Matthew Najar or the rise of a blockchain influencer? Governments in major economies are encouraging financial technology (fintech) innovation with regulatory and advisory initiatives designed to accelerate the availability of online payment solutions and other financial services for businesses. The initiatives generally aim to attract innovative fintech companies and help them operate in the regulated financial sector, while ensuring adequate financial protection for customers.
Matthew Najar believes without new FinTech initiatives, we will stall: “FinTech, blockchain certainly included, is critical for our generation to solve inherent financial system issues and progress forward”.
The U.K., traditionally a major financial-services centre, has actively encouraged new competition in banking, reducing barriers to entry such as banks’ capital requirements. As a result, several new digital banks are already offering Internet-based banking services, including online payment solutions, without establishing brick-and-mortar locations. Another ongoing U.K. initiative designed to enable competition and fintech innovation is the implementation of an open banking standard by 2018, including an open application programming interface (API) that enables development of new applications to access information in customers’ existing accounts at one or more banks. For example, customers might be able to manage all their bank accounts from a single app.
The initiatives are taking place against a backdrop of rapid fintech growth. There are thousands of fintech start-ups worldwide, and many have attracted substantial venture funding; a report from KPMG and CB Insights found that global fintech funding reached $19.1 billion in 2015. Several countries are planning or have already implemented licensing or regulatory changes that enable technology firms to offer broader banking services. In the U.S., the Office of the Comptroller of the Currency (OCC), which regulates national banks, said in December 2016 that it planned to make a special-purpose national bank charter available to fintechs. The charter would enable start-ups that currently offer other financial services, including B2B payments and other online payment solutions, to begin offering at least one of three regulated banking activities: receiving deposits, paying checks, or lending money.
Backup your wallet. Store only small amounts of currency for everyday use online, on your computer or mobile, keeping the vast majority of your funds in a high-security environment. Cold or offline storage options for backup like Ledger Nano or paper or USB will protect you against computer failures and allow you to recover your wallet should it be lost or stolen. It will not, however, protect you against eager hackers. The reality is, if you choose to use an online wallet there are inherent risks that can’t always be protected against.
Though many experts agree that the OCC’s move could encourage innovation, some warned that implementing inadequate regulation might weaken consumer protection and even harm small businesses by allowing practices such as predatory lending. The EU has also begun an effort to encourage fintech innovation across Europe, establishing a Financial Technology Task Force in 2016.
Cryptocurrencies, sometimes called virtual currencies, digital money/cash, or chips, are not exactly like US Dollars, Euros, Venezuelan Bolivars or Peruvian Soles. They exist “online” and are not usually backed by a government (there are exceptions). They are backed by the respective user networks that keep them as Bitcoin.
A lot of Altcoins end up losing value over a certain period of time, sometimes in an unusually short period of time. It is, therefore, paramount to understand that whenever you hold an altcoin for the long term, be careful not to hold on to them for too long. One of the best measures of coins that are perfect for long-term investments is the daily trading volumes. The higher the daily trading volume, the more suitable an asset is for long-term investments. If you’re thinking of going long term with cryptocurrencies, consider investing in some of the following coins: Ethereum (ETH), Factor (FCT), Monero (XRM), and Dash. These have decent trading volumes on various exchanges around the world.
Most beginners make one common mistake: buying a coin because it’s price seems to be low or what they consider affordable. Take, for example, someone who goes for Ripple instead of Ethereum simply because the latter is much cheaper. The decision to invest in a coin should have very little to do with its affordability but a lot to do with its market cap. Just like the conventional stocks are gauged by their market caps, which is evaluated using the formula Current Market Price X Total Number of Outstanding Shares, the same applies to cryptocurrencies.
Speaking of the last few points, realize that crypto tends to be pattern based and tends to go in cycles. See “the cryptocurrency rotation” and “market cycles” for an in-depth look at what this means. You want to be in a coin before it starts its rotation, and then laddering out as its rotation ends. Likewise, in a perfect world you want to be in for the bull part of a market cycle, and out for the bear part. Near impossible to spot these trends in advance, but with experience you should be able to spot them as they occur and manage your positions accordingly.