Bitcoin offers the cannabis industry an alternative to banks - CNBC New ( source : Reuters )

14/12/2017

Bitcoin offers the cannabis industry an alternative to banks

An estimated 500 banks will work with medical marijuana companies, but the majority still won't.

Experts say the cannabis industry could be a front-runner in adopting bitcoin as a safer alternative to cash.

Annie Nova

CNBC.com

Cannabis Bitcoin

Reuters | CNBC Composite

The cannabis industry may offer clues to the future of bitcoin.

Although medical use marijuana is now legal in more than half the states and recreational use is in some others, the drug is still illegal on the federal level. As a result, most major banks shun the marijuana business.

The cannabis industry, projected to grow to $50 billion from $6 billion by 2026, has long been in need of a financial solution.

Many in the industry are hanging their hopes on cryptocurrencies.

Technology companies like SinglePoint and POSaBIT are working to generate a payment method for dispensaries and consumers using bitcoin. In recent years, some cryptocurrencies have cropped up specifically for cannabis transactions, like PotCoin and HempCoin.

Before bitcoin was dominating headlines with its spectacular runup, there were people using it to buy illegal drugs. But now, ironically, some people in the marijuana industry are hoping bitcoin will bolster its legitimacy.

"That reputation is being turned around," said Wil Ralston, president of SinglePoint, which is creating an app called "SingleSeed" in which consumers and dispensaries can exchange bitcoins.

Some even say that the cannabis industry can lead other businesses to embrace virtual money.

An alternative to banks

While the number of banks that will work with medical marijuana companies is growing — estimated to be around 500 today — the majority still don't.

Another complication for most dispensaries is that they can't access typical merchant services, which companies need to accept credit or debit cards. There is no "cannabis" store identification, as there is with a flower shop or restaurant, and so most dispensaries remain cash only.

In 2014, SinglePoint, a mobile app payment company, placed terminals in medical marijuana dispensaries, in which people could use debit cards to make their purchases.

"They were going great," Ralston said. "Then overnight the banks shut them all down. There were no guidelines about how banks were supposed to interact with the cannabis industry. They didn't want to risk it."

Ralston said the attitude around cannabis at most banks remains: "We don't want to even bring up that word in our bank."

And so, he said, "we had to stop, and say, what other solutions are we going to provide?"

A vendor weighs buds for card-carrying medical marijuana patients.

Ralston and others at SinglePoint started looking into cryptocurrencies. Now, SingleSeed will allow dispensaries to accept bitcoin and consumers to pay with it.

SinglePoint won't stop with pot. He said 14 percent of the population is locked out of the banking system because they don't have credit or are involved in high-risk businesses.

Cryptocurrencies offer to provide these people an alternative, he said.

"Blockchain is applicable to any industry," he said. "We're letting consumers know, this is just an additional way to pay."

A safer, more transparent world

"Everybody wants to discuss the solution to the financial constraints of the cannabis industry," said Bryan Meltzer, a partner at Feuerstein Kulick, a law firm that represents people and companies in the cannabis business. "Cryptocurrencies and the marijuana industry have a natural intersection."

Meltzer said that in states where medical marijuana is legal, the government wants to know where the plant comes from. And all transactions need to to be recorded.

Blockchain, which shows a clear trail of the virtual money, could supply that level of transparency.

Marijuana dispensary

David Paul Morris | Bloomberg | Getty Images

Jeffrey Zucker, co-founder of Green Lion Partners, a cannabis strategy firm, said the fact that most dispensaries are only able to accept cash poses dangers for buyers and sellers. He said he knows of a family that owns a dispensary and was recently robbed, losing all their cash for the day.

"It's an unnecessary risk," he said. Cryptocurrencies "could help the operator to avoid cash on hand, and therefore make it a little less dangerous for them."

Still, purchasing in bitcoin can mean additional costs for the consumer. The IRS has ruled that bitcoin and other cryptocurrencies are property, not currency, for tax purposes — meaning that transactions trigger either short- or long-term gains or losses that must be reported.

