The Gateway to a Billion Transactions

The Gateway to a Billion Transactions

Saturday, 5th October 2013 – Melbourne, Australia
By Callum Newman

  • The Gateway to a Billion Transactions
  • Money Weekend’s Technology Future Watch

Last Saturday in Money Weekend we discussed the growing trend toward streaming services in the Australian market.

That got an interesting follow up this week when Channel Ten launched its latest digital strategy alongside the reboot of its catch up service ‘TENplay’.

TENplay will allow you to watch most Channel Ten shows on demand, along with a bunch of other nifty features.

That was just one of the developments this week that are set to change the way we watch TV, buy products and spend our money…

Changes Coming to a Business Near You 

Ten chief digital officer Rebekah Horne is behind the development of TENplay. An interesting point she made to the Australian is her belief that the small size of the Australian market means it can only support two major streaming players.

Last week we pointed out Channel Nine, Seven West Media, Foxtel and Quickflix all have plans to tap into this market in one way or another. Offshore players Netflix and Hulu are considering it as well.  Add Channel Ten and you have a very competitive landscape.

But it gives you an idea of the ‘internet everywhere’ theme we’ve explored in Money Weekend lately. TENplay will be available on mobiles, tablets, game consoles and smart TVs. In fact, one feature is the ability for the user to navigate between different devices while watching the same program.

But it’s not just free to air TV that’s evolving thanks to the digital revolution. The car industry is too. In this case, as reported by the Australian Financial Review, it’s the success of Subaru selling its BRZ sports car exclusively online, direct from the manufacturer. The AFR: ‘Its success highlights the potential for low cost retailing that may change the way we buy cars.

For the moment this trend is for fleet buyers, not retail. But it’s already changing the business model of dealerships. One of those changes will be a shift into greater investment in creating virtual showrooms to attract buyers researching online.  From the AFR again: ‘The digital age is the tipping point, and we will see the biggest changes to hit dealerships in the past 50 years.

Research shows retail buyers prefer to search online but make personal contact by visiting a dealership to close the sale. Online behaviour like this is why companies spend so much money on research. It’s enabled Facebook to find another lucrative way to tap into consumers’ online behaviour.

The Coming Death of the Traditional Bank Branch

The Financial Times reported this week that Facebook is expanding its offering of mobile ads to cash in on app makers and retailers. Apparently two thirds of people who download a mobile app only open them between one and ten times. The challenge for companies is to get users to keep using the app.

According to the FT:

Retail and e-commerce companies such as Target, eBay, and HotelTonight, an online booking site, have used the ads to get people to download their shopping apps. The new ads will allow them to entice shoppers back to the app for a product promotion or 24 hour sale.’

Facebook can help them do this and make a growing, tidy stream of revenue. But the company will be really cashing in if it can dominate the payments market. That’s the idea behind its latest launch, ‘Autofill for Facebook’.

Revolutionary Tech Investor analyst Sam Volkering gave us his take this week:

Essentially you stores card details in Facebook’s platform, which means when you go to shop on your mobile, instead of buggering around with fiddly card numbers, cvc’s and actual cards, you just tap on ‘Autofill with Facebook’ and bang, your card details are in and you can check out. And if you think no one would give their card details to Facebook…the 20 million per day users of Candy Crush Saga and the 8 million per day users of Farmville 2 will disagree with you. And if you think those users don’t pay for games, try over $1 billion in total revenue from Farmville and over $850,000 per day from Candy Crush.

The big banks are hustling to develop their technology platforms, and their priority is mobile devices. Take this from The Age this week:

In a speech to the Trans Tasman Business Circle last month, Westpac CIO Clive Whincup said the convergence of mobility, digitisation and social media had “radically shifted the balance of power, placing the customer in control”.

It will also mean bank branches will become much more tech-orientated, with fewer staff.

The Age article suggests that the number of financial services organisations engaging customers through mobile devices is expected to grow to 92 per cent within five years.

The way Sam sees it, Facebook and the other big tech companies are making online payment easier and stand to take a chunk of the market off the established banking system by cutting them out of the process.

