July 24, 2015- In This Issue:


5 Ways That Cryptocurrency Improves Lives

Cryptocurrencies like Bitcoin can improve lives. That's an undisputable fact that we have seen evidence for over and over again. Below we have listed five ways cryptocurrency improves lives. Let us know in the comment field how you think cryptocurrencies improve lives.




Many who choose Bitcoin and other cryptocurrencies as a means of exchange and storage would otherwise choose cash in daily life. Cash doesn't know anything about its holder. On the face this may sound nefarious, but in fact it's more a protective measure based on experience for most. For others, it's just a matter of comfort.


Whatever the reason, users seek privacy. Every time a credit card is swiped, personal information is entered into databases. It is hard to believe that such databases are all secure enough to protect this information from bad actors, especially in light of recent events such as the Target breach. Even those who outsource their security and payment processing, occasionally compromise user privacy inadvertently when their vendors are compromised. If you're looking for a version of cash that can be spent in the same way that credit cards are used online, cryptocurrencies can help you. There are some which focus specifically on privacy and obfuscation of user data, such as Dash.


Magister Advisors: "FinTech Revolution will Force the Second Great Restructuring of the Banking Industry in a Decade"

The rise of next generation Fin Tech companies will trigger a wholesale restructuring of the banking sector, according to tech M&A advisory firm Magister Advisors. 


Key to survival will be the Banks' adoption of the restructuring model applied by telecoms companies, dividing into 'NetCos', responsible for the underlying operation, and 'ServCos', concerned with service provision to customers. 


Victor Basta, managing partner at Magister Advisors, said: "Banks can survive, maybe even prosper, by proactively focusing on becoming world-class 'NetCos', standing behind and supporting thousands of 'ServCo' FinTech startups out-innovating each other for customers' wallet-share across a wide range of financial transactions.  Banks that become 'NetCos' could become the spade sellers arming a thousand gold-digging 'ServCos', which is a great and safe way to generate high, repeatable margins." 


The Global financial crisis of 2008 changed banks dramatically. Retail banking and investment banking separated, or were forcibly separated, to bolster against the risk of repetition.   Since then, banks have begun to face an even more profound threat; a wave of well funded international tech innovators focused on customer experience.  Much of the new innovation, with its emphasis on mobile, is making traditional banking practices look archaic.  According to analysis by Magister Advisors, more than $10 billion of venture capital has poured into FinTech startups in recent years representing unprecedented investment weaponry directed squarely at traditional banks. 

Standard Chartered Innovation Chief Says Blockchain Could Drive Down Transaction Costs

The blockchain has potential to drastically cut transaction costs while improving the security, transparency and auditability of transactions, Standard Chartered chief innovation officer Anju Patwardhan wrote in a blog posted on LinkedIn. Patwardhan is the latest in a string of financial industry executives to voice support for blockchain technology as a potential disruptive force for transforming financial services.


"If this takes off, prices for trading, money transfers, remittances, credit cards and other products could potentially be undercut drastically to the benefit of customers," Patwardhan wrote in a post titled, "Blockchain - a disruptive force for good?"


In addition, as firms are facing increasing regulatory pressure to prevent money laundering, the distributed ledger technology that underpins bitcoin could make transactions more transparent and easier to monitor and track, she said.


"With the use of blockchain technology, each leg of the transaction can be recorded and traced, making the ultimate destination and use of the funds clearer," Patwardhan wrote.

Betting on Blockchain: Firms Seek Fortune in Bitcoin's Plumbing

LONDON, July 22 (Reuters) - A year ago, bitcoin was widely dismissed as little more than a way for drug-dealers and terrorists to move money around anonymously. Now, some of the world's biggest banks and companies are buying into the technology behind it.


Underlying the controversial web-based "cryptocurrency" is the blockchain - a massive ledger of every bitcoin transaction ever made that is verified and shared by a global network of computers.


But the data that can be secured by the blockchain is not restricted to bitcoin transactions. Any two parties could use it to exchange other information, including stock deals, legal contracts and property records, within minutes and with no need for a third party to verify it.


Backers say it could cut out the middleman and help fight corruption, as the process by which the data is secured makes it virtually impossible to tamper with. Banks reckon it could save them money by making their operations faster, more efficient and more transparent.