For consumers who are worried about securing their privacy, blockchain technology — the mechanism that's behind cryptocurrencies — tracks people by an identification number, called a "key," meaning that their name is concealed.

Leslie Bocskor, president of cannabis advisory and services firm Electrum Partners, pointed to the recent string of security breaches at major banks and credit unions as a comparison.

"We're seeing there are fewer risks with blockchain transactions than with your normal credit card," he said.

He said the cannabis industry, with all its idiosyncrasies, could end up being the first to fully embrace cryptocurrencies.

"If it finds a way to avoid the traditional banking system, other businesses would follow suit," Bocskor said.

Could Russia cut undersea communication cables? - BBC News

15/12/2017

Could Russia cut undersea communication cables?

Sir Stuart Peach: Russia poses a "new risk" to economy and ways of living.

The UK's top military officer has warned that Russia could strike a "catastrophic" blow to the economy by targeting communications and internet cables that run under the sea.

Air Chief Marshal Sir Stuart Peach, the chief of the defence staff, said the lines could potentially be cut or disrupted.

The suggestion raises several questions:

Is that something Russia's likely to do?

What would happen if they - or someone else - did such a thing?

What do the cables do?

They provide internet and communications links between separate countries and continents.

The full network of around 428 cables spans 683,508 miles (1.1 million km), circling the globe.

Huge quantities of data fly around under the waves, in cables filled with fibre optics - strands of glass as thin as a sheet of paper.

A map of the underwater cabling network that stretches more than a million kilometres round the world

Unfortunately, while their technology is reliable, these pivotal cables are physically fragile. The fibres are encased in steel wire and then coasted in plastic - but many cables are still only around 3cm in diameter.

Natural disasters can damage them and even a ship dropping anchor can sever a cord. That's happened before at the port of Alexandria in Egypt, straining connections between Europe, Africa and Asia.

Why are defence chiefs worried?

The BBC's defence correspondent, Jonathan Beale, says fears of Russia cutting, disrupting or "wire-tapping" undersea communication lines are growing.

Defence and intelligence chiefs cite the country's modernised navy, increased submarine activity and willingness to use information warfare.

Are Russia's military advances a problem for Nato?

Russian subs are increasingly present in the North Atlantic, particularly the GIUK Gap, a strip of ocean between Greenland, Iceland, and the UK.

Air Chief Marshal Peach is flagging up that Britain and Nato lack the subs, ships and aircraft to sustain constant vigilance.

The Russian submarine Dmitry Donskoy, the world's largest in active service, arrives at Kronstadt Navy base, outside Saint Petersburg, on July 26, 2017Image copyrightOLGA MALTSEVA/AFP/GETTY IMAGES

Image caption

Russian submarine activity has stepped up in the Atlantic, reports say

Our correspondent notes that the UK will get new Maritime Patrol Aircraft within the next decade but until then is reliant on Nato aircraft to spot subs.

Nato's former top military chief, Admiral James G Stavridis, is also concerned. "We've allowed this vital infrastructure to grow increasingly vulnerable and this should worry us all," he said recently.

What would happen if the cables were cut?

Keir Giles, an expert in Russian information warfare who works with the Chatham House think tank, stresses that this is not a new concern.

He thinks it's unlikely to happen as the economic fallout would also affect Russia "but it is definitely a scenario for which they are practising".

And if it did happen, the damage would be considerable.

"The fact that people wouldn't be able to log on to Facebook would be just a tiny, tiny aspect of all the disruption that would be caused if these cables were interfered with," says Mr Giles.

"International trading and financial transactions are managed across sub-sea cables. The economic impact would be enormous and immediate.

He believes Russia is conflict-proofing itself, "seeking to reduce its reliance on the correct functioning of the internet by setting up its own parallel systems", and rehearsing for what would happen if its internet connection collapsed.

