Last Thursday

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

NFTs symbolise a cultural shift towards a creator-economy and represent your rights to something. An explanation for ‘non-fungible’ can be likened to painting a picture that would not be the same as a picture someone else might paint since the two differ from a rights’ perspective. Yes, you can take a screenshot and copy it, but the digital signature that says “it's mine” cannot be copied. Powerful, because digital ownership is a fundamental concept in this new metaverse-driven world. 



‘Atomic swaps’ (a Peer2 Peer transaction) can present a challenge since they make the traditional centralised markets and exchanges redundant because, by using digital assets, we can trade Peer2Peer. An owner of a digital asset (NFT) can bypass traditional exchanges and, in effect, deal direct. For example, you send me a text: “Can I buy your digital painting if I send you 2 Ethereum tokens?”. You transfer the NFT in question (using a blockchain) to my nominated digital wallet whilst, in return, I transfer the 2 Ethereum tokens. All this can take place in a few seconds and, because it is entirely digital, it creates a fingerprint that can be used to prove the authenticity of the transaction having taken place and that it has also been stored on a blockchain to prove who owns what. 

Thus, it is easy to see how such digital transfers of rights and digital assets are able to happen 24/7 and makes national boundaries potentially less relevant as buyers and sellers can truly trade globally. However, the lack of centralisation is juxtaposed to the current centralised (almost command and control) structures that we have historically developed in many financial markets and other industries. Typically, regulators and governments prefer to have the ability to hold an entity responsible or accountable in the event that there is a failure or a problem (should one party in a transaction wish to seek redress - for example, compensation). If a transaction has been made via a centralised - typically regulated - marketplace which, in turn, only allows members/regulated entities to trade on it, then a regulator of the marketplace is in theory able to:

protect investors 
maintain confidence in the marketplace. 

These two fundamental reasons are why many financial regulators have been established. But if digital assets are to be traded in a decentralised manner this can present real challenges for regulators. Or does it? Afterall, if every transaction creates a digital footprint and is recorded on a blockchain it is possible that regulators could employ smart contracts to monitor decentralised transactions and have access to the monitoring of transactions (which is typically required in the event there is a problem). 

The popularity of NFTs (whilst not as intense as it was in the summer of 2021) is still considerable and is being driven by global brands such as the UK Premier Football League, which has announced it will be offering NFTs to its global fan base. As the table below indicates, the interest grew substantially last year and we are now seeing a very active market in terms of people trading NFTs in the secondary markets.

The growth of the NFT market over the last year



Source: NonFungible.com

A return to self-regulation?
As ever, history is a powerful teacher. Or, as Marie-Antoinette (ex-queen of France) once said: “Nothing is new but what has been forgotten." It was only back in 1986 that we witnessed centuries of self-regulation being swept aside, with the UK creating the Securities and Investment Board (SIB) and the establishment of self-regulating organisations...


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2 Weeks Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The High Court in the UK * has recently ruled that non-fungible tokens (NFTs) should be treated as legal property, which is likely to have a number of implications. In a court case in 2020, the court had ruled to "treat Bitcoin as ‘property'". Therefore, whilst English courts had given a degree of clarity for cryptos, this had not been the case until now for NFTs.


The fact that NFTs have been ruled a ‘property’ removes a number of uncertainties which have possibly held back those reputable owners of intellectual property, or IP (museums, art galleries, firms in the music and film industry etc), from commercialising the existing IP they own by issuing NFTs. This NFT ruling also provides greater certainty for regulated financial institutions looking to invest clients’ assets into NFTs, supporting legal agreements around the handling of NFTs, such as insurance, custody etc. 

As Lavinia Osbourne, whose company brought this case to court, announced: “As this case, and the increasing number of hacks and scams in the NFT space shows, digital wallets and smart contracts aren’t infallible. Now that NFTs are legally recognised as property, NFT holders will finally be able to regain some control when things go wrong.” Furthermore, Racheal Muldoon, the barrister who helped obtain this ruling, said: “This case sets an important precedent in recognising that NFTs are property under the law of England and Wales, capable of being the subject of interim injunctions. It is a further example of the High Court leading the way internationally by assisting cryptoasset holders to secure the return of their digital assets”. So, will we subsequently see a reduction in insurance premiums? Ben Davis, a specialist insurance broker focusing on digital assets at Superscript, has reported: "This is a big step in the right direction for insurers to start looking at covering theft of NFTs as with more regulatory clarity comes more peace of mind for insurers." 


Undoubtedly, NFTs are now being used for a wide variety of purposes. Some will have very little, if any, value and could be as simple as a ticket to an event. Other NFTs have been used to sell digital art, with the most expensive to date being Pak's, 'The Merge', selling for $91.8m. It was bought by 28,983 collectors. Gaining greater legal clarity around the treatment of NFTs ought to provide comfort for all those engaged in them although, given the copious ways that NFTs are being used, this will no doubt give rise to further court cases and potentially even greater scrutiny from regulators in various jurisdictions. The adoption of digital assets continues to rise in Europe, as can be seen from the recent survey carried out by Coinbase, which found: “Consumer cryptocurrency ownership levels in the UK are second only to the Netherlands (47%) in Europe; ahead of Spain (26%), Italy (25%), Germany (24%) and France (17%). Bitcoin (BTC) and Ethereum (ETH) remain the most owned cryptocurrencies at 75% and 52%, respectively”. Without doubt digital assets are popular, and the recent NFT ruling will help to support the interest in this way of owning assets.


*If you would like a copy of the legal announcement, please contact us.

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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Blockchain is designed to manage electronic data transparency and accountability. It is described as a digital ledger technology or a spreadsheet duplicated thousands of times and stored in a distributed network across multiple locations. Blockchain's ubiquity is becoming evident with time.


The technology that powers cryptocurrencies is proving that it is able to be harnessed to meet many other challenges in a wide variety of industries including the medical industry. One of the greatest challenges facing the medical sector is fraud, which is prevalent in many ways: in drug trials;
manufacturing of fake drugs and the use of poor quality or the wrong ingredients;
allowing unqualified staff to perform procedures and examinations; 
invoicing medically unnecessary services; 
billing for services not performed; 
charging for branded drugs and using simple generic medication instead;
charging for more drugs than were used.


Source: Science Direct
According to the Fortune Business Insights publication: “The global fraud detection and prevention market is exhibited to grow from USD 30.65 billion in 2022 to USD 129.17 billion in 2029, exhibiting a CAGR of 22.8%”. Such levels of fraud lead to a lack of trust in the healthcare industry and are often a result of an absence of transparency. And this is what the use of blockchain-powered platforms is able to alleviate. Alongside being a catalyst for the utmost accountability, the use of Blockchain technology can ensure that data is more secure, accurate, and tamper-resistant in nature whereby making it almost impossible to mimic, falsify or manipulate data.

Application of blockchain in the medical industry
The uses of Blockchain technology in the medical sector are many and varied and it uses to tackle fraud is just but one. Other such examples are:

safety and transparency - ensuring a simple and easy exchange of data among providers of medical solutions can contribute to diagnostic precision, productive therapies and cost-effective ecosystems. Blockchain enables different health organisations to connect and exchange information on a commonly distributed ledger for better safety and transparency whilst still maintaining integrity and confidentiality. 

health record keeping - in most cases, patients’ data exists in silos that are not connected. For instance, your primary care physician has access to some of your medical data but not to data that specialists such as an endocrinologist, general surgeon or obstetrician can access, and vice versa. This hinders treatment and can impede the care management of a patient. Blockchain technology could solve this problem by making available an application that enables connecting to existing medical record (EMR) systems from different healthcare providers. Whenever a piece of new information is lodged into any of the EMRs, the blockchain would receive encrypted data regarding the information. This unifies all details and provides the patient and health providers with historical access, thereby making it easy and possible for healthcare providers to obtain a complete view of the patient's health status at any point in time.

digital identity - it is claimed that: “Stolen health information is 20 to 50 times more valuable on the black market than financial data. This stolen data is used for medical identity theft, an insidious crime that can lead to devastating consequences for individuals and billions of dollars lost industry-wide”. Blockchains can enable a transparent, auditable means for individuals (using their peculiar credentials and encryption key) to allow other parties to access their personal...


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3 Weeks Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Buy now pay later (BNPL) is an industry which has risen to meet certain challenges shoppers have in terms of lending. Worldwide, the industry is enjoying adoption and now accounts for 2% of the world’s consumer lending, with a volume of almost $100 billion. One might ask, how are BNPL platforms different from credit card companies?


