and invented the Nodechain, which stands for “No Data Chain”.

fintech review

FR: As a technical person, what is your opinion on the current state of all these coins that copy and paste from GitHub, more specifically why are you against open source? KK: I have a strong history in banking software as my father was a pioneer in this industry, as a leader in the US banking market, with 6,000 banks worldwide using his firm’s software. Criminals have big incentives if they crack the source code in financial software. Therefore, having open source gives these bad guys the time and tools needed to gain an explicit understanding of the code, which is undesirable for obvious reasons. Ultimately, instead of constructing a stable code-body, open-source ends up stunting the improvement of the code and essentially inhibiting the innovation behind it. In my opinion, open source usage for financial transaction software is a bad idea, which I understand is a controversial stance to take, especially in this industry. However, I do feel as if there are other ways to validate the functionality of software. We use third-party validation of software as well as novel “open functional validation”. Another issue that is a cause for concern is the time-constraints and experience of the programmers out there and how well they understand the code. Fixing all the bugs in the software is a very complicated process—does open source provide enough incentive to drive all the fixes? Again, I feel opensource fundamentally stunts innovation. The way we’re doing it allows for more innovation whilst improving the code which is closed, not open source. It is unfair of us to assume that everyone is dishonest—what we are trying to look for, rather, is failure modes, which is used in order to engineer the development of the code. FR: How does blockchain technology need to change for it to be adopted by the majority of businesses? KK: I fully believe that Blockchain has real value and functionality, but the functionality isn’t universally adaptable in every application, as it has specific functions in different areas. The issue is that we don’t want to allow someone’s transactions to be available to the public due to the likelihood of keys being stolen. Blockchain is great technology for open registries where the need for information to be publicised is required

WorldFree: A New Stable Coin

and therefore has several different applications. However, Blockchain isn’t the only possibility for cryptographics and peer-to-peer distributed systems. Blockchain has a role in financial transactions but it isn’t the only technology for them. The Nodechain is a fundamentally distinct technology for cryptocurrencies. It uses cryptographics and peer-to-peer distributed systems as well, but has a fundamentally different model which takes advantage of the different aspects of Blockchain. FR: What difference does the Freemark have from tether the cryptocurrency that is backed by the US dollar and now the Euro? KK: The idea with bitcoin was that it was an alternative to fiat. However, in a way, bitcoin may still be considered a form of fiat, the only difference being that a different group of people are asserting its value. In the case of Tether, it is being tied to a fiat currency. So, is it asset-backed? The US Dollar and the Euro are not asset-backed. That means you’re backing a cryptocurrency with something that is not asset-backed either. So essentially what we are doing is grouping new technological advancements with traditional methods. This may improve how the system works, however, I do not think this is the best way moving forward for the world of cryptocurrencies. The Freemark has two fundamental differences

to most currencies. Firstly, it is asset-backed with a regulated, audited fund –similar to a university endowment. It is invested in a rational and prudent way. The Freemark owners are not compensated in proportion to the returns, so it isn’t a collective investment scheme. It provides much legitimacy and liquidity to the currency due to it being asset-backed. Tether is backed by the US dollar and the presumption is that the US dollar is stable. However, the US dollar varies one to five percent a week and at times more. That is a clear sign of instability and shows a lack of connection to the physical world. Freemark, on the other hand, is pegged to a basket of 20 commodities which can be calculated through twelve-month moving averages of the commodities. Pegging a currency to the real world via the trading of commodities gives it an advantage over the variability of the US dollar due to that greater stability. Freemark is ultimately pegged to a basket of commodities and is asset-backed by a fund, giving it two different components. This gives us a sophisticated solution to a complex problem. Furthermore, we pay a royalty on the money supply growth to hedge against inflation and its acts as a special sort of reward I suppose. So, whilst inflation makes the US dollar worth less, we are turning this on its head and making money-supply growth into a positive.

FR: What various technologies does Worldfree use to build their technologies (NLP, NLR, NLU)? KK: Natural Language Processing (NLP) and machine learning are very connected. The main component of NLP is its pattern recognition. When you’re reading a book, the first thing you do is identify a sentence. You see the punctuation and words in the sentence. They communicate a meaning to you because you understand the words. The structure and syntax of the sentence further communicates the meanings of the words, conveying an understanding through syntax and semantics. The first part of comprehension and reading is pattern recognition of NLP and it refers to the structure and words pattern recognition. Natural Language Understanding (NLU) delves into the meanings of the words and syntax itself. NLU comprehends the meanings of the words, syntaxes and structure of the sentences. Natural Language Reasoning (NLR) refers to the deduction of ideas. The lexical and graphical semantics and syntax meanings are all connected and useable by the theory of deduction. Reasoning is critical to the human-computer interface so that’s where Worldfree has been focusing its technological advancements. Natural Language Reasoning (NLR) occurs after NLP and NLU—we must first recognise and comprehend meaning before we reason, therefore NLR is an advance.

fintech review

WorldFree: A New Stable Coin

FR: How does having a backed cryptocurrency by assets help bring utility? KK: There are a few issues to address when speaking of asset-backed cryptocurrencies. The issues are the legitimacy and liquidity of a currency. Another widely recognised issue is the impact of inflation, which is not accounted for when considering cryptocurrencies in a world still linked with fiat. Worldfree has worked to overcome this issue and feels that we have created a solution to this problem. FreeMark’s payment of royalties with respect to the growth in money supply is key in overcoming the issue of inflation. Inflation erodes the value of people’s savings, and is thus a disincentive to wealth accumulation. When governments increase money supplies, they do it without increasing the wealth in society—it’s just money, not wealth. The FreeMark automatically provides savers with a royalty when the money supply grows— this is an incentive for savings and growing wealth. It works in the opposite way that fiat currencies work, because existing savers benefit when the money supply expands. Asset-backed cryptocurrencies like the FreeMark thus have a big advantage over fiat currencies, whether

fintech review

crypto- or government. But to keep up with the royalties, and provide inflation and deflation resistance—essentially protecting the power of people’s savings, the assets have to be invested for rational returns. The whole idea of asset-backing provides good functionality and provides a way to facilitate the payment of royalties and the payment of increased money supply of the cryptocurrency. FR: How does the multiple asset backing work? KK: Firstly, we have to segregate the asset-backing from the commodity pegging. The asset-backing is comprised of real estate and various other assets differing in liquidity, which are handled prudently whereby we only invest in lower-risk investments that will grow the fund, as opposed to investments which give the highest returns. On the commodity side, we do not want to be exposed to the volatility of any given commodity as all the commodities endure volatility due to the forces of supply and demand. As a matter of fact, we use 25 commodities in our basket of goods, with 5 kept in our reserves. If one of the commodities get too volatile over a time period, it will automatically be switched out. Then, each commodity is weighted, depending on their level

of volatility. Least volatile commodities are given a weighting of 7%, with the medium range having a weight of 5% and the most volatile having a weight of 3%, so that we make a stable base. Thus, we use multiple commodities in order to mollify the effect of volatility via surges in supply and demand. FR: A big issue that has started to be questioned in the crypto industry, whether certain cryptocurrencies are supposed to be classified as securities. If regulation were to happen what would you think will happen to the cryptocurrency market? Also, where would the free mark be in this scenario? KK: The primary purpose of a currency in the traditional sense is a medium of exchange. So, are they securities? Well, not really. I mean you can have a coupon that you use in the supermarket that you would cut out of the newspaper in the olden days. There are a lot of issues due to the question. We should not presume that risk is evil- it is a part of life. Risk is inversely correlated to reward. Risk tolerance is up to an individual themselves and it’s something governments have to recognise and respect as well. There is also a need for us to ask tough questions of regulators regarding the manner