Russian President Vladimir Putin pictured speaking in Moscow, Russia, on 14 December 2017Image copyrightEPA

Image caption

Putin's Russia is frequently accused of using information warfare

Russia is not the only nation with an interest in undersea cables. During the Cold War, for example, the US attached a recording device to a Soviet cable to learn more about the USSR's submarine and missile capabilities.

However, Mr Giles says it's the only state "with an intensive programme looking at ways of isolating targets from information".

Russian military admits cyber-war effort

UK security chief blames Russia for hacks

Cyber trio charged with treason in Russia

Has Russia attempted to disrupt UK cables in the past? We can't be sure - it's classified.

What's in it for Russia?

Information control, in short.

"They are probing the vulnerabilities of civilian communications infrastructure," Mr Giles says.

"You can't see what they're doing underwater. You can see what they're doing on land or with satellites.

"What Russia learned from Crimea is that in order to take over communications for a target area you don't need expensive cyber weapons, you don't need noisy and disruptive techniques like denial of service attacks.

"All you need is physical access to the communications infrastructure and telecommunications expertise embedded with your special forces.

"They've been looking everywhere. They've been looking on land in the United States, they've been looking on land in eastern Europe... Anywhere that might in future be in an adversarial relationship with Russia should be concerned about this fixation that they have on achieving information dominance."

Murdoch Solves Empire Succession by Getting Rid of the Empire - Bloomberg

Murdoch Solves Empire Succession by Getting Rid of the Empire

By Felix Gillette

December 15, 2017

Fox sale to Disney a nod to need for massive scale in media

James in line for Disney role, Lachlan to run remnants

Disney CEO Iger Says Sky Is a 'Crown Jewel' of Fox Assets

Sky is the "crown jewel" of Fox’s assets, says Disney CEO Bob Iger.

For decades, investors, analysts, busybodies, columnists and gossips have loved to chew over the ultimate media-dynasty question: When Rupert Murdoch was at long last forced to step down -- whether for age, coup or scandal -- which of his children would assume the throne of his vast empire? James or Lachlan or Elisabeth? Now we know the answer.

There will be no vast Murdoch empire to inherit. There will be no throne.

Rupert MurdochPhotographer: Peter Foley/Bloomberg

On Thursday, Walt Disney Co. announced it has agreed to pay $52.4 billion to acquire much of the sweeping territory Murdoch spent a lifetime assembling. Among other assets, Disney will take control of 21st Century Fox Inc.’s TV and movies studios, its slate of cable TV networks, including FX and National Geographic, its stakes in the satellite-TV networks Sky and Star India, and its 22 regional sports networks. It may even get one of Murdoch’s children in the bargain: James is expected to help Disney with the integration process and may stick around to play a larger role.

Not that Murdoch is out of the picture entirely. He’ll still rule over a major broadcast network, a cable sports channel and Fox News. In an interview with Sky News, Murdoch said he will remain executive chairman, likely with his eldest son Lachlan as chief executive officer. And the Murdochs will hold a stake of more than 4 percent in Disney, ranking them among the largest shareholders. But that’s hardly an empire. In a world increasingly dominated by global tech giants, it’s more like a province. Maybe an enclave.

Jockeying for Control

Perhaps, as some have speculated, the new Fox will reclaim the newspaper and publishing assets Murdoch spun off in 2013 into a separate company, News Corp. But even if that happens, the resulting company will be minuscule in comparison with the sweeping realms of Amazon, Google, Facebook and Apple, all of whom who are jockeying to control the future of media, news, information and entertainment.

“The Murdochs spent all year talking about how they had scale,” says David Folkenflik, the author of “Murdoch’s World: The last of the old media empires.” “And then suddenly they were like, we have to sell to someone else so they can get bigger, so they can fight the giants. It’s too much for us.”

In the wake of the Disney deal, questions about family-power dynamics will surely persist. But the stakes will be dramatically lower. There is no longer a pressing need to find some brilliant global visionary to replace the patriarch and deftly navigate the complex, multi-variable calculus of the emergent global-streaming sphere. For Fox, the challenges and opportunities will be much smaller, much less daunting.