But these are early days - bitcoin was invented just six years ago - and the blockchain is still being experimented with. As is often the case with new technology, as when Apple released the iPad, it is not clear what problem it solves.


Peter Kirby, CEO of Texas blockchain-focused start-up Factom, likened the technology's stage of development to that of the internet in the early 1990s, when it was seen as little more than a way to send emails.


"Here we are again in the email for the internet era, and everyone's like, 'Oh, it's all about moving money through the world.' No. It's about a giant distributed ledger that you can write anything to and never unwrite it."

The Cashless Society

There is a movement occurring which has been very prominent in Europe. The movement from cash to non-cash payments. Scandinavians depend on cash approximately 6% of the time compared the US where this figure is 47%. Politicians in Denmark are deciding whether to let retailers accept only card. No cash. This proposal in Denmark is part of a package of economic growth measures.


Why is this happening?


Cash is expensive. Whilst it sounds paradoxical, there are many costs to take into account when paying with cash. There are three main reasons. Firstly, time. Business owners pay wages to employees to handle and sort the money, retailers would also be able lower their security costs. Secondly, the implication of crime is another factor of consideration. Without cash there is a much lower probability of theft arising. Thirdly, there are bank charges involved in depositing physical currency.


If reforms similar to those in Denmark are to be proposed in countries such as the UK, there may be an increase in government revenue, as there would be somewhat of a reduction in tax evasion. One may go as far as saying that the informal economy would diminish significantly, as less 'unrecorded' and anonymous transactions could be undertaken.


Reasons against the movement


If the UK were to become a cashless society, the offsetting of physical theft may be superseded by increased digital theft. Last year card fraud rose by 6% in the UK according to Financial Fraud Action (FFA UK) and in Sweden cases of card fraud have doubled in the last decade. However, it is possible that as we verge towards a cash free society, the additional money saved would be able to compensate for increased security measures to prevent such breaches and crimes occurring in the future.


Another hypothetical disadvantage of a cashless society is that there may be negative ramifications for both the elderly and homeless. Whilst some of the elderly may be sceptical of new technology and uneasy with the inability to hold physical cash, in the long term this may diminish as contactless payment becomes commonplace in every facet of society. The homeless may find it challenging to rebuild their lives given the challenges with establishing a bank account with which to transact.


6 Things You Missed from the State of Bitcoin

Last week, CoinDesk released the latest report in our quarterly State of Bitcoin series.

Just like all our reports to date, the State of Bitcoin Q2 2015 was an all-encompassing look at the bitcoin ecosystem, clocking in at just shy of 100 slides of data.


It was the first positive quarter for bitcoin since this time last year, characterised by increased attention amidst the Greek crisis and interest from banks and governments in blockchain technology.


However, these weren't the only takeaways from Q2. Here, we've put together a few hidden gems from the report you might have missed.


1. Bitcoin is on track to outpace the Internet


Bitcoin, more than anything else, is often compared to the Internet back in the technology's early days. Both are rooted in fringe ideologies and, if you believe the hype, both have the ability to disrupt and empower via distributed networks of data.


The comparison is something that the State of Bitcoin has tracked since the series began. So, how is the currency fairing so far?


In investment terms, bitcoin startups are outperforming expectations - with $786m predicted to be invested in bitcoin by the end of this year (Slide 38), versus the $639 Internet companies netted in 1996.


This is taking into account BitFury's latest $20m deal, which took place in Q3, alongside inflation and other startup running costs. Last year, bitcoin exceeded investment in 1995 Internet startups by $112m.


2. Bitcoin is looking more like a currency


Over the course of the currency's short history, bitcoin has made a name for itself in the media as the speculators' drug of choice through its dramatic peaks and troughs. While great headline fodder, these wild swings have limited bitcoin's reliability as a day-to-day currency.


However, as volatility has eased off over the last few months, bitcoin's trademark spikes have been smoothing out. The report shows that Q2 saw the lowest peak-to-trough percentage (20%) in recent memory. At its highest, the price was $262.48 and its lowest, $218.27 (Slide 11). This is down from 84% the same time last year.