Well, they perform in the same way as credit card companies, but without the interests and commitments. Because of the problems they tackle, BNPL platforms have a younger demographic (Gen Z and younger millennials) as their audience. However, this is not to say BNPL platforms do not enjoy patronage from the older demography. In a survey by The Ascent, over 37% of Americans had used BNPL at one point in time. 2021 drove that number to almost 56%. In another report by Accenture, the number of BNPL platforms was found to have reached 45 million people. Furthermore, a survey by Ascent found that 62% of users think BNPL could replace credit cards. According to Insider Intelligence, in 2025 the BNPL offering will account for an impressive $680 billion in transaction volume worldwide. This projected growth will occur as a result of the expanding number of e-commerce platforms and increasing adoption of BNPL services to meet the needs of other markets.

There are a number of firms which use Blockchain technology and digital assets that use this technology with the best known being PayPal (now offering BNPL in over 600,000 stores globally). XRPayNet, built on the XRP ledger, is another company which uses cryptocurrencies and launched its app in January 2022 offering a BNPL option. XRPayNet works at capturing and overcoming the current needs of real-life and on-demand crypto payment systems required by people and businesses all over the world. XRPayNet’s approach aims to address cryptocurrency problems that could let users trade cryptocurrencies from their savings accounts. 
BNPL firms in the DeFi sector

Source: BNPL.io

@Pay is a DeFi platform with a different approach to implementing BNPL in the blockchain industry. It is a Defi protocol, integrating Blockchain technology with its cryptocurrency to power its BNPL approach. The platform also offers significant cost savings to its users by utilising smart contracts and Blockchain technology. This is very helpful when offering DeFi e-commerce and other solutions to buyers and sellers. Another firm in the DeFi sector is Uquid which has teamed up with Binance to offer its ‘Pay in 3’ feature - spreading crypto payments on everyday purchases across three instalments. The increasing number of e-commerce and FinTech firms are driving the BNPL-crypto innovations forward because e-commerce stores are partnering with BNPL stores to meet the demand from the growing number of digital assets and crypto owners - many of whom are also their customers. One of the perks of the competitiveness of the e-commerce space is that it drives e-commerce platforms to implement innovations that are stress free for their customers. In addition, the increasing number of crypto wallet owners is prompting e-commerce platforms to optimise their checkout experience to remain relevant and competitive.

Many other companies are likely to join in building and strengthening these innovations, given the success these pioneering companies are set to enjoy. This is not to say there will not be challenges on the way in order to achieve these solutions. The most notable of these challenges is that of regulators scrutinising BNPL plans, labelling...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Blockchain is well known as the technology that underpins cryptocurrencies and it is useful to have an appreciation of how this technology is indeed employed in the crypto sector in order to identify how it can be used in other aspects of society and commerce. Blockchain technology is a digital ledger technology, or a spreadsheet typically duplicated multiple times and stored in a distributed network across many locations.


Certain blockchains permit participants in a network to transact directly with each other securely, cutting out third-party intermediaries and enabling peer-to-peer transactions. However, the capability of this technology extends beyond merely the financial sector as it can also be harnessed to transform the renewable energy industry. 

Blockchain-powered platforms are set to reshape the renewable energy industry, for example: 
from certifying the source of green energy by allocating generation assets to a specific point of consumption, 
by helping to make the energy grid more accessible through data-sharing in real-time, 
through enabling transactions between two parties. 

The establishment of the provenance of electricity supplies by enabling tracked, verifiable, and secure transactions between the parties is a key challenge Blockchain technology can establish. Furthermore, this enables the bypassing of intermediaries (and their associated fees and inefficiencies) to transfer goods and information between buyers and sellers. Blockchain technology empowers people to become prosumers, i.e., producing and selling power and therefore resulting in a far greater decentralised and distributed energy sharing system. 

                                     Sources of UK national grid electricity generation * This is updated very 30 mins

Source: Grid.iamkate.com
The benefit of blockchain in the energy industry
Our reliance on electricity seems to grow and grow and the energy industry has been consistently catalysed by innovations such as electric vehicles, smart metering and rooftop solar, amongst others. With the potential to transform the energy industry, Blockchain technology arises as the next emerging technology to stimulate growth in the energy sector through its smart contracts and systems interoperability. The interest in Blockchain technology is furthermore being fuelled by concerns about climate change and the desire for organisations to improve their Environmental Social corporate Governance (ESG) credentials. One very tangible way to help the world is to use more renewable energy (such as solar), but one needs to be sure of how the electricity consumed was generated in the first place.

Blockchain technology use cases are very varied and indeed there are many identified benefits of using blockchains in the energy industry, all whilst helping the environment. These include a new business model for energy markets, real-time data management and moving carbon credits or renewable energy certificates onto blockchain-powered platforms. Blockchain technology has the potential to improve efficiencies for utility providers by tracking the chain of custody over power grids. Aside from this, it offers unique solutions for renewable energy distribution. Legacy energy suppliers in the petroleum sector suffer from a complex network of participants and supply chains which often lead to inefficiencies. There are a number of initiatives including, Komgo, Vakt and dltledgers that have been developed to help improve the way petrochemical firms using Blockchain technology operate. For other examples of how Blockchain technology is being used in the energy sector, Consenys has highlighted a range of other case studies. 


Application of Blockchain technology in the energy sector
There are a few challenges that plague the popularising renewable energy usage. Two of these are the difficulty in handling renewable energy and the cost associated with proving that the energy comes from a renewable source - an overhead not required by other power generators. Blockchain technology may help solve these challenges. Without a...


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4 Weeks Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Doxxing began to gain popularity in the early 1990s, with its popularity being owed to the emerging hacker culture back then. The term ‘doxxing’ is a derivative of ‘docs dropping’, which meant documents about certain people and organisations were dropped. Doxxing was a means by which hackers punished opposing hackers, individuals and organisations. Their intention was to make their victims more vulnerable i.e., by making information about them available in the public domain. But that was then. In today’s world, the damage doxxing can bring about for victims has grown in scope and range, especially with the emergence of many other new technologies since the 1990s. So, what does this have to do with crypto projects? Well, it is all about information being released and available into the right and or, indeed, the wrong hands, and about who may not only steal your investments but try to steal your identity.



Traditionally, when projects were launched, the information about the company, staff and its directors was published for easy access by whomever needed such information. Now, this is not the case as plenty of new startups are leaving the “personal information” out and shrouding both themselves and their investors in a cloak of anonymity. This shadowy approach by startups is dangerous as it potentially strips projects of transparency and credibility, and surely begs the question - why? - by prospective investors. Many feel such crypto projects are hiding something by not revealing what would have been very basic information compared to those traditional ventures selling shares or issuing debt as a form of financing (as opposed to selling tokens). The lack of personal details about the founders/directors of these ‘shadowy’ crypto projects can exhibit all the hallmarks that these anonymous companies are being clandestine - could they indeed be a front for terrorists, tax evaders, drugs cartels and corrupt politicians?  
Would you invest if this were all you knew about the founder?



Source: Upsplash

This is not the total sum of anonymity in the industry since many crypto projects, too, have anonymous investors/shareholders and developers. An example of such a crypto project has been Wonderland, where investors gave money to pseudonymous developers and suffered a calamitous setback. The project’s treasury manager, who went by the name, oxSifu, turned out to be Michael Patryn - a man who had served 18 months in federal prison for fraud. This information came as a considerable shock to members of frog nation (the community’s investors) with the repercussions resulting in a 50/50 vote on the future of the project - either to continue or terminate. 

Furthermore, anonymous investors and founders have been discovered to be easily engineering ‘rug pulls’- scams where a crypto developer promotes a new project to unsuspecting investors and then disappears with their cash. A recent example of this can be seen in AnubisDAO; its anonymous founders and board members raised almost $60 million in 2021 before they disappeared with the funds. Unsurprisingly, this serves only to make people averse to anonymity around stakeholders, founders or project personnel. The actual individual who uncovered Wonderland’s oxSifu has also recently stated that an additional anonymous leader at another crypto project had once been charged by the Securities and Exchange Commission. Amazingly, the said person reveals all this with an anonymous account on Twitter. And therein lies the dilemma of the situation….

However, one of the reasons why people prefer to remain anonymous and undercover from hackers is that founders and owners of strongly performing tokens are an ideal target for the unscrupulous. Hence, fear of doxxing undoubtedly exists i.e., making the directors’/founders’/advisors’ personal details public exposes them as targets for hacks. So, how can one balance the desire to keep one’s personal information secure but offer confidence and insight to those potential investors whom the start-up directors are trying to attract? A potential solution to this conundrum is self-sovereign identity (SSI) using firms such as cheqd, a company tackling this problem...


