Business & careers The Unprecedented Rise of Bitcoin and the Shadow It Casts As the online currency bitcoin continues to rise in popularity, Tim Healy examines the currency, and asks whether online currencies have a future SINCE the early days of unregulated currency, to our current market valued at well over a billion dollars, online currencies such as bitcoin have skyrocketed in popularity and accessibility. The idea of a medium enabling the user to unlimited anonymity and a platform immune from federal taxation has regulators quaking behind their fiscal policies.
for the decriminalisation of class A hallucinogenics that find these forms of currency attractive; quite the opposite. Towards the tail end of 2013, a single unit of bitcoin would have been valued upwards of $1000. This is a stark comparison to the $13 valuation received only a mere 11 months earlier that sent investors to their search engines. Forbes Investing even stretched as far as to label 2013 as ‘The Year of the Bitcoin’.
“Bitcoin seems to thrive in a field where its competitors have fallen short: in terms of evading regional and international governments”
Despite its popularity and prices, serious questions still remain over the crypto-currency’s legitimacy. There is a much darker side to the shadow cast by this mysterious currency. Accompanied by the infamous crash of Silk Road, the name of bitcoin was brought into serious disrepute due to its heavy involvement. Bitcoin was the fiscal medium that facilitated the transfer of drugs, child pornography, assassinations, weapons and various other illegal paraphernalia on the darknet market. It is the anonymity that enables these elicit transactions. The total value in revenue through the currency of bitcoin was reported at around roughly 9,519,664 bitcoins, which, as reported by the FBI equated to roughly 1.2 billion dollars in USD. The fallout from this barely fazed the resilient bitcoin, as its stock price only took one day to recover. This in itself only proves
Perhaps bitcoin stands out more than other online currencies due to its nature of decentralisation. Bitcoin seems to thrive in a field where its competitors have fallen short: in terms of evading regional and international governments. This in itself serves as a catalyst to cultivate a growing online movement towards buying contraband in online black markets, due to the ease of transfer and lack of regulation. This said however, it’s not only the tech-savvy libertarians screaming
the ability these online currencies have to recuperate and prove their resilience, something traditional stock markets cannot exactly be accredited for. The pivotal questions remains however: could Bitcoin be the inflection point it was previously destined to be? The Wall Street Journal certainly believe so, recently reporting boldly that Bitcoin could perhaps prevent future economic disasters such as the recent Greek financial crash. Proposing that crypto-currencies such
as bitcoin have the ability to democratise how money is created, removing at its very root the issue over which the Greek government and the EU seem to be locked in a tug of war. There will always be a dilemma in the fate of Bitcoin, and that is its acceptance by state regulators and seemingly traditional banking sector. Bitcoin’s hopes of globalisation will not be helped by the standpoint of world power China, who holds the firm position that the currency is a form of
possible money laundering and a severe threat to perceived financial stability. This worrying prognosis from the economic powerhouse, accompanied by the very simple fact that bitcoin can be manipulated by online speculators doesn’t bode well for opting in new investors. That said, who knows? Maybe in five years time we will be paying our student contribution charge with bitcoins after another Eurozone collapse.
THE ECONOMIC IMPLICATIONS OF WEB SUMMIT LOSS With the news that the Web Summit is to move to Portugal in 2016, Sinead Conroy looks at the implications of the move for the Irish economy
LAST WEEK, we heard the disappointing announcement that the Irish born Web Summit will be relocating to Lisbon in 2016. Paddy Cosgrave, CEO of the summit, cited a lack of infrastructure as one of the primary reasons for the move. The company employs 130 people in Ireland and the event is estimated to be worth approximately 100 million euro to the Dublin economy. This year’s event, the fifth to take place, is expected to bring 30,000 people to the capital, 90 per cent of whom will travel from abroad, according to Cosgrave. The summit has been gathering pace at an almost breakneck speed, increasing in scale and momentum over the last number of years and attracting worldwide celebrities such as Bono and Eva Longoria. The summit is of huge interest to the 7,000 students and graduates expected to walk through its doors this year, encouraging innovation, creativity and start-ups. Given all of this positivity, one would have to wonder why our political leaders are so blasé about its
relocation and more especially, its loss to the Dublin and Irish economies. Minister for Finance Micheal Noonan has claimed that the Web Summit won’t be missed. Noonan remarked that people wont be disappointed because “Dublin is chock-a-block with business at the moment”. Similarly surprising comments came from the Minister for Jobs, Trade and Innovation, Richard Bruton, who claimed that the move was “a natural step” for the company. This seemingly resigned and flippant attitude raises serious questions as to the efforts being made to attract and keep events such as the Web Summit in Dublin. Figures supplied by an Enterprise Ireland spokesperson show that the Web Summit has recieved 455,900 euro in EI funding since 2011. In total it has received 800,000 euro from state agencies since its inception. Fáilte Ireland has estimated a loss to the city of 37.5 million euro as a result of the relocation. A considerable amount of taxpayers’ money has gone in to supporting and sponosoring the Web Summit over the last five years. Projections are that it will bring 175 million euro to the Portuguese economy next year. Why are our political leaders
