The blockchain and cryptocurrency sectors can be brutal sectors to operate in. Roughly 70% of all tech startups fail, and by some accounts blockchain projects are even more vulnerable. In late 2017, well before the crypto winter of 2018, a Deloitte analysis concluded that more than 90% of projects collapsed. What is it that makes blockchain so uniquely difficult? Is there a single problem that, once solved, would let all blockchain firms thrive? Unfortunately, the situation is more complicated. To endure and thrive, distributed ledgers must achieve four distinct, though interrelated, goals: scalability, enterprise adoption, accessibility, and regulatory compliance.
Scalability has long been a problem for blockchain applications; one of the stated reasons for Vitalik Buterin’s creation of Ethereum was his dissatisfaction with the Bitcoin blockchain’s sluggish transaction speeds. Visa runs thousands of transactions every second; Bitcoin might do seven in the same time period — the incumbents are exponentially faster. A scalable blockchain may not need to surpass Visa, since blockchain’s security and immutability are attractive propositions, but it’s vital that the number of blockchain transactions per second at least approach the payment processor standard.
While the blockchain business sector has its own trade press and its own corporate heavyweights, the value of the industry as a whole is small compared to the broader economy. Enterprise adoption of blockchain technology would bring untold value to the industry in contracts, trading volume, and transaction fees, but it would also accelerate the improvements that could eventually make Distributed Ledger Technology (DLT) indispensable to daily life. This is why 38% of enterprises plan on adopting blockchain solutions during 2020. Although the financial sector takes the lead in adopting the technology, blockchain continues to penetrate other sectors such as healthcare, agriculture, real estate, law, and logistics among others. One example of real-time blockchain applications coming to the fore is the ‘Tech against Corona‘ initiative where participating Dutch companies are supporting the response to the current COVID-19 outbreak. Another example is a permissioned blockchain network in Argentina which has digitized the routine tasks of gas technicians. Global supply chain markets have also been quick to explore blockchain technology in a move to expedite routine operations and foster transparency. A noteworthy example is that of BMW Group, who will guarantee traceability in multi-stage international supply chains by combining blockchain with cloud storage technology.
Computers couldn’t go mainstream when they operated on punch cards and BASIC — they needed to become more accessible and user-friendly. In a similar fashion, many blockchain projects remain stuck in the Proof-of-Concept (POC) phase whereby it’s possible to use these applications, but it’s rarely simple or intuitive. We cannot expect everyday users to remember or keep track of long hash codes, nor should prospective users have to understand complicated terms, advanced statistics, cutting-edge programming language, or graduate-level game theory.
Tomorrow’s best blockchain applications won’t draw attention to themselves; they’ll slot easily into the background of everyday applications and solutions.
Blockchain cannot reach its full potential without adhering to legal regulations. Though compliance is complicated and occasionally strenuous, failure to comply is more dangerous. Adherence to regulations is, of course, a hedge against risk. But just as importantly, it’s a spur to public confidence in blockchain. Compliance demonstrates responsibility and good citizenship, and increases public trust and interest in DLT.
If we are to achieve mainstream adoption of this nascent technology it’s crucial that we bridge the gap between traditional legacy companies and blockchain. With demand for blockchain techexpected to continue to rise, we will need to see improvements in scalability, accessibility, and regulatory compliance. As is typical with revolutionary innovations, blockchain will bring about meaningful change to traditional business but it will not occur overnight.
Robinhood plans confidential IPO filing as soon as March – Bloomberg News
(Reuters) – Online brokerage Robinhood, at the centre of this year’s retail trading frenzy, is planning to file confidentially for an initial public offering as soon as March, Bloomberg News reported late on Friday, citing sources.
The California-based brokerage has held talks in the past week with underwriters about moving forward with a filing within weeks, Bloomberg said.
Robinhood did not immediately respond to a request for comment.
Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc to lead preparations for an initial public offering which could value it at more than $20 billion.
Robinhood was at the heart of a mania that gripped retail investors in late January following calls on Reddit thread WallStreetBets to trade certain stocks that were being heavily shorted by hedge funds.
The online brokerage tapped around $3.4 billion in funding after its finances were strained due to the massive trading in shares of companies such as GameStop Corp.
(Reporting by Ann Maria Shibu in Bengaluru; editing by Richard Pullin)
Analysis: How idled car factories super-charged a push for U.S. chip subsidies
By Stephen Nellis
(Reuters) – When President Joe Biden on Wednesday stood at a lectern holding a microchip and pledged to support $37 billion in federal subsidies for American semiconductor manufacturing, it marked a political breakthrough that happened much more quickly than industry insiders had expected.
For years, chip industry executives and U.S. government officials have been concerned about the slow drift of costly chip factories to Taiwan and Korea. While major American companies such as Qualcomm Inc and Nvidia Corp dominate their fields, they depend on factories abroad to build the chips they design.
As tensions with China heated up last year, U.S. lawmakers authorized manufacturing subsidies as part of an annual military spending bill due to concerns that depending on foreign factories for advanced chips posed national security risks. Yet funding for the subsidies was not guaranteed.
Then came the auto-chip crunch. Ford Motor Co said a lack of chips could slash a fifth of its first-quarter production and General Motors Co cut output across North America.