WorldFree: A New Stable Coin

in which they regulate securities, especially in regards to marginal utility for less wealthy investors, and the irrationality of phasing out high reward investments. There is also the flip side to this where you’re regulating the greater part of humanity from investing in young firms extremely limiting the supply of funds. It is giving a better deal to existing players and is reducing social mobility and the funding for new ventures, which leads to a decline in job growth. FR: What do you believe will occur in the next year or so technologically wise in the crypto industry? KK: I think firms will continue to address scalability challenges, which we’ve addressed with the Nodechain, and there are a lot of innovative concepts from an economic standpoint, ours being one of the more challenging to the current approach. Worldfree recognises the value of Blockchain in the way we utilise the technology in our architecture. We take a lot of the advantages of blockchain and we incorporate it in the Nodechain in a much more scalable and secure version of cryptocurrency. Our asset-backing and pegging are all innovative things and we have patents pending which is of the utmost

importance. Our technology could be an important influence and opportunity for both users and for cryptocurrency in general. I’m not going to deny that there a lot of innovative and capable people in the cryptocurrency space. Our technology is different and novel but there are also other people out there inventing good things. The ERC-20, for example, is a bit premature to be made a standard in the industry, which is only in its infancy. However, when the early adopters come together, the marketplace became viable, as the success of cryptocurrencies has shown. Now, the rest of the world is taking note of what’s going on and they’re getting excited about the possibilities. So now it’s time for this technology to move into the mainstream which is really an entirely different marketplace. It’s the firms that make the transition from the early adopter marketplace to the mainstream marketplace that are going to be better engineered both economically and technologically. FR: Are there any industries outside the financial industry that you believe are not blockchain proof? KK: As innovators, we are trying to come up with better ways to do things. I don’t think that it’s

about tearing down industries, rather it is about trying to figure out better ways to do things. There are possibilities that this new technology will augment, replace or improve existing traditional methods of going about our daily lives and functions. Yet, this new technology must prove itself by use and cryptocurrencies are doing just that by demonstrating persistence. I guess you could say that it’s the same with our technology, where we are seasoned in the industry and we have developed commercial technologies that have been used by real firms and top global companies. We are always trying to create various technologies that can withstand the pressure of the global financial system and can incorporate other functionalities such as tax. We are constantly pushing the boundaries and trying to achieve this in the most intelligent way possible. As we see now in today’s markets, cryptocurrencies are disruptive and are essentially disrupting the disrupters. However, from an industry insider’s perspective such as myself, I feel as if it is all about trying to find the real value and functionality of the technology and how to successfully introduce it effectively into the market as opposed to disrupting industries. We are contributing to social mobility: as the new become the old, there is continuous change and improvements being made to benefit society.

fintech review

Asset Management, Blockchain and Dcoin

ASSET MANAGEMENT, BLOCKCHAIN AND DCOIN W r i t t e n by: M i c h a e l K it chener W e bs i t e : w w w . d c o i n.com.a u

The ubiquity of high ROI investments in both primary ICO markets, and secondary exchanges have made such investments very attractive opportunities. Naturally, this has attracted the attention of less risk-averse institutional investors, and recently many funds have been set up with a focus on reaping the rewards that this emerging ‘asset’ (I use this term with a degree of hesitance) class has created. Funds with such a focus have a myriad of possible avenues through which they can invest within this market: Through mining operations, funds can generate new coins on certain Blockchains and earn the price of the coins less the electricity cost that the operations have created. However, this is becoming increasingly difficult, as the computational power required to mine becomes more and more difficult.

fintech review

Investing in new coins and their corresponding companies through the ICO market, an investment that draws certain parallels with both participation in an IPO and a VC firm providing seed funding in exchange for equity. Of course, unlike both these types of investment, participation in an ICO does not confer any ownership of the company behind the token. Trading coins on various exchanges – for example, buying Bitcoin at 5000 dollars and selling it at 8000. This is likely the most common form of investing, or rather, speculation on cryptocurrencies practised by individuals. Such investments are, empirically, quite risky – which is unsurprising considering the lack of intrinsic value that exists in something that does not entail access to cash flow. Subsequently, prices are based purely off sentiment – and on the at times irrational whims of market agents. None the less, there are certainly strategies – focusing on

Asset Management, Blockchain and Dcoin

The D Coin Coin Mining and Cryptocurrency Trading Facility, Perth Western Australia.

“Bringing Digital Currency to Life.” quantitative analysis and effective portfolio management. A prominent example of these emerging funds is Dcoin – an Australian fund based in Perth. Dcoin’s Investment Fund offers access to a mining pool as well as secondary market speculation. The secondary market fund primarily speculates on Bitcoin, Dash, Ethereum, and Litecoin, as well as other, less popular coins. One particularly innovative investment strategy of Dcoin’s is their ‘coin polishing’ techniques. If you set aside the fancy name, coin polishing simply refers to utilising arbitrage opportunities that exist in-between exchanges. With many cryptocurrency exchanges there are often sizeable discrepancies in prices for many fiat to crypto and crypto to crypto pairs. For example, as I write this, ETH is trading at $824 USD on Kraken and $812 USD on Simex, this is not a huge discrepancy but larger ones frequently

occur. These opportunities bring a chance of guaranteed profit (provided that the purchase of the cheaper currency on exchange A and sale of that currency on exchange B can be executed sufficiently quickly). Ultimately, it will be very interesting to see the future of asset management and Blockchain technology unfold together, and watch how investment strategies for profiting on crypto price movements evolve.

fintech review

Lamden: A Blockchain Platform Built for Developers

LAMDEN A BLOCKCHAIN PLATFORM BUILT FOR DEVELOPERS W r i tten b y: Felix Lu Yang W ebsi te : www.lamden. i o

“Lamden is a suite of developer tools that speed up the process of creating new and custom blockchains and apps.” fintech review

Lamden is a development software package that helps mass adoption of blockchain technology, its goal is to integrate businesses into blockchain. Currently, businesses have a high barrier of entry to get into blockchain. Blockchain technology is in its infancy and the human capital resources are scarce. It requires a specialized individual to consult and develop blockchain applications. Considering the time, it takes to set up a blockchain for average businesses, it is a major disincentive. In the original bitcoin core code, there are many small nuances that you must get right in the codebase and if any of these are wrong, nothing will work. Combine this with the fact that most of the popular blockchains are derived from the bitcoin core code; Zcash, Dash, Litecoin etc. As a result, the blockchain ecosystem is of complicated networks that don’t interact with each other and are difficult to understand without investing large amounts of time into learning. Another point is that Ethereum’s documentation for their programming language is very non-standard thus making it difficult for anyone in the tech industry to pick up like they do a web library. This is where Lamden plays its part. Its mission is to create a standard and organise the best practices in the blockchain space and make usability clear and coherent for a regular developer.

Lamden: A Blockchain Platform Built for Developers

Saffron Saffron is a blockchain-generator that allows businesses and developers to concept and deploy private chains quickly and efficiently. By using prebuilt templates with a robust selection of options, Saffron enables customblockchain solutions uniquely suited to each project’s specifications.

Clove Clove is a decentralized application that makes atomic swaps between chains easy. Most Bitcoin-based and Ethereum-based chains, including ERC20 tokens, are compatible with the protocol. Clove enables decentralized payment channel swaps and facilitates trustless communication between compatible blockchains on the network.

Flora Flora is a distributed smart contract package manager for Ethereum and other smart contract blockchains. The decentralized package manager allows developers to share commonly used code, greatly reducing development time on often-repeated tasks. Flora models popular and familiar package managers like npm and pip to allow for easier development and a more familiar development workflow. It uses Apache Cassandra as a performant and enterprise grade datastore which allows the contents of the system to be distributed across participants of the Lamden system.

The method is that Lamden attempts to communicate between blockchains; like an intermediary for all blockchains. One example is that to buy some OMG you will need to first purchase BTC then buy OMG with that; TAU acts as an atomic swap. The idea is to have a decentralised exchange platform for all sorts of assets. These assets can be physical or digital things on independent blockchains. Mains cryptos have a direct market such as BTC -> ETC, strange intermediary markets that don’t have direct connections like OMG -> TRON. The concept is to put TAU in there for the brief period for a swap like OMG ->TAU, TAU -> TRON. Thus, you don’t need to hop between different exchanges. This type of decentralised infrastructure will be able to support anything that conforms to the Lamden atomic swap protocol. It will be in a completely decentralised manner, so you can use your own wallet, connect to the network and swap with anyone. The benefits of Lamden of targeting businesses and helping them integrate into blockchain, will result in some massive amounts of adoption; sparking innovation. Lamden will lower the barrier of entry so many software developers have an opportunity to

contribute to the world of crypto without having to spend copious amounts of time learning the difficult codebase of bitcoin code, for example. I believe if Lamden can achieve what it claims, this is revolutionary for crypto. To put things into perspective, Ethereum is 2 years old, one node size is 242 GB and for Bitcoin is 152 GB; even a light node a bootstrap node is still 20 GB; that is a large download time. Compare that time to installing Python, the inconveniences hinder many regular developers from dabbling in blockchain. Lamden plans on creating a metamask type application that would give you access to the swap functionalities of the network. It will have a nice UI; nice and simple for people just getting into cryptocurrencies. Overall, I think Lamden is a component that can potentially revolutionise blockchain by lowering the barrier of entry and allowing regular computer developers to contribute to blockchain. By connecting all these projects on a single connection that has atomic swaps, private businesses allow for self-development and can capitalise on blockchain technology. Lamden will capture the attention of curious developers that want to dive into blockchain without the obstacles.

fintech review

The Future Implications of the UK-Australia Fintech Bridge

THE FUTURE IMPLICATIONS OF THE UK-AUSTRALIA FINTECH BRIDGE W r i tten b y: D av id S amue l