not more concerned? What will be done to keep events like the Web Summit here in future, and what can be done to change the perception that Dublin failed to keep a home grown success on our shores? With little sign of concern shown by Noonan or Bruton last week, one would have to wonder whether any effort was made to fix the problems faced by the Web Summit in Dublin. The saga which has been ongoing for sometime has been seen by many as an embarrassment. Chief among the suggested reasons for the relocation have included poor WiFi and huge increases in hotel rates. This is an unwanted blow to the reputation of the country in international tech circles as well as in the international business and investment world. A spokesperson for the IDA confirmed that from the IDA’s perspective, “every effort was made to ensure the Web Summit continued in Dublin”. The IDA also highlight that its work “encouraging investment into Ireland is continuing and every day IDA staff engage directly with potential investors into Ireland, including those in the technology sector”. Enterprise Ireland also pointed out its position going forward “will be supporting other great initiatives
to help drive awareness of Ireland as the key location in Europe to start a business, and to help our companies succeed globally, creating and sustaining jobs in Ireland.” However, none of these statements of concern seem to address the issue of infrastructure – which is key to attractive international events, especially those of a technological nature. Tánaiste Joan Burton has claimed she is “confident” that Ireland can attract a similar event in the future. Despite this, it’s not clear what plans the Government has to improve infrastructure issues which seem to be at the heart of the failure to keep the Web Summit in Ireland. In reaction to the departure, opposition leader Micheal Martin questioned whether or not the government could have done more to ensure the Web Summit remained in Dublin. It was announced last week that Portugese authorities will be providing 1.3 million euro in financial support in 2016 where they expect the event to grow to 40,000 attendees. The loss to Dublin city will be seen in tourism, investment, reputation and local small businesses who use the event as a platform for development.
The Grim Truth About Google’s Growth Keira Gilleechi questions how Google’s increasing market share and ongoing expansion is affecting the growth of European tech start-ups
GOOGLE has recently come under criticism for the abuse of its dominant market share in Russia. Yandex, Russia’s largest search engine, accused the American company of excluding Yandex apps from Google powered Android devices. Google’s operating system is on over 80 per cent of smartphones sold in Russia. These phones require the pre-installation of Google Apps, and give these apps a preferential position on the home screen. While Google was found guilty of market abuses, it was acquitted of the accusation of unfair competitive practices.
This is not the first time that Google has been accused of using its dominance to manipulate the market. Google’s search market share in Europe currently stands at over 90 per cent, meaning there is very little room for competitor search engines to penetrate. Earlier this year, the European Union filed a case against Google, claiming that the company had distorted search results in order to place its own affiliates at the top. This effectively meant that Google was dictating which brands got seen and which shops got business. In 2013, the Federal Trade
Commission took a similar case against Google in the United States, although the investigation eventually concluded that Google had not manipulated its search results. However, the EU has stricter competition laws than the US, and this case could trigger a change in the way in which the search engine giant displays its results. This controversy comes at a time when Google’s status as a world leader is being challenged on all fronts. While Android phones command 80 per cent of the market, the release of the iPhone 6 in October of last year saw more Android users converting to Apple than
ever before. Furthermore, search traffic is being challenged by social traffic on an unprecedented scale. Earlier this year Shareaholic announced that social traffic referrals had outstripped search referrals for the first time ever. This is hugely significant as it will cause many businesses to question the value which they have placed on optimising their websites for Google search results, and perhaps instead will focus more on building their social network following. As a result Google are constantly expanding and acquiring new start-ups, in an attempt to find sources of potential growth elsewhere. In 2014, Google bought 34 new companies, up from 17 in 2013. In the same year, it also acquired more European tech companies than any of its competitors. Most notable of these was UK based DeepMind Technologies, an Artificial Intelligence focussed start-up, which Google paid £242,000 for. The company also recently announced that it would be reducing its focus on Google+ going forward, stating that users will no longer have to sign in with Google+ to use other products like YouTube or Gmail. This has led to speculation that Google is planning to acquire another social network, where it can dedicate its resources. The most likely candidate for acquisition is Twitter, due
to its continuously falling stock prices, failure to innovate, and slow growth. So what does Google’s on-going quest for world domination mean for European tech? Surprisingly, the biggest threat to the future of European tech is not necessarily Google itself, but rather the rate of exits that result in acquisitions and mergers. There is no European tech company that exists on the same scale as Google, Microsoft or Apple, as 37 per cent of European tech exits in 2014 resulted in acquisitions by American companies. In contrast, only 4.75 per cent resulted in an Initial Public Offering, indicating that many of our most promising start-ups are selling out before they’ve reached their full potential. In order for Europe to be able to contend with firms such as Google, it is necessary to offer alternatives to our startups so they don’t feel pressurised to merge or go public before they need to. One of the primary ways to tackle this issue is to focus on attracting more Venture Capitalists and Angel Investors to Europe, as their funding could encourage our tech companies to compete on the same level as Google. While tech conferences such as the Web Summit have succeeded in doing this to some extent, there is still a long way to go before the European tech scene is as sustainable as Silicon Valley. september 15th 2015