“It brings home very clearly the message that the semiconductor is really a critical component in a lot of the end products we take for granted,” said Mike Rosa, head of strategic and technical marketing for a group within semiconductor manufacturing toolmaker Applied Materials Inc that sells tools to automotive chip factories.
Within weeks, automakers joined chip companies calling for chip factory subsidies, and U.S. Senate Majority Leader Chuck Schumer and President Biden both pledged to fight for funding.
Industry backers now aim to be part of a package of legislation to counter China that Schumer hopes to bring to the Senate floor this spring. Still, all agree it will do little to solve the immediate auto-chip problem.
Headlines about idled car plants resonated with the public that had shrugged off abstract warnings in the past, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies. Lawmakers, already worried that a promised infrastructure bill will not materialize this year, decided to push for quick solution.
“Nobody wants to be seen as soft on China. No one wants to tell the Ford workers in their district, ‘Sorry, can’t help,'” Lewis said. “It was one of those moments where everything aligned.”
The package includes matching funds for state and local chip-plant subsidies, a provision likely to heat up competition among states including Texas and Arizona to host big new chip plants that can cost as much as $20 billion.
The subsidies could benefit a factory in Arizona proposed by Taiwan Semiconductor Manufacturing Co and one in Texas eyed by Samsung Electronics Co Ltd, even though those factories would be geared toward high-end chips for smartphones and laptops, rather than simpler auto chips. And those factories would not come on line until 2023 or 2024, according to plans disclosed by the companies, the world’s two largest chip manufacturers.
In the longer term, a raft of U.S. companies are also poised to benefit. Any chipmakers that build factories will source many tools from American companies such as Applied, Lam Research Corp and KLA Corp.
Intel Corp, Micron Technology Inc and GlobalFoundries – which already have U.S. factory networks – will also likely benefit.
Smaller, specialty chip factories also could benefit.
“The recent chip shortage in the automotive industry has highlighted the need to strengthen the microelectronics supply chain in the U.S.,” said Thomas Sonderman, chief executive of SkyWater Technology, a Minnesota-based chipmaker that makes automotive and defense chips. “We believe that SkyWater is uniquely positioned due to our differentiated business model and status as a U.S.- owned and U.S.- operated pure play semiconductor contract manufacturer.”
Even with subsidies, the U.S. companies still must compete with low-cost Asian vendors over the long run, and the immediate auto chip troubles will probably persist.
Surya Iyer, a vice president at Minnesota-based Polar Semiconductor, which makes chips for automakers, said his factory is booked beyond capacity and has started to speed some orders up while slowing others down, to meet automakers’ needs as best it can.
“We are expecting this level of demand to continue at least for the next 12 months, maybe even longer,” he said.
(This story has been refiled to add attribution to quote in paragraph 9, add dropped words in paragraphs 10 and 17)
(Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco and Alexandra Alper in Washington. Editing by Jonathan Weber and David Gregorio)
Atlantia disappointed with CDP bid for unit, continues talks
By Francesca Landini and Stephen Jewkes
MILAN (Reuters) – Italy’s Atlantia said on Friday an offer by a consortium of investors led by state lender CDP for its 88% stake in Autostrade per l’Italia fell short of the mark and asked its top managers to see if the bid could be sweetened.
“The offer falls below expectations,” the Italian infrastructure group said in a statement, adding it had mandated the chief executive and the chairman to assess “the potential for the necessary substantial improvements” to the bid.
Italian state lender CDP, together with co-investors Macquarie and Blackstone, has presented a proposal valuing all of Autostrade per l’Italia at 9.1 billion euros ($11 billion).
The consortium also requested Atlantia guarantee up to 700 million euros in potential damage claims and another roughly 800 million euros for a pending legal case, making the bid less attractive than previously expected.
One source said the consortium estimated overall pending legal claims against Autostrade at 3 billion to 4 billion euros, adding the 700 million euro cap did not mean the amount would be detracted from the offer price from the start.
Earlier on Friday Atlantia’s minority investors TCI and Spinecap had called on Atlantia’s board to reject the offer, saying it undervalued the asset.
“No deal is better than a bad deal, especially a bad deal and a wrong price,” TCI Advisory Services partner Jonathan Amouyal said in a emailed comment to Reuters.
TCI, which holds an indirect stake of around 10% in Atlantia, repeated that the value for 100% of Autostrade should be no less than 12.5 billion euros.
The board will hold a further meeting in order to take a final decision on the offer in due time, Atlantia said.
The negotiations between Atlantia and the CDP-led consortium are part of an effort to end a political dispute over Autostrade’s motorway concession triggered by the collapse of a motorway bridge run by the unit.
(GRAPHIC – Atlantia share performance: https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqggjdpx/image-1614331237501.png)
The bid expires on March 16, but the deadline could be extended in case Atlantia calls an extraordinary shareholders meeting (EGM) on the issue, according to one source with knowledge of the matter.
Shares in the group ended down 0,7%, after recovering some losses, as investors waited for the decision of the board.
Atlantia, which is controlled by the Benetton family, owns 88% of Autostrade, with Germany’s Allianz and funds DIF, EDF Invest and China’s Silk Road Fund holding the rest.
The group also kept open an alternative plan to demerge and sell its stake in Autostrade per l’Italia unit and called an EGM on March 29 to extend to end-July a deadline for offers for the demerged stake.
(Additional reporting by Stefano Bernabei, editing by Louise Heavens and Steve Orlofsky)
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