Kris Sayce and Sam over at Revolutionary Tech investor have one niche payments company on the buy list. Arguably, that potential is priced into the big players like Google, Facebook and eBay. And the big banks won’t be easy to dislodge with their massive resources, either.

But there are different angles to the same idea. Another way to play it is to consider online security.  Who can profit by making your mobile transactions, accounts and networks secure?

As mobile banking and payments get bigger and bigger, this will be a trend to follow.

Callum Newman+
Editor, Money Weekend 

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Money Weekend’s Technology FutureWatch
By
Sam Volkering

Technology:
Is The US Government Hoarding Bitcoins?

By now you’ve possibly heard the illegal hidden website ‘Silk Road’ has been taken down by the FBI. If you’re unaware of Silk Road, it is/was a hidden website on the Tor Network.

The Tor network is a completely anonymous part of the internet. Some call it the Dark Web, but in essence it supposedly keeps your identity anonymous when online.

Around the 10th July this year, US Border Patrol conducted a routine search on a mail delivery. During that routine search they uncovered a parcel. In this parcel were nine counterfeit identity documents.

Ross Ulbricht had ordered these documents. Ulbricht used the website he owns, operates and profits from to get these documents. That website? Silk Road.

 

…………………………………………………………………………………………………………………..

This chain of events culminated in Ulbricht’s arrest this week. Ulbricht is a 29 year old that runs a criminal website selling drugs, explosives and guns.

So you’d expect a Hollywood style arrest. In some plush hotel suite littered with the paraphernalia his website sells. But no, his arrest was subtly done while he was at the library.

Due to the shutdown of Silk Road and Ulbricht’s arrest the price of Bitcoins plummeted to $109US. This kind of volatility isn’t unusual for Bitcoins, and it’s this kind of news that often makes it jump around.

For some time the US government has been wary of the Tor network, Bitcoins and the way in which criminal activity is fuelling their notoriety. And Silk Road has been a target for the FBI for some time.

In response to this the Tor project posted a statement about the anonymity of their browser. In part I’d suspect because there would be many concerned (legitimate) users now worried about their privacy.

‘So far, nothing about this case makes us think that there are new ways to compromise Tor (the software or the network). The FBI says that their suspect made mistakes in operational security, and was found through actual detective work.’

The FBI has subsequently arrested Ulbricht. The US has now lodged a criminal complaint against him. They also lodged a civil complaint against Ulbricht and…

‘Any and all assets of Silk Road including but not limited to the Silk Road hidden website and any and all Bitcoins contained in wallet files residing on silk road servers, including the servers assigned the following internet protocol addresses: 46.183.219.244; 109.163.234.40; 193.107.86.34; 193.107.86.49; 207.106.6.25; and 207.106.6.32.’

In the Civil cases the US Department of Justice can take proceedings against property, not just the person involved. In order to keep the property the only proof needed is that the property is a result of crime. In this situation, the property they’ve seized is Bitcoins.

Voilà, the U.S is 26,000 Bitcoins richer.

Now what’s worth asking here is, what will they do with the Bitcoins? Because the aim of seized property is to maximise the net return from seized property then one would assume they have to sell the Bitcoins back into the market? And if that’s the case, then this is just a temporary dip in the Bitcoin price. In other words, a buying opportunity.

But let me leave you with this. If you’d just acquired 26,000 Bitcoins and it cost you nothing, would you hold onto them to ‘maximise the net return’? I know I would. But the US Government…surely not?

Makes you even think if they can seize Bitcoins, who’s to say they haven’t been actively buying them for some time? Maybe the Winklevoss twins aren’t alone. Maybe, just maybe the US government is hoarding Bitcoins too?

Energy:
E.Coli to Be The Number Two in Fuel

We’ve written before about the genius of Korean scientists. More specifically the scientists at the Korean Advanced Institute of Science and Technology (KAIST). They’re a smart bunch at KAIST and they haven’t let us down this time.