The Fintech industry is rapidly growing and shows no sign of stopping. Over the last four years, the industry has grown a staggering 41%, with global investment in Fintech peaking in 2015 at an estimated US$46.7 billion [Pritchard, KPMG, 2017]. In the UK alone, Fintech firms have generated £7 billion in annual revenue and raised £1.3 billion of investment in 2017. Furthermore, in Australia, investment in Fintech firms peaked at US$656 million in 2016 [Chadwick, 2018]. This immense growth, coupled with the relatively positive outlook of the implementation of blockchain technology at the G20 Summit held in Argentina, cements Fintech as a recognised sector that is here to stay. A closer look into

fintech review

the Fintech industry reveals the immaculate advancements in technology that are being made on a daily basis and demonstrates how imminent the change in the landscape of the financial services industry is. The UK has established itself as a hub for the Fintech industry, with more people working in the UK Fintech industry than that in New York or in the combined Fintech workforce of Singapore, Hong Kong and Japan. As of 2015, approximately 61,000 people were employed in the UK Fintech sector, translating to roughly 5% of the UK’s total financial services workforce [EY, 2016], with this number likely to inflate considerably

over the coming years as we shift into a more digitalised era. Recently, the UK further solidified its position as a leader in Fintech through the UK government’s launch of the Fintech Sector Strategy at the second annual International Fintech Conference held in March. Among the various initiatives that were proposed, there was one in particular that had colossal potential promise for Australia, dubbed the ‘Fintech Bridge’. The announcement of the Fintech Bridge between UK and Australia was a huge leap forward for the Fintech industry, reaping benefits for both countries involved. So, what

The Future Implications of the UK-Australia Fintech Bridge

exactly is the Fintech Bridge? The Bridge further builds upon the current agreement between the Financial Conduct Authority (FCA), the regulating body in the UK for financial firms and markets, and the Australian Securities and Investment Commission (ASIC) in order to improve regulatory cooperation between both parties. The governments of Australia and UK will also liaise with one another on a quarterly basis in order to create a framework for them to standardise policies across various areas of Fintech. Also, the agreement includes a clause of commitment whereby both governments are to provide support for UK-based Fintech firms selling products and services in Australia. Furthermore, the agreement binds both countries in committing to the cooperation and development of each countries’ respective Open Banking regimes, a key ingredient in reducing the barrier to entry for new third-party firms providing financial services [HM Treasury, 2018]. All the aforementioned clauses within the agreement are vital in ensuring the growth of the Fintech industry on a global scale. So, what exactly are the future implications of this agreement? The first advantage is that this collaboration between the UK and Australia will strengthen ties between both countries and will lead to ever-

closer relations as we move forward. From 2016 to 2017, Australia’s import of services from the UK was calculated to be A$8.168 billion, the second highest for Australia as the UK commanded a 9.7% share of total imported services. Likewise, Australia’s export of services to the UK was estimated at A$5.315 billion, the fourth highest for Australia with a 6.5% share of total exported services [DFAT, 2017]. Seeing as the UK is a key trade partner of services for Australia, it is of the utmost importance that relations between the two countries are as strong as possible. The Fintech Bridge is all the more relevant and ideal as it strengthens the bond between the two countries in an area where they are most inter-reliant on one another. With year-on-year growth during the 2016-2017 period being 0.5% and -1.5% for imports and exports of services respectively [DFAT, 2017], the Fintech Bridge will most likely increase the value of both figures and contribute to greater economic growth in both countries. Additionally, with the Fintech industry expanding so rapidly and slowly phasing out traditional methods of banking, it is quite likely that the service trade segment of the GDP will grow for both the UK and Australia and will command a larger proportion of each country’s respective nominal GDP value as they both continue to establish themselves as financial hubs in the Fintech industry.

Productivity and efficiency are also significant indicators as to how effective the agreement will be. With the liaison between both governments and respective financial regulators, the process of entering the Fintech market and being able to be compete with other firms is vastly simplified through the transparency of policies and support provided by each government. This expansion in the UK has therefore become fundamental in the success of up-and-coming Fintech firms in Australia. The clarity in regulation and governance will ultimately lead to Australia playing a greater role in the global financial industry and being a vital pillar of success for the Fintech industry on a worldwide scale. There is undoubtedly a very bright future ahead for the Fintech industry. With technological advancements being made on a regular basis, vast improvements are being made to the financial system in terms of efficiency and cost reductions. It cannot be denied that blockchain technology will play a core part in the future of the financial industry and how we go about our daily lives. Therefore, with Australia making great strides in the Fintech industry through this newly signed Fintech Bridge, it is just a matter of time before Australia becomes a global powerhouse in the financial world and a headquarter in the Asia-Pacific region.

[Pritchard,

KPMG,

2017]:

h t t ps: / / h o m e.

kpmg.com/au/en/home/media / pr ess

re-

leases/2017/02/fintech-pulse-q4-2016-23feb-2017.html [C hadwick, 2018]: https://www. z dn et . c o m / article/australian-government-forms-fintech-bridge-agreement-with-u k / [EY,

2016]:

https://www.go v . u k / go v er n-

ment/publications/uk-fintech-on-the-cutting-edge [HM T reasury, 2018]: https: / / asset s. pu blishing.service.gov.uk/government/uploads/system/uploads/attachment_data/ file/ 692874/ F intech_ Sector _ St r a t egy_ pr i n t . pdf [DFAT , 2017]: https://dfat.gov . au / t r ade/ r esources/Documents/uk.pdf

fintech review

OriginTrail: Enchancing Supply-Chain and Improving Transparency

ENCHANCING SUPPLY-CHAIN AND IMPROVING TRANSPARENCY W ri tt e n by: F e l i x L u Ya n g W eb s it e : w w w . o r i g i n t r a i l . i o

“ E a c h y ea r, fo o d s ca n d a ls ha mpe r co n sume r co n f i de n ce , thus k nowing t h e o r i gi n o f fo o d i n de e d i s the i r ri g ht . A l re a dy a t thi s m o m e nt , t h ere are d i fferen ce s a mo n g fo o d pro duce rs i n re g a rd to th e l ev e l o f i n fo r m at i o n w e pro vi de to co n sume rs a n d w e be l i eve t h e i m p o r ta n ce o f t h a t w i l l eve n i n c re a se i n the f uture .” OriginTrail is targeting the supply chain industry. It aims to change how supply chains work, so information is transferred faster and cheaper, with more scalability and more security using blockchain technology. OriginTrail is attempting to solve a huge problem in a huge industry. Compared to many other coins on or nearly in the market, OriginTrail is ahead of the pack. Other coins lack immediate practical use; such as only having a whitepaper or no real-world application. Even while in development OriginTrail is already being used in it’s early stages, currently working with the online Chinese farmers market Yimishiji. HOW DOES IT WORK? OriginTrail synchronises supply-chain data in a decentralized format. It is difficult to record each point of a standard supply chain; product safety and quality will be unknown to the consumer. With OriginTrail each point in the chain will perform checks to ensure that the delivery of the goods did not affect the quality of the product. Each point will have to confirm that the received good of the right quality and

fintech review

standard; improving transparency in the supply chain. This data is stored a on blockchain and thus is immutable, so no third party can modify or manipulate the data. This guarantees the integrity of the whole supply-chain. WHY WILL THIS BE BENEFICIAL? An ever more complex global trade system means increases in complexity of the standard supply chain. In such an environment the need for simplification is evident. With current supply chains, parties are all required to operate with different levels of information and accountability, resulting in a substandard market. There is a lot of darkness and anonymity in the supply-chain industry and TRAC attempts to bring transparency towards consumers. Every business relies on the principle of trust. By increasing transparency, this trust will increase. Particularly, consumer food safety will increase; since the information is immutable and based on the blockchain.

OriginTrail: Enchancing Supply-Chain and Improving Transparency

First Purpose-built Protocol for Supply Chains Based on Blockchain.

Food Safety Collaboration Center Food Safety Innovation Spark Award

Imagine if you wanted to figure out the origins of an organic vegan bar. If you try using Google it’d be very difficult to find trusted information on whether it was organic or not. TRAC enhances traceability in food supply chains, allowing customers to find where their food comes from (hence the name “OriginTrail”). Although currently focused on the food supply chain, TRAC aims to change the entire supply-chain industry. WHERE IS ORIGINTRAIL AT NOW?

even in the cryptocurrency world. Its ICO was launched only last month. At the time of writing one TRAC is 0.155 USD. OriginTrail is a very unique solution to very relevant industry. Over the last century supply-chain technology has increased by ridiculous amounts. Unlike other industries such as Dentistry(DENT), retail supply chain has a large market cap. With enormous corporations like Wal-Mart and Zara leading the supply-chain retail industry, I see large growth potential in OriginTrail.

