3 Things that Could Happen if Cryptocurrency Remains Unregulated

The lack of regulation in the cryptocurrency market has contributed to the success of iterations such as Bitcoin, which climbed in value in 2017 from just under $1,000 to a peak of almost $20,000 12 months later. While many who have invested in Bitcoin or alt-coins such as Ripple XRP and LiteCoin on a personal or professional level contend that these digital currencies must remain unregulated in order to reach their potential and thrive, they have become so popular that to leave them unregulated could have adverse consequences. Here are three things that could happen if cryptocurrency continues to grow without a reasonable degree of macro-level regulation.

 

1. Inexperienced investors could fall prey to fraud.

 

One practice that has gained popularity as a result of the unregulated cryptocurrency market is the “initial coin offering,” or ICO. These business transactions bear some resemblance to the conventional IPO used to issue company stocks. However, instead of earning shares in a company, investors involved with ICOs earn a digital asset, known as a “token,” which provides the issuing company with the money that it needs to fund its venture and investors with the promise of a financial stake in the company’s future.

 

Unfortunately, the popularity of ICOs has drawn the attention of scam artists and hackers, who pose a serious threat to inexperienced investors who want to become involved in the cryptocurrency market. While some would argue that the fault lies with investors who fail to perform adequate research, it’s important to consider the fact that regulatory bodies have placed restrictions on IPOs to protect investors from fraud.

 

2. It could diminish the reputation of the industry.

 

The reputation of cryptocurrency has been negatively affected by the dark web and questions about whether it could be linked to activities such as terrorist financing. The U.S. Department of the Treasury is concerned enough about the prospect of terrorists leveraging cryptocurrency to commit crimes that one of its officials recently testified before the Senate Banking, Housing and Urban Affairs Committee in an effort to push for stricter regulations on cryptocurrency exchanges. Several instances of terrorists hosting online Bitcoin fundraisers to support their groups have been identified since cryptocurrency began to grow. The anonymous nature of cryptocurrencies exchanged via blockchain technology makes terrorists’ actions difficult to track, providing them with a secure way to purchase supplies for their efforts and offering them a form of currency that can be easily exchanged on the dark web for commodities. A lack of regulation could diminish the industry’s reputation.

3. It could be the beginning of another global financial crisis.

 

In the wake of the rise of Bitcoin last year, professionals within the finance sector likened the phenomenon to that of “tulip mania” in the early 1600s and the 1987 stock market crash. While most experts agree that cryptocurrencies do not have the economic power to cause a global financial crisis, many are concerned about the effect that they could have on the world economy if they continue to grow quickly in popularity and to be used without any restrictions. Major financial institutions are already trading in Bitcoin, the best-known and most widely used form of cryptocurrency. In the event that this practice becomes widespread among all major financial institutions, a surge in growth without any regulation could destabilize the international market and pose a serious threat to the world economy.

How Blockchain Can Dramatically Improve these 3 Major Industries

In a January 2018 article published on the Forbes magazine website, blockchain was named as one of 11 industries poised to become among the most significant digital disruptors of the future. While the experts believe that all industries will be affected by blockchain in the next several years, the following will have particularly significant gains to make if they choose to fully embrace the technology.

 

1. Real Estate

 

The real estate sector could benefit most from blockchain in an important way: the ability to abandon paper-based records in favor of a highly secure digital approach. Even the simplest real estate transaction is rife with paperwork. Every step—from opening escrow and obtaining insurance to securing mortgage approval and negotiating closing services and costs—requires hours of paperwork sent back and forth between the buyer, seller, and all involved intermediaries. In addition to unnecessarily prolonging the property-buying process, all paperwork is susceptible to human error, creating the possibility for mistakes that could later become public record. Paper-based records also have a greater potential for fraud, which can result in higher operating costs. Since the blockchain can automate the process of tracking documents, confirming their accuracy, and seamlessly transferring property deeds, real estate transactions can be conducted quickly, cleanly, and more precisely. Additionally, blockchain could completely eliminate the need to involve escrow companies, as funds within a real estate transaction could be released to the appropriate parties once the conditions of a smart contract on the blockchain are met.

 

2. Health Care

 

The field of health care has a lot to gain from the implementation of blockchain technology because it has the potential to restructure the entire health care system in a way that can help patients to obtain more accurate information and more comprehensive care. One of the foremost problems that health care providers struggle with is the inability to access the full picture of a patient’s medical history. This is due to the fact that patient data is not always easy to track down from past medical providers and because sensitive information is difficult to share with new doctors due to security threats posed by cyberattacks. Blockchain presents medical providers with the option of storing their patients’ medical history within a secure hub where they can safely and easily be shared with other professionals. Ultimately, this leads to a reduced likelihood that records will become lost, which can cause an individual to encounter issues with continuity of care. The more accurate of a picture that members of the medical community have of their patients’ entire medical history, the more likely they will be to correctly diagnose illnesses and prescribe treatments that save lives.

 

3. Crowdfunding

 

The impact that blockchain can have on the crowdfunding industry has everything to do with its affordability. Crowdfunding is a relatively modern concept that many in the business world see as a more accessible, small-scale alternative to venture capital funding. However, what these two forms of raising capital have in common are the high fees that entrepreneurs encounter when attempting to fund their creative ventures. Centralized crowdfunding sites such as Indiegogo and Kickstarter serve as an intermediary between individual online investors and the entrepreneurs who are trying to gather financial support for their ideas. They retain investors’ donations in escrow until the contract between an entrepreneur and his or her investors has been fulfilled. While this is in the best interests of donors, the fees for using these services are surprisingly high, and they reduce donations that could otherwise be put directly toward the entrepreneurial venture that donors intended to support. To retain these donations in full, entrepreneurs can use the blockchain to issue their own cryptocurrencies, which investors later have the option to trade in for services, products, or cash from the entrepreneur’s company. These investments are secured by smart contracts in which rewards and equity in exchange for contributions to a venture are distributed automatically once the terms of the blockchain-based contract are met.

