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What the New Force in Healthcare Means to Ethereum

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Call them the three new amigos of healthcare: Bezos, Buffett and Dimon shook the worlds of technology and healthcare on Jan. 29.  Together they are forming a separate company to do battle with high patient healthcare costs and unacceptable levels of patient satisfaction.  Everybody who read their cryptic announcement is speculating about who will be the winners and losers.  

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My vote is for Ethereum and maybe a few of the healthcare apps that are mounted on the Ethereum platform.  As risky as investing in any cryptocurrencies so far this year, here is why we think Ether holds the least risk in the healthcare reformation.

Healthcare: The Nightmare We All Know

We have all heard the disheartening figures. Healthcare in the United States is a disaster consuming over $3.5 trillion last year.  That is just under 20% of all goods produced in this country.  According to conclusions of the Peter G. Peterson foundation, the US spends more than twice any other nation but the outcomes are often no better.

That medical costs are out of hand is no surprise.  What is shocking is that in spite of things like the Affordable Care Act, costs continue to spiral faster than just about everything else increasing about twice as fast as the overall rate of inflation.

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Healthcare costs dwarf even the mammoth Defense budget at less than 4% of GDP.

Working Against The Odds

So far the efforts of Washington to make changes in the system have failed.  That is why the recent joint announcement by heavy hitters, Jeff Bezos, Warren Buffett and Jamie Dimon is interesting.  Among their three companies: Amazon, Berkshire Hathaway and JP Morgan Chase, there are nearly a million employees.  The plan is for top executives from each to form a new healthcare company using technology to improve patient outcomes while reducing costs.

You can bet any investment benefits will accrue first and foremost to company employees of the three amigos.  And of course, there is no guarantee  any real benefits.  But success could create opportunities that go beyond our ability to visualize.

As noble as the announcement sounded, very little detail is available and all parties in the new venture caution against expecting a quick fix.  That did not stop a selling wave in the leading healthcare insurers. This can only be interpreted as respect for the creative accomplishments of these three corporate leaders.

Ethereum Could Have A Quick Impact

It would be wise to view any new plan to need a development window of five or even ten years to be judged on its own merits and the challenges to success are formidable.  However the power of these three executives combined with some of the most obvious flaws in the current system, make the solution an attractive proposition for Ethereum and its smart contracts. Here is why.

Ethereum is not a solution to healthcare, it merely provides the plumbing for others.  That translates into potential demand that could develop even at the earliest stages. And then there are all those apps already using the Ethereum platform.

The Advantages of All Those Apps

The present practice of patient record keeping is part of the healthcare disaster.  For a long time patient privacy issues have encouraged medical records to be “siloed” in many different locations.  Blockchain technology offers a compelling solution to consolidating patient records without loss of privacy.  This is what Ethereum is all about.

The open source nature of the Ethereum platform offers a field day for virtually any medical app that could supplement the new company. That means more demand for Ether that drives the Ethereum platform.

Celebrity Endorsement

One line of thinking that makes sense is that major corporate backing of technology will bring much deserved awareness to the numerous startup companies whose apps provide solutions like video consultations with doctors that save time and cost.  Apps with smart contracts hold the potential to speed medical reimbursement.  

Federal and state governments that play a central role in reimbursements are ill equipped to evaluate new payment systems. But with an endorsement like Amazon, Berkshire Hathaway or JP Morgan, a new paradigm in social media takes place.

And Then Consider The EEA

Founded a year ago, the Enterprise Ethereum Alliance already boasts a membership of about 300 companies of all sizes and that includes JP Morgan.  The EEA mission is to bring together Fortune 500 companies with blockchain industry experts.  In addition to its membership, JP Morgan gained experience with Ethereum through a consortium of  Wall Street trading firms that tested the technology uncovered savings totaling billions.  If you want to become best friends with any corporate CEO start with saving them money.

