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Bitcoin is the mother of all Ponzi schemes.

It will crash and fade at some point. But on the way to its inevitable death, the journey may make many more insanely rich. This is a global high-velocity bubble, the first in which the entire world can easily participate in.

And so it could be HUGE.

But it will end in tears.

Why? The problem isn’t that Bitcoin is digital. I’m cool with digital.

I do get that paper currency is nothing more than paper printed by a government.

But suppose I started a paper currency, the Asim Dollar, and stated that I legally cannot print more than 1,000,000 Asim Dollars ever, just like the cap on Bitcoin.

The question is would anyone use, or give a value to, Asim Dollars?

If I was the first person to think of this, in amongst a group of cavemen, I might get some traction but once everyone sees others making new paper currencies, the Asim Dollar will collapse.

That applies to Bitcoin too. Bitcoin is open source so it’s damn easy to copy, and those copies can be improved on, which is what we’re seeing happening.

The new copies of Bitcoin address some of the weaknesses of Bitcoin, in particular speed of transaction and the blockchain file size.

So when they’re better where will that leave Bitcoin?

Cryptocurrencies in general also have other fundamental issues. Given they’re decentralised who do you go to if your Bitcoin suddenly disappears? No one.

And can anyone give any assurance that today’s hack of US$64m of stolen Bitcoin will not be the first of many hacks? Nope.

Further, the lack of price stability makes Bitcoin far from ideal as a currency.

The only currencies that have maintained value are ones that are backed by something like gold or ones that are backed by legislation and a government.

Bitcoin is neither.

Bitcoin is a scam. And while blockchain technology has uses, it’s massively overhyped in large part due to Bitcoin itself.

The future of money is digital. But it’s not Bitcoin…

Source: Quora, answered by Asim Qureshi, CEO LaunchPad, 5 $1-10m startups (including Jibble.io)

After superpower China announced earlier this week that it has banned Initial Coin Offerings (ICO), the value of bitcoin fell 11.4%immediately after. Circulating speculations claim the ban will impact the large amounts of capital raised from ICO, a total of more than $1.7 billion from January to early September 2017.

What is ICO and bitcoin? What impact does it have on businesses and why did China, one of the world’s most influential countries, ban something so lucrative?

What is bitcoin?

Invented by the then-unknown creator Satoshi Nakamoto in 2009, bitcoin is a ‘peer-to-peer’ electronic currency. It has no physical form so it does not require a central location to store.

In other words, bitcoin runs independently from banks and financial institutions and without any involvement from those institutions, bitcoin transactions are ‘free of charge’ but this also means if they get stolen or lost, there is no possible way to recover losses.

ICO Explained

Craig Wright, an Australian entrepreneur, who claimed in 2016 that he is Satoshi Nakamoto, creator of bitcoin. Source: The Economist.

Cryptocurrency is any currency associated with the internet that uses cryptography – the process of converting legible information into an almost uncrackable code, to track purchases and transfers.

Cryptography was created to cater to the need for secure communications in the Second World War. It has evolved in the digital era thanks to mathematical theory and computer science, to become a way to secure communications, information and money online.

Bitcoin was the first cryptocurrency, other examples include Ethereum and Ether.

How does it work?

To buy or sell bitcoin, users need to have a bitcoin wallet installed on their desktop or mobile devices. The identity of users are kept anonymous but transactions are tracked with digital identification comprised of a bitcoin address and a private key.

Think of your bitcoin address as a transparent safety deposit box. Everyone knows what is inside but only the private key can access it. These “safety deposit boxes” are public logs called blockchain.

How do you get bitcoin in the first place? Users typically take part in mining.

Mining is the act of verifying bitcoin transactions by contributing computing power to match private key to bitcoin address. Whenever a new block of transactions is created, it is added to the chain of blocks, hence the name. Still with us?

For comparison’s sake, blockchain technology  is similar to Google Docs.

Before the arrival of Google Docs, users could only edit documents via Microsoft Word one person at a time because two users couldn’t edit a document simultaneously. With Google Docs, both parties have access to the same document at the same time if they are provided access.

Blockchain technology is like a shared document, but it is a shared ledger.

What is bitcoin used for?

