How to keep your bank from robbing you

Monday, 16 October 2017
Melbourne, Australia
By Bernd Struben

  • Be afraid banks…be very afraid
  • Ignorance is bliss if you’re in banking
  • They’re talking about it, but not talking about it

This week’s Port Phillip Insider will be a little different.

Last week I brought you stories from around the world involving the astounding — and stealthy — rise of crypto currencies. Specifically, the highly risky, highly lucrative initial coin offering (ICO) sector.

I quoted crypto expert Sam Volkering extensively. That’s because no one I’m aware of knows more about this revolutionary new phenomenon than Sam.

With that in mind, this week you’ll hear directly from Sam himself.

Today he writes to you from Toronto. He made the trip over from London to attend the SIBOS banking and finance conference.

The Society for Worldwide Interbank Financial Telecommunications organisation — SWIFT — runs SIBOS. But as Sam explains below, the organisation has been anything but swift when it comes to anticipating the challenges and opportunities presented by cryptos.

You’ll find Sam’s article right after the market section below.

Markets

Over the weekend, the Dow Jones Industrial Average closed up 30.71 points, or 0.13%.

The S&P 500 gained 2.24 points, or 0.09%.

In Europe, the Euro Stoxx 50 index finished down 0.99 points, or 0.03%. Meanwhile, the FTSE 100 dropped 0.28%, and Germany’s DAX index gained 8.98 points, or 0.07%.

In Asian markets, Japan’s Nikkei 225 index is up 131.83 points, or 0.64%. And China’s CSI 300 is up 0.17%.

In Australia, the S&P/ASX 200 is up 31.6 points, or 0.54%.

On the commodities markets, West Texas Intermediate crude oil is US$51.91 per barrel. Brent crude is US$57.83 per barrel.

Gold is trading for US$1,302.02 (AU$1,653.36) per troy ounce. Silver is US$17.37 (AU$22.06) per troy ounce.

One bitcoin is worth US$5,696.34.

The Aussie dollar is worth 78.75 US cents.


Be Afraid Banks…Be Very Afraid
By Sam Volkering

I’m a little impatient about new tech.

More specifically, I’m very impatient about getting my new BitPay and TenX card. These are payment cards that will allow me to spend my crypto in the real world.

However, my impatience is now higher than ever. And it’s all because last night I was robbed…

Ignorance is bliss if you’re in banking

I just landed in Toronto. I’m here for the SIBOS banking and finance conference. This will mark my third SIBOS conference. I first attended in Dubai in 2013. Then Singapore in 2015. Now here in Toronto 2017.

I only go every two years because it gives me a better gauge of change to banking and finance. Go every year and it’s harder to notice change. Every two years I can see tangible differences.

The conference itself, is run by the Society for Worldwide Interbank Financial Telecommunications organisation. Most commonly known as SWIFT.

SWIFT is the organisation that helps banks around the world message each other to help move fiat money from bank to bank, across oceans and borders. As an organisation, SWIFT is 44 years old. Comparatively new, compared to the age of some of the world’s big banking institutions.

And for 44 years…well maybe 36 years, SWIFT was an important part of the financial system. But SWIFT like many other ‘traditional’ financial institutions, didn’t anticipate bitcoin and the rise of cryptocurrency.

Even when I first attended SIBOS in 2013 — when bitcoin was just four years old and no one knew what ‘altcoins’ were — no one in the traditional system was talking about cryptocurrency…no one.

In 2015, things had changed a little bit more. In fact, it was at SIBOS 2015 where I met with one of Ripple’s early founders, Chris Larsen and had a chat about the future of crypto.

There were a few others about in 2015, murmuring about crypto. But even then, none of the ‘traditional’ types were really thinking about crypto or worried by it.

I remember having a discussion about it back then with a fellow attendee I met during one of the ‘technology’ sessions. Our discussions revolved around new fintech and ultimately lead to crypto.

I explained that, what was hardest for me to get my head around was the ignorance from the presenters and exhibitioners about the swell of development in crypto.

There was virtually no real coverage or discussion about it. Yet it was something they should have been worried about. And when I talked to others about bitcoin and the recent developments of altcoin, few people (perhaps one in 20) even knew about it.

I was shocked. And a little amused. I knew what was coming. No else one there (aside from a select few) did.