‘Next Great Leg’

Murdoch, for one, says the sale to Disney is not a retreat. It’s a pivot. “With today’s announcement, we launch the next great leg of our journey,” he said on a call with investors Thursday. “The world of media has obviously been undergoing rapid change. New technologies, competitors and shifting consumer preferences have redrawn the whole media map.”

And diminished Murdoch’s place on it.

It’s to Murdoch’s credit that he recognized sooner than most of his peers the existential threat Alphabet Inc.’s Google and its ilk posed to the expansive media empires of the last century. These days, you can’t go five minutes at a future-of-media conference without everyone fretting about the so-called online advertising “duopoly”: Google and Facebook Inc. will rake in 63.1 percent of all digital-advertising spending in the U.S. this year, according to eMarketer. For everybody else, that leaves just crumbs.

Redstone’s Mess

Murdoch, for one, is cashing in his chips. Along the way, he is doing the kind of empire estate-planning his onetime rival, media mogul Sumner Redstone, long neglected. That inadvertently touched off one of the most tangled and bitter succession battles ever.

By trimming his empire now, Murdoch may be saving his own heirs from a similarly bloody fate. Ultimately, it’s a practical move, somewhat out of character for the serial acquirer.

“This is the end of an era,” says Tom Watson, deputy leader of the U.K.’s Labour Party, who played a key role in the campaign against phone hacking at Murdoch’s newspapers in 2011. “The Murdochs, after 30 years of aggressive empire expansion, are now in retreat.”

— With assistance by Anousha Sakoui

Ireland’s outsized economic growth skewed by multinationals - Financial Times

15/12/2017

Ireland’s outsized economic growth skewed by multinationals

Amazon to pay €100m to settle Italy tax dispute

Arthur Beesley

Another set of stellar growth figures for Ireland highlights the acute volatility in Dublin’s economic data that results from the heavy presence of big global companies in the country.

Data released on Friday suggest Irish gross domestic product (GDP) accelerated at a rate of 10.5 per cent in the 12 months to September, far surpassing even the most ambitious projections and prompting economists to rewrite their forecasts for the year.

But Paschal Donohoe, finance minister, was quick to say a large part of the surge arose from Irish-resident multinationals increasing the amount of contract manufacturing they carry on outside Ireland. Under statistical rules such manufacturing is marked down as a boost to Ireland’s exports. This is then reflected in the country’s national accounts, even though the actual economic activity takes place elsewhere.

The minister’s 2018 budget was predicated on the achievement of 4.3 per cent GDP growth this year. “On the basis of today’s data, the outturn for this year is likely to be above … projections,” he said.

“Having said that, it must be acknowledged that a key factor behind the stronger-than-expected growth was exports associated with contract manufacturing which has little, if any, impact on domestic activity.”

Data from Ireland’s central statistics office show that GDP in volume terms rose 4.2 per cent in the third quarter of 2017 while gross national product rose 11.9 per cent.

With private consumption rising 2.7 per cent on an annual basis and building and construction investment up more than 7 per cent, Mr Donohoe said the domestic economy also made a strong positive contribution. “These figures are mirrored in strong employment growth as well as tax receipts to end-November which increased by 6 per cent over the same period last year,” he said.

But he warned of economic overheating, saying the domestic recovery presents its own challenges. “In particular, if the economy continues to grow in excess of its potential, capacity constraints will begin to emerge. In these circumstances, it is essential that budgetary policy does not contribute to overheating.”

Austin Hughes, chief economist at KBC Bank Ireland, said high growth rate suggested by the data was not related to the economic economic circumstances faced by most Irish businesses and households. “The scale of the multinational sector and the size of the swings in that sector’s activities tend to throw up numbers that aren’t representative of general conditions in the Irish economy,” Mr Hughes said.

“When you look at the underlying picture you’re looking at a growth rate that is region of 4 per cent probably for this year rather than the 6-7 per cent rate that these numbers imply. We’re seeing a solid improvement in household spending and domestic investment but we’re not back at the boom of 10 years ago which might be suggested by these numbers.”