Blockchain solves two challenging problems associated with digital transactions: securing information and avoiding duplication making the technology widely applicable to multiple use cases.

It also eliminates all the pain points with transferring money through traditional methods: crossing borders, rescheduling for bank holidays, high bank fees, failed/dropped transfers, etc.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tabscott, Blockchain Revolution

Because bitcoin allows users to stay anonymous, it has raised concerns in its application to facilitate drug deals, money laundering and illegal purchases. But as with all crime, there is a price to pay if caught.

“But if you catch people using something like Silk Road [bitcoin market], you’ve uncovered their whole criminal history,” Sarah Meiklejohn, computer scientist at University College London, says. “It’s like discovering their books.”

In more positive applications, tech giants like IBM are utilizing blockchain technology for information storage in healthcare, government, and supply chain for its accuracy and transparency.

Estimated spending on blockchain technology by banks in 2019 can be as high as $400 million.

ICO Explained

The price of bitcoin has fluctuated aggressively since it became popular in 2013 when prices rose by almost 10,000% before the biggest online bitcoin exchange sent it crashing.

Telegraph recently reported that there are currently 15 million bitcoins in circulation, each of which is worth $4,231 (as of September 2017). A single bitcoin’s sharp increase in value has many sceptics believing that we are in a bubble.

ICO Explained

Back full circle, what’s the big deal with ICO?

Similar to an Initial Public Offering (IPO), an Initial Coin Offering (ICO) is when a company offers a chance to invest in a new cryptocurrency. Instead of trading shares, companies exchange their newly created cryptocurrencies, known as tokens in ICO…essentially, code.

An example would be OmiseGO ICO in August, when the payments company raised $25 million selling its OMG tokens. Since then, many news outlets are reporting millions of dollars raised in selling cryptocurrencies in a matter of a few hours.

China banned ICO because its legality is described as ‘undefined’ and it was only in July this year that US regulators began looking into it.

According to Sun Guofeng, director general of the Chinese Central Bank, banning ICO was a necessary move to stop illegal fund raising.

China-based ICOs raised about $400 million through 65 offerings with more than 100,000 investors. If it all came crashing down, China would be in hot water.

What is the future of ICO around the world and in Southeast Asia?

To clarify, holding cryptocurrencies in China by private parties is still legal. The People’s Bank of China only makes it illegal for financial institutions to hold or transact in them. It does not mean that there is no opportunity for Chinese developers and service providers in cryptocurrency.

While countries are slowly trying to control ICOs, the Southeast Asian market sees bitcoin as an opportunity to improve the financial maturity of its citizens, over 70% of whom are unbanked.

Singapore has been dubbed to be the next ICO hotbed given its a favorable location for startups, favorable regulatory standards, and supportive tax measures.

And developing markets like Vietnam are embracing digital currency as showcased by smart vending machine startup Dropfoods that announced its ICO this week and Myanmar’s SKYBIT that aims to open the country to a global market through bitcoin.

Bitcoin is not evil. Digital currency is not the bad guy. What has fueled the “ICO bubble” uproar is the excessive optimism that is outweighing rationality that usually comes with smart investing.

Tokens purchased by “investors” in an ICO can be used to transfer value within the new coin’s ecosystem, or to other cryptocurrencies’ ecosystems. The problem is that there is a high likelihood these ICO projects will fail. Why?

Take it from the creator of a famous cryptocurrency.

“Many firms are issuing a coin not because it makes sense to do so, but because they have a product they can sell quickly.” – Ethereum founder Vitalik Buterin

Here’s what you should know today.

1. Grab is adding Myanmar’s Wave Money to its mobile wallet

Ride-hailing and mobile payments startup Grab is partnering with Wave Money in Myanmar.

Drivers will be able to sign up for e-money accounts that let them cash out their daily earnings at one of Wave’s 9,000 shops across Myanmar, Grab said in a statement.

Grab also plans to integrate Wave Money’s digital wallet with its own wallet, GrabPay, so that passengers in Myanmar can use Wave Money’s ecash to pay for Grab rides.

Grab’s strategy of choosing to pair up with local payment options, such as Kudo in Indonesia and now Wave Money in Myanmar shows how importance catering to local tastes are.

