1.15.2016
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THE SKINNY
Can’t We All Just Get Along?
Bitcoin, the virtual currency network, is going mainstream. And you know what they say: Mo’ money, mo problems.
What’s the Problem?
It really comes down to how many financial transactions the network can handle. Bitcoin’s creator Satoshi Nakamoto initially put a temporary limit on the number of transactions to protect computers on the system. But, to compete in the big leagues along side companies like PayPal and Visa, the Bitcoin network would need to process more transactions. So, to increase the number of transactions on the network or not? That is the question.
Is It Really That Serious?
When the question came up last year, two camps quickly formed: One in favor of the increase and the other against it. Points of contention over technical capabilities and financial interests have added to the mounting tension between both groups. Some Bitcoin developers have even received death threats, ultimately leading them to bow out of the whole Bitcoin system all together.
GIVING THE PEOPLE WHAT WE THINK THEY WANT?
To settle the score, the group favoring the increase peeled off and created software allowing for more transactions called Bitcoin XT (XT). But shortly after XT’s release and endorsements of the software from the likes of CoinBase and others, a hacker released Bitkiller, a malicious software, to take down computers running XT. The hacker claims he was paid off to get rid of Bitkiller.
Where Do We Go From Here?
Since then, the Bitcoin community has gotten together twice to try to reach a better compromise but no answers yet. It’s pretty unclear where things are headed. Oh, the drams!
WHAT ELSE IS GOING ON?
Party’s Over …
China’s not the place if you’re trying to get your Fintech company off the ground. The government’s taking “corrective actions” that’ll force Fintech startups to either consolidate or simply fold. This is a 180 from the Chinese governments initial outlook. At one time, It was all about Fintech startups so they could compete with Chinese e-commerce companies like Baidu, Alibaba and Tencent. But, now China has changed its mind. Thanks to things like new regulations, unsustainable business models, and low return on investments (ROIs), these startups will struggle this year. E-commerce companies aren’t safe either. But, you know who will be? The banks, of course. If things go as planned, banks in China should reclaim their power in no time.
When You’re All About It …
Wall Street is embracing Fintech companies with open arms. Fintech can mean a lot of things but basically covers services and apps that help make financial transactions happen. Banking vet and Silicon Valley Bank’s Head of EMEA & President of the UK branch Phil Cox thinks that Fintech “winners” will be companies that can offer solutions to major problems like improved customer service from banks. Seems like a no-brainer …
If Only We Knew What You Were Talking About …
Nasdaq, the New York Stock Exchange, and the entire capital markets crew wants to know how they can make blockchain technology work for them. So, what’s stopping them? According to one study, the talent just isn’t there. In other words, there just aren’t people that understand both blockchain technology and the ins and outs of capital markets. Also, there’s the other issue that blockchain technology may not pair nicely with existing IT infrastructure of capital market firms.
THE STREETS ARE TALKIN’
Messaging app Snapchat wants to do more than just make sure that your sketchy pics don’t last. It wants to help manage your funds by getting into the robo-adivsor biz.
Moneybox, a U.K. startup coming to us soon, wants to make sure that you save and invest some of your coins. It just pulled in US $3 Mill to help make its dreams a reality.
CoinDesk, an online publication about all things Bitcoin, just got bought out by the Digital Currency Group, an industry leader.
Is PayPal drinking the Bitcoin kool-aid? Likely story. The company just brought on bitcoin entrepreneur Wences Casares to join its Board of Directors.
It’s a good time to be in the payments biz. The 10-year-old payment startup Adyen is worth about US $2 billion, but no one’s heard of it. The startup wants to change that and is looking to cause a media frenzy by taking its financial situation public (even though it’s still a private company). Interesting…