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A Month Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Social media platforms such as Facebook, Twitter, YouTube and Instagram have certain media types on which they focus. Twitter uses nuggets of texts limiting users to 280 characters per Tweet; Instagram mainly uses pictures; YouTube is focused on videos, and Facebook is a mix of the three previous media types. One thing which Blockchain technology is poised to change and which the platforms all share in common is how power is managed.


These social media platforms claim they want to transfer the decision making and control from a centralised structure to more of a distributed organisation. However, what do these social media platforms offer currently, aside from their platforms? Nothing. The majority of content on social media platforms is created by the users, but who earns from all the posts and activities? Centralised companies that own and control these platforms take the lion’s share of any income since, after all, they are owned by shareholders looking to maximise profits. Typically, decentralised social media platforms aim to share the revenue and distribute it into the hands of platform users, although there are signs that some centralised social media platforms are changing. For example in September 2021, LinkedIn announced a $25million fund to pay users for content.

Decentralised social media platforms mostly use open-source software and crypto-economic incentives to build their platforms and user-base. Several blockchain start-ups are creating alternative social media platforms such as:
OpenStream World (OSW)               
LBRY
D.Tube
Dlive
BitChute
THETA
Verasity
LivePeer



Source: Back linko

Decentralised social media platforms are also looking to address some of the challenges that the traditional social media platforms such as YouTube and others face, these being: 

Data privacy
Now, more than ever, we are connected to  and members of a range of different apps and social media platforms which all want to capture our data. The average social media users have over 8 different accounts. The data captured is typically resold to advertisers (of Facebook’s revenue almost 98% was generated by advertising) and this then can used to manipulate the behaviour of the users social media platforms. Mark Zuckerberg (Facebook’s CEO) has been summoned before the US Congress on concerns over the misuse and data-related issues on a number of occasions. Meanwhile, according to The Sun newspaper: “YOUTUBE has been accused of allowing its platform to be "weaponized" leading to viewers being "manipulated and exploited".

Data property
At the heart of every data issue, privacy of whose property the data belongs to is a particular question.  Over the years, ‘Netizens’ have voiced their complaints about how their data is being used. 

Freedom of speech and freedom of association
Many argue that freedom of speech and freedom of association are the essentials for a free, democratic society. The challenge is that ‘one person’s terrorist is another’s freedom fighter’. YouTube has been caught in just this as one party argues the importance of allowing the public access to videos whilst another party disagrees. The New York Times has claimed: “Facebook Has Been a Disaster for the World. How much longer are we going to allow its platform to foment hatred and undermine democracy?” But people should be free to see what they want without big tech companies deciding for them - or should they?

Decentralised social media platforms are designed so the control of the platform is vested in the users but this is not to say decentralised social media platforms are paradise. As much as there are pros, cons follow.

Pros
Retardation of the monitoring and illegal use of consumer data: it...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

“Every dog has its day is an expression believed to have come from around 405 BC when a Greek playwright, Euripides, was mauled and killed by a pack of dogs. An analogy to this tale could be the US dollar. So, is the end nigh? That is, has the mighty greenback ‘had its day’? Historically, world reserve currencies have been typically superceded and replaced as the result of military conflicts, but will the US$ be replaced not by war but a result of economics?


Whilst the US economy is still the largest in the world, its economic dominance has declined, and continues to, as a % of global GDP. As the newspaper, the Independent, has reported, even in the field of renewable energy: “ America is losing its superpower status to China… Between 2010 and 2020, China outspent the US by nearly 2-to-1 on energy transition-related investments and leads in renewable energy employment”. Meanwhile, the key attributes a world reserve currency needs are confidence and trust for companies and countries to use it, both as a medium of exchange and a store of value. However, it would seem that as a store of value the US$ does not have a great track record. Decline in the value of the US$



Source: Libertas Wealth

As we increasingly see our lives becoming more digitised, national geographic boundaries seem to matter less. So, will a digital currency replace the US$? Notably, one of the recurring reasons that organisations cite for using Blockchain technology is the transparency that it offers, and transparency helps to build trust. Any new currency will certainly need to be trusted. The global economy has been faltering along under a mountain of debt and the levels of global debt have reached, what some believe to be, unsustainable levels. Global debt issued by governments is now over $71trillion - this ‘binge’ on borrowings having been fuelled by weak economic growth as a result of the COVID-19 pandemic. Governments have forced interest rates down, potentially breaking their own laws by engaging in ‘monetary financing’. In fact, this practice is illegal in many parts of the world, such as Japan and Europe, and occurs when a central bank creates money to buy government bonds, in effect, enabling those governments to spend without limits. Back in 2014, it was prohibited for the European Central Bank (ECB) to do this. Indeed, its quantitative easing programme is already in question by the German Constitutional Court, which has threatened to no longer provide the ECB with further financial support. Germany’s Constitutional Court reached a verdict back in May 2020 determining that the ECB had potentially acted illegally in buying €2trillion of government bonds. Moreover, Germany is owed over $2trillion and the recent Russian-Ukraine conflict will only escalate inflation rates globally, whereby further intensifying pressure for interest rates to be increased. Given that France, Germany and Italy are Europe’s biggest buyers of Russian gas and finding alternative energy suppliers will certainly not be possible - quickly or cheaply – this will undoubtedly put add further inflationary pressures across the EU. Could this subsequently mean the beginning of the end for the euro? 

Meanwhile, the US government debt has increased to 98% GDP (at $30+ trillion) as of April 2022, and the Chinese have over $10.5trillion of government debt equating to 60% of GDP. In the US, corporate share buybacks continue which has resulted in only 3 companies in the S&P 500 having no debt - these being Abiomed, Intuitive Surgical and Monster Beverage. The US$ itself has been the...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Loyalty programs are a big business, not only as a way to attract customers to repeat purchases but also as a source of valuable revenue. For example, in April 2020, as the COVID-19 pandemic started to impact the world, Hilton Hotels raised $1billion of cash from American Express for its honors program.


Covid also presented JP Morgan with an opportunity to buy the world’s biggest third-party credit card loyalty operator and, in doing so, gave it access to 70 million people who were members of loyalty programs globally. Indeed, loyalty programs are very valuable. Inc.com reported last year that American Airlines generated $6.5billion of “proforma cash sales” in 2019. American Airlines, with a capitalisation of $15billion, was issuing a debt instrument valued at $7billion backed by its loyalty program - AAdvantage. Loyalty programs are both a huge and global business with the market set to expand at a Compound Annual Growth Rate (CAGR) of 13.0% between 2019-2024.

Loyalty management market growth rate by region (2019-2024)



Source: ModorIntelligence.com

The loyalty industry is an ever-growing one given that, in a survey by Smallbizgenius, 75% of consumers said they preferred those companies which offer rewards. Of note, 87% of Americans don’t mind their data being tracked due to the rewards they get from loyalty programs, notably at a point in time when the public is actually wary and critical of how its data is being used. Furthermore, in a study by Bond, 95% of loyalty program members also wished to engage with their brand’s program through new and emerging technologies. This intersection is where loyalty programs can implement Blockchain technology, in the form of NFTs, to help their programs. The role of Blockchain technology and digital assets for loyalty programs is just beginning to unfold. NFTs, powered by Blockchain technology, will undoubtedly change the loyalty industry and already we have seen a number of global brands embracing NFTs as part of their loyalty programs. Three examples include Burger King, Clinique and Marriott Hotels. Unsurprisingly though, there are both merits and challenges that come with the inculcation of NFTs into loyalty programs: 

Merits
publicity - NFTs have amassed a cult-like following from people all over the world (in part attracted
by FOMO) as prices of some NTFs have risen dramatically, also offering owners of intellectual property (IP) a new way to commercialise their IP. There is no such thing as bad press in marketing; businesses which imbibe Blockchain technology into their loyalty programs should have no time gaining a high number of loyal customers. What’s a loyalty program without loyal customers?

easy to create - the democratisation of NFTs is one of the features that made it mainstream and this is due to the ease with which NFTs can be created. Companies can then focus time on planning for the longevity of the programs, securing maximum customer engagement whilst ensuring the loyalty programs match their brand identity.

exclusivity - NFTs, by nature, are unique and scarce and this feature alone will make most participate in loyalty programs. These NFTs are not exclusive for the sake of rarity or merely to create urgency. In the loyalty program, the rarer the NFT, the more the benefits and rewards are attached to them.

innovative - as stated here, customers wish to have experience with new technologies, and NFTs will make the desire of many come to life. From the...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Cryptocurrencies are as diverse as the real world, but they are all typically powered by the same technology - blockchain. One of the potentially most interesting uses of cryptocurrencies is in the field of decentralised finance (DeFi) as it offers the opportunity to challenge the existing financial services sector and also helps to embrace many of the 1.7 billion people globally who are unbanked. DeFi is termed as ‘decentralised’ because there are no central authorities.


