Centralized vs decentralized currency in the crypto community has been a debate that has been raging for as long as the medium has been around. The benefits and drawbacks have been widely discussed amongst coin enthusiasts, and we’re now seeing a new form of crypto emerging, a hybrid cryptocurrency.
A hybrid cryptocurrency is one that takes the best parts of both centralized and decentralized currencies. But to understand what these benefits are, the pros and cons of centralized and decentralized currencies must first be understood.
A centralized cryptocurrency is one where the currency is controlled by a singular entity. Because the currency is under the control of this singular entity, this creates more stability within the currency because it is wholly controlled by the entity in question. They’re the ones who set the price and decide where and how the coin is traded. An example of this in the real world would be reward points that you receive from various merchants for being a loyal customer. These currencies can only be spent with one company and are therefore centralized. There are very few centralized currencies being proposed at the moment due to blockchain still being relatively niche, and the community being relatively anti-centralization. But one example is The Bank of England’s current research into potentially releasing its own cryptocurrency in the future.
On the other hand, decentralized currencies are very common in the crypto world. When Satoshi Nakamoto created his completely decentralized Bitcoin in 2009, he could scarcely imagine the impact it would have on the world and its financial system. A decentralized currency is one that uses multiple entities to operate the coin, spreading the load of a blockchain across multiple nodes (computers). Traders enjoy the idea of a decentralized currency due to the additional control they have over the coin in many of the stages of its development and trade, due to the fact that it is operated by innumerable people and not a singular person or company. They may also enjoy the relative anonymity that this decentralized blockchain platform provides. Examples of this in the Crypto world are Ethereum, BitCoin, LiteCoin and many more.
It’s important to note that centralization and decentralization don’t only apply to cryptocurrency; similar concepts apply across a wide range of technologies. For example, Facebook is a centralized system, as all information is run by a central server. On the other hand, torrent networks, which allow many users to host the same files, allow for much faster download speeds than a traditional centralized server, and is a strong example of decentralized file sharing.
So why do some cryptocurrencies now run with a hybrid system? Because, simply, both systems have drawbacks that a hybrid system can remedy.
DasCoin is one of the premier hybrid cryptocurrencies on the market today. It takes the best of centralized and decentralized currencies and creates a model which eliminates the negatives of both systems, and does so in several ways.
Centralized systems in any form, including currency, are liable to issues with having a singular entity in control. Because the systems are completely controlled by one entity, this means if that one entity makes a mistake, or acts in a corrupting manner, the entire system could suffer. DasCoin eliminates this worry due to its transparent system of governance. This system allows trusted members of the community with a considerable stake in DasCoin to act as checks and balances in the system, by becoming voting nodes. The only way that changes can happen to the blockchain, and therefore the currency, are through a democratic process agreed upon by at least 51% of the voting nodes. This eliminates the worry of one entity changing the blockchain to the detriment of the majority and ensures that DasCoin always works in the interest of the community.
On the other hand, decentralized currencies can often suffer from a lack of direction. This can mean that they can be inefficient and cumbersome. One example of this inefficiency is the transaction speed on the Bitcoin blockchain. Confirmation speeds on this blockchain can be anything from 10 minutes to over an hour, meaning that using the currency to buy anything can be an exercise in frustration, especially in the real world. DasCoin’s blockchain is a permissioned blockchain meaning that it uses a network of trusted nodes to complete transactions. These nodes are licensed to participating consortium alliance partners within the Das ecosystem.
Anyone holding a NetLeaders license can involve themselves in the currency and become a part of this trusted network by minting DasCoin of their own or from purchasing directly on external exchanges from April 27th, 2018. This hybrid system means that the blockchain remains secure but also with a trusted network making sure transactions are handled quickly and efficiently.
Another drawback with decentralization is that it causes legal issues in all parts of the world. Many governments, including the British, US and Thai government have all taken steps to try and curb various cryptocurrencies. This is due in a large part to the lack of regulation in the sector, as various blockchains have been used for nefarious purposes in the past, such as money laundering. By using rigorous KYC and AML processes of centralization on their blockchain that maintain a sense of anonymity seen in decentralization, DasCoin’s hybrid model is well set for incoming regulation in the sector whilst still protecting the security and decentralization that users have come to expect from a successful altcoin.
