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Why You Must Buy The Brand Names

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No matter if you are a developer with deep knowledge of technology or a prospective first time investor, your choices are pretty mind-boggling. This year started with 1384 cryptocurrencies. More are coming every week.

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Literally billions are being made but how to choose the right one. If it means spending you life buried in complex technical blogs trying to understand both the obtuse technical language and then the writers jargon, you may decide to bail.

Putting Perspective on The Technology

There are loads of folks who understand the different technology between bitcoin and Litecoin or between Ethereum and Cardano. My perspective comes from analyzing dozens of businesses over more than four decades and cryptocurrencies is one of the most promising yet.

Simple Solution

Here is a solution that will help you cut through the complexity. Buy the best brand name. Classic investment risk management dictates a completely different strategy. Every certified investment advisor will recommend risk diversification and clearly cryptocurrencies are about as risky as you can find.

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However, after digging through all 1384 cryptocurrencies, you will be fully diversified by owning just two brands. The couple that we are talking about is bitcoin and Ethereum.

There are other choices in the top ten like Ripple, bitcoin Cash, Cardano and Litecoin. Each brand is worth researching but none offer all the combined benefits of bitcoin and the Ethereum Network.

ICOs Don’t Need To Be Confusing: Look To Ethereum

 In the past year some huge returns have been chalked up by initial coin offerings. Here we are talking about companies seeing their value go from fractions of a penny to dollar multiples in no time. The challenge is how to choose the right one.

Consider what you are dealing with. Initial coin offerings allow companies that are at pre-venture capital stage to get started. So the risks here are higher than investing in a blind pool venture capital fund.

The accepted formula by VCs is to aim for a success rate of 2%-5%. This means that 95% of the companies that are much further developed than most ICOs will fail. With your chances of finding the dream ICO generously placed at 1%-2%, why bother.

In 2017 more than 1,000 ICOs raised about $4 billion. According to ICO Watch List, 78.7% of those used the Ethereum platform. So if you want to play the ICO game, why not simply own the gas the powers the network: Ether.

 The Ethereum Brand: Think Microsoft Corp

In a recent CNBC interview Ethereum co founder Steven Nerayoff made the comparison of Ethereum with the early stages of Microsoft Windows. Along with Bill Gates, Microsoft is one the world’s most ubiquitous brands. Side note: Microsoft didn’t reach Ethereum’s present value until after ten years of Windows.

Nerayoff cites billions of dollars being poured into as many as ten times the number of projects in 2018 over the previous year. From his vantage point these projects include a wide breadth of industries starting from financial tech, oil & gas, gaming, travel/resorts, government and various creative areas.

According to Jeremy Millar, cofounder of the Enterprise Ethereum Alliance (EEA), CEOs across the world are clamoring for blockchain technology. Millar believes most CEOs require a heavy dose of education about the new technology and that means there will be a natural demand for the largest supplier with the biggest brand- Ethereum.

A key to Ethereum’s brand leadership started last February when the EEA to connect Fortune 500 companies with Ethereum experts. Now with almost a year under their belt membership has grown to over 300. This is brand leadership in the most important market for Ethereum. Nobody else is close.

The Bitcoin Brand

Think of bitcoin as a brand like MasterCard, Visa, American Express or even Crest toothpaste. Each of these names enjoys instant consumer recognition thanks to million invested in advertising, marketing and image development. Bitcoin is unique in the sense that not a single bitcoin has been spent to advertise its usefulness.

One source claims there are well over 10,000 merchants that accept payment in bitcoin. Headliners include Microsoft Corp, Subway, Whole Foods, Intuit, Expedia, Bloomberg, Dish Network and Overstocked.

Ask First Data, Fiserv or any other payments processing company and they will attest to the difficulties of changing client habits in accepting payments. Any newbie attempting to enter the payments business will have to answer the dual questions: what makes you better, faster and cheaper then bitcoin and do you have greater consumer acceptance? Right now, bitcoin has a lead of at least two year and they aren’t sitting still.

The Bitcoin Moat Is Being Built

 Bitcoin is the king of digital currencies but the king is not perfect. There are those shortcomings like volatility and slow speed.

The start of a bitcoin futures market began on December 18. The CME and CBOE are giving everyone the ability to hedge. The prospect of reduced price volatility will attract additional mainstream retailers.

No more than a few days after futures trading began on the CME, one of the largest luxury used car dealers in Japan announced the acceptance of bitcoin. Since then the giant investment bank Goldman Sachs has created a research team and issued a glowing report on the cryptocurrency outlook. The tipping point for bitcoin has taken place.