It has disintermediated many of the usual agents, brokers and other intermediaries which are so prevalent in existing financial services. In theory, this means that the public can get the best deals on financial products without having to trade with a third party. In many jurisdictions, governments have actively encouraged ‘open banking’ and the establishment of neo-banks/challenger banks, but DeFi offers the promise of even greater competition for established financial institutions and thus greater choice for buyers of financial products and services.


Source: Twitter
DeFi is a financial application built using blockchain-powered platforms and designed to disrupt the traditional finance world. It is a financial application on open, programmable blockchains and covers activities such as saving, lending, sending money, trading, investing and more. Rather than relying on third parties, DeFi encourages open-source cooperation whilst maintaining security. These DeFi applications are built using cryptographic data bases not relying on having the information stored or maintained at one location or fileserver, which means that they have in-built disaster recovery. Another feature is that by using Blockchain technology, DeFi offers greater transparency for the buyers, sellers and regulators and therefore it ought to, if designed correctly, engender enhanced levels of trust. With adaptation of traditional financial tools to the DeFi world, it is advancing at a fast rate. There is an expectation that other industries will follow suit in the near future.

What DeFi offers 
DeFi products and services are available to anyone who has a digital wallet and an internet connection, no matter where they are in the world. Users can trade and/or move their assets wherever they want, without having to wait for bank transfers or pay traditional bank fees which can sometimes be subject to delays and are very often restricted to standard 09.00 to 17.00 working hours, five days a week. DeFi markets trade 24/7 and are helping to democratise banking and finance by making financial services easily accessible to anyone.

Transactions are public
The Ethereum blockchain is responsible for typically more than 90% of all DeFi transactions, which means every transaction is broadcast to and checked by multiple users. This means that anyone can see what transactions are happening in a very transparent manner. DeFi applications can be a game-changer since they give investors more information than they typically would have had access to. DeFi can also help to ensure that people have access to market leading products and services. 
 
DeFi is secure
With no central authorities, users do not have to worry about the safety of their money because users are always in charge of their capital at all times. However, as with any new technology, there are risks associated with DeFi platforms particularly if smart contracts (which power many DeFi platforms) have not been fully stress-tested against heist and hackers. In 2021, DeFi platforms saw over $10billion being stolen so clearly more needs to be done to address this in order to protect investors in this sector.

DeFi’s uniqueness
DeFi loans are one of the popular applications. DeFi platforms link borrowers with lenders, hence eliminating the...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

When people hear about cryptocurrencies, the first thing that usually comes to mind is Bitcoin and Ethereum but there are a multitude of other coins/tokens that cryptocurrencies can embrace. This situation usually plays out as chaotic to people as they imagine there are too many cryptos in existence than are needed.


However, in this apparent confusion and chaos, there is an order of which most people who are conversant with cryptocurrencies and blockchain are aware - different cryptocurrencies exist for different reasons. With this in mind, the rest of this article will look at some of the different types of cryptocurrencies in existence.
Bitcoin
This was the first cryptocurrency that really grabbed people’s attention and, no wonder, since at one stage it rose in value from a few cents to each Bitcoin being valued at over $64,000! Bitcoin has dominated not only media attention but also, with a market capitalisation of $800,000, it accounts for approximately 40% of the crypto market value. Ever since its adoption in 2008, Bitcoin has seen numerous ups and downs but its adoption continues to grow, with countries now accepting Bitcoin as legal tender.



Source: David Shares on Unsplash

Altcoins (alternative coins)
The success of Bitcoin prompted many other blockchain enthusiasts to create their own cryptocurrencies, all in a bid to gain control of parts of the growing crypto market. The cryptocurrencies created were alternatives to Bitcoin. Although they shared certain features with Bitcoin, they were still all different in varying ways. Some altcoins differentiate themselves from Bitcoin by offering new features such as reduced volatility or smart contracts. Others distinguish themselves by adopting a dissimilar consensus mechanism to authenticate transactions and produce blocks. As of March 2022, there were over 18,000 cryptocurrencies (Bitcoin and Ethereum being responsible for almost 60% of the market), with altcoins accounting for the remaining percentage. As it stands, the growth of most altcoins is tied to Bitcoin. With time and development in the cryptocurrency network, the expansion of altcoins will soon be independent of Bitcoin - after all, every other coin aside from Bitcoin is an altcoin. Some examples of altcoins are Solana, Binance Coin, Ether, Dogecoin, Filecoin, Shiba Inu and Wakanda Inu. However, for now, there does appear to be a degree of systemic risk in the sense that much of the crypto market follows the rise and fall of Bitcoin’s price.

Stablecoins
Stablecoins are a class of cryptocurrencies that have attempted to solve the price volatility problems of Bitcoin and other cryptocurrencies which use different types of assets to peg/link their value. There are four types of stablecoins:
fiat-backed
crypto-backed
commodity-backed
algorithmic 

Stablecoins have enjoyed support and adoption, even with those organisations and people who have taunted Bitcoin as being problematic. Stablecoins serve as the bridge between fiat currencies and cryptocurrencies. They can offer the instant processing, privacy and security characteristics of cryptocurrencies as well as the stable nature of fiat currencies. Fiat-collateralised stablecoins are coins that are pegged to fiat currencies such as the US$, £, Yen etc. The biggest fiat-backed stablecoin is USDC with Grant Thornton carrying out a monthly attestation to confirm that the tokens are backed by the equivalent number of US$.



Source: Bermix Studio on Unsplash

However, the biggest stablecoin in terms of value, Tether (USDT), is not 100% backed by US$. Crypto-collateralised stablecoins are coins that use other cryptocurrencies as collateral such as Dai. MakerDAO created the Dai...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

There is no denying that the internet is evolving at an ever-increasing rate. Consequently, this has led to the development of advanced internet technology and, in turn, to the introduction of metaverse. As a quick explanation, the metaverse is a representation of an immersive 3D virtual world where users are able to interact with different spaces.


Just like the real world, the metaverse allows users to move around different metaverse spaces as their personal digital avatars. Metaverse is often referred to as virtual worlds where avatars can socialise, work, play etc. Similar to a Zoom call, these virtual spaces are always available and do not disappear when you have finished using them. Meta’s YouTube video on the metaverse offers its own synopsis of the metaverse - a digital world that uses a blend of technologies such as augmented reality (AR), Blockchain technology and virtual reality (VR).  Some of the initial ways that the metaverse is being proposed to have an impact include:
on-line games
real estate
social interaction/ experiences
Meta’s metaverse



Source: Meta

The origins of the concept of the metaverse date back to the early 21st century whereby using virtual reality headsets and interacting in an almost ‘video game-like digital world’ was the theory of the metaverse first introduced by Neal Stephenson in his 1992 novel, “Snow Crash”. As this demonstrates, it is not a newly invented notion - it has been around for a while and is most certainly still evolving. Until recently, in October 2021, the CEO of Facebook, Mark Zuckerberg, announced Facebook was to change its name to Meta. It is not only Facebook that believes the metaverse is here to stay. Microsoft has recently announced the largest acquisition it has ever made to acquire Blizzard Activision (paying a massive $68.7billion), and is looking to integrate its Teams platform into Meta’s Workplace platform.

One of the benefits which metaverse has the potential to address is that of remote work environments. According to Akash Takyar, CEO of Leeway Hertz, (which has helped build over 100 tech platforms for a variety of companies), the metaverse can help “the employer to resolve problems like productivity time theft and goldbrick at the workplace by keeping track of team productivity through their unique avatars”. Working remotely has been forced onto many due to COVID-19, and it has had its drawbacks - probably the most identifiable is that of being distracted and not working when you are expected to. To assist with this issue, the metaverse enables managers to effectively communicate with their employees, including reading body language and in-person interaction. Essentially, by more interactive monitoring this will hopefully encourage employees to be more productive, even at home, and offer a more engaging experience in which to communicate. Furthermore, metaverse allows organisations to create a virtual office and/or classrooms at home. Globally, the COVID-19 pandemic has resulted in a heavy toll on all levels of the education sector. School and university students have been required to learn remotely, undoubtedly producing many challenges. Whilst platforms such as Zoom allow students to interact with teachers, professors and each other, there remains the physical barrier that cannot be overcome with such technologies. The metaverse aims to provide a ‘joined-up’ online experience in which a single avatar can move between spaces - such as from a lecture hall to a science laboratory. Since there is complete control over what students...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

It seems week by week another Central Bank Digital Currency (CBDC) initiative is announced. We recently heard the Bank of Japan (central bank to the third biggest economy globally) announce it was to proceed with its CBDC project. In the UK, it is similar to painting by numbers or, as some may say - “dot to dot”. The UK’s Bank of England has gone from being indifferent to embracing, to potentially even encouraging digital currencies.