The battle between centralized and decentralized currencies still has a long way to go, with blockchain still moving towards being adopted in the mainstream, but a hybrid model of the two extremes may very well be the answer for blockchain enthusiasts and governments.
O-CITY enters Kenya to drive contactless payments across Matatu bus service
Up to 10,000 buses to become cashless with O-CITY’s M-Pesa-based ticketing solution
O-CITY, the automated fare collection provider by BPC, today announces its initiative to drive contactless payments across bus services in Nairobi, Kenya. The O-CITY pilot, designed to reduce the use of cash in response to the COVID-19 pandemic, was launched in partnership with transport savings and credit specialists, NikoDigi, and Kenyan payments firm, Tracom, to accelerate the deployment of cashless fare collection.
Used by 70% of the population in Kenya, Matatu buses are a dominant transport mode across the country whereby passengers traditionally pay in cash. O-CITY’s automated fare collection platform leverages the M-Pesa mobile wallet, which is used by 90% of the population in Kenya. Passengers enter a code on their phone and a debit is made on their wallet, which can be instantly seen by drivers to grant access to ride. The platform removes unnecessary tickets and cash payments, instead offering an accessible payment solution that consumers already use, via a device already in their hand.
O-CITY’s platform is also built to make fare collection more transparent between the bus owners and drivers. Buses and routes are privately owned by several operators who ‘lease’ to drivers who must meet daily financial fare targets, before generating their own earnings. Fare pricing differs depending on the route and a range of factors, so digitising the transactions enables visibility and reliability of fare data. With heavily congested routes in Nairobi, digitising fare collection also serves to remove the friction of exchanging money and time taken for drivers to pick up passengers.
An important part of O-CITY’s pilot is an educational campaign to get the bus owners and drivers on board to become champions on the service. With teams on the ground at drop off points promoting the benefits of the service, buses and drivers can enrol in as little as 10 minutes. Local marketing on buses also promotes the ability to pay digitally to passengers.
Patrick Karera, MD at Nikodigi: “Having provided savings and credit management solutions for both the Matatu and Boda Boda (motorbike taxi) sectors, Nikodigi understands the needs of vehicle owners and drivers. Together with our partners, we have designed a product that automates fare collection without taking control away from the drivers and conductors or radically changing how they operate. We dubbed the solution “Lipafare” meaning ‘pay fare’. The platform has been embraced by passengers because of its ease of use, but also because it eliminates cash transactions during the COVID-19 pandemic.”
Tokhir Abdukadyrov, SVP of smart city and transport solutions at BPC: “A mobile money revolution has been happening in Kenya with the ubiquity and success of M-Pesa. The move away from cash to contactless public transport is an important part of this movement. At O-CITY, we know that innovation does not always require new technologies, but instead new ways of performing a task. By connecting our O-CITY platform to mobile wallet M-Pesa, we’re able to build a simple contactless fare solution that is familiar to the customer and likely to encourage adoption. Moreover, it enables us to scale fast to rollout the service at a time when cashless payments have a newfound importance.”
Can companies really afford to WFH?
By Carmen Ene, CEO of 3StepIT.
Firms scrambled to enable Working from Home (WFH) at the beginning of the Covid crisis, but ten months on, corporate IT strategies are becoming far more challenging as new work patterns emerge.
Recent research from 3stepIT confirms that technology investment over the next 12 months will be heavily influenced by the changes required to manage the Covid-19 pandemic and support a new-look mobile workforce.
Almost a quarter (24%) of 2019’s annual IT budget is set to be swallowed up by remote working demands. At the same time, with 29% of desktops sitting unused in deserted offices, companies are having to accelerate the retirement of IT equipment, raising serious questions regarding the security and legitimacy of asset disposal strategies.
The implications are stark: in a bid to support the requirement for flexible working, companies risk jeopardising other strategic IT investments that could be key to delivering the agility required to survive the pandemic.
As Carmen Ene, CEO at 3stepIT insists, a more affordable and sustainable technology acquisition model is required.
New Working Environment
Covid-19 has driven an acknowledged shift to WFH, but the new working environment is far more nuanced. Government policy continues to shift. Working in the office was encouraged for a few months in the bid to reinvigorate the urban economy; now we are back to WFH. The day-to-day experience for the majority of working adults continues to chop and change.