Read the rest of the story here.

 

2. TenX raises roughly $80 million for cryptocurrency payment system for everyday life

the company is proud to report following a 1 million USD seed round at the beginning of 2017 with famous lead investor Fenbushi.

TenX completed a successful token raise over this past weekend on June 24, 2017, 1 pm UTC. It exchanged an equivalent of 245,832 Ether (valued at roughly 80 million USD at the time of the swap) to the company’s PAY tokens at a rate of 350 PAY tokens per 1 Ether (with a 20% bonus during the first 24 hours).

The PAY tokens will provide access to part of TenX’s revenue of their already live payment service and also serves as a loyalty program to its own users.

During the token swap, TenX accepted one of the most diverse ranges of tokens any company has ever provided. In addition to Ethereum, also ERC20 tokens, Bitcoin, Dash, and Litecoin were accepted.

3. Bangkok based Digio gets series A investment

Among the participants in the round was InVent, a VC arm of telecoms-focused holding company InTouch.

Bangkok-based Digio – which aims to turn your smartphone into a mobile point-of-sale (mPOS) system – counts payments giants Mastercard and Visa among its partners, as well as big tech corporates including Epson and Samsung.

It develops a range of products, including a device that allows vendors to take card payments on their smartphones, an ewallet, and a secure solution for receiving customers’ signatures electronically.

Digio’s founder and CEO Nopphorn Danchainam said that Digio’s system can now accept payments from third-party ewallets, including Alipay and WeChat Pay.

Read the rest of the story here.

Here’s what you should know today.

1. Hike beats Whatsapp to launching messenger app payments in India

The launch of Hike Pay not only shows an ambition to build a messaging platform, it also means Hike has beaten WhatsApp, the chat app that dominates India, to the punch. Facebook-owned WhatsApp is typically coy about future updates and services, but co-founder Brian Acton has spoken publicly of plans to launch digital payments in India.

Hike, which is introducing version 5.0 today, is starting out with peer-to-peer and bank-to-bank payment options, the former being an in-app wallet that is not dependent on a bank account and the latter a service powered by India’s government-backed UPI payment system.

In an interview with TechCrunch, Hike CEO and founder Kavin Bharti Mittal described a product very much like WeChat’s red envelopes.

“We’ve drawn some inspiration from our friends in China,” he explained. “We think it’s going to be extremely exciting.”

WhatsApp is one thing, but India’s mobile payment space is already condensed with specialists. Paytm, which has raised money from Alibaba and most recently SoftBank via a $1.4 billion investment, leads the pack with over 200 million registered users. MobiKwik is purely focused on payments and claims 50 million users, fast growth and a potential $1 billion valuation soon.

Read the rest of the story here.

 

2. Bebe relaunches ecommerce under new ownership

Global Brands Group Holding clarified the strategy for its new interest in bebe, saying it will relaunch a newly transformed ecommerce platform and its international brick-and-mortar stores.

The announcement represents the first initiative under Global Brands’ direction of bebe’s ecommerce platform, direct-to-consumer divisions and international operations, according to a Global Brands press release.

Thanks to $67 million in cash in the bank as of the end of last year and little debt, Bebe has been able to make a graceful exit from the retail landscape, in contrast to some of the messier jockeying for assets that is often a hallmark of the bankruptcy process.

Bluestar CEO Joseph Gabbay said that Global Brands’ ownership will facilitate the e-commerce efforts that had already begun. “Global Brands Group has been a strategic licensee and can now seamlessly synergize the international distribution, ecommerce platform and wholesale business,” he said in a statement.

Read the rest of the story here.

 

3. Community Chatter: Bangkok’s old-school noodle shop is now accepting bitcoin payments

A branch of the popular Lim Lao Ngow fish noodle shop is one of the first restaurants in Thailand to set up bitcoin payment. The chain has been a local favorite for 80 years.

The shop lets visitors pay for their meals (a bowl of noodles is about B35) with bitcoin, where the price in baht is converted to bitcoin currency upon payment according to the blockchain system.  Bitcoin became legal in Thailand in 2014 and, according to the Coinmap, there are currently 13 services that accept bitcoin payment in Bangkok. – See more at:

In an announcement on the official website, the Lim Lao Ngow team says that accepting bitcoin payment is an investment in a digital currency that will only continue to grow in the future

Read the rest of the story here.

