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Google, Facebook Colonizing Banking World, Are Cryptos Substituted?

A strange occurrence is unfolding in the economic industry. It has been developing in the past few decades. After the internet came and communications became effective, the financial world underwent a technical reconstruction. Those locked out due to lack of capital got some reliable refuge in this revolution. E-commerce startups and internet brokers with a mere ‘.com’ suffix proliferated. Some of the entities threatened to overthrow the traditional entrenched financial institutions. Among them was Confinity, the current PayPal, which was the first online payment processor. Unknown to many, financial disruption was PayPal’s original intent. Luke Nosek, the PayPal co-founder, recalled the company’s original venture speaking at the World Economic Forum in February 2019. He said: “The initial mission of PayPal was to create a global currency that was independent of interference by these, you know, corrupt cartels of banks and governments that were debasing their currencies.” The disruption of the financial industry left banks choosing between adapting and going extinct. Eventually, PayPal’s original plan failed and it became intertwined with the institutions that it had hoped to oppose. But, the 1990s disruption never really ceased. History may never repeat although it rhymes. The same phenomenon is happening again today. This time around, banks are threatened by the emergence and rise of Bitcoin and blockchain technologies. Notably, the whole decentralized network is gradually and constantly staging a financial insurrection. Facebook’s Entry It is not just startups trying to overthrow traditional banking institutions. Facebook has also joined in challenging the status quo with the introduction of the Libra project and other projects. Facebook Pay was launched on November 12. The firm unleashed a cross-platform fiat-based payment system for Instagram, Messenger, and WhatsApp. That announcement had a few people wondering. For months now, Facebook has been marketing its Libra project promising affordable, global remittances instantaneously. That concept has faced rejection from governments, watchdogs, and other critics globally. Most participants in the crypto community rejected the idea referring to it as a derivative trial to solve something that Bitcoin already fixes. Regulatory authorities globally united in opposition to what appears like a project that undermines the financial system. Libra’s early supporters have left the Association in large numbers in a revolt led by MasterCard and Visa. Yet, Facebook has gone ahead to release a payment system that appears to resemble the Libra initiative. The regulatory ‘noise’ seems to have scared the Social Media giant and its associates with Facebook even capitulating against pressure. The firm has, in the end, decided to offer a tried-and-tested, bureaucracy free payments network. Has Facebook also thrown in the towel just like PayPal abandoned its people’s currency dream? The issue may not be as straightforward as it appears with Facebook Pay localized within the United States’ jurisdiction for now. Hence, Libra still carries a significant use case worldwide. Also, Facebook still said that its Libra project is alive and kicking in an announcement by Deborah Liu. Liu is the current vice president of commerce and marketplace at Facebook and she explained: “Facebook Pay is built on existing financial infrastructure and partnerships, and is separate from the Calibra wallet which will run on the Libra network.” The question comes, if Libra is well, why the abrupt shift to Facebook Pay? Was the ‘noise’ around Libra just a trojan horse for a palatable foray into the financial sector. According to the CEO of Velocity Markets, Jonathan Kelfer, it not likely that Libra was just a detour: “Facebook Pay is in line with current services found outside the US, such as AliPay. Facebook sees a strong user value proposition for this means of payment and is looking to leverage it within its ecosystem. With Facebook Pay, users would inherently be restricted to their local currencies, lessening the potential for cross border payments and a more stable reserve. Conversely, Libra would act as a truly global currency.” Google Joins the Party Facebook is not the only behemoth that has joined the fintech revolution. After Facebook Pay was unveiled, Google also announced that it is planning its localized banking enterprise. The Search Engine Company has partnered with Citigroup and the Stanford Federal Credit Union to enable it to offer checking accounts through the Google Pay app. Google reiterated Facebook’s new-found rhetoric saying that the initiative would enhance the expanding digital ecosystem. Google’s ‘Cache’ project is already being lauded as the “future of banking.” Others are calling it the latest “Bitcoin killer.” With Facebook testing the finance world, Google felt it necessary to claim a major stake of its own. But, Google aims to get the existing financial institutions onside instead of fighting a losing battle with them. That strategy will most probably work in the firm’s favor. The backlash that Facebook encountered from the regulators is enough to make all tech firms looking to challenge the status quo to think twice. The New Normal FAANG companies have enjoyed a growing oligopoly within the industry for years. Now, their major focus on financial enterprises raises eyebrows. Kelfer thinks that it may be a strong attempt to hoard data that they have  not had access to: “Big tech is in the business of collecting and distributing information. Given their large ecosystems, they are likely to want to see frictions reduced in any way possible, including transactions. The data that can be collected from spending habits would also be valuable.” Interestingly, tech-finance migration appears to be in line with an ever-growing trend. A recent CoinShares report showed that social networks are rapidly turning into the new payment networks of choice. Various mobile payment platforms like Google Pay, Apple Pay, Amazon Pay, and now Facebook’s budding initiatives have a cumulative 6.4 billion active users between them. Additionally, around 40% of internet users choose these payment modes. Among these companies, just Facebook is harnessing the potential of digital payments and blockchain technology. How About Cryptocurrency? China’s CBDC laid dormant since 2014 to early 2019 and its revival corresponded with Libra’s whitepaper. It was suggested that the fears of capital flight through Facebook’s omnipresent currency resulted in a significant increase in the pace of CBDC’s development. The European Central Bank was also reviving its plans for a financial overhaul. According to Benoit Coeure, an ECB board member fears that Libra would cause a risk to the financial sector stirred a ‘wake-up call’ for the bank. With a loud wake-up call, the ECB awakened its TIPS project that it launched in 2018. TIPS means Target Instant Payment Settlement service and it strives to support real-time payments within the Eurozone. But, Coeure urged the ECB to launch a CBDC of their own. These are just a few examples but according to a Bank of international settlements report, almost 70% of banks could either be engaged in a CBDC or are planning to begin working on one. The world’s banks are gradually taking things into their hands with the threat of innovation knocking on their door. Many now wonder, why is Google going for the traditional institutions instead of investing in digital payments and innovating more? According to Kelfer, a former software engineer at Google thinks that the Search Engine company may have made that decision since banking is not within its remit. He commented: “True investment banking, underwriting, securitization, and many of the other hallmarks of Wall St would fall well outside the core competencies of big tech.” Kelfer also believes that Facebook will not succeed in going against the grain with its Libra project: “Libra has a very low likelihood of becoming a ‘global reserve’ in that central banks already hold a basket of currencies and interest-bearing instruments directly and manage these positions according to their mandates and local economic conditions. Central banks need to retrain control over these allocations, which would not be possible with Libra.” Interestingly, there is a unique prejudice in the matter of cryptos since even when Libra’s whitepaper launched, doubts developed on the token’s anti-competitive nature. Margrethe Vestager, the European Commission’s executive vice president for digital, even accused Facebook of trying to develop an isolated financial system. Ironically, Bitcoin runs on the very same basis of a decentralized economic system free of intermediaries. Bitcoin was developed to oppose the banking sector just like PayPal’s inceptive aim. BTC came after the 2008 financial crisis with its defiant intent coded into the genesis block by Satoshi Nakamoto. Now, as Facebook strives to surmount the bureaucracy of creating a new system and Google strives to update an already existing one, Bitcoin and the entire crypto sector already fix the issues that the big tech is seeking to innovate upon. Like what you're reading? Subscribe to our top stories The post Google, Facebook Colonizing Banking World, Are Cryptos Substituted? appeared first on Cryptovibes.com - Daily Cryptocurrency and FX News.
Cryptovibes