3 Solutions That Blockchain Can Provide to the Telecom Industry

Over the last two decades, the telecommunications industry has grown significantly, driven by the adoption of new technologies. According to one Colorado-based research firm, the sector, which is expected to generate $2.4 trillion in revenue by 2019, currently services a market of around 4.7 billion mobile users.

However, some industry experts suggest that companies within this sector may find that the telecom industry is reaching a tipping point in the near future, with many firms losing ground to competitors who offer simpler, streamlined services that overtake more traditional telecommunications options. In order to avoid becoming a victim of digital transformation, experts suggest that one thing telecommunications executives should be doing is looking for ways to modernize their operations, such as through the implementation of blockchain technology.

Blockchain is a secure digital ledger technology that allows for the distribution of information without replication. It can carry out transactions quickly and efficiently while protecting the sensitive information contained therein, allowing individuals and organizations to interact anonymously through a system that relies on collective transparency in order to keep business dealings honest. With regard to the telecommunications sector, blockchain technology can offer three solutions that will help modernize the industry and allow companies to develop in the digital age rather than fall victim to it.

1. Simplify and streamline internal processes

The telecommunications industry hinges on cooperation between a complex web of customers, vendors, distributors, and providers. The use of blockchain technology could allow firms to develop a more efficient business model by streamlining Operation Support System (OSS) and Business Support System (BSS) operations. In the digital age, efficiency is crucial, and blockchain is a tool that can facilitate quick dealings between a large number of parties within a single transaction, which includes accurate and efficient billing. Blockchain could also create faster on-boarding processes for new customers when a client’s new telecommunications provider operates within the same blockchain as the previous provider.

2. Reduce the incidence of roaming fraud

Each year the telecommunications industry loses revenue to fraud, approximately $6 billion of which stems from roaming fraud, which occurs when a mobile user automatically connects to the services of another network provider in the event that his home network is unavailable. The use of a telecommunications service while roaming incurs a greater expense for customers and is a major source of revenue for telecommunications companies. However, call data often does not appear on the user’s home network for days or weeks, providing a window of opportunity for fraudsters to attack. Many subscribers who commit roaming fraud have used a visiting network and then feigned ignorance about using roaming services. They deny requesting roaming services or insist that they were not educated on the charges that roaming services can incur. Industry experts suggest that the best way to curtail the incidence of roaming fraud is to reduce the time that it takes for the two networks to exchange data, and blockchain is the perfect tool to make this happen. Blockchain can serve as a platform for systems that provide subscribers with a pathway to use roaming services after authenticating their identity, and can track the data usage in real time so that the window of opportunity that allows people to make fraud claims is greatly reduced.

3. Help telecom companies reduce costs

Apart from the money saved from streamlining operations, blockchain can help telecom companies cut costs in many ways, which includes using smart transactions to allow customers to purchase digital products, including music, gift cards, and mobile games. Blockchain can facilitate the purchase of these types of products through cryptocurrency, which incurs a much lower cost to companies than transactions undertaken with credit or debit cards.

Stanford Ignite Helps Entrepreneurs Gain Business Knowledge

A certificate program designed to help entrepreneurs develop and execute their ideas, the Ignite program at Stanford Graduate School of Business aims to provide students and business owners worldwide with the business fundamentals essential for launching their entrepreneurial ventures.

The Ignite program is geared toward entrepreneurs with innovative ideas who may not have the necessary means to successfully develop an innovative concept into a thriving business. The participants in the Ignite program are a varied mix of individuals from a wide range of professional backgrounds—from students who are just starting graduate school to scientists and engineers in top positions at large companies. Any leading innovators who have not received business degrees at the graduate level are encouraged to apply for a spot within Stanford Ignite.

Upon acceptance, entrepreneurs will participate in a seven-week course led by notable faculty members from Stanford Graduate School of Business. Instruction covers basic subjects related to core business skills, such as marketing, accounting, and strategy, as well as more specific skills such as product design. Students in the Ignite program will also learn functional skills related to areas such as negotiation, leadership, and teamwork. Apart from the standard courses, Ignite students will hear guest speakers and attend panels comprised of executives from major corporations and investment firms, some of whom also serve as mentors.

As a part of the curriculum, participants will work together in groups of five to six to conduct a venture project. Projects can be designed as new, independent ventures or to innovate a product or service that an existing company already provides. Ideas for ventures can be submitted prior to the beginning of the course through an online portal, where program participants can then vote on the concepts that most appeal to them. Those who submit the most popular ideas can then give video presentations on the first day of Stanford Ignite, and each participant can rank the presentations based on the degree of interest. Stanford Ignite’s faculty director then places participants into teams. The projects established through Stanford Ignite will end either with the seven-week program or will be carried forward by the original idea generator.

Altogether, Stanford Ignite requires a time commitment of around 100 hours of instruction, and an additional 100 to 150 hours outside of class for preparation and participation in venture projects. Although not all venture projects will continue on to the funding phase, all participants who complete the program will earn a certificate from the Stanford Graduate School of Business. Some participants may choose to move forward with their venture projects and establish businesses outside of the program. Current ventures founded by entrepreneurs who participated in Stanford Ignite include ALICE Technologies, Bell Biosystems, Driptech, and HeyCrowd.

Stanford Ignite celebrated its 10th anniversary in 2016. In one decade, it helped to facilitate the creation of over 100 thriving businesses led by around 1,600 program participants from all over the world. What began as a single, on-campus course has blossomed into an international program with locations in India, China, Chile, Brazil, the United Kingdom, France, and New York City.