The Cryptocurrency Gold Rush

When James W. Marshall discovered gold in Coloma, California, little did he know that a fever of greed would pass through the nation, unleashing an excitement that would re-shape the U.S. landscape and rattle the population. If history has proven anything, it’s that the smallest inkling of wealth can profoundly impact the world economy.

Like the 19th century gold rush that brought roughly 300,000 people to California, bitcoin is moving a whole lot of money without much thought to the consequences. Maybe it’s some visionary minds moving fast or a severe case of FOMO, but either way, many are rolling the dice in the hope that they won’t be left on the sidelines.

As we stand on the precipice of the bitcoin revolution, the question remains…what lessons have we learned from history?

What is Bitcoin?

Bitcoin is a global payment system that operates without any bank or institutional interference. It works like any currency where it can be earned or acquired and exchanged for goods, services or other currencies. Transactions take place between users and is protected by cryptography, hence the name cryptocurrency. A public digital ledger called a blockchain records all the transactions, removing the need for a central bank. Since the inception of Bitcoin, there are over 1384 cryptocurrencies available on the Internet and that number continues to grow. To put this number in perspective, there are only 180 global currencies across the globe.

The Failure of Speculation

It’s common to be blinded by something new, exciting and potentially prosperous. A quick scan of any newsfeed or newswire will reveal all these success stories proclaiming bitcoin as a path to riches. Rarely do people lament the crazy exchange rate or having lost their investment. Even when the value of bitcoin dropped 20% in late December, it garnered little attention.

The 1849 gold rush is a prime example of how the prospect of wealth can backfire. While many got rich off the deep gold deposits, an even larger group invested everything only to receive nothing. Mining companies went bankrupt, people were backstabbed, workers were left bloodied and communities of people were pushed off their land. All for the promise of something that didn’t contain the value that people had assumed.

This isn’t to say that bitcoin won’t eventually become a globally accepted currency, but the rush needs to be tempered. In fact, with something of this magnitude it should be a slow and thoughtful build.

The Early Fallout

Bitcoin is not without its influential detractors. While many believe digital payment and currency are necessary, others in the economic and financial community see bitcoin as being inflated to increase the wealth of a small group of people. Former chief economist of the World Bank, Joseph Stigliz, believes bitcoin should be made illegal due to its lack of oversight and regulation. Warren Buffett even added ‘I can say almost with certainty that they will come to a bad ending’.

Whether it’s the stock market or tech, every bubble bursts. When value is speculative, it can balloon a market to unsustainable levels. Prices become impossible to justify and more money gets invested by people who are aggressively looking to make a fortune. There’s also the possibility that the U.S. Government intervenes, which could kill bitcoin’s perceived value and render it an empty investment.

With speculation, there will undoubtedly be losers. While some savvy investors will find prosperity, most need to proceed with the utmost caution.

A market correction is creeping up.

It’s only a matter of time.

Latest iPhone Threatens To Slow Down Mobile Payment Adoption

There has been tons of hype and buzz regarding Apple’s iPhone 8 which is expected to be showcased to the world on September 12th at the newly minted Steve Jobs Theater.

Some of newest features which have grabbed the public’s attention have been an all-screen OLED screen, removal of the iconic Home button, wireless battery charging, and a new system-on-a-chip. While most consumers will view the removal of the home button as a necessary step towards slimming the form factor of mobile device even further, it’s important to look at how this decision can impede the adoption rate of mobile payments moving forward.

Removal of the home button means that biometric scan (Touch ID fingerprint authentication) is a thing of the past. Instead, Apple will be relying on 3D facial recognition sensors. This means that the next time you try to pay something with your phone, you’ll need to stare straight at the screen versus placing your finger on the button.

Some tech reports suggest that Apple made the decision to remove biometric scan functionality from their OLED screen since they weren’t able to perfect the technology, which entailed vibrating the front screen to detect a fingerprint.

Does facial recognition equal a frictionless experience?

For millennials accustomed to broadcasting stories every day using Snapchat and Instagram, it appears that the adoption curve won’t be as steep. But for others, it will be the first time for them to use their front-facing camera. Another important factor is how sophisticated and accurate is the facial recognition software that Apple will be using to authorize payments with their latest iPhone.

When you think about how NEXUS using retina scan for its members, its practically foolproof because it’s in a controlled environment at the airport. Banks are also starting to experiment with facial scan authentications for ATM machines which makes sense since it saves the consumer the trouble of having to take out their ATM card to make an ATM transaction.

But what happens if you are in a retail or convenience store which has very poor lighting and the phone camera has difficulties detecting your facial features to authorize the payment. While I’m sure that Apple has made these considerations, it’s absolutely crucial that the mobile payment experience needs to be as easy as taking a credit card from your wallet. If it’s not, you have a lost conversion.

The impact to mobile payment adoption

Recent statistics show that 83 percent of Canadians have a smartphone – which they use to shop online, pay for items in store, and do their banking. In fact, we are so connected to our phones that 77 per cent of us would never leave home without it.

With that kind of dependency, it’s not surprising that Canadians are embracing their phones as payment devices. Canada has one of the highest penetrations of card-based payments in the world – more than 70 per cent of personal purchases in Canada are card-based.

However, Apple’s decision to omit biometric scan on their latest iPhone may slow down Canada’s pace to moving toward become cashless if the new payment experience becomes a pain point for mobile consumers.

Elevate Toronto Will Be a Game-Changer For City’s Tech Industry

View of Toronto City Hall

You may have noticed that Toronto is solidifying its place as a North American tech hub. The Atlantic recently published a piece on how Toronto is more than happy to bring Silicon Valley employees and prospective tech talent up north. Meanwhile, in June, Tech Crunch reported on how the city is likely to become the next great producer of tech startups. The recently announced Elevate Toronto festival in September I think will only further Toronto’s status as a tech capital.
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Jonmichael Moy: Canada is the new Wild West for technology

Image showing sign board of Toronto, Canada

Canada’s rich history of technical innovation dates back to the 1970s, when Nortel Communications began shifting its focus to digital technologies, and later gave way to Bell Canada Enterprise after multiple iterations of telecom deregulation. Research in Motion, which was founded in 1984, also had a significant impact on cellular phone technology with its messaging service and BlackBerry devices.

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