It was like walking around knowing this huge revolution was coming to everyone at the conference and I was the only one in on it. Strangely comforting and funny, all at the same time.

They’re talking about it, but not talking about it

And now here I am, another two years later and the conversation (finally) has found its way to crypto, blockchain and the revolution that’s coming for the banks and the whole banking system.

It kicked off with a press release from SWIFT last week on 13 October:

SWIFT tests show blockchain has potential for global liquidity optimisation’.

The idea is that SWIFT will use distributed ledger technology (a blockchain) to enable banks to monitor and reconcile cross-border liquidity real-time. At the moment it’s done typically as end-of-day statements.

The idea is of course to make the banks more efficient, accurate and cost effective.

Already, I can see there will be far more about blockchain technology this week. Here are a few sessions I’ll be attending…

  • Blockchain in the cash and securities space: Utopia or reality?
  • Payments to the power of blockchain
  • Blockchain and payments: Lessons learnt and future prospects
  • ‘Does blockchain technology alleviate security concerns or create new challenges?’
  • What does the future hold for banks — Evolution or extinction?
  • The future of money

And then one I’m really looking forward to, ‘Breakfast with [Sir] Tim Berners-Lee — The internet: past, present and future’

The last one may not be crypto related — but it’ll still be fascinating to hear from the inventor of the World Wide Web…again.

The point is, you can see the idea of DLT and blockchain tech is finally high on the agenda. But funnily enough, not a single session specifically mentions ‘cryptocurrency’. I know it will be a hot topic. But more like the elephant in the room. I doubt anyone will really go into much detail. Although there may be a few…

I know crypto will pop up because one session has Jed McCaleb on the panel.

McCaleb founded and built MtGox. He made it one of the biggest developments in bitcoin, ever. He eventually sold it to Mark Karpeles and left the project. It was Karpeles who would go on to steal millions worth of bitcoin and run MtGox into the ground.

McCaleb is also one of the founders of Ripple. After leaving Ripple, he then founded Stellar and their native cryptocurrency, Stellar Lumens.

I anticipate there will be others like McCaleb here. I anticipate I’ll come across new crypto projects that are looking to launch (ICO) into the real world. Hopefully I’ll come across the next Stellar Lumens, before they launch into the crypto market.

The irony, is that it’s people like McCaleb alongside other new crypto projects that are the fundamental threat to all the other ‘traditional’ banking and finance people that will be here at SIBOS.

That’s the exciting thing about all this. The development in new crypto projects is happening so fast and with such potential, that it’s creating one of the biggest wealth creation events I’ve ever seen.

The opportunity is so big I’ve developed a new advisory service solely to help people take advantage of it. And it’s no exaggeration to say this is the most exciting advisory service I’ve ever worked on.

I’ll be looking specifically at ICOs with the potential to supercharge investors’ crypto holdings by 1,000% or more.

That might sound crazy. And to ‘traditional’ types it is. But that’s also why I put together a free Crypto Masterclass so that people like you can understand what’s going on. You can check it out here.

I know this world of new cryptos, ICOs and existing crypto like bitcoin, will survive. I know they’ll change the world. And I know this because, as I said at the top, last night I was robbed.

I went to grab a pizza last night and decided to withdraw some cash from an ATM. I used my Commonwealth Bank account to do it.

After I got my pizza and back to my hotel I checked my NetBank online banking.

And there it was. The thieving [expletive]. A $17.39 fee for an ‘International ATM Withdrawal Fee’. My own bank robbed me.

$17.39 to get some cash out of an ATM!

The more complex excuse will be they have to settle funds with counterparty banks, blah, blah, blah. But I’ll tell you this now, none of that will exist when you can use crypto to buy your pizza in Toronto, Melbourne or London.

There’ll be no one to rip you off. No middlemen, no intermediaries, no SWIFT.

I can’t wait to kiss fiat money goodbye.

Crypto provides us a decentralised, distributed, free system. It’s going to change everything. And it could create immense crypto-wealth if you know how to get on the right ones.

As soon as I get my BitPay and/or TenX payment cards, I’ll even prove it. I’ll use them to buy real goods and services in day-to-day life.

But of course, to see what that looks like, you’ll need to make sure you understand what’s involved. And the best way to do that is with my free Master Class. You can watch that right here.

I’ll be back with more tomorrow. Including details of my brand new advisory service.

Stay tuned!

Regards,
Sam