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Is The Old Guard About To Get Disintermediated By UltraCoin? Ask Carl Icahn & PayPal
thumb Fortune Front Cover
A few days ago I was waxing poetic over the abilty of David Z. Morris' ability to grasp rather complex, intangible concepts and loquaciously lay them forth in the written word via the pages of Fortune magazine. After all, what creative destruction advocate wouldn't get all mushy after reading "Reggie Middleton, currently building a client called BTC Swap. Middleton, gravelly voiced, dapper, and businesslike, doesn't fit the stereotype of woolly young bitcoin developers. But he slyly describes himself as "not quite an anarchist," and BTC Swap is a shot directly across the bow of the financial industry"...
Or "Middleton sounds a bit like an 18th-century pirate striking back against the Empire when he declares that "what I'm doing right now is a direct threat to fiat merchant banking." For him, excitement over value fluctuations in the bitcoin currency is missing the point: "It's not a threat as people sit there and ponder whether bitcoin is a bubble or not. But if people go through the protocol and use their imagination, the existing system is threatened.""
Alas, nothing lasts forever. Fastforward 72 hours and Fortune publishes...
As exerpted:
FORTUNE -- Carl Icahn, the billionaire activist investor, has been interested in technology lately. Wednesday, he made several TV appearances to reiterate his call for tech giant Apple (AAPL) to engage in a massive $150 billion share buyback. As usual, he demonstrated that he was willing to put his money where his mouth was, revealing that he had upped his stake in the company by $500 million to $3 billion, causing Apple's stock to jump 1%.
Well, my subscribers (click here to subscribe) know where I stand on Apple, reference:
Apple 4Q2013 preliminary update (Technology)- Apple 3Q2013 Valuation Update - Retail (Technology)
- Apple 3Q2013 Valuation Update - Pro & Institutional)
Then, after the bell, eBay (EBAY) revealed that Icahn had built up a stake in the online auction retailer and was pushing for some radical changes. But in this case, though, Icahn wasn't interested in buybacks -- he was looking for a breakup. Ebay said Icahn wanted the company to spin off its online payment arm, Paypal, and had requested two seats on eBay's board. eBay rejected both of Mr. Icahn's proposals.
... Paypal has grown from its roots as a small payment processor helping buyers and sellers of Beanie Babies feel safe to do business on eBay, to a full-on payment alternative for thousands of merchants with millions of members. Its advantage in many cases is simply speed and convenience -- how many times have you clicked the Paypal button while checking out of an e-commerce store just because you didn't want to get off the couch to grab your credit card?
Does the author mean like this?
thumb bitpay website
...eBay is also lagging when it comes to valuation. The company as a whole trades on a multiple of nine times next year's enterprise value divided by earnings (or ev/ebitida), which measures a company's return on investment. Meanwhile, the payment operators, like Visa and Mastercard (MA), trade roughly at 15 to 17 times next year's ev/ebitda, or around 40% higher than eBay. E-commerce sites also trump eBay's numbers with Amazon trading at around 33 times next year's ev/ebitida and Groupon (GRPN) trading at around 17 times.
But Visa and Mastercard are about to face the same double whammy that PayPal is staying at. Let me show you with video...
or pretty pictures...
You see, the payment processors are very soon to be subject to...
Disintermediation
Why? Because P2P solutions such as UltraCoin easily allow for such, and at dramatically lower prices to boot...
send payment costs
If we were to look at this graphically, it would be comical to compare...
send payment costs visual
On the commercial macro payments side...
macropayments
So, what happens when your competitors offer a competitive product for between 1/1000th and 1/3rd the price?
margin compression
Now, back to the Fortune article and the apparent strawman argument...
... As a part of eBay, Paypal is run by people who know tech and know retail, not by people who necessarily know payment networks. As such, Paypal's growth beyond the web may not be as successful as it could be if it was led by people who worked at a credit card company like American Express (AXP) or a global payment provider like First Data Resources.
Again this seems to ignore the coming wave, alas... I digress...
... eBay's aggressive international expansion is helping to grow PayPal's global presence, especially in countries like Brazil and Russia, where eBay is taking off. If the cord is cut too early the fear is that PayPal's international growth may stall.
Stall or stagnate?
As my readers recall, I've developed a cross currency swap system that allows holders of BTC to dance around two dozen or so sovereign fiat currencies with ease. Combine this with dramatically lower costs and ease of transmission and I see either a material change in business model or... Margin Compression!!!