Bitcoin Miner Canaan’s IPO Nets Just $90M After Losing Banking Partner

Bitcoin Miner Canaan’s IPO Nets Just $90M After Losing Banking Partner Bitcoin (BTC) mining giant Canaan Creative has raised $90 million in its initial public offering (IPO) — over 75% less than expected.  According to Bloomberg, which quoted filings from United States regulator the Securities and Exchange Commission (SEC) on Nov. 20, Canaan sold 10,000,000 […] Cet article Bitcoin Miner Canaan’s IPO Nets Just $90M After Losing Banking Partner est apparu en premier sur Bitcoin Central.
Bitcoin Central

Russian Banking Giant Sberbank Awarded Blockchain Repo Patent, Parties To Settle Using DLT

In the latest turn of events, Russia's Sberbank Rossii becomes the first to obtain a distributed ledger technology (DLT) patent. The Sberbank blockchain patent obtained for an operational engine using DLT and a Repurchase Agreement (repo) dealing with a smart contract solution. The patent solution allows stakeholding parties to self-execute the deal after registering the […]
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Why Thinking In Terms Of Crypto Doesn't Work

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Ways of Raising Capital for Startup

There are many ways of raising capital for your startup. You must consider all options and choose the one that best suits your particular venture. Here we provide an overview of seven common ways of funding to help you weigh the pros and cons of each source and make an informed decision.

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Meh: Yet No Hidden Reason For Fluctuations Here

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This weekend was pretty calm. The market still continues to decline, and, as usual, the voices of bulls are becoming more and more faint. Meanwhile, it turns out that the Bitcoin name was trademarked for at least 10 years in the UK. Read further to know what's going on.

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All in this week’s News Digest: McAfee still has a lot of faith in crypto, Robert Shiller explains the roots of this faith, more new exchanges are coming, an investigation into Bitcoin price manipulation, and Verge is hacked again.

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Minor and major recent milestones in Top-50 coins and tokens, except for meetups and hackatons.

