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Widening Global Wealth Inequality Gap Can Be Narrowed By Universal Basic Income

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By Nir Yaacobi, Economics Lead, GoodDollar

Carrying the can: it is no fault of the poorest 3.8 billion people on the planet that global wealth is becoming more regressive — but to redress the balance new thinking is needed

The global wealth inequality gap is widening, according to Oxfam. To coincide with the start of the World Economic Forum 2019 in the Swiss ski resort of Davos on January 21, the development charity published its annual report on the state of the world’s economy.

The headline-grabbing finding from the research was that 26 of the richest people on the planet own as much, in terms of assets, as the 3.8 billion people that comprise the poorest half of the globe’s population.

This time last year the figure released by Oxfam was that the wealthiest 42 people owned as much as the poorest 3.7 billion. That statistic is used on the landing page for GoodDollar, a research hub that explores how decentralised cryptocurrencies and blockchain technology may enable models based on universal basic income (UBI) with the central aim of reducing global wealth inequality.

Need for change: GoodDollar’s website homepage is now out of date following Oxfam’s latest statistics showing the wealth inequality gap is widening

The figure needs updating, to reflect the worsening situation, alas. As Oxfam’s 2019 report summary states: “Our economy is broken, with hundreds of millions of people living in extreme poverty while huge rewards go to those at the very top.

“The number of billionaires has doubled since the financial crisis and their fortunes grow by $2.5 billion a day, yet the super-rich and corporations are paying lower rates of tax than they have in decades.

“The human costs — children without teachers, clinics without medicines — are huge. Piecemeal private services punish poor people and privilege elites.”

The accompanying press release points out: “Billionaire fortunes increased by 12 percent last year … while the 3.8 billion people who make up the poorest half of humanity saw their wealth decline by 11 percent.”

The report promotes the urgent need for a new system. “We need to transform our economies to deliver universal health, education and other public services.”

At GoodDollar, we believe blockchain-powered UBI is the right tool to help fix what the report calls “inequality at home [with] developed nations currently failing to meet their overseas aid commitments [that] could raise the missing billions needed to tackle extreme poverty in the poorest countries by increasing taxes on extreme wealth”.

Simply put, a new decentralised mechanism is critical to tackling wealth inequality — and sooner rather than later, with many economists predicting another global financial crisis before long.

If the wealth transfer from the rich countries to the poor ones is operated by governments and authorities in individual countries, with their own interests at heart, then this approach is likely to finance the public administration in the rich countries and corrupt regimes in the poorer nations. Very little will arrive its destination.

“Upwards of 30 per cent of funds allocated to humanitarian aid is lost to corruption,” points out Ira Ryk-Lakhman, GoodDollar’s General Counsel, in a recent guest article on Cointelligence. “This is mind-blowing. Other estimates calculate that over 80 per cent of the funding that is allocated for charities does not make it to the final beneficiaries.”

A new way of thinking is needed to right the balance; GoodDollar and other decentralised, blockchain-backed UBI programmes should be explored. For instance, GoodDollar, once established, will cut out the middleman — in this case a government or custodial authority — and hand funds directly from the rich to the poor.

We believe that with the right decentralised tool the very rich people will be willing to donate more of their funds if they know it is destined for the right cause, rather than for a new tax that they will always find a way to avoid. Change has to come, and together we can narrow the wealth inequality gap.

Do you have the skills to help the GoodDollar project? We need builders, scientists, and experts in identity, privacy, and financial governance, as well as philanthropists and ambassadors. Contact us at hello@gooddollar.org, via our social media channels (Twitter and Telegram), join the OpenUBI movement, or visit our GitHub page.

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Cybersecurity took center stage in 2018 and could present an exciting investment opportunity

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Cybersecurity has always been a topic of importance for both enterprises and individuals. However, 2018 was riddled with events that highlighted just how crucial an issue it is, following privacy breaches such as the Cambridge Analytica Facebook scandal. With renewed interest in online safety and privacy, cybersecurity stocks are attracting increasing attention in the investment world.

2018 – the year of the hack

The attention to online privacy reached new heights in 2018, following the Cambridge Analytica scandal, which jeopardised the data of some 87 million Facebook users¹. The scandal put in question many of Facebook’s user privacy practices, resulting in Founder and CEO Mark Zuckerberg testifying before Congress. A month later, the General Data Protection Regulation (GDPR) came into effect in the EU, applying new restrictions on any entity that collects personal data.

The dynamics of online security

One of the reasons cybersecurity is, and will remain, a hot topic is the ever-changing nature of the online world. With so much sensitive information being stored in the cloud and on computer networks, the risks are ever growing and the need for effective cyberdefenses is ever present. From “simple” risks, such as phishing scams, to complex ransomware programs and crypto mining bots, each person and enterprise with an online presence is in danger of falling victim to a cyber attack.

The cybersecurity industry is huge, estimated at more than…

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Mobile payments is a big market – and it’s about to get much bigger

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In recent years, mobile payment has become a key method of online shopping and other forms of eCommerce. With more members of Generation Z, who grew up in a world where smartphones were not an innovation, but a reality, this segment of the financial space is expected to grow tremendously in coming years. With more smartphones in people’s pockets and an increasing number of countries shifting towards cashless economies, it is no surprise that many of the leading payment technology companies in the world are constantly working to introduce new and improved payment solutions.

In 2016, the mobile payment market was valued at $601 billion¹. By 2017, it grew to nearly $720 billion², and it is expected to cross the $1 trillion milestone in 2019³. Forecasts suggest that it will continue to grow, reaching anywhere between $2.7 and $4.5 trillion by 2023. This growth will be prompted by many catalysts, which will both get more people to use mobile payments and make it easier for existing users to conduct more of their transactions with mobile devices.

Going mobile

The introduction of mobile internet and smartphones placed mobile payment at the fingertips of billions around the world. As the industry grew, more users started using mobile payments, due to its seamless, frictionless nature. Moreover, using an application for making payments gives the user more transparency and control over their finances,…

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Big banks, big opportunity? Earnings season kicks off

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Each quarter, publicly listed companies share their earnings reports with their investors and the general public. These reports provide insights into each company’s performance and more often than not, impact their stock prices. Over the next six weeks, companies will be sharing their reports for the fourth quarter of 2018 (Q4), with major banks kicking off the earnings season.

Reporting earnings in a challenging market

This earnings season has a very meaningful backdrop, as Wall Street has been heavily impacted by external forces recently. Firstly, the Fed’s drive to hike rates over the past year, with four rate hikes in 2018, has put pressure on the market.

Perhaps the most important factor causing Wall Street to struggle recently has been the rising yield of 10-year bonds. These bonds, issued by the US Treasury, present a relatively low-risk investment option and produce steady returns twice a year. When the interest produced by these bonds is high, it could push investors away from the stock market, as the safer option is now also high yielding. Recently, 10-year bond yields have been giving investors interest rates of 2.73%.

Entering this earnings season, many companies face the challenge of remaining a lucrative investment option for their shareholders. For some companies in the financial sector, this season might be especially crucial, as they have to recover from less-than-impressive results last quarter.

Banking on earnings

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