Walmart has already recognised and awarded OriginTrail the prestigious “2017 Food Safety Innovation Award”. There is also a pilot program running in China and Europe designed to incorporating traceability into the supply of organic grass fed beef, and when it is finished it will be available on the web. Currently OriginTrail isn’t on many large exchanges, though it can be found on IDEX, EtherDelta and HitBTC. It is relatively unknown

fintech review

Assessing Fintech’s Risks

BIGGEST RISKS

BIGGEST BENEFITS

ASSOCIATED WITH USING AI-DRIVEN SECURITY SOLUTIONS

Highlight non-obvious relationships in big data

Augment human decision making

Potential time savings

Learn company security preferences

“easy for attacker to bypass”

high false positive rates

slower security operations

too much reliance on humans to make security decisions

2017 Beyond the Hype: Artifical Intelligence, Machine Learning and Non-Malware Attacks Report (Carbon Black, 2017)

ASSESSING FINTECH’S RISKS W r i tten b y: Ger ald Chan

As the new era of fintech is ushered in, it promises a whole range of benefits and improvements. Broadly speaking, fintech can be defined as the new financial industry that applies technology to improve financial activities (Schueffel, 2017). As this technology evolves, it is evident that fintech will modernise legacy systems, streamline financial processes and reduce financial friction. Fintech has long been commended for its benefits in aiding economic growth and the enhancement of financial stability. However, fintech possesses both macro-financial and micro-financial risks that should be taken into consideration as they could potentially undermine the financial stability of the technology itself. The decentralized aspect of fintech is often touted as one of the key benefits. Without a central point of failure in the system and fewer trusted incumbents, the usual detriments of a financial system are minimized. While decentralization will disrupt the traditional business model, the benefits of decentralization may not be as important as some anticipate (FSB, 2017). The processes of the network effect and economies of scale will likely lead to the consolidation of services. Even for decentralized peer-to-peer cryptocurrencies, the accompanying services

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and exchanges are often concentrated. In terms of 24-hour market volume, the top 5 cryptocurrency exchanges accounted for over 70% of all transactions (Coinmarketcap, 2018). This network effect, coupled with the first-movers advantage, could lead to a rise in the systemic importance of new players and consequently undermine the benefits of decentralization. THE IMPORTANCE OF TRANSPARENCY The opacity of securitizations, along with its high delinquency rates, can be attributed as one of the causes of the 2008 financial crisis. As a result, both Europe and the United States of America have taken steps to ensure more assetlevel transparency for its securities, which have shown to be of better quality with lower default rates (Ertan, Loumioti & Wittenberg-Moerman, 2017). Transparency can reduce information asymmetry and lead to the better pricing of risk, greatly reducing the risk exposure to the average consumer. The proliferation of artificial intelligence (AI) and use of algorithms could potentially diminish transparency levels in the financial industry. Algorithms are valuable intellectual property and are rarely disclosed. Yet, they are often

Assessing Fintech’s Risks

TOP 3 CHALLENGES TRADITIONAL FINANCIAL COMPANIES FACE IN DEALING WITH FINTECH COMPANIES

42%

58%

Differences in business models

Singapore average

Global average

53%

IT security

IT secutiry

49%

67%

Regulatory uncertainty

40%

Regulatory uncertainty

Differences in business models

(PWC Singapore, 2016)

utilized to expedite the loan process. Likewise, the use of artificial intelligence to gather data efficiently and streamline operations can be seen in the real estate sector (Mitchel, Forbes, 2017). Arbitrary profiling based on factors such as location and social media profiles has led to the outright rejection of loans. Reports indicate that more than half a million people have already been blacklisted in Kenya for obtaining loans for as little as US$1 (Nogales, SSIR, 2018). It is clear that it would be difficult for these individuals to seek redress in the case of AI mistakes. MACRO-FINANCIAL RISKS As fintech firms seek to reduce costs and automate processes with the use of AI, the lack of human supervision could present new risks. Greater automation and the use of more sophisticated algorithmic trading can lead to new and unpredictable sources of contagion in financial markets (Kirilenko & Lo, 2013). Such risks can amplify shocks to the financial system and raise the likelihood of financial instability. Reputational contagion is also prevalent in the fintech industry, with negative coverage of one entity being able to affect perceptions of the industry as a whole (Mitic, 2017). This is

illustrated by the cryptocurrency Bitconnect, which was revealed to be a Ponzi Scheme. Due to the indirect association with Bitconnect, other legitimate projects like Bitcoin and Litecoin were perceived by the general public as scams. This had the subsequent effect of devaluing the whole cryptocurrency market. Fintech firms could also amplify systemic risks by lowering lending standards and reinforcing credit cycles (Tuckwell, Altfi, 2017). As risk models become more standardised due to the reliance on similar algorithms, consumers tend to exhibit “herd behaviour” and lending becomes procyclical (Scharfstein & Stein, 1990). A result of this is the magnifying of financial fluctuations and increased swings in asset prices. The competitive nature of the fintech landscape is altering market dynamics, with firms pursuing riskier strategies to increase profitability. MICRO-FINANCIAL RISKS The fintech industry has seen rapid growth over the last few years, with firms expanding without the necessary risk management expertise. The typical fintech firm is small, leanly staffed and focuses on only one aspect of service, with the average cryptocurrency company in North

America only having 12 employees (Hileman, Rauchs, 2017). Without the necessary expertise, fintech firms can face the issues of maturity and liquidity mismatch. Regulations have not kept up with the growth of the fintech industry, with many firms falling outside the regulatory parameters. Firms are often not subject to the same level of scrutiny as their traditional counterparts and therefore could pose a risk to the financial system. While cyber attacks are a threat to the entire financial system, fintech firms are often more susceptible to hacks and could in fact accentuate the risks. This is because the entire model of many fintech firms is based on coding and other forms of automated decision-making (Mangnuson, 2017). The greater use of technology and digital solutions provides hackers with more entry points to target. The increasing reliance on third-party services could also be a central point of failure. For example, only a limited number of parties currently provide cloud computing services. However, the compromise of these services could lead to significant ramifications. Recent hacks of cloud services highlight the need for security measures and emphasises the importance of recovery plans.

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Tutorial: Cryptocurrency Mining

CRYPTOCURRENCY MINING T uto r i al W r i tten b y: Fintech Re vi e w C o m m uni ty

A share of Nvidia has jump about +133.37(120.02%), global GPU and ASIC shortage, and prices that are sky high. What gives! Its all about the new cryptocurrency mining craze that’s making it way onto mainstream media. Even the CEO of Nvidia is bullish on cryptocurrency, his company supports it. Even if you wanted one GPU for a gaming computer you would have a hard time finding some due to the shortage and the sudden spike of crypto-miners. What is cryptocurrency mining? Is it better to mine than actually buy the actual coin? We’ll respond these question and more, in this article. WHAT IS CRYPTOCURRENCY MINING Mining is, in technical terms, the process of verifying and adding transaction onto the public ledger and also the minting of new coins. Anybody is able to mine, if they have an internet connection and suitable hardware. Mining is a jigsaw puzzle for computation. The first person to finish the puzzle gets to add the block to the public ledger and reap the reward, then the process repeats itself. WHAT REWARDS DO MINERS GET Mining equipment is extremely expensive these day, for quality one at least. How do miner make a profit? Well for every block they solve they receive a reward , if you’re the first to solve the puzzle, you get 12.5 new Bitcoins ($131,575[as of time of this writing]). Which is how new bitcoin are minted. Every 210,000, or aprox. 4 years, the block the reward gets halved. Litecoin has a higher reward for miner, 25 newly minted Litecoin ($5,481[as of time of this writing]). If you start mining always lookup

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reward information of the coin of your choice. Miners usually hold on to the rewards and hope for them to grow and therefore gaining a bigger profit margin. WHY DO YOU NEED SO MANY COMPUTERS The race to solve the computational puzzle is actually really competitive and difficult. The more miner, or higher hash rate, result in a higher difficulty to solve a block, but if their is a lower hash rate the difficulty is set lower. The difficulty automatically adjust itself so the rate of finding a block is always constant. In the early days of bitcoin you could have found a block with any computer using it CPU. As soon as more miner joined CPU wasn’t profitable, therefore GPU were used to mine since they’re more efficient in mining than CPU. Then in 2013 the whole mining market changed with the release of ASIC( ApplicationSpecific Integrated Circuit) miners, which are more efficient and return consistent, higher rewards than GPUs. Every since then ASIC have been improving, and miner have been purchasing them in bulks, which has made them scarce and expensive. With these ASIC miners flowing into the market, the difficulty is raising. GPU mining is still not obsolete. It is still profitable to mine Etheruem, and many other alt-coins (e.g, Monero, Bytecoin, Verge) with GPUs. ASIC manufactures are mostly producing SHA256(BTC) and Scrypt(LTC) miners, since their is a higher demand. This is where GPUs shine , they are able to mine multiple algorithms, which opens a realm of different alt-coins mining with room for great potential.

