Tag: bitcoin

FinTech 101: What is a Green Bank?

On February 8, 2021

What Is a Green Bank?

You may have heard the term “Green Bank” and wondered what it meant. This short article will explain the term and concept behind it.

Green Banks in a Nutshell
A green bank is a bank that exists for the sole purpose of battling earth climate change by funding projects that may be able to decrease the global carbon emissions and increase the use of alternative and renewable fuels and energy. They tend to support infrastructure spending in wind, solar, and other renewable energy space.

Green Banks: Functional Model
Green banks are not climate charities. Their funding is expected to be paid back with a profit for the bank. Currently, they are supported by some states in the U.S. and also by private funding. Green Banks utilize philanthropic and public funds. They generally fund energy projects that beyond the research stage and “good to go”. The Coalition for Green Capital (CGC) is a nonprofit agency that is deeply involved in advocating for green banks’ continued development.

Where Did the Idea for Green Banks Originate?
The idea for green banks started in 2008 when two entrepreneurial-minded, Ken Berlin and Reed Hundt, came up with the concept as part of the Obama transition team’s plans for promoting cleaner energy changes in US society. A proposal to enact federally supported green banks was attached to the American Clean Energy and Security Act. The concept never made it as legislation at the federal level. Green bank supporters were not daunted. Consequently, green bank advocates persuaded some states to take up the cause.

Green Banks: Some Statics
Currently, there are at least ten states that have at least one green bank. In addition, they are in the early stages of catching on globally as well. They also exist in Australia, the United Kingdom, and Malaysia. Within the U.S., green banks have already been involved in the funneling of some $3 billion in funds for clean-energy projects.

Green Banks: Their Future Development
With the advent of the Biden presidency, green banks may again find a firmer footing at the federal level. Indeed, in December 2020, Mr. Biden proposed the idea of a national green bank. They appear sure to gain more traction internationally as the desire to dampen climate change takes hold.

The Ins and Outs of Cryptocurrency Mining

By Jacob Parker-Bowles

On October 30, 2020

In FinTech, Jacob Parker-Bowles

Most people have heard of cryptocurrencies by now. Bitcoin and Ethereum are two prominent examples of this type of currency. Crypto is designed to be secure. It utilizes blockchain technology to create a secure record of transactions. Many people invest in crypto by trading through marketplaces, much like traditional ForEx markets. Of course, it’s also used for transactions. Cryptocurrency has the advantage of being anonymous. It’s very difficult to trace. Famously, this intense focus on security has made it very popular on the dark web.

Cryptocurrency is created through a process called mining. Miners also add new transactions to the ends of blockchains. Working as a cryptocurrency miner requires some seriously powerful computer technology. Traditionally, powerful graphics cards have been needed to conduct an effective cryptocurrency mining operation. Miners also need to be very proficient at math. It’s a competitive field, and being able to solve problems more quickly than other miners is essential to success.

These days, miners tend to work in large teams. It wasn’t always this way. It used to be fairly easy for an individual miner to get set up. In fact, in the beginning, there was really no financial reward for creating new blocks in a chain. The people who did this work simply believed in cryptocurrencies. Over the years, some big investors have been getting involved in the mining space. This includes big high street banks. Individuals have had to form larger groups in the hope of competing with these large groups.

The financial rewards of cryptocurrency mining are sizable. A newly-mined block can be worth up to 12.5 bitcoin. That’s quite a bit of money. Each new block needs to contain data proving that the miner who’s claiming it actually did create it. Essentially, they must show their work in solving the mathematical problems in order to get the reward. This is still a fairly wild marketplace. Japan has started regulating crypto, but only lightly, In other countries, there are still no rules.

It’s expected that this will change in the near future. For one thing, investors risk being burned and losing large sums of money. For another, it’s highly likely that governments will want to start collecting taxes on the capital gains associated with cryptocurrency transactions.

How To Avoid Fake ICOs

By Jacob Parker-Bowles

On June 12, 2018

In FinTech, Jacob Parker-Bowles

It’s hard to avoid hearing about cryptocurrencies these days. Amazing return for Bitcoin, Ethereum, Litecoin, and many others tantalize professional and amateur investors alike. Bitcoin’s meteoric rise captured the public’s imagination. Less famously, Ethereum rose from just $8 at the start of 2017 to near $700 in March 2018. Such returns are an investor’s dream come true.