 

Financial Technology, or “fintech”, has been at the forefront of Southeast Asia’s growing digital adoption. In 2015 and the first half of 2016, a total of $345 million was invested in fintech startups in the region alone because market maturation and ecommerce adoption have been stagnated by payments.

In recent years, there has been an array of mobile wallets and government initiatives in the region, like PromptPay in Thailand, or Wave Money in Myanmar. Not many initiatives have involved a less explored and more popular technology in the West – blockchain and bitcoin.

eIQ speaks with Philip Lim, the founder of SKYBIT, a bitcoin startup that encourages cross border payments to a frontier market – Myanmar.

He explains the concept behind blockchain, how SKYBIT could possibly change the lives of the Burmese and why he decided to launch his startup in one of Southeast Asia’s less developed countries.

What is blockchain technology and bitcoin?

“A blockchain is a ledger of transactions which are grouped into blocks and tied together one after the other by encryption,” explains Philip.

The bitcoin blockchain is the largest and most active one, it is the token of monetary value that flows in the network.

“A blockchain is immutable, which means you can’t change its history, as the system would reject it,” says Philip. “Immutability also means that the record is seen as permanent. A good non-payments application would be for transfer of assets like land.”

“The number of bitcoin transactions per day around the world has continued to increase and has recently almost reached 370,000. Such increase in transactions could be attributed to media attention, especially of bitcoin’s steep rise in price recently but the technology has actually been around since 2009,” says Philip.

How does SKYBIT utilize blockchain technology?

Philip developed SKYBIT to create significant social impact in Myanmar by solving difficulties in transferring money to Myanmar as it was one of the factors impeding the country’s and the peoples’  development.

The SKYBIT payment processor helps Burmese businesses and aid organizations receive payments from abroad. A number of charity organizations have already signed up to accept donations from anywhere in the world.

Merchant Accounts dashboard on the SKYBIT platform

Example Ad Item on the SKYBIT advertising platform

A customer who wishes to make a payment clicks on the “Pay with bitcoin” button on the sales page, enters details such as email address and bitcoin address (used in case of refund), and is taken to an invoice page, where they can simply scan the uniquely generated QR code using any bitcoin app such as Copay, Coinbase and Bitcoin Wallet.

Invoice page and QR code generated by SKYBIT.

Payment is detected instantly and the entire process is done in a matter of minutes.

Invoice page and QR code generated by SKYBIT.

Behind the scenes, the bitcoin is received by SKYBIT, and SKYBIT deposits Myanmar Kyat into the organization’s SKYBIT account. The organization doesn’t need to handle or even understand bitcoin at all.

In case of a refund, SKYBIT can send bitcoin back to the bitcoin address provided by the customer and there is a limited amount of time to report a problem related to an invoice or request a refund, during which the merchant cannot withdraw the amount earned from the sale from their SKYBIT account.

“Signing up to use SKYBIT is far easier than applying for a merchant account to accept credit cards, as banks only want to deal with large businesses. This may encourage small merchants and even individuals to use SKYBIT and access a global market,” comments Philip.

“Credit cards also still have many problems, especially fraud and chargebacks, which can cause losses to merchants. With bitcoin, which was designed especially for the internet, transactions are detected immediately and irreversibly settled within minutes, and cryptographic checks prevent fraud,” says Philip.

“Traditional forms of payment are outdated and not entirely secure as they were designed before the internet was even invented,” says Philip.

Cryptocurrency adoption within Myanmar

Bitcoin can be purchased from SKYBIT via its exchange to effectively open up a whole new world of online shopping for the more affluent Burmese.

Myanmar banks have only recently released cards that are accepted internationally, but most locals would not qualify for one or the process takes too long.

“Traditionally, Myanmar is a very cash based society. People have stacks of money kept at home, and most understand it’s not practical,” says Philip.

To address this issue, mobile wallets like Wave Money have been introduced in Myanmar to allow locals to send local currency via smartphone, even in rural areas.