Tutorial: Cryptocurrency Mining

SOLVING A BLOCK As we said earlier solving a block is a complex computational puzzle. Let me show you. I wrote a simple python script that will show us just how hard and complex this process. My script turn a simple alphanumerical input into a sha256 hash (what bitcoin uses). import hashlib as hasher hash = hasher.sha256(b”hey this is a test”).hexdigest() print(hash) We inputted “hey this is a test” and we converted that string into a sha256 hash. The output was… a05781e7486acfc67a6318e287c0ae8a9edfa5bdd0a888cd 26432b2a64877773 It is extremely difficult to find out what the original message is, just with a hash. The only way to actually crack it is by guessing. Yes guessing thats what a miner does, guesses the answer to find a block. You may think these hashes might have some correlation and “I can hack my way for more coins”, lets put that to the test. import hashlib as hasher hash = hasher.sha256(b”Hey this is a test”).hexdigest() print(hash) So the difference between this one and the previous test is that I capitalize the “H” in hey. Now lets look at the hash.

d868123b6fcd7823d0b1296f30165deff3e585c02bb0aa 3b29548a4866866419 Although the nonce (the input, we used “hey this is a test” as the nonce) that bitcoin uses is an integer between 0 and 4,294,967,296. Guessing is the only viable option to finding a block. Right now the bitocin mining network is guessing about 20,081,000,000,000,000,000 hashes per second. Which is an enormous amount of guess just to claim the bitcoin block reward. Keep in mind, this is just using bitcoin’s sha256 algorithm. Depending on the coin and its algorithm it can be easier or harder to solve the hash. POOL MINING If somebody were to use a simple PC to solo mine Litecoin (which is less difficult than Bitcoin) they would find a block every 81829701 days, which is 224190 years. So a way to remediate this problem is to join a mining pool. A mining pool is a group of miners that share their processing power to find a block faster. Once a block has been found they split of the reward among all who contributed. CONCLUSION Cryptocurrency mining is such a hot topic nowadays. That is painted as being a straight forward way of making simple money. But we got to see what its really about, and therefore better informed. Their is more profit being made in cryptocurrency trading than mining, but mining provide consistent rewards in cryptocurrency which can be reinvested for a bigger ROI Nonetheless, Cryptocurrency is a computational wonder and resource heavy process, that is well rewarded.

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Opinion: Browser-Based Mining: the Ups, the Downs, the Democratic

BROWSER-BASED MINING: THE UPS, THE DOWNS, THE DEMOCRATIC Opi ni o n Pie c e W r i tten b y: Michael K e rri s o n

History has a tendency to repeat itself, and with the speed that blockchain tech and cryptocurrencies are going, it’s not unreasonable to expect a few repetitions. Enter browser-based mining.

broaching $30 USD, and the venture petered out. But in 2017 and on to today, the diaspora of alt-coins and blockchai fever has made it too profitable, and thus too tempting a target.

In 2011 a service called BitcoinPlus.com set up JavaScript for mining Bitcoin (back when it was cheap and easy) within the browser. Fast forward to 2017 and its uneasy spectre is raised when Coinhive opens for business, providing much the same service but focusing on mining Monero.

Let’s start with the business model. With high network hash power, it may take a single user quite a long time to achieve any kind of return (be it successfully mining a block or just making enough progress to be on average worth a couple cents). Say it takes an hour of time on the website where the script is embedded: that might only be feasible on certain types of websites, or it might take a single user several days of recurring visits. But spread that hour over thousands of users, and across all kinds of hardware, and almost any website might be able to make some kind of money. Exact values here will vary, but more website traffic means more revenue - at a cost to the visitor, in wear-and-tear and electricity.

The fundamental idea is simple and elegant: distribute the mining across many users, devices, and sessions. This is, ironically, browserbased mining’s greatest strength, and the cause of its downfall twice. Circa 2011 the problem was profitability; Bitcoin was only just

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Opinion: Browser-Based Mining: the Ups, the Downs, the Democratic

If users aren’t consenting to this use of their processing power, this is illegal. For BitcoinPlus.com, Coinhive, and some of the players in between, this hasn’t been an issue per se, as they have positioned the service as an alternative to advertising or malvertising to fund websites. But when legally questionable sites like The Pirate Bay pick it up, and hackers begin inserting the script across other unsuspecting websites, there’s a problem.

media (particularly news) comes from: Youtube’s “adpocalypse” is a prime example. For better or worse, we currently have a choice between paying very directly for content even when we don’t consume it premiums, or having content producers be beholden to advertisers, big companies, and political agendas. A system where consumers can directly support what they want only while they use it could be a very attractive third option.

This is just a sketch of the history - Symantec do a great summary here, including some more empirical analysis. That includes the perfect storm that has lead to yet another failure for browser-based mining. Monero is more privacy-focused than Bitcoin and its derivatives, making it ideal for those who are acquiring it illegally. Combine that with the ease of use and the scale you can achieve - especially when injecting the script on popular websites - and the incentive structure is clear.

And it goes even further than that. This kind of approach emphasises consumer-grade hardware and rewards scale over and above conventional cryptocurrencies. There are certainly problems with Monero specifically, but other currencies and developers should be paying attention.

But it’s not all doom and gloom. Firstly, Coinhive have responded very well to the problems they’ve faced: they told The Register that they respected moves to block their software, and brought out new code called “AuthedMine” that “enforces an explicit opt-in from the end user”. If browser-based mining could be a viable alternative to advertising or premiums, it could revolutionise all kinds of online media industries. And that’s just the tip of the iceberg. Browser-based mining could shake up media in more ways than just their bottom line. It’s also important to consider where funding for

It’s no secret that Bitcoin mining has become incredibly concentrated as the costs to mine have increased and mining have more and more pooled their power. Changes, updates, and even forks require varying majorities of the network’s hash power - but if that hash power is concentrated under one roof, it pretty much ceases to be a decentralised currency. Things rapidly get political. But when every person with a smartphone holds hash power, we could instead see incredible democratisation. That’s something that’s probably undervalued right now, but will almost certainly come further into the spotlight as crypto awareness grows. It’s currently unlikely that any one actor - corporate or national - has the clout or interest to attack and even take over large blockchains, but it’s not impossible, and there’s plenty of government scrutiny left on this side of the extreme.

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Opinion: Blockchain’s Killer App: Money

BLOCKCHAIN’S KILLER APP: MONEY Opi ni o n Pie c e W r i tten b y: Aleksanda r S ve ts k i Li nkedIn@ Aleks S vet s k i Medi um @ A leksa ndar S ve ts k i

In the beginning… there was Bitcoin. Bitcoin and Blockchain development commenced roughly 70,000 years ago - when homo sapiens transcended their biological limits. It’s a story that has its roots in the evolution of humanity. Humans have been on the planet for over two million years. Homo Sapiens, as a species of human have only been around for about 150,000 years. 70,000 years ago, something happened - it’s linked to the activation of our prefrontal cortex, the shrinking of our digestive system and a few other things. Although nobody really knows “how” it happened, it resulted in us moving from the middle of the food chain, to the top of the food chain - very quickly. This is where the age of “history” begins. Before we explore what changed, let’s get some context. After studying the average social group size and brain function of humans and primates throughout history, British Anthropologist Robin Dunbar posited that: “The human cognitive processing system can tolerate a maximum of 150 “friends”, or stable social relationships.” – Robin Dunbar This number has held roughly true over the millennia, across all species of human and primate. It’s an evolutionary biological limit that homo-sapiens still have to this day.

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Homo Sapiens evolved beyond ALL other species (including other humans) because we were somehow able to communicate on a higher level, transcending our biological constraints. We did this in two parts, firstly through complex language, and later by using this complex language to create “shared fictions”. Homo Sapiens are the only species on the planet that are able to communicate about, share and relate to things that don’t actually exist. These are fictions that we all share. Consider a monkey. A monkey can lie. They can say there is an eagle in the sky to trick their fellow monkey into running away, so they get all the bananas to themselves. Monkeys can also warn of danger, saying something to the effect of “there is a Lion at the River”.

However, it was the ability to cooperate in groups beyond this number that changed everything 70,000 years ago. How did we do it? Communication. Communication changes everything. But it’s not just any form of communication. Animals, mammals, insects, and others all communicate in their own ways and from this form tribes, colonies and packs. In fact, most are way better at organizing and building complex cooperative colonies than humans are (ants cooperate in groups far larger than any human), but these groups and their communication is purely biological.

On the other hand, only Homo-Sapiens can say: “The Lion is the Spirit ancestor of our people”. Only Homo-Sapiens - who are from different parts of the world, don’t know each other, have never met, and have no biological reason to trust each other - can strike up a conversation, build rapport and build trust simply because they are Italian, or Chinese, or some other “fictitious” nationality. And only Homo Sapiens can use that same reason to band together and build the Pyramids or blow each other up “in the name of our country” like we did through most of the 20th century.