With all the publicity, many firms have turned to initial coin offerings (ICOs) to raise capital. ICOs are like cryptocurrencies, but they are issued by private companies in the same way startup corporations issue stock. The concept of the ICO is simple. Investors get a piece of the company by buying the coins the company issues. Theoretically, if the company is successful, the coin appreciates in value. In this way, ICOs work much like traditional initial public offerings of stock.

Except stocks are highly regulated. ICOs are more of a wild west type of investment. That being the case, many are cautious about ICOs. Due diligence is just as important, if not more important, in selecting an ICO as it is in picking a stock.

How to avoid scams

As a wild west investment, scams are out there. Fake ICOs have popped up. As Cryptocompare explains, there are several ways to spot a fake.

Be on the lookout for ICOs touting unrealistic expectations. An ICO that promises to fix global warming is a scam, as are ones that offer out-of-this-world price predictions. Also, be wary of any ICO promoters who use a salad of buzzwords that offer no substance. Also, any legitimate ICO will provide a detailed white paper. If the white paper is just a rehash of buzzwords and unrealistic expectations, you can bet you are looking at a fake ICO.

Email scams

Darryn Pollock warns against phony emails purporting to be from crypto wallet providers. These emails attempt to entice users into providing their private keys, allowing the scammers to steal their cryptocurrency.

Look out for phony profiles

ICO investor Ankit Kumar recommends checking on the profiles of the ICO’s founders and advisers. Often, scam ICOs will put up fake names and fake biographies. Check these names against all the research tools at your disposal, such as LinkedIn, Facebook, Twitter, and Instagram. Are these real people? If they are, you should be able to cross reference them.

Robinhood Makes Cryptocurrency Affordable and Accessible

By Jacob Parker-Bowles

On May 5, 2018

In FinTech, Jacob Parker-Bowles

Cryptocurrency is rapidly becoming one of the most popular investments, especially among young people. Dedicated investment platforms that focus on the currencies, such as Robinhood Crypto, are starting to come into use. More than a million people signed up for the platform’s early access program, largely due to the way that it makes trading easy and affordable for the average investor.

Zero-Fee Trading

Zero-fee trading is the primary reason for Robinhood’s popularity. Most trading platforms charge fees of at least 1.5% for trades and fees that reach up to 4$ are fairly common. That isn’t a huge problem for experienced investors, but it does prevent new or casual investors from taking part in the system by eliminating a large portion of their profits.

Robinhood is popular with that segment of the market because it does not charge any fees. That reduces the profit margin that the traders need to attain to justify their risks, which makes it easier for novices to come out ahead. Robinhood funds its platform by collecting interest on money that is deposited into investor accounts, just like the way that a bank makes money on deposits.

Ease of Trading

Part of Robinhood’s popularity also comes from the tools that it offers to make trading easier. Most of these tools were already in use for stock traders but had not become available to people who invested in cryptocurrency.

The platform allows a rapid transfer of up to $1000 from a bank account to the investment account, with the usual ACH transfer being necessary for larger sums. That money can be used to purchase cryptocurrencies at any time, and some transactions will even be automated through the system. Stock trading is also integrated into the platform for the convenience of investors.

Security

Security is the final factor that is causing people to use the Robinhood platform. The platform helps to address security concerns by using a mixture of both hot and cold storage systems for the cryptocurrency, which provides a layer of protection from hackers. Regular reviews of the system’s code and careful management of the company’s personnel will also help to prevent the loss of data that could expose investments to theft. Taken together, these policies provide an adequate level of protection for investors.

Altcoins That Are Worth Your Attention

By Jacob Parker-Bowles

On December 22, 2017

In FinTech, Jacob Parker-Bowles

When the average person thinks of cryptocurrency, they likely think of Bitcoin. Not only is it the most popular, it is also the most expensive, and some say the most volatile. While most cryptocurrency are tied to Bitcoin, either by using similar code to create it or simply through the market, each coin has its own distinct use and purpose. I suspect that in the future, a few altcoins will rise above the rest and will stay. Although I think everyone should put many hours of research into anything they invest in, here are some interesting altcoins to keep your eye on.

Litecoin

Litecoin is, in its basest form, a copy of Bitcoin. However, Litecoin comes with some distinct advantages that set it apart. It has a limited number of coins, just like Bitcoin, but it is larger at 84 million versus Bitcoin’s 21 million. It also processes transactions 4x faster than Bitcoin (with an average time of 2.5 minutes), and allows for better technology to be implemented. This has resulted in lower waiting times for transactions, as well as lowered fees. Finally, Litecoin is more fair to miners when they are rewarded.