“Since Wave Money can only be used to send Myanmar Kyat, it cannot be used for international payments so Wave Money and bitcoin can actually complement each other,” says Philip.

“It makes a lot more sense to replace USD as the de-facto currency of the internet with bitcoin, as there is too much friction when dealing with traditional fiat currencies on the internet.”

“Businesses also aren’t allowed to display prices in any currency other than Myanmar Kyat. Within the past two years, many businesses in Myanmar, including Swensens and The Pizza Company, began openly quoting prices in USD. Authorities ordered them to stop because of the weakening value of the Myanmar Kyat relative to USD at the time,” says Philip. “They are afraid it will devalue the local currency.”

A social enterprise

“There have been, and still are, so many big problems that need to be solved in Southeast Asia, especially in Myanmar. Poverty is the normal mainstream thing there,” says Philip. “Most people around the world have been oblivious to Myanmar’s problems.”

“I was learning about bitcoin and could really connect with all the things that prominent bitcoin evangelist Andreas Antonopoulos was saying. For example, 5 or 6 billion people have not been cared for by traditional financial systems. He also mentioned that one of the common uses of bitcoin was for donations.”

The sky’s the limit for SKYBIT

Philip, together with a new co-founder, plan to push offline marketing in order to meet organizations face-to-face in Myanmar.

“This is not the kind of thing I can create a Facebook ad for because the technology, even just web pages and email, is so foreign to much of the Burmese,” he says.

Despite currently being one of Southeast Asia’s most underdeveloped markets, Euromonitor predicts the country will become one of the 20 ‘markets of the future’ to offer the most opportunities for consumer goods companies globally.

But opening up Myanmar to the world takes investment and finding such is currently SKYBIT’s highest priority.

“The platform is ready, and ideally will flourish once I have enough funds to open an office in Myanmar filled with a strong marketing and sales team,” says Philip. “The country is full of potential and I’d like to take the next steps in introducing Myanmar’s goods and services to global shoppers, whilst simultaneously helping the people of Myanmar at all levels of society.”

Here’s what you need to know today.

1. Sea (formerly Garena) files for $1 billion IPO

Sea Ltd., Southeast Asia’s most valuable startup, has filed confidentially for a potential U.S. initial public offering that could raise about $1 billion.

Sea is considering listing in early 2018, though no final decisions have been made

The company, founded in 2009 by entrepreneur Forrest Li, began as an online gaming portal and has since branched out to add mobile shopping and payment services. A $1 billion deal would be the largest technology IPO out of Southeast Asia, according to data compiled by Bloomberg.

Any overseas listing of Sea would be a blow for Singapore, which has been trying to woo local startups to sell shares at home as it seeks to build a regional hub for fast-growing, innovative companies.

Read the rest of the story here.

 

2. Philippine blockchain startup Coins tops up series A with another $5m

Blockchain-powered fintech startup Coins announced today it has raised an extra US$5 million for its series A, which it first raised last October.

The funding is led by Naspers Ventures, the investment arm of South African tech and internet conglomerate Naspers.

Headquartered in Manila, Coins uses blockchain technology to enable financial services like money remittances, bill payments, and mobile credit top-up for its users, whether they have a bank account or not.

The unbanked – people who don’t have access to traditional banking services – are a big part of the company’s mission. The startup’s technology helps them access a range of those services through just a mobile phone. Users can top up their e-wallet easily at physical outlets that partner with Coins and thereafter use it for online transactions.

Read the rest of the story here.

 

3. Recommended Reading: Report: ‘Ultra-fast’ fashion players gain on Zara, H&M

Now, in a challenge to those fast-fashion stalwarts, many smaller apparel brands have sped up the design-to-sale process even more, turning fast fashion into “ultra-fast fashion,”

Boohoo.com, ASOS and Missguided can produce merchandise in two to four weeks, compared to five weeks for Zara and H&M and the six- to nine-month cycle for traditional retailers.

“Customers want it now,”said Shelley E. Kohan, VP of retail consulting. “There’s an emotional immediacy attached to that.”

Now lower-priced retailers like Boohoo and ASOS, which have strong (if not pure-play) ecommerce operations, are now challenging even the fast-fashion old-timers, according to Fung Global.

Read the rest of the story here.