This really makes one think... Is eBay a short play in and of itself? I know Carl Icahn would likely get a large bang for his investment buck backing UltraCoin than he would calling for a PayPal spinoff. Then again, what do I know? Those who wish to discuss the merits of an UltraCoin investment by Icahn can feel free to ping me at reggie at ultra-coin.com.
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that which is unsustainable ...
... will not be sustained.
Reggie? UltraCoin? You're going to re-engineer the global financial system?
Rehashing other people's ideas and pretending they are yours is not the same as coming up with the ideas yourself.
and I have to add: bullish for Doge
What other idea's ? This is a totally new technology - smart zero-trust contracts stored on the bitcoin blockchain - Who else has come up with that one ?
The problem is too many people fail to read past that first big, pretty picture...
Could be they just got tired of you posting pictures of yourself?....or maybe they lost their shirt shorting RCL on your advice.
"The problem is too many people fail to read past that first big, pretty picture..."
With all due respect Mr. Middleton, don't you see that as a very real problem for your concept's success? Nowadays, most people can barely read at all and have the attention span of a turnip.
And my product is not aimed at those people. I think I'm safe :-)
No, the problem is that your unimaginative coin name has already been taken by someone else, so people who did not read your previous article with the screenshots in it, think you are just making a knock off of a knock off of bitcoin.
No the problem is we read too much, which leads to too many dangerous questions.
Sorry, but Buttcoin will not save you.
Reggie, you're a little late to the party on this trade.
One more thing... fuck you.
What is Buttcoin ? I have heard of Buttplug , does it have a similar function ?
Oh , and by the way - fuck you.
Reggie, why haven't you posted any of this info to ZH since you're selling the hell out of your book here?
https://bitcointalk.org/index.php?topic=413978.0
Maybe folks ought to know about the 2 million UTC premine of which 100k goes to a "professional external consultant" along with 0.1% of all coins ever to founding partners? Which of these entities is Reggie? Plus a presell of 1.6m UTC for 0.00005 BTC each..... People are always on ZH complaining about over-concentration of ownership in BTC, well here's 2% of UTC owned before it even goes live.
What is the value of this beyond yet another scrypt based coin? There's an awful lot of breathless enthusiasm in these articles with no explanation of how the launching of one more digital coin has any difference from a market full of them. All I see is open developer bounties for standard SW like blockchain explorers and platform wallets...... If someone wants to use BTC then just go use it, there's already a huge network presence, multiple merchants and exchanges.... Frankly this just looks like a financially savvy person jumping on the bandwagon for their own benefit without adding anything new, what are we missing here?
And frankly PayPal is horrible and should die, they aren't a bank and aren't regulated like one, they do not provide the same customer protections as other financial institutions and the web is rife with horror stories of people being ripped off with no recourse. They are another fee-generating arm of eBay and prey off the lazy and ignorant. So what, ultracoin is just going to be a PayPal-like escrow for BTC use? Another middleman when people could just use BTC. Please, either explain it plainly or just admit it's just one more scrypt coin in the pile.
You, my rude ass friend and your cohorts in baseless accusational crime, seem to have a problem with reading. My project has nothing to do with Ziggy, et. al. My full name, first and last, is there for all to see.
So, your verbose accuations are for naught, and it is not spelled wrong since I'm the one that created the spelling. I created a video of UltraCoin going for a spin, and demonstrated that I am - by far - the furthest ahead with construction, distributiona and implementation of smart contracts. You can institute swaps, hedges, shorts and intelligent loans right now with UltraCoin. Here's the video instituting a swap, P&L and doing a currency trade P2P, without any exchange. That's right, no Mt. Gox, no Bit.eu, no one but you and your counterparty, fully collateralized.
This would likely be obvious to anyone who bothered to read what it was they were criticizing, so I suggest you stay away from UltraCoin, for it is likely above your paygrade!
What I'm doing now is stomping out bugs and hardeing security. Everybody and their mother wants to hack this.
Hey Reggie Middlefinger,
I've got $1,000,000 in greenbacks to wager that Bitcoin sees 2 digits again before 4 digits. What's my easiest and safest way to make this bet?
The low transaction fee argument is specious when Bitcoin fluctuates 10% in a day. The digital currency model should be tied to something of real value, a box of Tide or a pack of batteries for example.
"I've got $1,000,000 in greenbacks to wager that Bitcoin sees 2 digits again before 4 digits. What's my easiest and safest way to make this bet?"
Jan 26 BTC/USD 1 / 1004
You would have lost that million bucks.