The announcement that Belgium-based financial services company, Euroclear, is to invest in Finality.org  is potentially very, very significant for the UK financial services sector. Firstly, we had the FPC announcement and then (the deputy governor at the Bank of England) Sam Wood's letter on 24th March. This was followed on 25th March when Finality.org revealed Euroclear as a new investor. Finality is to have a commercial relationship with the Bank of England, even though the Bank of England website claims it “only offers banking facilities to the government, other central banks and commercial banks.” The new synthetic CDBC that Finality is looking to issue would seem to suggest that the Bank of England is going to allow institutions to trial a sterling-backed digital currency which will need to operate outside the Bank of England’s long-established Gross Real Time Settlement (GRTS). The reason is because a cash-backed digital currency will be able to trade 24/7, unlike GRTS that operate 5 days, certainly not 24 hours.

Banks backing Finality

Source: LedgerInsights.com
It would appear though that London is striving to be on a par with Europe which had announced in November 2021 its “pilot regime for market infrastructure based on distributed ledger technology” enabling financial markets in the EU to use Blockchain technology to create digital stocks, bonds and UCITs (mutual funds). These new digital securities will also be able to be settled in digital commercial bank money and cash-backed stablecoins. Not to be left behind, ANZ mint (issued/created) the first Australian cash-backed Dollar A$DC  in March 2022, using the Ethereum blockchain. ANZ is one of Australia’s biggest banks. Meanwhile, it is worth remembering that cash-backed stablecoins generate no money for the issuer, especially when interest rates are so low. However, as interest rates rise it is possible for cash-backed stablecoins to pay out 80% of the interest they generate - so if we have interest rates of just 5%, that equates to 1% p.a. Of greater significance is that digital cash-backed currencies are like 'the oil in an engine', enabling financial markets to operate more efficiently and smoothly by allowing smart contracts to transfer value (cash) outside traditional banking rails - potentially faster, cheaper and with greater transparency. Trust evolves from transparency together with the promise of stronger compliance and risk controls.

Furthermore, there is also the promise that CBDCs and, indeed, stablecoins offer the ability to address a country’s shadow economy since a digital currency leaves a digital footprint - something that cash does not. Perhaps this explains why, for tax purposes, French residents are only allowed to make cash purchases of up to the value of €1,000 and in August 2021, Spanish residents had the maximum they were allowed to spend using cash reduced from €2,500 to €1,000. Meanwhile, if you take more than $10,000 in cash into the US you are required to notify customs and complete a Report of International Transportation of Currency and Monetary Instruments. So, this all begs the question - if you have cash-backed digital currencies that you can access anywhere, anytime, do...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Technology is undoubtedly at the centre of the 21st century and Blockchain technology, by facilitating the creation of immutable transactions records that are potentially visible to many, makes the use of this technology attractive to the financial sector. Blockchain technology’s use of cryptography is a compelling alternative compared to many of the current procedures and processes which have their roots in paper-based analogue systems for record-keeping.



In 2008, a developer (or group of developers) under the pseudonym Satoshi Nakamoto developed Bitcoin (although no one knows who Nakamoto really is) that would enable the transfer of value/unit of exchange employing a hash method used to timestamp blocks. To put this in more simplistic terms, it is useful to think of the hashes that link different blocks of data together as being a series of fingerprints so that, unless the correct fingerprint/hash is used, the different blocks of data cannot be linked/chained together.
Furthermore, blockchain is a record-keeping technology designed to make hacking information or forging the data stored on it extremely difficult, thereby making it secure and immutable. It is a decentralised, distributed and unchangeable ledger used to record transactions across many computers so that the record cannot be altered retroactively. It establishes trust, accountability and transparency. The use of blockchain-powered platforms results in removing intermediaries therefore helping to make transactions less expensive and more efficient. The technology has a broad range of applications that can be integrated into a variety of businesses giving investors an extensive range of options. The financial sector is one industry where Blockchain technology has obvious applications and many benefits. 

 
Use of Blockchain technology in the financial sector


Source: Research gate

Cross-border transactions
Transferring money internationally has always been slow and costly due to the fact that systems often go through many intermediaries and banks on their way to the payment's final destination. That could all change by using Blockchain technology to enable consumers to conduct digital transfers with mobile devices, whereby avoiding the necessity to use banks or many of the existing international payment transfer firms in order to send money to people and companies overseas.

Security
Blockchain technology uses advanced security compared to other platforms or record-keeping systems. Any transaction that is ever recorded needs to be agreed upon according to the consensus method. Since blockchain transactions are peer-to-peer and decentralised they are potentially more secure than traditional transactions. There is less time for hackers to access transaction data when the data is held in multiple locations, and this means disaster recovery plans become stronger and more resilient by using blockchain-powered platforms. 

Accountability
Blockchain technology offers the opportunity for an organisation to create decentralised networks where there is no need for a centralised authority, so improving the system’s transparency. Blockchains make transactions traceable as, in effect, the hashes leave a digital fingerprint so allowing banks to process and monitor transactions more effectively. A good example of this is the recent FBI success in seizing $3.6 billion of Bitcoin that had been stolen in 2016. The ability to track and trace digital transactions becomes easier compared to locating a suitcase of cash. As a result, Blockchain technology is an effective technique for tracking transactions and assuring accurate and secure data.

Improved efficiency
Cash, wire transfers and cashiers’ cheques are secure methods of payment, but cash is untraceable. Wire transfers are time-consuming and cashiers’ cheques can be faked. Blockchain-powered platforms help to address these challenges resulting in more trust and less risk, which...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Non-Fungible Tokens, or NFTs as they are popularly known, produce different results when implemented in different areas of human endeavours. For big brands such as Taco Bells, MacDonalds, Pizza Hut, Lamborghini, KFC and many others, NFTs are a way in which to market themselves and stay ahead of the competition.


For the many other start-ups, scientists and entrepreneurs who are trying to raise capital for their projects, NFTs have presented themselves as an alternative way to raise capital. Knowing how crucial it is for businesses to raise capital for whatsoever reasons and projects, in this article we shall endeavour to understand capitals and the place of NFTs. 

Conventionally, capital has been given through equity, i.e. this is a situation wherein business owners relinquish parts of their ownership of the business for capital. NFTs now bypasses this, leaving both sides satisfied. To better understand people’s motivation, collection system and the building of a vibrant community, an example, such as the one following, would suffice: Let’s say an existing streaming service wishes to launch a new business line - a new documentary section, but at a higher price than the basic plans. It probably needs $5,000,000 to start this new division i.e., investing in equipment and staff, etc. The streaming service could create 2,500 diverse kinds of NFTs, at $2,000 each or even at different prices, whilst increasing the benefits attached to those costly NFTs. Of course, all the NFTs give special benefits to their owners, investors, but they wouldn’t be equal. The NFTs could give access to investors at a discounted price, either to a new section or to the whole streaming platform. This could then motivate the streaming platform’s audience to invest capital in the business because they want the benefits that come with it. 

This new model of raising capital using NFTs is beneficial to both the business and the investors. For the business, it gives them the opportunity to raise capital without relinquishing any ownership over the business. This model establishes alternatives for incomes which encourages investors and their audience to front the business while counteracting the risks and losses that come with the funding. Once the business is launched, investors can also sell or rent their NFTs with profits. The same applies to someone who bought an NFT from an investor. In the end, this model presents a scenario where everyone involved is happy. Interestingly, a new Hollywood film which has turned to NFTs to help raise the finance to produce it is called Zero Contact and stars Anthony Hopkins. 



Source: YouTube

Meanwhile, the success of an NFT project depends on the audience and community built around it and is a key attribute as to whether an NFT project is a success or not. A vibrant community is vital for success when issuing NFTs. Building a vibrant community usually starts with defining who the target audience is, since this is tantamount to building value for your project. A vision can then be shared with the community explaining what the project is and how the community stands to benefit from it. The aim of the vision is to get the audience to believe in it. Once communicated, a social media platform easily accessible to your audience is then chosen for easy reaching. Discord is the most used, alongside Telegram, Twitter and Reddit....