DUNBAR’ S NUMBER Britis h Anthrop olog is t R ob in D u nba r p os ited tha t:

Opinion: Blockchain’s Killer App: Money

ANCIENT MONEY

MODERN MONEY

>10,000 BCE

9,000 BCE

5,000 BCE

Barter

Commodity Money

Abstractions

(Cattle, Salt, Sugar Tobacco, Cotton)

(Shells, Rocks, Rai Stones)

(Metals, Bronze, Gold, Silver; even knives)

1,500’s

1950’s

1990’s

1,000 BCE

Coins Ancient > Roman > Medieval

Stage 1

Gold Backed Paper Money

Shared fictions are languages in and of themselves, and over the millennia there have been many kinds. From castes to corporations, from races to rulers and religions. All are shared fictions, all are designed to facilitate cooperation, coordination and exchange on a broader level. One of the earliest “shared fictions” was money, and it still exists today because of how fundamentally important it is for society to function. Money, at it’s very basic level, is a form of communication, it is a shared fiction. It’s an abstraction that we’ve all agreed represents value. The “form” of money has evolved over the years. From spices, to shells, to coins, to gold, to paper, to plastic, and now native digital currencies. Money is one of the only forms of communication or shared fiction that has stood the test of time and managed to transcend the borders and barriers all other shared fictions have been restricted by. Not even religion can come close to the power of money. Why? Because of what it represents.

Fiat Paper Money

2,500 BCE

1,500 BCE

Stage 2

Gold

Plastic Money (Starts with Diners Clubs, then AMEX)

It was popularized by the Florentine banking families during the renaissance because it was easier to carry a note that promised the redemption of an amount of gold, than having to carry the gold itself. This was the defining model (in and amongst periods of gold standards, etc) for 500yrs, until the promissory notes transformed into what is now called “fiat currency”, ie; a currency that is backed by nothing other than “trust in the state”, or “trust in the issuer”.

2000

Digital Money

complexity, you create societies that are able to exceed Dunbar’s number by orders of magnitude. It’s also important to note that as a society increases in complexity, value will continue to abstract in order to lower the friction of exchange. This is why money is so important, because value is subjective it comes in many forms, but money is objective and can therefore represent all of them. Money evolved about 3000 - 5000yrs ago, when we invented layer 2 abstractions of money by introducing “trust”. This would facilitate better transactions and exchange, ie; coins were created with stamps by the emperor. This model persisted (in many variants) until the next major abstraction; ie; paper or Promissory notes.

With each abstraction, we added better attributes to money, however we also increased the dependence on trust. The more attributes we added, the more the pillar of trust became secretive and complex with a high barrier to entry. Now In a world that is becoming increasingly interconnected and complex, we need a better form of exchange. One that is faster, more transparent and trustless. And this form of money already exists - it’s been staring at us since 2009. It’s name is Bitcoin. Each generation has been conditioned to believe “x” is real money. Gold and paper backed by “governments” have been the major incumbents for the last century. When we first started moving to plastic there was an uproar that this was not real money. The same thing happened with building the digital veneer over money that we use today. Whilst these continual abstractions have come with advantages and disadvantages, they’ve pathed the way for truly native digital, global currencies / means of exchange to emerge.

WH AT I S M O N EY ? ATTRIBUTES

At the very foundation of Society and its ability to grow and function is one key ingredient: VALUE. Furthermore, the ability to exchange value is what makes society run. When we cooperate, we are doing “work”, which has some form of “value” and in all our contributions and interactions, we have exchanges of this value. When you extrapolate that out in layers of

Fungibility Portability

DEFINITION

Durability

Store of Value

Cognizability

Measure of Wealth

Divisibility

Abstration/ Representation of Value

Homogeneity

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Opinion: Blockchain’s Killer App: Money

“ M os t p e o pl e h ave been afraid or unwilling to put t he i r s a v i n g s in to o n e o f th e se new currencies, ei t he r b e ca use o f a l ack o f saving s, an aversion to ri s k , o r j u s t p l ain o l d tech n ical difficult y. Buying an d se lli n g cr yp to cu r ren cie s is st ill too hard! ” - Ale ksanda r S vetski, C EO @ S tas hh and F o und e r a t Bl o c k c h a i n T r a i n i n g In s t i t u t e .

For some of us, it still seems like internet funny money, but for the next generation - paper, cash and plastic will seem like useless relics of the past. Native digital currencies are the future, and most importantly those that are decentralized, borderless, global and censorship resistant - because technology is democratizing everything else, and we need a form of money to go with it. There is a lot of contention around the idea of digital currencies - and a big part of that is due to their volatility. People say that “these can never be currencies” because they’re unstable, and whilst that may be true now, they miss something fundamental. Before something can become an exchange of value, it must become a store of value. Becoming a store of value takes time – especially when it’s something so disruptive to so many stakeholders in so many parts of the world. The other argument is that it’s not “backed by anything”. Well, the last (and only) real, trustless store of value was gold. Which is also backed by nothing, except that it’s real and tangible, which means it’s safe and secure. It’s also finite, recognizable, durable, relatively stable and relatively fungible. Today gold has a market capitalization (network value) of more than $7T – impressive, till you consider it took 5000 years to get there! Over time, as adoption grows, so too will the network value of digital currencies. They will become real mediums of exchange. It’s not an if but a when. Electricity, the telephone, the internet, Facebook. Nobody saw any of those coming, nor predicted their growth. There is a reason for this, networks are fundamentally different to companies and traditional and capital infrastructure models.

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The mental models we’ve developed over the last 100 years to measure and analyses capital, markets, corporations, cooperatives and more don’t fit with the laws that govern networks. Networks are not companies. They don’t have to worry about profit, loss, shareholders, a board or customers. Thinking back on the dot com bubble can be painful for some, but the internet continued, and in fact accelerated its growth during the crash. The companies built on the internet were affected, but the underlying network was not. We’ve been trained and conditioned to value things based on profits, earnings, revenues, customers, margins, returns on investment or capital allocation. Networks are just not subject to the same valuation models and hence we can’t predict what their future value will look like. Networks have time on their side. Time is usually against you in the corporate world because you’re fighting for market share, fighting for mindshare, fighting against new startups. With something like Bitcoin, apart from a catastrophic failure, the fact that new technologies come and go doesn’t really mean much. Bitcoin is stable. Bitcoin has infrastructure. Bitcoin has security. Bitcoin is censorship resistant. Bitcoin has network effects. The question is not; “How good or valuable is the technology today”, but “how will it evolve over time?”. For example, one of Bitcoin’s primary use cases is banking the unbanked, and I cannot overstate how valuable this is. You may have heard of “The Rising Billion”, the 1 billion people crossing the traditional “poverty” line and coming into the global economy. Exponential technology is already bringing them the tools they need to participate. But what about banking and financial services?

Opinion: Blockchain’s Killer App: Money

NETWORK GROWTH Quadratic and Exponential growth is non-intuitive. Humans think and perceive linearly, which is why we’ve always mis-predicted networks. Linear Curve Quadratic / Exponential Curve

“Networks are subject to quadratic math, meaning they follow a recursice growth curve that continues to steepen as it grows. Changes are initially imperceptible, but as a network trends toward a critical mass of nodes, it becomes self sustaining - each new node, adds further utility, momentum and strength to the network at large.”

Netword Examples: Electricity, Telephone, Internet, Facebook, Bitcoin.

The banks cannot and will not service them because banks are companies, they need to make money and there is no money to be made out there... yet. Open, public, decentralized protocols do not have that issue. Bitcoin doesn’t care who you are, where you are, how much you have or why you want to use it.With a phone and internet access the unbanked will have the basic financial services that we in the “developed” world currently take for granted - and in fact, probably better. And they won’t have to sell their privacy and souls to get access. By the time banks catch up and try to service these 4 billion people, it will already be too late. Why the hell would anyone subject themselves to the rigor, discrimination and constraints of traditional banking when they’ve got something so much better? They won’t. And that’s because the network effects will have already reached a critical mass.

