Blockchain Technology

It seems that especially after the current Pandemic, the way people will trade, communicate, shop and especially move money will change. Blockchain Technology will be the revolution in the transfer of value as the internet was the revolution in the transfer of information. My question is given the size of this opportunity, can Freetrade look into it for the benefit of the community. I personally have been studying, investing and hugely benefited from Cryptocurrency Investments. These are the early stages only of the Blockchain revolution, a long way to go with huge opportunities available . Quite happy to share my knowledge and experience with the community

Do you mean giving investors access to invest in cryptocurrencies or building blockchain tech into the FT product?

Investing in crypto:
They have said the plan is to list bitcoin/crypto ETFs in the future - this is probably the best you’ll get. You can’t really allow users to buy cryptocurrencies on the app, it would require significant changes or using CFDs.
(For example you can’t just buy Bitcoin, users have to have their own mobile/hardware wallet that can transact with the blockchain.)

Blockchain in the product:
What makes blockchain special is that it is decentralised, there is no benefit having a decentralised app when stock trading is a centralised process.

Just my thoughts :slight_smile:

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An ETF, or even trading smart contracts on behalf of Freetrade community will be a good starting point, but I was thinking a no risk “Storage” facility on behalf of your clients.

The problem with Crypto is it is very complicated technology, not really for the average Joe.

Sure some day to day everybody will be transacting & passing money or I would say "value, in the form of a Crypto token,instead of fiat currency, ie buy and sell things everyday Bitcoin (BTC) , Ripple (XRP) or Ethereum (ETC) cryptocurrencies instead of GBP. USD, etc. and this is the way things will go,

Did you know that facebook’s model of their own cryptocurrency Libra has actually been copied from the locals already using it in Kenya. It is called Easypaisa in Kenya, and the locals developed it and successfully for many years now. Facebook actually went to Kenya and copied their platform and integrated it into Facebook . The problem for facebook was that the US Banks saw it a threat to their existence and managed to lobby their Securities and Exchange Commission to black Facebook, for the time being at least

I was thinking a no risk custody service to hold clients wallet for them for them with an annual charge taken by Freetrade or a percentage taken by Freetrade to buy or sell Crypto on the behalf of Clients.

Many people are also are taken in by Scam coins as they want to invest in Crypto but have no idea which are legitimate coins and which are not. My suggestion would be to List only Bitcoin, (BTC) XRP (Ripple) and Etherium (ETC) for clients and they wont go wrong. All the due diligence is already done for them

(See the example below. Especially useful to pass on Cryptocurrency assets to the next generation, holding assets on behalf of an institution, or in a Will maybe.

Just a business idea which I think has huge potential going forward. XRP, by Ripple Labs, and Etherium (ETC) are holdings also. No need to bother with anything else

Happy to take a leading role for you to develop this.

https://www.ft.com/content/ca95d640-f0b6-11e9-ad1e-4367d8281195

Please let me have your thoughts

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sorry this link will be more helpful

https://cointelegraph.com/news/fidelity-investments-fully-rolls-out-crypto-custody-service-exec-says

More than 1/3 of my portfolio is crypto.

Personally I feel Freetrade should focus on doing more of what it is doing right now. Improving its tech, adding more stocks, giving access to more markets, growing its userbase and having one clear core focus.

Crypto and blockchain have huge potential, yet they are also a burden. By storing tokens for example, FT becomes a target for hackers. The threat already exists and would be exacerbated by offering hot or cold wallets alike.

In the future, sure. But for now, I am of the opinion that Freetrade should aim to be the best version of itself that it can be. Pick the low hanging fruit and grow the momentum further with the current infra.

It is however worth discussing.

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Crypto is definitely interesting but I think this post highlights one its biggest problems - the average person doesn’t care about the technology that underpins it. Look at markets where crypto has been successful and it’s largely because it’s solved a problem. Eg. in Venezuela, it’s been a way of making payments outside of government control and a protection against massive inflation. In Iran, it’s been a way for people to avoid sanctions.

In my opinion, there are also almost no fundamentals for crypto trading. Loads of it is insider dealing or driven by greater fool theory. I think this could actually change if it becomes a store of value akin to gold if we see large-scale inflation and/or global instability due to COVID-induced economic downturn.

As to trading, it’s really difficult to see there being any value in using blockchain to support, for example, a stock exchange. I know that one crypto exchange has done something like this and it just results in worse pricing due to there being much lower liquidity.

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I don’t want FT to be a crypto company - but would welcome a couple of ETF’s in this area.

If you want companies who are deep into crypto then there are plenty out there. FT has plenty to do without getting into crypto wallets and storage etc.

Also Blockchain and Crypto are not the same thing. Blockchain is just a term for a decentralised public database, and apart from Bitcoin there are few other successful public uses of blockchains. Companies often generate a buzz when talking about this term but often what they are doing is a centralised private database. Many argue that blockchain is a solution looking for a problem a lot of the time.