Sounds like a man who wants to lose his shirt - fast - are those real greenbucks you are wagering or are they coming out of your colour laser printer ?
Never asked for your opinion. Asked Reggie Middlefinger how and where to short it. If you want to understand the Bitcoin bubble just glance at this simple chart:
http://thenextweb.com/shareables/2013/04/10/the-only-two-bitcoin-charts-...!tbSzG
You are advised to listen to me. I have made good calls in the past.
Have you considered the other possibilty that it's an S Adoption Curve ?
http://www.business-planning-for-managers.com/main-courses/marketing-sal...
Yes.
However, my theory is that widespread adaption of a virtual currency will occur through a medium that it jointly owned/controlled/regulated/supported by world superpowers and by that time the great Bitcoin experiment will have exploded In a blaze of Winklevossian puke.
It's a ponzi and everyone knows it. The question is only when will the music end?
"It's a ponzi and everyone knows it" ? Well you better go tell that to Richard Branson , BitPay , and all the other multi-millionaire (some of them muliti-billionaire) VC's who have now been ploughing hundreds of millions into new startup's which rotate around bitcoin. Looks like their due-diligence was not quite upto your amazing foresight . Who are you really man ? Warren Buffet ?
"You are advised to listen to me. I have made good calls in the past."
I am just an engineer, not a finance guy or trader. Your call sounds straightforward, but on second thought seems complicated to me.
If BTC goes down momentarily to $99, then a week later ends up at $1million/BTC, then you win.
If BTC momentarily goes up to $1001, then declines to 25 cents and stays at that level for 10 years, you lose.
So how can you be so certain in your call? What am I missing here?
First, this is fight club, you want nicey nice words then look for them somewhere else, posters speak to the point here and you are well aware of that as a long time contributor.
Second, I asked for you to explain if this was not the case, and you did, bully, thanks.
But at the time this article was posted ultra-coin.com was non responsive, which lead many of us on a search that resulted in discovering another scrypt coin by the same name. You've also posted a digital coin graphic which is pretty standard MO for digital currency devs. You really don't think those two things are confusing at all? Hey, it's great you and the other ultracoin people came to a nice agreement but the fact remains there is the potential for confusion so don't go blowing up on everyone that points it out when both systems are launching at nearly the same time under the same name. And since your approach is an application layer I still don't understand the need to brand it with a digital coin logo, it only adds to the confusion.
Thanks for explaining it more, but acting like there's some angry conspiracy here is unwarranted when clearly there is a naming conflict in the same market space, expect the less savvy broader public to continue to make that same mistake over and over again.
Aren't PMs bugless and fully hardened?
fully hardened - yeah with Tungsten
Godo morning Reggie -
While we may differ about iOS vs. Android. I certainly would still like to offer my tech services.
I am currently developing a nice, visual portfolio app, and would enjoy possibly integrating your service or offering a whole new app.
Cheers!
Here I am:
reggie at ultra-coin.com
When the anonymous founders of UltraCoin (spelled wrong in the ZH title as usual) use internet handles like "ziggy" and "bumface" it certainly gives me a warm and fuzzy feeling that everything is kosher with this new alt release. Even the most scam-ridden penny stock is required to provide a real person's name and address, and a legitimate security is expected to be underwritten by some bank or brokerage with a business license.
Who are these guys anyway? Mexican drug lords? Chinese triads? Or most likely, a couple of unemployed programmers with a lot of idle computing equipment and way too much time on their hands?
I don't think it's the same ultracoin , I think Reggie is building another layer / platform / app. which sits on top of the bitcoin protocol .
From my narrow perspective, it would seem that TPTB will manufacture some crisis at the appropriate time to create a "need" to outlaw all competing crypto-currencies and institute their own.
This will all be done in the name of protecting the sheeple from the MOPE fraud that the media will portray.
Just remember, we are headed for a fully functional digital economy that tracks everything.
You may have your digital wallet, but TPTB will control how and when you access it.
DaddyO
Hmmn ,in that case the crisis would have to be global , maybe aliens landing ? Little green men from mars ? An asteroid or a solar flare ? Surely if such a global crisis did ensue then a truly de-centralised financial network would be precisely what would be needed to help to deal with it ?
Nice deflection!
Barring the little green men, what do you do to protect your butt from a centralized effort by the alliance of all the worlds central banks to institute a NWO digital currency?
Yesterday's tin foil hat conspiracy theorist has become today's prophet.