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The world was sent into a state of shock when Russia invaded Ukraine on February 24th 2022. Ukraine has suffered inextricable loss on numerous levels with the relentless bombardment of its cities. Ever since, the onus has been on the Ukrainian armed forces to fend off the invaders. But the thing about war is that it is expensive. It takes money to wage one, lots of money. Following the invasion, the President of Ukraine, Volodymr Zelensky, has asked leaders of the world to solidarise with him and come to the aid of Ukraine. 



Of note, cryptocurrencies have allowed for the by-passing of institutions that might not allow for payments to Ukraine. Given the fact that martial law has been implemented in Ukraine, bank activities have been suspended. However, cryptocurrencies are good for donations in times such as this since they allow individuals and organisations to directly support causes, cutting off means whereby corruption could thrive. Unlike countries that have banned cryptocurrency and blockchain-related activities, Ukraine had been working on the digitisation of governance (also recently seen with Salvador adopting Bitcoin as legal tender). Ukraine’s Ministry of Digital Transformation, which was established in 2020 and tasked with the advancement of Ukraine’s infotech industry, was recently charged with the procurement of needed equipment in the fight against Russia. The ministry is also charged with gathering cryptocurrency donations. Prior to this, every donation had passed through traditional payment channels. It wasn’t until February 26th, 2022, that the Ukrainian government began receiving crypto donations. The plea for donations was soon posted across different platforms starting from the deputy prime minister, Mykhalio Fedorov’s, Twitter to Ukraine’s Twitter account. Following the success of the donations, there has been a promise for future airdrops as a means to facilitate the long-term support of citizens and organisations worldwide. One can only but wonder what would have happened if Ukraine had taken an anti-blockchain stance as most countries have. Although, the donations received pale in comparison to the sum the US has donated (Biden recently demanded $10 billion authorisation from congress, after America had pledged $350 million) joining many other countries which have offered Ukraine support.

Source: Twitter

Insomuch as Putin’s Russia is the cause for the financial situation in Ukraine, it, too, has fallen onto hard times what with sanctions from a vast number of different countries now potentially beginning to cripple its economy. Sanctions usually work by powerful countries curating a list of important businesses and people its inhabitants must avoid having transactions with. Concerning, but ironic, is the fact that cryptocurrencies serve as a means of sanction evasion for Russia, not just as a means for raising donations for Ukraine. Two sides of the same coin and furthermore highlighting the concerns most have about cryptocurrencies. Habitually, in the global finance scene, banks would block transactions from persons under sanction or their business, as can be seen with the UK sanctioning Ibrahimović and what it has meant for Chelsea football club. Previously, the US and western countries had, in 2014, sanctioned Russia for its invasion of Crimea, the result of which was the swift economic change and the yearly loss of $50 billion. But Russia has not been idle since then. The emergence of cryptocurrencies and digital assets has presented a way potentially for it to evade sanctions. The US has been aware of these developments and warned that cryptocurrencies could pose a serious threat to its sanctions, stressing it had a lot more work to do in understanding how these digital assets can be used.

Blockchain, cryptocurrencies or any other technology or...


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2 Months Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Once again it is being reported that eBay is both to accept cryptocurrencies as a form of payment and has also started to allow the buying and selling of NFTs in 2021. Meanwhile Amazon, whilst it has not confirmed its acceptance of cryptocurrencies or Digital Assets, is clearly researching this since it has been developing a digital currency and blockchain roadmap.


For a while, Shopify, Canada’s retail giant and answer to Amazon, has enabled the merchants using its FinTech platform to accept cryptocurrencies. Shopify has even devised a simple guide for merchants to follow, explaining the advantages of using cryptos and how to get started so that it can offer cryptos as a payment option for their customers. The most valuable FinTech firm in Europe, Klarna (with over 90million customers), is rumoured to be preparing for an IPO in 2022 and has been a veritable leader when it comes to Buy Now Pay Later (BNPL). However, for now, it’s chief marketing officer, David Sandström, has said that Klarna “has no plans offer customers the option to pay using cryptocurrencies”. Sandström has gone on to say “Credit card companies have made an astounding amount of money by essentially cheating and taking advantage of people with bad terms and conditions, high rates and extremely disadvantageous interests. Roughly 70% of American millennials don’t have a credit card because they fear them more than they dread death, according to some reports.”

Furthermore, the main credit card providers such as Visa and Mastercard have shown a much more positive attitude towards cryptocurrencies. In an interview with Barron’s, Vasant Prabhu, Visa’s vice chairman and chief financial officer, said: “What we can do is be the bridge between the crypto economy and the fiat economy.” Indeed, both Mastercard and Visa now offer a wide range of debit cards that deal in crypto and can use their respective network of merchants globally. This is helping to onboard more people with digital wallets, currently reported to number almost 300 million people, with potentially 1 billion digital wallet holders by the end of 2022. Presumably, this excludes 20% of the population of China who have access to the Chinese CBDC have a digital wallet.

As we see more jurisdictions issuing their own CBDC payment platforms, there will potentially be the need for banks and FinTech firms worldwide to upgrade their processes and systems in order to accept digital currencies. Awareness of crypto and digital currencies is certainly growing and being fuelled by marketing and advertising campaigns, such as the 2022 Superbowl which attracted 112 million viewers. A 30-second advert cost $7m, a 27% increase on last year with the adverts being run by eToro, Coinbase and Crypto.com to promote their various crypto and digital assets products and services. During the Superbowl itself, FTX gave away $1million of Bitcoin as part of its marketing mix!


Source: Twitter

Certain jurisdictions are looking to overhaul their legislation and regulations, as was highlighted last November by Australia’s Treasurer, Josh Frydenberg: “For consumers, these changes will establish a regulatory framework to underpin their growing use of crypto assets and clarify the treatment of new payment methods.”  A common trait is that FinTech firms are making it simpler for users to buy and sell goods and services digitally, often bypassing the bank’s existing payments infrastructure. It is worth remembering the basic technology behind cryptocurrencies is likely to be the preferred choice for...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The global economy suffered a huge economic shook in 2020 as COVID -19 enforced a lockdown across the world, compelling governments to take drastic action so as to try and prevent the spread of the virus. International travel came to a virtual standstill as countries, in effect, shut their boarders, together with citizens being told to stay at home as opposed to go to work.


Almost two years later, such travel bans still exist in the second and third largest economies of the world (China and Japan) as their boarders remain closed to the majority of foreign visitors. Meanwhile, in the world’s largest economy (thanks, in part, to huge handouts) the US government has spent $3.5trillion to keep the economy running. With the worst of the covid restrictions now having been lifted, we have seen a new phenomenon, ‘the great resignation’, whereby over 33 million Americans have handed in their resignation since 2021 as they look for better pay, conditions, work-life balance and more working from home. The reasons are varied, but the phenomenon is very real.

The percentage of workers looking to quit their job in the next 12 months

Source: JobsList
Labour markets are tight as employees struggle to retain staff, let alone attract new ones. This can be seen by global recruiters such as Robert Walters which has reported a surge in profits as employees demand higher wages. Furthermore, there has been a shortage in the number of applicants. Page Group, another quoted recruitment company, has also seen its profits rise as companies struggle to compete to attract the right staff. However, there is another trend that has emerged - workers at some of the most iconic and successful tech firms globally, such as Amazon, Facebook, Google and Microsoft, are struggling to find staff and, indeed, staff are leaving in search of the next new exciting sectors. The world’s most valuable quoted company - Apple - which earlier this year became the first company to be valued at more than $3 trillion is finding it hard to retain staff. 

9to5Mac, the publication which closely follows Apple, has reported: “Companies like Apple, Amazon, and more take time deliberating if or how to jump in, fast-moving startups in the crypto space are attracting executives and engineers from the tech giants”. 9to5Mac has also quoted Sandy Carter, who quit as a vice president of Amazon’s cloud computing: “…she posted on LinkedIn she was joining a crypto technology company. She included a link for open positions at the start-up. Within two days, she said, more than 350 people — many from the biggest internet companies — had clicked the link to apply for jobs at the firm, Unstoppable Domains”. The start-up sells website addresses that has created a blockchain-powered platform and is also engaged with NFTs. Of note: “Ms. Carter, said people were interested in working at crypto firms for more than just money. Some were drawn to the ethos of web3, which strives to decentralize power and decision making. It’s an alternative to how Google and Facebook came to dominate the internet by sucking up personal data from users to sell targeted ads”. It is difficult for some of the older tech firms to simply offer more money or fringe benefits when staff are leaving based on fundamental beliefs such as these. This interest in those decentralised organisational structures trying to give people back control over their data together...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Inflationary pressures mount even more

For regular readers of Digital Bytes, you will be only too aware we have been writing about rising inflation across the world as the global economy struggles with supply chain challenges post COVID-19. Added to this huge quantity of debt, governments across the world have issued to shelter their citizens and economies from forced shutdowns and isolation polices evident at the height of the covid pandemic.