Excitingly this breakthrough isn’t just about electric buses. This breakthrough from the KAIST scientists has to do with petrol, poo and E.Coli.

The humble little gut bacteria that spoils food and makes you sick has some pretty potent potential for producing petrol.

Oh and it does it through poo.

In a report by the Wall Street Journal the scientists said,

‘When the modified E. coli were fed glucose, found in plants or other non-food crops, the enzymes they produced converted the sugar into fatty acids and then turned these into hydrocarbons that were chemically and structurally identical to those found in commercial fuel.’

That is, the E.Coli poo is petrol.

It might not necessarily replace traditional fuel, but it could be…the number two. The process is nowhere near efficient enough to start pumping E.Coli poo down at the local Shell just yet. But like all good science and technology breakthroughs, it’s a start.

What this could do is flush the concept of dwindling fuel supplies down the toilet. You see E.Coli is very common, easy and inexpensive to grow. It could lead to a common way of creating fuel.

I know it all sounds a little out there, bacteria poo as fuel. But the science doesn’t lie. In a world where we’re consistently seeking alternative forms of energy this is but another option, hopefully. The future of energy will come from multiple sources. Whether it’s fusion power, EV’s, solar, wind or bacteria poo, each one has a role to play.

And with the team at KAIST advancing their research, E.Coli might just turn out to be better for you than you think.

Health:
Is Eugenics Alive and Well?

Earlier this year Dan Denning, Nick Hubble and I had our DNA analysed. If you haven’t seen my results have a look here.

Anyway, I found the results to be particularly helpful. Not in the sense that I now know I’m prone to atrial fibrillation and heroin addiction. But in the sense that I’m more educated about my own body.

I think this kind of information is invaluable. I also know what kind of traits I’m likely to pass on to any future children I might have.

The company we used for our DNA analysis is 23andme.com. It was pretty easy. They sent us a kit, we gave them a saliva sample, shipped it back to the US and a few weeks later we had our results.

23andme are under fire at the moment for a new patent they just had approved. The company says it’s nothing new and that they lodged it five years ago.

The patent was designed to assist with 23andme’s Family Traits Calculator. As the company states,

‘The tool – Family Traits Inheritance Calculator – offers an engaging way for you and your partner to see what kind of traits your child might inherit from you.’

They go on to say,

‘The tool offers people an enjoyable way to dip their toes into genetics. It aligns nicely with our goal to introduce people to their DNA and help them better understand the science of genetics.’

But the particular wording of the patent states,

‘(Gamete donor selection includes) identifying a preferred donor among the plurality of donors, based at least in part on the statistical information determined.’

What this really means is the patent allows for something that will raise the eyebrows of many. It effectively allows for selection of a preferred donor based on particular genetic traits. It’s a roundabout form of eugenics.

In today’s world we have cutting edge technologies. In particular the rise of Personalised Medicine and the DNA revolution has opened the proverbial can of worms.

Because of the availability of such pioneering technology we have to ask a simple question. Is eugenics so wrong in the world we currently live in?

It’s a huge topic, which I’ll cover in more detail over the next few weeks. But there’s significant debate about what eugenics actually means. And over the course of history the term has taken on some significant, and horrible definitions. None more so than the incorporated ideas of Eugenics in Hitler’s Mein Kampf.

But what if eugenics led to a better life for people? What if we had the ability to use genetic code to prevent suffering? What if we could prevent a child suffering from leukaemia? What if we could eliminate genetic disease completely? Alzheimer’s, Parkinson’s, perhaps more. The potential is astounding.

But of course there are moral and ethical issues too. There will always be those that seek to use such practices for immoral purposes. There will also be plenty of people that use this technology for its greater benefit.

Besides, what’s to say the practice of eugenics isn’t currently alive and well? Perhaps the patent issued to 23andme is more a sign of the times rather than a horrible mistake.

There are arguments from both sides of the fence. But when you think about the potential eugenics might have with available technologies, maybe it’s not such a bad thing after all?

Sam Volkering+
Technology Analyst, Revolutionary Tech Investor

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