Another reason Litecoin is a great altcoin to watch is it is easily accessible for even the most tech-illiterate. You can quickly buy Litecoin on Coinbase, which also offers a Litecoin wallet. Also, Litecoin is tremendously less expensive than Bitcoin, coming in at a few hundred dollars, rather than several thousand. While I cannot suggest anyone go and buy Litecoin, I think it is an altcoin that is worth watching out for.

Ripple

Another altcoin making waves is Ripple. Many people looking to exchange currency are doing so through Ripple. The currency itself has a built-in way to switch currency instantly. For example, people looking to travel may use Ripple, because they can convert from their country’s currency into their destination’s.

Likewise, banks are interested in Ripple for these reasons. It becomes much faster and less expensive to exchange currency through Ripple, rather than the traditional way. This is a bonus to both the bank and the consumer, as rates to transfer are significantly lower. Furthermore, Ripple can be a benefit to overseas merchants, and may eliminate excess fees for foreign buyers. This one factor is why I think we can expect to see Ripple adopted on a broader level than Bitcoin or Litecoin.

Monero

One benefit of cryptocurrencies on the whole are their anonymity. However, none is safer than Monero, which claims to provide complete discretion with your transactions. Because Monero is completely decentralized, you are 100% in control of your money, and if you lose it, there is no way to get it back.

Due to the nature of Monero, it is used heavily by criminals. While I do not condone criminal activities, I would be foolish not to recognize that this cryptocurrency has staying power for this reason. Also, many celebrities and companies are offering discounts to anyone who makes a purchase using Monero. I have mixed feelings about Monero, however, I will continue to watch it and see what happens next.

As I’ve said previously, I cannot and will not give you advice on how to invest in cryptocurrency. However, these three altcoins are becoming quite popular, and anyone interested in the options available may want to watch what happens to them. I believe that altcoins, just like Bitcoin, are going to become even more mainstream, and we will likely see more great altcoins join in the future. For now, we will have to watch the market and the news carefully before deciding where to place our money.

The Cashless Trend

By Jacob Parker-Bowles

On November 22, 2017

In FinTech

Every day, society is making moves toward becoming more cashless. It started with the wave of debit cards and credit cards making it less necessary to carry cash. Now, with the rise of cryptocurrencies, Apple/Android Pay, and other fintech services, carrying cash on you seems to pose more risk than reward. Today, I want to break down what society will look like as the world continues to adopt cashless options and moves away from paper money.

To begin, let’s look at cryptocurrency. Bitcoin is an example of a desire for anonymous, neutral money. By this, I mean people like being able to go anywhere and use their money without having to worry about foreign exchange rates and understanding how foreign currency works. Now that countries are more readily utilizing Bitcoin, at least in major cities, people don’t have to worry as much about preparing for their next trip.

Speaking of trips, we make trips regularly, whether it’s to a corner store or across the sea to another country. Going cashless would make traveling so much easier. There are still many cities (particularly in the USA) where buses and subway trains only take exact cash. Consider how many people would rather pay with a card or their phone, rather than having to count out dollars and cents, and overpaying if they don’t have the exact change. Luckily, many European countries are adapting to the cashless wishes of their citizens. One stellar example is the London Underground. Oyster cards are easy to use for residents and tourists alike, and I expect to see most countries utilizing similar technology in the years to come.

Restaurants and businesses also gain huge benefits from running cashless. While gas stations may be easily robbed now, in a few years they may not accept cash anymore, which can lead to a decrease in robberies. Sure, companies who run strictly cashless need to invest in cyber security to prevent hackers from exploiting their faults, but guarding against hackers is a much safer situation than guarding against men with guns.

One area that I imagine could easily move cashless is utilities. Many people (perhaps most) pay for their utilities online in some capacity. Nobody sends real money, and older people are the ones most likely to write a physical check. I don’t necessarily expect companies to begin accepting Bitcoin immediately, but I do believe there will come a point where they refuse to take a paper check as payment.

Of course, all of this leads up to banking. Banking is going to be one of the most rapidly evolving fields over the next decade or two. Traditional banks will begin shutting down as customers flock to online banks, where interest rates on savings and checking accounts are substantially higher. It is also predicted that AI will automate many financial services, making physical locations with real people irrelevant. Also, if cryptocurrencies keep their upward momentum going, there may be no need for a bank, traditional or online.

The next few years will be interesting, given the rise of so many fintech companies. Old systems are sure to be phased out, and I predict that the landscape of finance is going to change drastically. For now, we have to wait and see what the newest technologies will bring.