The recent conflict in Ukraine will serve to add extra pressure on global inflation rates due to further supply chain interruptions, as well as the fact that many commodities both soft (agricultural) and hard (metals and petrochemicals) have soared in price in the last few weeks. We are all well aware, too, that Ukraine has historically been known as the ‘bread basket of Europe”, and as Farming Life has pointed out: “It boasts some of the most fertile land on earth, with rich black soil, chernozem, that is perfectly suited to growing grains. Chernozem is extremely fertile and is known to produce high agricultural yields, thanks to its high moisture storage capacity. Indeed, Ukraine has the ability to provide enough food for half a billion people, maybe more”. 
On 22nd February this year, Ukraine’s ministry of agriculture forecasted: “2021/22 exports would have potentially been 33.8 million tonnes of corn, 25.3 million tonnes of wheat and 5.5 million tonnes of barley” yet, given Russia and Ukraine are responsible for in excess of 25% of the world’s wheat exports and Ukraine on its own makes up 13% of all corn exports globally, it is of little surprise that in the first week of March 2022 we saw some of the greatest price rises in these commodities since 1959. Ukraine, itself, is responsible for almost 50% of the global production of sunflower oil and has replaced the US as the largest supplier of corn to China. Both commodities are key ingredients used in many food products and as farmers in Ukraine are impacted by the Russian conflict, or exports are blocked, it is likely to lead to further pressure on prices and thus global inflation.

Price of Wheat

Source: Markets busines insider
Price of Corn

Source: S&P Goldman Sachs Commodity index
As the above chart illustrates, the price of other commodities has also risen as in the last year this index has increased in price by over 70%.


Price of Aluminium

Source: Markets-Busines Insider
14% of global aluminium production comes from Russia and also 11% of the world’s nickel which is required for the production of stainless steel and used by electric car manufactures.

Price of Nickel

Source: Markets-Busines Insider
 
Price of Brent crude oil

Source: Markets-Busines Insider
Oil and gas prices were already on the increase and the turmoil in Ukraine in the last couple of weeks has only served to add further pressure. According to statistics from BP: “Russia remained the second largest gas, and the third largest oil producer, ‎accounting for 17% and 12% of the global output, respectively”. Therefore, any restrictions imposed by sanctions (or by the Russians) would have a huge impact, particularly in Europe which is highly reliant on Russian petrochemicals. 

The potential impact of the Russian conflict in Ukraine will undoubtedly be felt globally, not simply in terms of higher commodity and energy prices, but also directly by the banks. The Bank of International Settlements data shows that Italian and French banks have the greatest exposure in Europe, with $25 billion of loans to the Russian economy as at the end of September 2021. Austrian banks had $17.5 billion...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Blockchain technology is gradually permeating across all industries and spheres of life. Some areas are more prompt to changes, whilst others are not ready to accept innovations as quickly. Despite the fact that the traditional insurance industry is viewed as one of the most stable markets it still welcomes new technologies, and blockchain is no exception here.


The main reason for the wide adoption of Blockchain technology within the industry is quite simple: blockchain-powered solutions can solve many issues within the traditional insurance system and bring transparency, and therefore trust. Although Blockchain technology is still in its infancy within this industry, the transparency, immutability, security and speed of blockchain solutions could certainly transform the way the sector operates going forward. 

Blockchain technology in the insurance industry


Source: Fintechtris
Unsurprisingly, many processes throughout insurance are outdated. Policies are invariably processed using paper contracts, and many interactions are completed either via the telephone or face-to-face. With a predominance for paper-based analogue processes, there is always the potential for human error, tampering and lost information. Blockchain technology solves these problems by digitising transactions as part of a secure and immutable ledger and (with the use of smart contracts) much of the administrative process can be automated and even payments made without the need for the policy holder to formally make a claim. 
 

Benefits of blockchain
Examples of the benefits of blockchain within the insurance industry include:
speed and efficiency - a single place to store transactions streamlines processes, making them faster and more efficient; this also helps to negate human errors.  
transaction traceability - blockchain transactions cannot be edited or deleted, whereby bringing welcome advantages over those supply chains typically prone to theft and fraud. 
cost reduction - without a centralised player, vendors’ and intermediaries’ costs can be removed. If authorised via a blockchain-powered platform then less interaction is required on transactions, so reducing the time spent on them. 
enhanced security - every transaction on a blockchain platform needs to be agreed upon via a consensus of network members. Transactions are always encrypted and link to the previous transaction by a method known as hashing.
better transparency - using Blockchain technology, there is no centralised authority and therefore the transparency of the system is improved; it is also possible to only give certain information to relevant parties. Greater transparency creates a securer and more trustworthy environment, removing some of the uncertainties for the underwriters and thus enabling insurance policies to enjoy lower premiums. So, a win-win for underwriters, brokers, and policy holders. 

Application of Blockchain technology in the insurance industry                                        
1.Parametric insurance - the use of smart contracts could be particularly appropriate for parametric insurance policies as it could make payments automatically once an event has occurred. Examples of parametric insurance cover are such as, seeking protection from an earthquake or from weather events such as tornadoes, hurricanes, etc. The severity of these types of events can be verified by independent agencies, for instance the National Earthquake Information Center or Africa RiskView (a satellite weather surveillance system). One of the key advantages is that payments can be paid much faster - an important factor when, historically, assessing the levels of damage, engaging loss adjusters and completing claim documentation has been an arduous and time-consuming process.

2. Fraud detection - the FBI estimates non-health insurance fraud in the US to be around $40 billion per year. Blockchain technology helps reduce the many...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The world we currently live in is a digital one, so dependence on digital assets as much as physical ones should not be surprising. Most organisations are, in fact, gradually moving their businesses, advertisements and marketing to largely hinge on digital assets. Whether you are an importer in Australia or a shipping company in Brazil, your business relies in part on being able to call up the right photos, logos, videos, datasheet, and other rich media to describe the goods and services you offer. Most businesses face the challenge of ensuring that digital assets are properly stored, tracked, and managed. Customers demand current and relevant information; partners need precise data and brands need coordinated and coherent messaging. With these many demands, the answer is a digital asset management platform.



What is digital asset management (DAM) software? Digital asset management software, also known as a digital asset management platform, enables organisations to manage, organise, discover, store, retrieve and share data from a single point of access. Digital asset management systems enable internal teams to manage complex portfolios of rich media content from a central interface with ease.



Source: Pimcore

The importance of DAM software and blockchain in managing digital assets
As the volume of digital assets increases, so does the coordination effort. DAM offers many benefits to organisations that work with digital assets, and this is a reason to get DAM software if you have none.
Although Blockchain technology is not limited to financial transactions, it has many advantages over traditional transactions and it is for this reason, Bitcoin (alongside many others) uses blockchain in the management of financial transactions. In view of this, it is fitting to surmise that blockchain and DAM platforms have matters in common i.e., management of digital assets.

What Digital Asset Management encompasses



Source: dataworld
Asset protection 
At the most fundamental level, DAM software offers a secure repository for valuable digital files, making sure that valuable IP is protected and that brand media are stored safely. Also, the DAM’s reporting tool and file logging system makes it possible for you to track any user who accesses a file. Operating your company’s digital assets without digital asset management software may expose your digital assets to many dangers. Blockchains rely on the idea of distributed peer nodes that resolve the state of data using a consensus model. Any peer can accept a transaction and by this eliminate the need to rely on a centralised system that is at risk of attacks. Hackers majorly disrupt systems through distributed denial-of-service (DDoS) attacks; the attacks focus on a central server. This single point of failure does not exist with decentralised blockchain. Also, in digital cryptography, records can only be assessed or modified by the owner. However, owners can give special viewing permission to individuals to see the records in full or part. These permissions can be made time-sensitive, expiring after a certain time.

Prevents duplication
DAM plays an important role in preventing duplication of files and efforts by ensuring that original/source files don’t go missing. By doing this, it also prevents confusion during the creative process enabling much easy and faster location of assets in many organisations, which employees historically have spent hours searching for relevant data. Organisations that use DAM, can keep track of multiple iterations, store them centrally and know where to go for the latest version of an asset. It enables you to perform fast and targeted searches, thus increasing the productivity of your employees. This is particularly interesting as it doesn’t only save time but helps with content management and cost-saving. It also helps in the import and export of files and their enrichment with additional information. DAMs do not only ensure quality control but also facilitate organisations in sharing assets freely between multiple teams.