The business implication is also varied, with companies enjoying different levels of employee productivity. According to the Office for National Statistics (ONS), while around half of companies have seen no difference in productivity, nearly a quarter said it had fallen.
Just 12% have seen an increase in productivity. The Bank of England’s Chief Economist has recently commented that WFH risks stifling creativity and cuts people off from new experiences.
Despite the challenges for businesses and employees alike, the WFH trend is set to continue. A survey from the Institute of Directors confirmed nearly three quarters (74%) of company directors plan to retain increased home-working post-coronavirus – whenever that may be.
This attitude is confirmed by research from 3stepIT which reveals 60% plan to allow employees/more employees to work from home and 56% to offer more flexible working hours.
The question for businesses then is how best to achieve this new flexible employment model, especially given the continued economic uncertainty and the many demands on the corporate budget?
The initial response from many companies to enable WFH was impressive – companies of every shape and size closed the doors and embraced remote interaction. Hastily allocated laptops and video calls addressed the immediate challenge.
As the pandemic rolls into month ten and many nations enter lockdown two, organisations are facing up to the reality of increased investment needed to fuel a mobile workforce for the long-term, as well as an urgent review of the temporary and emergency technology packages that were put in place to enable home working.
For many companies, this will demand a significant and unplanned upfront cost, potentially draining company cash reserves when they can least afford it.
Almost half (47%) of businesses in Europe expect to increase investment in remote working over the next 12 months, with IT strategies becoming increasingly focused on facilitating social distancing (47%) and increased home working (46%) to reflect the changing needs of employees.
The need to allocate investment to support a remote workforce is unquestionable. Yet there are many other immediate priorities facing IT budgets as businesses work hard to adapt to extraordinary change.
From the physical events that have gone virtual to supply chain challenges and the sheer uncertainty of demand in every market, technology has a vital role to play in enabling agile business.
The majority (61%) of IT decision-makers expect IT budgets to rise next year but with the shift to home working demanding nearly a quarter of annual budgets, funds will have to go much further than before.
How can companies support the investment in technology required to enable secure and productive remote working without compromising on short-term capital investment in essential digital transformation projects?
New thinking is required, however the value of financing rather than purchasing IT equipment outright has been proven over the past few months.
89% of companies already using finance to acquire some or all of their assets have been able to make investments in additional IT hardware to enable employees to work from home, and over half (54%) are more likely to use finance to acquire assets over the next two years.
A growing number of companies are starting to realise that access to technology is more important than ownership.
Technology Lifecycle Management
It is important to recognise, however, that finance is just part of this equation. The pandemic may have forced companies to accept flexible working on a scale previously deemed impossible, but there are still significant challenges for IT management to address.
The initial equipment acquisition is, in many ways, the easy bit. What is the strategy for remote support, which is critical if employees are to be productive? How will aged equipment be securely retired and disposed of when employees rarely, if ever, come to the office? How do you keep track of where devices are and if they’re in health?
Effective remote working requires a comprehensive Technology Lifecycle Management model that supports the business from acquisition through support to disposal.
With flexible working here to stay, IT managers have an ever increasing list of demands – and a need to demonstrate the value of every expense. The widespread adoption of WFH is not the only dramatic shift in strategic approach precipitated by Covid-19 – there has also been a change in attitude towards IT device ownership.
Focusing on providing employees with secure, effective access to technology rather than owning it, provides IT managers with a chance to not only release essential capital budget but also manage the IT lifecycle more efficiently and sustainably.
FICO UK Credit Market Report September 2020 Shows Card Spend Rise Stalling
Analysis based on UK card issuers’ data also shows high level of unused credit could be a risk as festive spending may be an antidote to a year of woes
- Average spending on UK credit cards levelled after previous months’ increases; rates of one missed payment fell
- Rate of two missed payments continued to grow and September saw first increase in three missed payments since April 2020
- September was second consecutive month to see increase in average interest charged
- Percentage of payments to balance exceeded September 2019 rates
- Cash usage continued to increase
London, November 19 2020 – Global analytics software provider FICO today released its analysis of UK card trends for September 2020, which shows the continuing impact of COVID-19 on household finances even while furlough and payment holidays remained in place during the month.