Fact Or Fantasy

Some readers may look at these possibilities for Ethereum and scoff simply because of the very stubborn problems in controlling healthcare costs.  You can not be blamed if you fall into this camp.  At the same time with the sharp crypto price correction since mid December perhaps you can afford to look beyond the emotion of present day traders.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 76 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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R3’s Blockchain Corda Used By HSBC and ING For The First Time

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HSBC

UK-based HSBC Holdings Plc. along with Dutch ING Bank NV, completed the first transaction based on the blockchain.

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The transaction was credited to Cargill Inc. and was performed during last Monday. It was based on a shipment containing soybeans and transported from Argentina to Malaysia. The transaction relied on a distributed ledger technology or commonly known as blockchain platform named Corda, developed by the R3 consortium.

R3 Blockchain Network

R3’s own blockchain network is currently supported by 12 banks, including Bangkok Bank, ING, SEB & U.S. Bank, and of course HSBC among other international banking institutions, which could help the DLT technology broaden its borders and make it accessible to the mainstream public.

The use of blockchain technology eliminated the need for paper and/or other physical documents, while it drastically fastened the transaction process.

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Under traditional circumstances, the same transaction would require from five up to ten days to be filled, exchanged and verified by the respective parties involved in the transaction. Using next generation DLT technology, the process was smooth and instant without the need for mortal interference.

Vivek Ramachandran, HSBC’s global head of innovation and growth for commercial banking, issued the following statement when asked about the transaction:

“This is an inflection point for how trade is conducted. With blockchain, the need for paper reconciliation is removed because all parties are linked on the platform and updates are instantaneous.”

“The reason why letters of credit have persisted is because of two real challenges — the absence of digital infrastructure and the challenge of coordinating multiple parties. This platform helps us overcome the first and I think the technology and everyone focussed on it gives us the impetus to go after the second now with hopefully much better results than we have seen in the past”

The use of blockchain technology in the IT sector seeks to make transactions of crucial data more reliable, secure and faster. With DLT technologies, companies are able to reduce the risk of fraud in letters of credit and other types of transaction with the use of smart contracts, as well as severely reduce the number of steps required for the transaction to happen.

Major Partnerships

Letters of Credit (LoCs) are the main way for vendors (importers and exporters) to trade with each other, as it eliminates problems such as the great distance between them, the different language and the different laws.

LoCs guarantee more than $2 trillion worth of transactions annually, but the process creates a great deal of paperwork and it is extremely time-consuming.

R3, while a silent player in this disrupting scene, has managed to establish some astonishing partnerships with major international central banks, including the Bank Of America.

The company uses a slightly different approach when it comes to blockchain technology, which is relatively close to IBM’s approach with Hyperledger. Corda is not a token, and you won’t find it or its mixed market cap used by projects using R3’s network in CoinMarketCap or similar cryptocurrency trackers.

While many banks attempted to join the blockchain train with Ripple and other similar transfer unions using blockchain technology as their basis, HSBC and ING are not your average banks, and they’re definitely on the verge of something that might revolutionize the scene and bring banking institutions closer to the future.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Goldman Sachs Plans On Joining The Blockchain Revolution

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While blockchain-powered monetary systems are considered extremely volatile by the majority of traditional investing firms and banking professionals, some of them might have found their way onto the scene. Take Goldman Sachs for an example.

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Goldman Sachs carries an interesting log of achievements throughout its history in the banking and venture capital fields respectively.

Being an American “Bulge Bracket” investment bank and financial services company, GS managed to get involved with major Wall Street banks, governmental agencies and Academic Institutions, as well as large industrial corporations, establishing a series of long-term relationships with their partners, clients and associates.

Goldman Sachs is considered a primary dealer in the United States Treasury market, and it is one of the few banks that suffered but endured the subprime mortgage crisis in 2008, receiving a $10 billion investment from the United States Department of the Treasury as part of the Troubled Asset Relief Program.

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Ten years later, Goldman Sachs is again on the main scene of the global economy, this time taking its chances by investing in the disrupting high-tech sector and specifically in distributed ledger technologies, commonly known as blockchain.

Goldman reported last week that they would soon open a trading desk for bitcoin (BTC) futures contracts after a series of requests generated by the bank’s clients and partners.