Wide variations in Ireland’s GDP data are nothing new. A 26 per cent annual increase in 2015 was attributed to internal restructuring by Irish-based multinationals, generating headlines around the world. This was dismissed as “leprechaun economics” by Paul Krugman, the Nobel-winning US economist.

The affair led policy-makers in Dublin to develop a new measure of economic activity to strip out the impact of globalisation on the Irish economy. Data on Ireland’s “modified gross national income” is published annually alongside traditional quarterly data. By this measure, Ireland’s economy is about one-third smaller than its GDP figures suggest.

'Slow-moving crisis' as Beijing bolsters South China Sea war platform - Guardian

'Slow-moving crisis' as Beijing bolsters South China Sea war platform

US thinktank reveals satellite images showing new munitions depots, radar systems and fighter jet deployments to disputed region in 2017

Chinese dredging vessels in the waters around Mischief Reef in the disputed Spratly Islands earlier this year.

Chinese dredging vessels in the waters around Mischief Reef in the disputed Spratly Islands earlier this year. Photograph: Reuters

Benjamin Haas China correspondent

@haasbenjamin

Friday 15 December 2017 14.46 AEDT Last modified on Friday 15 December 2017 14.48 AEDT

China has created military facilities about four times the size of Buckingham palace on contested islands in the South China Sea, a new report has said, calling the build-up a “slow-moving crisis” in one of the world’s most dangerous flashpoints.

China built about 29 hectares (290,000 square metres) of new facilities on contested islands in 2017, including munitions depots, sensor arrays, radar systems and missile shelters, according to an analysis by US thinktank the Center for Strategic and International Studies.

The South China Sea is dotted with small reefs and islands, and parts of it are claimed by a host of south-east Asian neighbours.

China claims nearly the entire sea and has artificially increased the size of some islands and deployed fighter jets to bolster its claims, with the islands frequently described as “unsinkable aircraft carriers”. Beijing has reclaimed 1,280 hectares of land in just one area, according to the US department of defence.

Beijing has begun diplomatic overtures to countries in south-east Asia, joining talks to develop a code of conduct for the South China Sea, although those talks will likely take years to produce a result all parties can agree on.

The United States, the United Kingdom and other have long criticised China’s island building and military deployments in the disputed waters, while Beijing counters that the air strips, fighter planes and missile installations are there to protect fishing boats.

“Further militarisation of outposts will only serve to raise tensions and create greater distrust among claimants,” said Marine Lt Col Christopher Logan, a Pentagon spokesman, but he declined to comment on specific US assessments of China’s build-up.

The US regularly sails warships past the islands amid Chinese objections in what are described as freedom of navigation exercises. The UK has said it plans to send a warship, possibly an aircraft carrier, to the region sometime next year.

In an effort to increase pressure on China, the recently passed US defence budget included a provision encouraging navy ships to make port calls in Taiwan.

A place called 'hope': the tiny island on the frontline of US-China tensions

China considers the self-governing island part of its territory and has reacted angrily to the proposal. A clause in the defence bill signed by Donald Trump directs the Pentagon to “consider the advisability and feasibility of re-establishing port of call exchanges between the United States Navy and the Taiwan navy”.

“We firmly oppose any form of official exchanges or military links between Taiwan and the US, as well as US arms sales to Taiwan,” said Lu Kang, a Chinese foreign ministry spokesman. “We hope that the US can fully grasp the damaging nature [of the legislation].”

Last week a Chinese diplomat in Washington warned that the island would be taken by force if US warships docked at Taiwanese ports.

Before joining the Trump administration, former White House strategist Steve Bannon described the South China Sea as one of the most dangerous international flashpoints.

“We’re going to war in the South China Sea in five to 10 years,” he said in March 2016. “There’s no doubt about that. They’re taking their sandbars and making basically stationary aircraft carriers and putting missiles on those.”