It may seem far fetched but the past few years have many of us scratching our heads in amazement at the rapidity with which things are moving in that direction.
DaddyO
long and complex discussion of the proposed UltraCoin:
https://bitcointalk.org/index.php?topic=413978.0
Announcement : 13 jan.
Launch and : February 1st.
Mining start : X
...
-2 equal partners (ziggy and bumface)
-Scrypt-jane
-Pow/Pos
...
-Total coins: 100,000,000
-Premine: 2% (2 million UTC, please view public premine distribution ledger below.)
-Block time target: 30 seconds
-Block reward: 50, halving every 990,000 blocks
-Difficulty retarget: 6 hours ...
-Mined block confirmation: 50
-Transaction confirmation: 5
Response from other commenters appears to be mixed, some pro, some con, with the usual bickering over who gets a cut of the initial profits. My impression is that this is just another alt coin, no better and no worse than other alt coins, with no substantial distinguishing features.
Looks like I was typing similar thoughts while you posted this. I agree, right now is see nothing special about this at all. Unless there is a rabbit to be revealed from a hat this right now looks like Reggie is talking about how he's invented the next great thing when it's just one more iteration of an open source project where others have done the groundwork.
I suspect this happens to be a seperate project with the same name, since it isn't a particularly imaginative one.
Reggie posted here earlier about a beta of his project, which is supposed to have derivative functions built into the blockchain, as far as I could tell. The software itself looked like very early dev stuff.
BTW, 30 second block times? Arg, this better not be what Reggie is looking into, with times like that it will fork constantly and have tons of stale shares, duplicates, and other waste. Terrible from the mining side of things.
What happens when the blockchain is some ungodly size?
What is your definition of ungodly ? 25 years ago an 'ungodly' 5MB hard drive was the size of a fridge , technology tracks the size of the blockchain quite nicely now (Moore's Law) - and if it ever does get out of hand it can be pruned back by removing all the spent transactions (these account for around 90% of everything stored in the chain).
We all must consider the US has the ability to set the value of fireign money. Foreign meaning anything that isn't USD.
BTW the site is down.
I hope you guys are right, but do you seriously think TPTB will just fork over the ability to rule the world without a fight?
Things could get interesting. The Lakota Nation might test the limits of soverignity with their Maza coin crypto currency, set to open to the public next month.
http://www.mazacoin.cf
They already have a pm bank as well:
http://www.freelakotabank.com/a-new-standard-of-value/
"The Lakota Nation ... with their Maza coin"
Everybody wants to get into the act!
Lol
Goodnight Mrs. Calabash, where ever you are
Yes, but P2P plus strong crypto is proving hard to beat. Way more upside than downside compared to the staus quo. Taleb
Hard to beat, except with bombs, jails and cyber terrorism.
Crypto currencies will do to brick and mortar banks what Bittorrent has done to brick and mortar music and movie retailers.
And the day that Amazon starts accepting BTC for payment is the day BTC hits critical mass.
Bye bye, brick and mortar 'TBTF' banks. Your days are numbered and there's nothing you can do to stop it. You are not too big to fail. You are too big to save.
The day Amazon starts paying their employess BTC is the day BTC hits critical mass.
Otherwise, BTC is just a digital transfer of USD.
You are clearly delusional. Anyone who thinks crypto currencies will destroy brick and mortar banks is massively underestimating the determination and resources of TPTB. If anything, the banks will get involved and with a little help from their pet legislators will destroy it's advantages. And failing that, they will have it outlawed as a tool of terrorists and money launderers. I mean, get real people. You crypto currency cheerleaders are starting to sound like Apple fanboys. I would absolutely love to see you guys alternate currencies succeed and your predictions of the demise of the TBTF banks come true, but that is as likely as pigs taking flight.
Okay , but the TBTF banks are all technically insolvent , what happens when they all start 'pulling a Leman' ?
Certainly, banks can, and should when insolvent, fail. However, digital currencies, which only exist on computers and can only be exchanged via electronic means, will not be the cause of the legacy banking systems demise. The current global financial model, which has been discussed extensively on this site, is based on the infinite expansion of credit/debt. As any reasoning person knows, nothing designed by man is infinite. The only thing that, theoretically anyway, is infinite, is time itself. We humans live in a very finite world. Sadly, our finite resources are rapidly dwindling, which means much pain ahead.
"However, digital currencies, which only exist on computers and can only be exchanged via electronic means, will not be the cause of the legacy banking systems demise"
MBS and related derivatives exist only digitally and they caused the demise of several banks