In conclusion, the most important thing we can do as a community is to spread the word and participate. We need to increase the adoption of the core protocols, because everything else will then have a foundation upon which to grow. Network effects are the biggest advantage we have. That’s what we’re trying to do at Stashh. Our mission is to lower the barrier to entry for the mass market and thereby increase overall adoption. Most people are unable to participate in this new asset class because they lack savings, have an aversion to risk, or find it just too technically difficulty. And it’s true; Buying and selling cryptocurrencies is still too hard!

more, early adopters qualify for 0% exchange fees at “stashh.io”. Whether you buy some Bitcoin through our application or not doesn’t matter. What matters is that we adopt this new technology and spread the word. So go out and buy some Bitcoin or any other cryptocurrency you believe in. Be a user, be a “node” - and the network will grow faster than any of us could’ve ever imagined.

https://en.wikipedia.org/wiki/Dun-

We’ve created a way for people to simply download an app, link their accounts and much like a digital piggy bank, the spare change from all their random daily transactions gets automatically invested in Bitcoin and Ether. In this way, people can “test the waters” - and in time, we can teach them to swim. If you’re interested in finding out

bar%27s_number https://medium.com/blockchannel/cryptoeconomic-theory-basics-of-social-order-2be4c1be89c1 http://humanscience.wikia.com/wiki/ Worst_Predictions

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Opinion: A Mature Cryptocurrency Industry: Where We Are And Where We Need To Be

A MATURE CRYPTOCURRENCY INDUSTRY: WHERE WE ARE AND WHERE WE NEED TO BE Opi ni o n Pie c e W r i tten b y: Tho ma s N i ve n

“We nee d to drop the free -spirited culture of financial anarchy and realise we are an industr y dealing in in the billions.” fintech review

There are two things for certain in this world, death and taxes, and cryptocurrency has yet to really experience either. It is no secret that the industry is regarded with suspicion and even distain by veterans of the more senior and traditional financial markets. Neither is it a secret that cryptocurrency has surpassed every expectation put to it since it was first created back in January of 2009. It has decentralised that which has always been solely within the purview of the powerful to change, it has allowed billions to be made by those who would otherwise be earning minimum wage, and most of all, it has seen growth at rates higher than any other financial instrument in human history. It has also allowed pump and dump schemes to defraud millions of their hardearned dollars, made the trading of drugs, slaves and deadly weapons easier than ever before, and has allowed the creation of a new Wolf of Wall Street-esque culture in the form of scam ICO’s and Ponzi schemes in a near-lawless financial market. Not a bad rap sheet for an industry not yet old enough to buy its own beer. For the cryptocurrency market to shed its scales of sketchiness, several things are going to have to happen. One of these are inevitable, two are not. The first and simplest is that more people, particularly wellestablished and institutional people, are going to have to understand the way cryptocurrencies work. To most of them, all they need to

Opinion: A Mature Cryptocurrency Industry: Where We Are And Where We Need To Be

understand is how to “buy a bitcoin” and they’re a crypto wizard. Anyone who understands even the smallest amount of traditional equities markets knows it takes more than buying a share in Google to make yourself a financial expert. For the industry to mature and be treated seriously, it must be understood. The second is that it has to slow down and stabilise. This is the only inevitable one. Currently it is not abnormal to see ICO’s that more than triple on value the day after they are released. This is unsustainable and to be frank, ridiculous from the perspective of a traditional investor. Traditional investors would consider returns of 20% per year absolutely astounding, and the idea of more than doubling your money every month is either impossible or criminal to them. Bernie Madoff, famous hedge fund manager and criminal, managed to achieve the likes of 40% per annum for some of his investors till he was imprisoned for running his fund like a Ponzi scheme. Returns of the likes we are currently seeing scream of criminality to the traditional investor. Furthermore, even with the instability we see, the returns we are seeing make every other investment on the planet abysmal by comparison. If the average institutional

investor does end up understanding cryptocurrencies before this slowdown occurs, a massive shift of wealth from equities to cryptocurrency will occur as investors seek to take advantage of these insane returns. Should this happen, it’s possible cryptocurrency will be able to add responsible for a financial crisis to its rap sheet. Therefore, short of the fall of global capitalism, the industry is destined to slow down and stabilise to be more in line with traditional markets. The third and in my view, hardest to achieve, is that we in the industry must accept that this slowdown will happen culturally. Currently the culture around cryptocurrency can at best be described as libertarian and at worst as deliberately criminal and anarchistic. A lucky 22-year-old can become a millionaire in almost any financial market, but in cryptocurrencies that happens every week. This is not normal. We are not special, and we must accept that. We are a financial market like any other, and crashes have happened in every market from shares to wood to oil to property to bonds. We need to drop the free-spirited culture of financial anarchy and realise we are an industry dealing in in the billions. If we want to be taken seriously, we must first take ourselves seriously.

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Opinion: “Expert Opinions” vs Crypto

“EXPERT OPINIONS” CRYPTO O pi ni o n P i e ce W ri tt e n by: H o n g r u i S h e n

“ It is inev ita ble th a t i nexperie nce d inve sto rs tu rn to th e se aso n e d v ete ran s of W a ll Street fo r th e ir o p in io ns o n th e m arket . H o wev e r… .[th i s i s] not “rea l news” b e cau se th e fu n d am e ntal s o f t he cr y ptocur renci es i n q u e stio n h ave n’t b e e n c h an ge d .” On the 12th November 2017, JP Morgan CEO Jamie Dimon commented on Bitcoin in an investor conference, decrying it as a fraud. He compared it to tulip bulb mania and highlighted several illegal activities that can be facilitated with bitcoin and other similar cryptocurrencies. The market reacted with anger - crypto enthusiasts took to their usual sites like Reddit and Medium to hit back at Dimon’s irresponsible jab. Many were quick to point out the hypocrisy in Dimon’s statements as the man himself was one of the catalysts of the 2008 financial crisis and got away with millions. Even the notorious crypto celebrity John Mcafee went onto CNBC to refute. But along with anger, were fear and uncertainties. Bitcoin, along with other alt-coins, plummeted. It is inevitable that inexperienced investors turn to the seasoned veterans of Wall Street for their opinions on the market. However, these opinions are artificial news that institute either buying or selling pressure. They are not “real news” because the fundamentals of the cryptocurrencies in question haven’t been changed. Jamie Dimon’s opinion did not have any backing evidence or an intelligent argument to back up his claims. Investors should also note that Wall

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Street moguls do not always have your best interests in mind. It is important to realize that the equity market and the crypto market are mutually exclusive to a certain extent. As said by CFTC chairman Christopher Giancarlo, millennials are certainly enthusiastic about cryptocurrencies, much more than they are about traditional markets. Their savings are going into cryptocurrencies, not bank accounts. This is a threat to banks and other large public trading enterprises. Thus, when Jamie Dimon slammed bitcoin, an obvious conflict of interest existed. It was unprofessional and morally unethical for him to do so. Nevertheless, the crypto market had since recovered and reached new highs a month after the event. Jordan Belfort, commonly known as the Wolf of Wall Street and made popular by his book and movie of the same name, has also made negative comments about cryptocurrencies. Unlike Dimon, Belfort is known to be much more aggressive and frequent in his ramblings; he tweets many times a month urging his followers to avoid cryptos. The ex-conman also made appearances on CNN money and FOX business where he compared bitcoin to his schemes in his early years and has suggested that cryptocurrencies will soon drop to zero. Fortunately, his skepticism had no real calculable effects on the market, and his

Opinion: “Expert Opinions” vs Crypto

tweets are usually met with 90% dissatisfactions from the replies. There have been suspicions that Belfort was paid to spread fear and uncertainty. Though there has been no evidence given to support this claim, I believe this possibility cannot be ruled out given Belfort’s long and sinister record of scams, schemes and dishonesty. Warren Buffett, the second richest man on earth and a seasoned veteran of financial markets has also made numerous negative comments on cryptocurrencies since early 2017, notably doubling down each time. His latest appearance was in January 2018 on CNBC, saying cryptocurrencies will come to a bad end. Unlike Dimon, his opinion had no measurable effect on the psychology of a regular crypto investor and has not noticeably affected the market. This suggests that the market is become more mature and more resistant to the influences of celebrities. Buffett has more popularity, credibility and integrity than both Dimon and Belfort, but still, you should treat everything he says with skepticism. Here’s why. The man is nearing his 90s and by his own admission he has difficulties accepting innovations. The man is known to have entered late to tech stocks, and still owns only a few select few tech stocks. This

is a man who became a billionaire in his 50s, and due to reinvesting and the magic of compounding, his wealth generation became faster and faster. This doesn’t necessarily mean his investment choices are becoming wiser over time. Nonetheless, this article is not an attempt at discrediting Buffett’s achievements, but to highlight the fact that he is not perfect and has clearly made mistakes with tech stocks, the fastest growing set of stocks this side of 1990. The same parallel applies to cryptocurrency. Buffett sticks by his rule of only investing in what he understands but, ironically, he’s sticking his nose in an area in which he’s almost clueless about. I do believe it’d be more beneficial for his credibility if he stays neutral on the topic of cryptocurrency instead of consistently attacking it. That all being said, if a financial celebrity promotes cryptocurrency instead of condemning it, investors should be equally cautious. Promoting a financial instrument without any good reasoning is as bad as slamming it with no evidence. In the future, when it comes to Wall Street veterans expressing their “expert opinions”, whether it be Warren Buffett, Jimmy Dimon or Jordan Belfort, so long as the fundamentals of cryptocurrencies don’t change, investors may as well consider them as sources of ‘fake news’.

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Opinion: Buzzwords: Be Aware

“The key is in determining whether the descriptions are true about the tokens you are looking at .”