The benefits of DAM are inexhaustible, the results of which are increased productivity...


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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Talk to most of the mighty legal and accountancy firms in Amsterdam, London, New York, Paris and Singapore (considered to be the financial centres of the world) and you will find that one of the fee-paying activities keeping them busy is giving advice on Non-Fungible Tokens (NFTs). NFTs have become almost mainstream, with almost any organisation or individual owning intellectual property looking to cash in on the NFT craze and issue their own NFT. As to be expected, where there is money you will often find nefarious actors lurking around and hoping to both snaffle and abscond with unsuspecting investors’ cash - or defraud the tax man. Indeed, the BBC has recently reported just this in the UK: “HM Revenue and Customs (HMRC) said three people had been arrested on suspicion of attempting to defraud it of £1.4m”, adding that,HMRC said the suspects in its fraud case were alleged to have used ‘sophisticated methods’ to try to hide their identities including false and stolen identities, false addresses, pre-paid unregistered mobile phones, Virtual Private Networks (VPNs), false invoices and pretending to engage in legitimate business activities.”



It may actually come as a surprise to some that the calibre of organisations selling NFTs include: Selfridges - which is, “bringing digital goods to real-life shopping and broadening its accessibility in fashion……. featuring artwork by Victor Vasarel and new physical pieces from designer brand Paco Rabanne inspired by Vasarely’s work.” (Vogue magazine)
Gucci - selling virtual handbags at a higher price than the physical ones
All 20 of the Premier Football League clubs 
The British Museum is to sell its second set of NFTs
The Hermitage Museum in St Petersburg to sell NFTs of Michelangelo paintings
Hollywood actors and celebrities are selling NFTs

As the below chart shows, the attraction of NFTs is global. 

 
Countries with the highest NFT adoption rates


Source: Finder.com

However, is it the lawyers, accountants and consulting firms who are helping their clients to issue NFTs? If so, this could be treading on thin ice? If NFTs were to be classed as a form of cryptocurrency, then potentially should they only be issued by those organisations (in the UK) on the Financial Conduct Authority (FCA) crypto register? 

The reason this is ‘potentially’ is because the FCA definition of cryptocurrencies quotes: “Cryptoassets are cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology (DLT) and can be transferred, stored or traded electronically.” The FCA has further stated that if a firm is engaged with the trading of crypto assets it is a requirement to apply to be on the FCA crypto register - which is not an insurmountable problem, especially for those firms already regulated. However, although required to have existing AML/KYC processes in place, the challenge for these firms is the time it can take to actually be entered onto the FCA crypto register since applications to date have involved a slow process. In addition, the FCA has already declared that in the summer of 2022 it will be announcing new rules: “The FCA’s draft rules include proposed restrictions on the marketing of cryptoassets, in preparation for the Government bringing the promotion of these high-risk investments under the FCA’s remit.” Meanwhile in the US, whilst no formal definition for crypto assets exists, the Investment News publication has reported that “the SEC has the authority to regulate crypto-currencies because they're often part of an investment contract, which meets the definition of a security under current law”. So, given that an NFT is a unique digital representation (typically of intellectual property i.e., an asset), will the American regulators endeavour to argue that NFTs are securities?

Something else for consideration is that, if in the future we see record labels, museums, sports clubs, tech start-ups being sanctioned by regulators in different jurisdictions for selling crypto assets without the appropriate regulatory licenses, will these issuers of NFTs therefore sue their advisors? Furthermore, if this were to happen, are the legal, accounting and consulting firms actually insured? Ben Davis at Superscript (a specialist digital asset insurance brokerage in the UK) told us: “Companies need to ensure that they have kept their underwriters/ providers of insurance up to date...


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3 Months Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The potential invasion of Ukraine by Russia continues to dominate the headlines and has pushed oil and gas prices to recent highs as the threat of economic sanctions against Russia conceivably giving rise to the superpower reducing the amount of fossil fuel it exports to Europe. Bearing in mind that Russia supplies over 33% of Europe’s gas, any sustained reduction in gas supplies could have a significant economic impact for the European economy. However, one country in Europe that would not be impacted by any Russian gas restrictions and is indeed actually benefitting from high oil and gas prices is Norway, with 99% of its energy requirements coming from renewable energy, particularly hydro-electricity.




Where Norway’s energy comes from 


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Source: Krypotvault.no


Norway exports over $52billion of oil and gas, accounting for over 48% of the entirety of Norway’s exports. Therefore, high prices only serve to increase the amount that Norway earns whereby further enriching its massive sovereign wealth fund. This is estimated to be worth $1.1trillion and makes it the largest in the world. According to the publication Being crypto.com: “Kryptovault, Norway’s largest Bitcoin miner as well as the country’s largest data center provider and operator, is looking to clean up conversations around mining, as well as tidying up the energy footprint of mining bitcoin. Currently, Norway uses 100% clean energy, with 95% hydropower and 5% wind power” illustrating, once again, that not all Bitcoin mining is detrimental to the environment. If anything, Kryptovault is having a positive impact on the environment, having announced it is now to use the heat generated from its Bitcoin mining operations in order to dry seaweed and wood. This video from Kryptovault shows how the use of dried goods extols the green ESG credentials of its proposal.


Furthermore, it is not only in Norway that Bitcoin miners are using energy that otherwise would have potentially been wasted. In Texas, the gas that is often ‘flared off’ when prospectors are looking for and hit oil is being utilised. According to research from Denver-based Crusoe Energy Systems, by utilising the gas that would have historically gone through the flaring off process can reduce CO2-equivalent emissions by about 63%. The gas is put to use to power micro generators and the electricity is then employed for powering Bitcoin mining computers. Giga Energy Solutions is a company using flared gas to now mine Bitcoins, and in 2021 generated over $4m - not bad for the two young lads in their mid 20’s from Texas who set Giga up.

Flared gas

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Source: Crusoenergy.com


These initiatives demonstrate how the Bitcoin Mining Council is working to have net-zero emissions from electricity consumption associated with crypto mining by 2030. As this target draws ever closer, we could well see other companies taking a more positive stance towards cryptos by following in the steps of Uber which itself has announced it would accept Bitcoin once it was more comfortable with the impact currently subjected by mining on the environment.

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Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Matt Hancock, the UK’s ex-Health Secretary’s recent comment has caused quite a stir online with a recent posting from TeamBlockchain referring to it on LinkedIn attracting thousands views. Looking at the table below, it is interesting to see interest from other countries in what Hancock had to say; also of note as to the types of companies viewing such posts, i.e. large blue chip organisations! For those of you who missed it, Hancock announced that “the U.K can be the global home of cryptocurrencies if the government handles it right”, further adding, “not only will crypto foster economic growth, it will also impact governance due to its transparent nature." 



Summary of viewers


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Source: LinkedIn


The UK’s tax authority (HMRC) has just released up-to-date rules on how decentralised finance (DeFi) lending and staking in proof-of-stake networks - the way that some cryptocurrency transactions are validated. However, the new HMRC rules do leave a degree of confusion as to whether the proceeds will be taxed as income or a capital gain but, in any event, it will potentially mean that reporting to HMRC is going to be somewhat arduous and complex. In the US, the Office of the Comptroller of the Currency (OCC) confirmed last November that banks in the US were under obligation to demonstrate procedures and processes be in place in order to be able to deal in cryptocurrencies. Furthermore, the OCC has invited representatives from a selection of the major banks to advise on what they feel is the most appropriate way in which cryptos ought to be treated. 


Meanwhile, SEC Head, Gary Gensler, believes that cryptocurrency platforms/exchanges will work with regulators - so are we see a return to an era of self-regulation as firms voluntarily comply with SEC regulations? The stakes are high if regulators do not give perspicuity over how they intend to treat cryptos; buyers and sellers will otherwise migrate to those jurisdictions that do offer definitive clarity. However, the real question is, will national boundaries in a digital world become less relevant? So, provided investors are comfortable that measured and appropriate controls are in place and KYC/AML procedures are followed, will they migrate to those exchanges based offshore? Moreover, will the OCC surprise us and embrace cryptos, in effect avoiding passing control to other jurisdictions? After all, the Chinese have already issued their own CBDC……. Now it looks like Russia is about to shortly announce that they too will be regulating cryptos. Russia’s Minister of Finance Anton Siluanov said: “Cryptocurrency should be regulated rather than banned in Russia”. On Tuesday, February 8, the Russian government and central government published a report noting that they will soon introduce a crypto regulatory draft by February 18.

The Russian government is working on an arrangement wherein the distribution of digital assets will happen only through banking systems or licensed intermediaries.


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