I agree with @DavidK that a lot of crypto has no intrinsic value. Bitcoin goes up because more people are buying it, and often due to the behaviour of large mining companies in Asia who have a lot of the network these days. As for BTC being used to pay for goods and services, in the short term there is little chance of this as the currencies are too volatile vs USD so it’s difficult to price in them.

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Crypto is starting to be used for everyday purchases via the Visa and MasterCard Toll gates. This is allowing it to be used for instant point of access purchases. This is the solution to the slow transaction time problem, that Blockchain has struggled to solve in the past.
I agree the value is not yet stable enough to allow easy pricing of goods, so a local currency is still required. But there are very few barriers to adoption now.

I personally have 2 crypto Debit cards in my wallet. I can use them anywhere VISA or MasterCard are accepted.
One has Crypto loaded on the account. When I make a purchase, the £GBP value is taken from the account at the spot price of the crypto at the time. The card issuer then deducts the appropriate amount of crypto from my account.
The second card exchanges Cryto for £GBP (sells your crypto) at the time you load it onto the card. The card then acts as any normal debit card.

Two different models, that allow you to instantly spend your crypto.

Should FreeTrade use blockchain technology? Absolutely no reason to. There is no advantage.
Should FreeTrade include BTC ETF’s? Seems reasonable.

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The second card you refer to, would that be attached to something like a regular back account or more like a pre-paid credit card?

The second card is more like a pre-paid card. The psychology behind its use is different to the first.
If you like the idea of holding the crypto, in the hope that it goes up, then you only load the card just before, use as the crypto gets sold. An alternative use is if you have sat on your crypto for a while and have made a nice profit, then you can choose your exit point and put it all on the card, exiting your position.

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Why do you have the cards though? Just because they are a cool thing to have or do they actually serve a specific purpose for you? Also isn’t the exchange rate for them rubbish? I would imagine the merchant you are paying won’t accept BTC so the card is going to convert it for you (and make money in doing so) and crypto spreads are usually INSANELY wide, so it ends up probably being pricier than just paying in fiat or a multi-currency account. That is just my assumption though, so feel free to tell me I’m wrong :slight_smile:

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I think that you are missing the point DavidK. The idea is that you leave your holdings in the Crypto Asset (my holdings are BTC and XRP mainly ) as long as possible and draw on the card only if you need the money. Agree the exchange rates are high on these cards but the growth of Crypto assets are 1.000s X often, far outweighing the exchange rates that your refer to. I think that BramblerJohn has it spot on! What good is any type of money, crypto, fiat if you dont spend it!

Can you send me details if the cards that you hold Bramblerohn. I would like to do the same. Its cool!

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Surely it’s the other way round? if you load up with £100 worth of bitcoin and bitcoin goes up it’s now worth £105. Then you buy something worth £100 you have £5 worth of bitcoin left over

So the first card allows you to hold the BTC in the account. When you make a purchase you get the spot price at the time. Yes there are fees etc, so you don’t get full value, but there are always fees somewhere.

The second card involves you selling the BTC when you load the card. In this case you have to be happy with the price at the time and not look to the future price of BTC. BTC might go up so you have missed out on some increase in value. BTC might go down so you loaded the card at the right time. The same with any asset that you convert to fiat (£GBP).

In answer to @DavidK, the reason I have the cards is two fold…

  1. Yes they are cool!

  2. I have some investments overseas that pay out in Crypto. One is in Real estate. Instead of receiving the rent in local currency, it is converted to ETH and then paid to me. Another is in Solar Panels, that I lease out to socially responsible businesses in South Africa, with an IRR of 11-12% pa. You can choose to be paid in the local currency (ZAR) or in BTC. I choose to be paid my monthly lease/rental in BTC.

So I am using the crypto as a form of international currency, which allows me to earn income abroad and spend it in the UK.

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This is exactly the point Of Crypto. Ripple (XRP) are Also making some serious progress on cross border remittances using Blockchain technology. XRP is more appropriate instrument for cross border remittances between institutions. Eg Bank to Bank and a modern upgrade to SWIFT which is slow, unreliable and expensive in comparison. Well done John, you are ahead of time and congratulations on being an early adopter!

That’s very cool, never heard of those use cases before. How do you end up investing in solar panels in SA?

The Solar Panel Company did a crowdfunding campaign A few years ago which is where I discovered them. I didn’t actually take part in the crowdfund, but kept an eye on the company. They went on to build a viable business that is going from strength to strength.
The business model is elegant. They negotiate with companies such as schools, supermarkets and retirement homes, to construct a solar plant on their roof. The solar panels and installation is then available for investors to crowd fund. Once funded, the installation takes place. The business (school, supermarket etc.) then leases the panels from you as the owner on a 20 year lease agreement. Paid monthly.

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Wow this thread is like a time machine back to 2017.

Bullish on bitcoin!

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