The bitcoin moat is being built even wider by Bitcoin Lightning Network, which was released this week both increasing speed and resulting in dramatically lower fees.

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 75 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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2 Comments

2 Comments

  1. douglash

    January 13, 2018 at 11:13 am

    Wow, are we paying to subscribe to Hacked to get the advice, “Just buy ETH and BTC for full diversification”?

    A more sophisticated approach to diversification would be to think about various token functions as ‘sectors’ and buy 2-4 high class offerings within each sector. Example:

    Store of Value coins: Bitcoin, Diamond
    Convenient Transaction coins: Dash, Litecoin, Bitcoin Cash
    Smart Contract coins: Ethereum, NEO, QTUM, Cardano, EOS, Lisk, Ethereum Classic
    Business-friendly coins: Ripple, Bancor, Neblio, Modum
    Functionality coins: Raiden Network, BlockCat,VeChain, Walton Coin, Quantstamp
    Exchange coins: KuCoin Shares, Binance Coin, COSS, Spectre, Kyber Network
    Blockchain for the Masses coins: Everex, UTRUST, NEM, Stellar, Omise Go
    IOT coins: IOTA, IOT Chain, Golem, SPARK
    Privacy coins: ZCash, ZCoin, ZClassic, Monero, Pivx, Zen Cash
    Masternode coins: Dash, Pivx, Diamond, Crown
    Change the World coins: SALT, Substratum, Civic, ARNA
    AI coins: Deep Brain Chain, Neurotoken, Red Pulse

    I could call out a few more sectors, but you get the point. There are key differences in utility of these blockchain ecosystems. Targeting high quality coins within each sector is a far better approach, to me, than just loading up on ETH and BTC. It’s a lot of coins, but the great thing about being diversified is that you really don’t need to trade often. Every day you’re having a good day in some sector.

  2. douglash

    January 13, 2018 at 11:15 am

    *sorry, Golem and SPARK were supposed to be under AI coins.

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Walmart’s Flipkart Deal: The Dawn of a New Day in India

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It’s the dawn of a new day in India, particularly cross-border investment, thanks to Walmart’s groundbreaking controlling stake in Bengaluru-based e-commerce darling Flipkart. Walmart has tried for years to no avail to enter the South Asian country, until now.

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As a result of the deal, Walmart now has five seats on the online retailer’s board and is poised to play an influential role on the direction of the company — including a possible Flipkart IPO — setting the tone for further investments into the region in the interim.

It’s $16 billion deal values Flipkart at a whopping $21 billion and helps the Arkansas-based big-box retailer to compete more fiercely with Amazon, considering that the integration goes smoothly. Walmart has chosen a controversial target company to kick things off. Flipkart has been at the center of a saga ironically surrounding a previous cross-border investment.

Amazon is fighting back, however, as evidenced by it reaching into the belly of western India including Gujarat’s Bhuj, where some residents don’t even have online access. Amazon is taking an Etsy-like approach there with a focus on handmake craft items that are unique to this corner of the world.

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No doubt corporations around the world have it on their radar as a possible harbinger of more cross-border investment activity to unfold in the region.

Gopal Jain of Mumbai-based private equity firm Gaja Capital told The Financial Times: “India continues to be perceived in global boardrooms as a tough place to do business in.” But he also said that as a result of this deal, global executives have gone from “being on the heels to being on the toes.”

India’s Cross-Border Investment

The overhaul of India’s international investment has been two decades in the making. And while India Prime Minister Narendra Modi says his administration has opened the doors to foreign investment, there still hasn’t been much evidence of that. For instance, cross-border M&A into India totaled $14.5 billion last year, lagging the performance of other developing countries including Brazil and China by as much as 50%, as per Dealogic data cited in the FT.

Indeed, the last time that a deal of anything close to the size of Walmart’s Flipkart acquisition was more than a decade ago in the telecom space when Vodafone took a majority position in Hutchison Essar. That deal left a sour taste in the mouths of would-be pursuers given hostile tax environment in which Vodafone was forced to operate.

Prime Minister Modi has the opportunity to prove to the rest of the world that India indeed is open for investment. If the Walmart deal can somehow help to shake the stigma that is attached to foreign investment into India, as evidenced by the “tax terrorism” that’s been attached with the region, it, in fact, could reflect the dawn of a new day for cross-border M&A in India.

Feature 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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4.5 stars on average, based on 6 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. Full disclosure, she's invested in bitcoin.




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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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