“The big challenge for credit providers right now is understanding the true level of financial difficulty consumers are facing because of the support being provided by furlough and payment holidays,” explained Stacey West, principal consultant for FICO® Advisors. “Our UK card data suggest that many people are becoming more prudent and reducing their card balances, but those who can’t reduce their card use are increasingly struggling.
“The recent announcement concerning the furlough extension and increase in percentage paid, along with the extended payment holidays, will result in increased debt levels being delayed until further into 2021. Christmas spending is likely to add to that longer-term debt burden. Of particular concern is that average balances on accounts missing two or more payments is higher and growing. Cash usage on cards has also increased month on month.”
Spend on UK cards increases marginally
Average spending on UK credit cards increased by only £1 in September to £640. Average spend is now only 2.9 percent lower than a year ago.
“Regional lockdowns and the end of the school holidays appears to have curbed the increase in spend seen over the previous three months,” said Stacey West. “With the introduction of the tier system, with stricter regulations reducing spending opportunities, October could see this stabilisation continue. The early part of November could well reflect extra spending ahead of the month-long national lockdown.”
Monthly payments continue to increase
The percentage of payments to balance increased for the third consecutive month; it is now 2.9 percent above September 2019. This is the first time since April that payments have exceeded those of 2019. The percentage of cardholders paying less than the full balance fell and the proportion paying the full balance increased and is now 8.4 percent higher than a year ago.
“The higher proportion of payments to balance is, of course, good news. Even if it’s a direct consequence of lower balances and the furlough and forbearance arrangements, it is encouraging to see consumers trying to manage their debts responsibly,” adds West.
Two and three month missed payments increase
The one missed payment rates decreased in September after two months of growth. But the average balance on accounts missing two payments is 9 percent higher than a year ago and the three missed payment rates increased for the first time since May, with the average balance 11.3 percent higher year-on-year. There is a segment of customers who could not afford to make their payment in July who continued to miss payments into September. The October data will show if this impacts 4+ missed payment rates.
West added: “Whilst it is positive to see the one missed payment rates falling, the true scale of the debt at risk of being unpaid will continue to be masked for many months due to the announcement of the continued support, extended payment deferrals and the introduction of more forbearance measures by issuers. Enhancing analytics by using better tools and increasing the data available will help issuers effectively identify the customers that need support so that they can communicate appropriately. Open banking transactional data will remain an important source and it is anticipated its use will expand in 2021.”
Unused credit a risk as Christmas approaches
The percentage of the card limit utilised on active accounts reached another over two-year low. September saw a second consecutive decrease in the average card limit to £5,404. While the highest proportion of accounts, 29.3 percent, have a limit in the range of £5,001 to £10,000, the average balance for these accounts is only £1,242. Those with limits of more than £10,000 have an average balance of £2,366.
Exposure on inactive accounts is at 34 percent and 72.3 percent of exposure on active accounts is unused.
“These figures clearly show the level of unused credit in the market. Despite the lockdown Christmas is expected to push spend up and a large proportion of consumers will have existing credit available to use without checks being in place to determine if the extra spend is affordable,” West adds. “Up to 80% furlough payments until at least the end of March, the Job Support Scheme and the extension of mortgage, loan and credit card payment holidays will give some consumers confidence to continue to spend in the short term.
“Higher card debt levels in 2021 is, therefore, a risk and issuers will be taking proactive steps to address this with increased customer interaction to understand the true existing and delayed financial impact. It is likely that digital communication will come more into play as a result. It is potentially easier to ask personal questions and for consumers to respond via digital channels. But this puts the onus on lenders to ensure they have the systems and contact details in place now.” A recent FICO survey showed that nearly one in five Britons say their bank doesn’t have their mobile number.
Accounts over their limit remain stable
September saw a decrease in the proportion of accounts exceeding their limit and this number is 42.9 percent lower year-on-year. However, the average amount over limit started to increase again and is 30 percent higher than September 2019.
Cash spend on cards continues to increase
The percentage of consumers using credit cards to get cash increased for the second consecutive month, after a significant fall during the first national lockdown. Although increasing 2.8 percent, levels are still 53.8 percent lower than a year ago.
This has resulted in a 2.6 percent increase in cash as a percentage of total spend. Both monthly increases were higher than those seen in 2019. However, it may be many months until we see the levels of cash usage reach pre-pandemic levels, and they may not rise that high again.
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