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Opinion: Buzzwords: Be Aware

BUZZWORDS: BE AWARE O p i n i o n P i ec e W ri tten b y : H o ngrui S he n

It has been a common occurrence in ICO startups to exploit new investor’s simplicity with fancy buzzwords. Without paying further attention to whitepapers, you are potentially vulnerable to vaporware and in extreme cases, outright scams. WHAT BUZZWORDS? You’ve seen them before, “decentralized”, “scalability”, “artificial intelligence”. WHY DO ICO STARTUPS USE THIS MARKETING TACTIC? Inexperienced investors follow gurus on youtube, and have learnt a set of very limited, inflexible and oversimplified techniques to analyze cryptocurrencies. They have become predictable and play right into the hands of ICO startups – letting them know what words would attract your pocket money. This is not to say all ICOs and cryptocurrencies are unreliable whenever the mentioned words are involved. The key is in determining whether or not the descriptions are true about the one you’re looking at. Thankfully, this is not that difficult, but first one must learn the meaning of these buzzwords. First of all, “decentralization”. This is one word you are absolutely required to know if you’re interested in entering crypto market. Without going too technical, decentralization is what most cryptocurrencies such as Bitcoin and Ethereum try to achieve. It eliminates a single point of failure. Many try to think of it as a spider web, cutting one section of the web would not destroy the entire web. A better comparison is the DNA in your cells, if one cell has died, the same DNA information is still carried on in other cells. “Decentralization” is also democratic, no one single point makes decisions on behalf of others. However the benefits come with a price, a decentralized protocol is less efficient than a centralized one in certain applications. Therefore you have to ask yourself, is the ICO project of your interest attempting to decentralize a system that’d overwhelmingly benefit from decentralization, or is the startup going out of its way to decentralize something that doesn’t need decentralization.

“Scalability” refers to how many transactions a blockchain protocol can process within a given time, specifically whether this transaction speed is able to increase, or at least be maintained, as the number of blocks on the chain increase. Given this, you can already rule out an ICO project’s reliability if the ICO is simply an ERC-20 token or NEP-5 token. This is very simple, scalability only applies to protocols. Ethereum is a protocol, NEO is a protocol, but tokens on the Ethereum and NEO network are smart contract standards. Their functions and features do not go beyond what the protocol they’re based on already offered. That is, an ERC-20 token can only be as scalable as the Ethereum network it was built on. Unless the ICO project aims to build a product that is scalable beyond the smart contract token itself, the phrase “scalability” has no use other than as a marketing tool. Instead, this smart contract token should only be marketed as a utility token. Lastly, “artificial intelligence”. AI is not something to be taken lightly. It’s also a hot topic, not only in fintech, but everywhere else. When AI is combined with blockchain, a mega buzzword is created. Firstly, a bit about the different forms AI can take. AI comes in two varieties, a “weak AI” is one that is limited in its scope and usability, and a “strong AI”. Think Siri or Amazon’s Alexa and you’ll have an idea for what a weak AI can do. Truthfully, it is not an AI at all, but a program designed to emulate one. Strong AI is a different beast entirely. Human levels of self-learning is a must for strong artificial intelligence, it involves both hardware and software innovation as yet unseen. The weight of the said project cannot be taken on by a small team with only couple million dollars. You are looking at Google and Facebook sized companies exploring this space. If AI is ever mentioned in an ICO project, it is almost certainly talking about the weak kind, and is really only using it as a marketing term. These are only a few of the common buzzwords used by ICO startups. There are many more, and as you read more whitepapers, you will come to know them all. As always, you should practice due diligence when it comes to your investments. Use your knowledge and common sense to see through the guise of marketing tricks like the ones shown here.

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Opinion: The 4th Industrial Revolution

THE 4TH INDUSTRIAL REVOLUTION O pi ni o n P i e ce W ri t t e n by: G e r a l d C h a n

The first industrial revolution was brought about by the development of steam engines and machine tools, marking a turning point in history. Almost every aspect of daily life was influenced in some way, with average income undergoing sustained growth. The second industrial revolution saw notable developments in steel-making and telecommunications, thus leading to a globalized world. The third industrial revolution saw the proliferation of digital computers and the internet. The fourth industrial revolution is building on the third and can be characterized by the amalgamation of technologies that is blurring the lines between the physical, digital, and biological spheres (Schwab, 2016). While this revolution encompasses many technologies, this article will delve into the two that most excite me, namely, the Internet of Things and artificial intelligence along with its impacts on us. ARTIFICIAL INTELLIGENCE (AI) The effects of artificial intelligence are already permeating through our lives. Look around and you will see automated cars and drones or news

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of artificial intelligence competing at the highest levels in strategic games like chess. Just hold down the home button on your iPhone and you will find yourself conversing with an intelligent assistant called Siri. The impressive progress in artificial intelligence is driven by the exponential increase in computing power and the resulting vast amounts of data available. A common concern about this rapid development of artificial intelligence is the potential existential threat it could pose to humanity. While there is an ongoing debate on this matter, perhaps a more pressing issue in the near future is the displacement of labour by automation. A recent study conducted by Dr Michael A. Osborne of Oxford University shows that up to 47% of the U.S population is at risk of losing a job to automation and artificial intelligence within the next 20 years. This could lead to economic inequality as labourers lose their jobs. In addition to the economic aspects, there will be a mental toll on labourers who have dedicated their entire lives to their job. For some who have built their entire identity around their job, depression will likely set in when they find themselves jobless. It is imperative that we adapt and upgrade our skills, knowing that automation is coming.

Opinion: Opinion: The 4th Industrial Revolution

INTERNET OF THINGS (IOT) The network of physical devices embedded with electronics and sensors that allow devices to connect and communicate is known as the Internet of Things (IoT). Smart and interconnected systems are increasingly pervading our society, with smart home products and watches becoming more popular. Reports show that the number of connected devices are growing at a rapid rate, with an estimated 20.8 billion devices to be interconnected by 2020. The concept of real-time enterprise whereby organizations respond to demands or queries instantaneously is essentially becoming a reality.

With data mining and machine learning become more prevalent, the privacy threats it could pose are enormous, with the potential for political manipulation. The irony is that the tracking and sharing of data is an important part of this connectivity. The recent debacle implicating Facebook and Cambridge Analytica highlights the problem of privacy and data storage. The sheer amount of data that IoT devices can generate is staggering and each data point serves as an entry point for malicious individuals to exploit. It is therefore important for consumers to realize the price they are actually paying when they upgrade to a smart device.

With the increasing number of connected devices, the growing concern of exploiting the Internet of Things is evident. When everything is connected by the internet, the network becomes more vulnerable and a single rogue device can cause outages and pose security threats. A casino discovered this the hard way when cyber criminals hacked a casino through an internet-connected fish tank (Whigham, news.com. au, 2017). The fish tank had sensors connected to a computer which then regulated the temperature, cleanliness and food. This served as the entry point for criminals to bypass the security measures and enter the network. The increasing number of IoT devices hacked highlight the need for security guidelines that protect its users.

CLOSING THOUGHTS While we have only briefly covered two aspects of the fourth industrial revolution, it is clear that this technology is already reshaping our economic and social environments. While there are enormous benefits, there is also the potential for great peril. As consumers, we must develop a comprehensive understanding of how this technology is affecting us and use it to empower society instead of harming it. Debates about pertinent issues such as control of data and privacy will continue raging on in the years ahead. We need to adapt to the everchanging landscape of technology and demand that our basic human rights and values are not violated in the process.

“Th e fo ur t h ind ustr ia l revo l u t i o n i s b u i l di n g o n t he thi rd a nd ca n b e chara c te r i ze d b y a m a l g a m a t i o n o f tec hn olo g ies t ha t is b l u r r i n g t h e l i n e s b et w e e n p h ys ical, d ig ita l , a nd b i o l o g i ca l s p h e re s .” ( K l a u s S c h w a b , 2016)

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1st May 2018 - 10th June 2018

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Fin tech Re vie w is a m ag az i n e f oc u s s i n g on t h e inte rse ct i o n o f fin an c e and t e c h n ol ogy i n t h e mode rn ag e . W e pro v id e you w i t h d e t a i l s an d re vie ws of t h e l at e st fin t e c h n e w s , w h i l e an a l ysing mar k e t t r e n d s an d ve n t u r e s s o y ou d o n ’ t have t o . Y o u w ill al so f i n d i n t e r v i e w s w ith ke y indu st ry le ad e r s an d op i n i on p i e c e s fro m t hose e x pe ri e n c e d in t h e ga me . We h op e yo u e njoy th i s p u b lic at i o n a s mu c h a s w e e n jo ye d writin g i t , an d m ay i t e n h a n c e y ou r kn o wle dge abo u t t h i s r e lat iv e l y n e w ma r k e t .