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Centra Tech's founders are sentenced to jail, Marc O’Brien joined Crypterium, ETF is launhed, Jack Dorsey’s opinion, Binance adds TrueUSD, China published its crypto rating, electricity consumption, Sberbank used Hyperledger Fabric blockchain, Microsoft joins the crypto ban, JP Morgan talks about crypto, Wozniak supports blockchain, ETH futures, Taihuttu still holds BTC, IBM’s token, crypto education in France

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Orchid to Debut A Privacy VPN Network Based on Token Technology in December

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How to buy and store Ethereum (ETH)?

Almost all activities, on the Ethereum network, are powered by its native crypto token Ether or ETH. ETH boasts of a $20 billion market cap and a circulating supply of ~108 million coins. This makes it the second-largest cryptocurrency by market cap.  The Ethereum network token entered the cryptocurrency trading arena in 2015. According to CoinGecko, since launch, ETH has registered a 2800 percent increment in price to date. Although Ether is down almost 87 percent after hitting all-time highs at ~$1500, it is pretty much an attractive alternative investment option because of the overall appeal of Ethereum, as a decentralized computing platform.  Many see ETH as a much more promising crypto investment option than bitcoin. Few Fortune 500 companies and financial trust Ethereum. They recognize it as the de-facto blockchain platform for building next-generation applications and monetary settlements.  For all of these reasons and more, many investors are rapidly adding ETH to their portfolios. But how does one buy Ether? And from where?  Buy Ethereum (ETH) on Crypto Exchanges Probably the easiest way to get some Ethereum network tokens is from a well-established cryptocurrency exchange operating in your country.  ETH enjoys massive popularity within the crypto community due to its demonstrated decentralized use case. Any crypto exchange will surely have Ether listed for buying and selling.  Choosing a Suitable Crypto Exchange While locking onto a particular exchange, some preliminary research needs to be done. Cryptocurrencies by their very nature are assets that come with high risk and equally high rewards. Consequently, the fledgling space also attracts a lot of fraudsters. So, it is mandatory to do your due diligence before picking a platform to buy Ethereum.  Crypto exchanges need to have well-established headquarters a genuine team (probably with a good Twitter, LinkedIn presence), well-responsive support, decent liquidity and security of trading funds, etc. Some well-recognized names are Binance, Bitfinex, Coinbase, Kraken, eToro.  Registering on The Chosen Crypto Exchange After choosing a suitable crypto trading platform, you would be required to register yourself as a legitimate user.  That means you will have to provide a few personal details as KYC (Know Your Customer) which confirms your status as a bonafide citizen of the particular country or state where you reside. This is done by exchanges just so that they are in line with global Anti-Money Laundering (AML) regulations.  After exchange officials verify your details, its time to use your newly opened crypto trading account to buy ETH. But for that, you need to deposit some fiat currency first. This should be relatively easy as all your details (including banking information) were okayed for trading.  Depositing Fiat Funds to buy Crypto Simply add money through your bank account or debit card on file. Cryptocurrency exchanges do not generally have high minimum investments. You can invest as little as $5 or as much as $1,000 or more. This is of course, based on the country or location of your residence, and the official currency in circulation.  Funds generally can some time to appear in the ‘fiat account’ of your chosen crypto trading platform. This depends on the bank and exchange transaction processing speeds, protocols, etc.  Once the fiat deposit happens, you can instantly use it to buy Ether. But remember to go through the current rates and trading volumes.  Buying Ethereum with Stablecoins or Other Crypto Assets In the past 2 years, there has been a gigantic upsurge in ‘crypto-to-crypto’ purchases. The proliferation of fiat-backed stablecoins like Tether (USDT) and rising bank restrictions on crypto purchases with credit/debit cards and wire transfers has led to the same.  It’s very simple buying ETH in a crypto-to-crypto (C2C) arrangement. All you need is some Bitcoin as it is considered the benchmark crypto asset for all C2C transactions or a US dollar-backed stablecoin like USDT or USDC (USD Coin) which is easily available on peer-to-peer trading exchanges. These platforms let users exchange actual fiat with fiat stablecoins, which you can use to buy the Ethereum token.  Withdraw Ether (ETH) into a ‘Private Wallet’  An important step follows your ETH purchase. It’s important that you transfer the funds into a cryptocurrency wallet, which you control. Storing your crypto funds on exchanges is not out of risk. A great lot of them have fallen prey to notorious hacks in the past. The recent one to get hacked was Binance, the largest crypto exchange by trading volume. It shows how unsafe your crypto funds can be, even with dominant trading platforms.  Hence, it is advised to store your crypto on a wallet where you control the private keys. Some examples of companies selling such ‘cold wallets’ are TREZOR, Ledger, KeepKey. Alternatively, you could use software wallets like Exodus, TrustWallet, etc. For Ethereum though, you have something called ‘light client wallets’ which are widely used by ETH investors. They are MyEtherWallet, Atomic Wallet, etc.   The post How to buy and store Ethereum (ETH)? appeared first on Bitcoinist.com.
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PreMarket Prep Recap: Chuck Talks To TD Ameritrade, Macy's Wins The Retail Limbo

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Benzinga
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