At the same time, the Goldman-backed Circle company recently purchased cryptocurrency exchange Poloniex and it is planning to transform it into a leading exchange.

Most of these banks have heard about the numbers or seen the numbers that companies like Coinbase and Binance are putting up. There’s a real risk that some of those companies could overtake some of Wall Street’s biggest banks if they don’t get in the market.

…says Spencer Bogard, a Goldman Sachs partner at Blockchain Capital, who thinks that although it is an important step towards the legislation of cryptocurrencies and/or other token-based systems, it might cause further confusion as we still can’t say with absolute accuracy which token is actually legit and which is not.

Rana Yared, an executive officer responsible for creating the “silk road” between the GS customers and cryptocurrencies as an investable asset class, quotes that “Bitcoin is not a fraud” as previously described by various other Wall Street major bankers, including Jamie Dimon from JP Morgan, as well as important figures in the scene such as Waren Buffet and Bill Gates.

Whether Goldman’s adoption is a move towards mass adoption of this innovative technology or just a short-term opportunity to make fast profit for the major banking institution, we can say with greater certainty that cryptocurrencies and blockchain technology are here to stay.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Revolut: Apps For Cryptocurrencies

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For the last few months, it seems like we have been transfixed in the collapse of crypto prices, trying to figure out what is going to cause the next move up.  The answer is not easy to find. So I thought it might be an interesting change of pace to look at a fintech company that is participating in the crypto movement but has a few other cool things going as well.

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This may not fatten your investment account immediately but it should take your mind off bitcoin for a few minutes.  After that, who knows.

Big Valuation

Revolut is a UK based payments company in business since July 2015.  Last summer Revolut founders Nikolay Storonsky and Vlad Yatsenko raised over $66 million in VC funding and another $23 million from crowdfunding.  Yes, the Crypto buzz had something to do with their success. But there is quite a bit more.

Storonsky must be pretty good with a pitch deck considering the implied $200-$400 million valuation of the company.  He and his partner have deep experience in the global payments business. Nikolay spent years as a currency trader with Credit Suisse so he understands the absurd level of fees charged by the current system.

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The technical wizardry, however, rests with his partner Yatsenko. Vlad spent over ten years building financial systems for major Wall Street investment banks.  He serves as the company’s CTO.

Crypto Link: An Interesting Approach

According to company literature, the Revolut app allows customers to open a current account in under a minute, and includes a prepaid contactless MasterCard debit card.  So far there is nothing unusual about Revolut. But wait, there’s more.

The firm launched personal international bank account numbers (IBANs) across Europe just recently, and plans to integrate virtual currencies like bitcoin, Ethereum and Litecoin in the future.  This includes plans to add a wealth of new services in the coming months from the integration of cryptocurrency to pay-as-you-go travel insurance at the tap of a button.

Even before this gets accomplished, Revolut offers a currency exchange with 25 different currencies and a peer-to-peer payments service.  As Storonsky tells his story, “ . . . what we are demonstrating goes beyond banking.”

The one question investors are raising is how all these wonderful free services will be monetized.  An announcement this week should provide at least some answers.

CNP Fraud Prevention

Revolut has a new product aimed at tackling online card fraud. The mobile-only bank unveiled a virtual card that wipes a user’s card details and introduces new details each time they make a payment.

When people make an online payment, they enter card details and most often online retailers hold onto the data. This is where fraudsters have a field day.

In the trade it is known as Card Not Present (CNP) fraud.  As online shopping has increased steadily, CNP fraud has risen exponentially – something like 50% annually.

What happens is, every time you make a transaction, Revolut software deletes the card details so it’s impossible to make any transaction after that.  Just in case you were wondering, all the data remains in the browser of the customer. So the quality of customer service is not sacrificed.

Full Disclosure  

Revolut is not your typical ICO (i.e., all whitepaper and no product).  It is not fueled by any cryptocurrency or token. I first came across Revolut following their VC round last year and was impressed with the valuation, background of the founders and the business model.  I have no vested interest in the company. Someday the VC will want to cash out most likely through an IPO. So Revolut is a name you will want to keep track of.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 76 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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