12.08.17 Your morning briefing
The information you need to start your day, from PaymentsSource and around the Web:
Revolutionary exuberance: Many high profile financial figures have weighed in on bitcoin since the cryptocurrency began its meteoric rise, with former Federal Reserve Chairman Alan Greenspan being the latest. Greenspan told CNBC that bitcoin reminds him of colonial currency that turned out to be worthless. The Continental currency was issued during the Revolutionary War period, and George Washington and other colonial military figures used the money to buy arms and other supplies. The Continental Congress declared the currency legal tender and its value was determined by the amount of paper bills available and the demand for that paper. In other words, there was no commodity such as gold or silver to back the currency and give it value. The currency did fund real goods and services, but had no value by 1782, Greenspan, who is co-authoring a book about American history, told the cable network.
Saxo says there's more upside: As bitcoin soared past $15,000 for the first time on Thursday, the price is starting to get too high for some of the cryptocurrency's most ardent fans. Which raises the question of how high will bitcoin go? There's lots of predictions, but perhaps the most bold comes from Saxo Bank, which forecasts a market peak of $60,000, followed by an equally severe crash to $1,000, reports City AM. The Danish investment bank, which includes its bitcoin outlook among its "outrageous predictions" (as such it's not a formal recommendation to clients) contends there is still more "traditional" investment that will go into bitcoin over the next year as a result of the bitcoin futures contract, causing further spikes in valuation. At its peak, Saxo predicts the value of bitcoin will pass $1 trillion, enough to mint bitcoin billionaires. The crash will come in 2019, caused by China and Russia pushing bitcoin aside in favor of their own cryptocurrencies.
Patreon's charging patrons: Content crowdfunding service Patreon is changing its fee structure and will now charge a fee to patrons, or the people who pay content creators. The new fee is 3.9% plus $0.35 per pledge, and creators will see a flat 5% fee taking from their pledges. Engadget reports Patreon's old system, under which creators incurred various processing charges, sometimes resulted in creators losing between 7% and 15% of their total pledges, resulting in Patreon looking for ways to ease that burden. The new structure is designed to defray the cost to creators, though Engadget reports some smaller donors may reduce their activity because of the new fees. Patreon has grown quickly in the past year, though it has also been challenged to adjust to new YouTube advertising policies.
Man in the middle: Making another argument against the use of static authentication such as usernames and passwords, researchers from Birmingham University are working with banks in the U.K. to identity and fix a flaw could have exposed millions of consumers to hacking. Finextra reports the university ran a test on mobile apps from HSBC, NatWest and other U.K. banks and found a security gap that allows external users to perform a "man in the middle" account takeover and nab usernames, passwords and PINs. The problem resides in the use of "certificate pinning," which is used to protect wireless channels for mobile app usage. The researchers said certificate pinning is a solid technique, but in this it hid other flaws, such as a solid hostname verification. Other weak links were found such as phishing vulnerabilities that allow an attacker to take over part of a screen while a mobile app is running. The researchers say all versions of the apps they examined have been updated and are secure.
Credit union blockchain group hires former Mastercard exec: John Ainsworth is the new CEO of CULedger, leading a group that will develop uses for distributed ledger systems, such as streamlined payments and identity risk systems. Ainsworth is the former executive president of North American markets for Mastercard and will join CULedger December 18. In CULedger's announcement, Ainsworth said he has spent the majority of his career working with credit unions, and predicted more change in the next 10 years than in the past 50 years. CULedger has more than 50 credit union members and recently launched a blockchain business, CUSO, that offers card processing, business loans and other services.
From the Web
China's Sun Art partners Alibaba to boost store efficiency; shares jump
Reuters | Fri Dec 8, 2017 - Sun Art Retail Group, China’s top hypermart operator, said on Friday its stores will use Alibaba Group Holding Ltd’s software solutions and online transaction data to improve business efficiency, sending its shares up 5 percent. The co-operation agreement between Sun Art and Alibaba follows a $2.9 billion investment in Sun Art announced by Alibaba last month in the e-commerce giant’s latest push into offline retail portfolio.
Facebook co-founder’s B Capital leads $10M investment in Indian payment startup Mswipe
TechCrunch | Thu Dec 7, 2017 - B Capital, the investment firm from Facebook co-founder Eduardo Saverin backed by BCG, has stepped into India after it backed smart point-of-sale company Mswipe in its first deal in the country. The U.S.-Asia fund is investing $10 million into Mumbai-based Mswipe alongside DSG Consumer Partners in what is an extension to a Series D round announced this summer. Originally pegged at $31 million, the addition extends the round to more than $40 million. Mswipe was founded in 2011 and it has now raised a total of $65 million from investors.
Indonesia bans fintech firms in payments from using cryptocurrencies
Reuters | Thu Dec 7, 2017 - Indonesia’s central bank has issued a regulation banning use of cryptocurrencies by financial technology companies involved in payment systems, and said it is examining whether there’s a need to regulate trading on virtual currency exchanges. The regulation, signed in November but made public on Thursday, requires financial technology companies involved in processing payments, such as e-wallets, to register at BI to ensure virtual currencies are not used in payments.
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