Solving volatility to drive mass crypto-payments adoption – Central Bank of Crypto and Crypto Dollar

Posted on September 19, 2017August 22, 2019 by George Alex Popescu Leave a comment

In my eyes volatility is what is preventing crypto currencies from being more used for payments in online commerce.

I believe that crypto currencies are much better adapted than credit cards for online payments (faster, cheaper, non-reversible, simpler, etc). And yet crypto currencies are hardly used at all:

Preferred methods for online payments — Preferred method for online payments ( from here, chart made in 2016)

BTC is 300x more volatile than EUR

I strongly believe that lack of adoption is due to the crypto’s volatility. Merchants have costs in fiat currency (USD for example). Having a BTC price for their product that changes by 30% a week is not manageable and provides poor customer experience. Imagine if you wanted to buy a car and the price was today 10 BTC and tomorrow 13 BTC and day after 7 BTC while the normal consumers haggles over $200 for the price of the a $40,000 car and needs hours/days to make the payment. This is not manageable.

The 8 lessons from comparing the internet age vs the blockchain age

Posted on September 11, 2017August 5, 2019 by George Alex Popescu Leave a comment

I believe in 10–20 years 1 BTC=$300,000 and 1ETH=$22,000. Let me explain why using a comparison of Internet age vs the Blockchain age.

Early ‘90s

I look at the blockchain space as being in the same state as the internet was in early ‘90s.

Why is that? Because only a few of my friends have heard of Bitcoin and none of Ethereum. Because none of them have used anything in the crypto/blockchain space. And when I ask taxi drivers, or random people I meet I also get the same answers: yes, I vaguely heard of Bitcoin but they know nothing about smart contracts, ICOs, and they are not using anything in the crypto space, yet.

I believe history repeats itself. We can learn from the early years of the internet and internet/tech companies what is likely to happen to the blockchain space.

Image mining on the blockchain, a new horizon

Posted on August 1, 2017August 5, 2019 by George Alex Popescu Leave a comment

Blockchain is great at decentralizing control and data. It creates communities, as people must contribute to the ecosystem in some form to give the data value. This value can derive from maintaining the ledger, providing a resource, or contributing data. New industries are being tested with this technology, but it is the computer vision and machine learning industry that needs to embrace blockchain.

For instance, when creating augmented reality applications, a massive amount of data is needed to make it accurate and efficient. However, this takes a lot of time and can slow the project down.

Lampix augmenting a paper drawing and sharing it for collaboration

Lampix is Introducing Blockchain Image Mining to the Computer Vision and Machine Learning World

Lampix plans on using the power of blockchain to create one of the largest image database with the help of machine learning. Developers will be able to tap into this database for their own product, such as Google Glass, Holo Lens, or our Lampix product, and create applications. This is exciting, as for any application, a lot of data is necessary to make it accurate and work properly. The database will consist of over a billion datasets contributed by image miners, who are compensated with PIX tokens for submitting datasets.

Initial Coin Offerings (ICO)- New Funding Source?

Posted on July 26, 2017August 22, 2019 by George Alex Popescu Leave a comment

Initial Coin Offering (ICO) is the next big thing in the world of fundraising. It combines the features of an IPO and crowdfunding allowing backers to support a startup via donations while generating massive returns on their investment. ICO is basically crowdfunding of a new cryptocurrency venture where a percentage of the cryptocurrency (and not the venture itself) is sold. This new cryptocurrency is usually sold for a fiat currency or other mainstream cryptocurrency like bitcoin.

For many decades, any startup looking for funding would have to go to a VC firm, the self-appointed gatekeepers to capital. Crowdfunding in general, and sites like Kickstarter in particular, democratized the funding process. It allowed young companies to get themselves directly in front of prospective consumers and raise funds from backers.

Underwriting Using Cosigning vs 3rd Party Data

Posted on May 16, 2017August 5, 2019 by George Alex Popescu Leave a comment

Alternative lenders use all sorts of complicated models based on sophisticated algorithms and machine learning in extrapolating data that is never certain or reliable. Cosigning is simple. It relies on a real person with a prime credit score. The equation is reduced to a number and a heartbeat.

To deliver above average returns to investors, online lending startups have been grabbing alternative data from a potential borrower’s email, social media, and even mobile accounts. They are determining risk based on a borrower’s likes, shares, and phone usage. There is a better option to capitalize on the $3.5 trillion consumer loan market: Cosigning.

Here are 5 reasons why online lenders like Backed, Inc., which relies on cosigning, yield superior overall returns than those lenders who rely on algorithms that are overloaded with over 10,000 data points:

How AI is Used to Audit Bank & Credit Card Statements

Posted on May 5, 2017August 5, 2019 by George Alex Popescu Leave a comment

Artificial intelligence has been immensely advantageous to the financial sector. The lengthy tedious work which took hours for humans to perform was reduced to seconds by computer software. The use of papers, pens, and abacuses for conventional accounting systems have been transformed into the computerized system of accounting and auditing. Innovation in this field is so powerful that it has elevated the financial auditing process to a higher plane.

Ocrolus is a financial service provider with two powerful AI products: “PerfectAudit” and “MedicaidGenius.” These products eliminate the need to audit bank and credit card statements manually.

The company was founded in 2014 and is headquartered on Wall Street in New York. After testing and polishing, Ocrolus launched officially in January 2016. Its team consists of four executive members–Sam Bobley, Victoria Meakin, Vikas Dua, and Zoheb Sait. There are an additional 15 employees working on the technology and operations side of the business.

Victoria Meakin serves as president of the company. She was also the co-founder and president of PhoneCharge, an electronic payment processing company that sold to CheckFree for around $100 million. CEO Sam Bobley is a young technology entrepreneur who graduated from the University of South Carolina-Columbia. COO Vikas Dua was previously associated with on-demand Series-C startup Handy.

The QED Matrix Helps Leaves and Mountains Become Trees

Posted on May 3, 2017August 22, 2019 by George Alex Popescu Leave a comment

Nigel Morris is a co-founder of Capital One and has led it to emerge as a multi-billion dollar behemoth. During his time at Capital One, he noticed there is a gap between banks and the fintech industry. To bridge this void, his team rolled out QED Investors in 2007 and was able to bring on board some ex-colleagues from Capital One to build QED; this helped him to ensure the team hit the ground running. QED has invested in multiple startups that have not only become unicorns, but have changed the entire landscape of the financial ecosystem in which they operate. Most notable are Credit Karma, SoFi, Prosper, GreenSky, BrainTree, and ApplePie.

Fintech Opportunities and Hindrances

Morris has seen the best and worst of big banking and fintech startups. He has seen that banks have some really important assets that fintech companies lack: low-cost deposits, regulatory access, top-notch compliance, huge customer base, and high profitability. But they are trying to be everything to everyone and this is where fintech companies are gaining ground. Fintech companies, rather than offering everything, offer a specific product or service that banks haven’t developed or cannot develop because that is just not part of their DNA.

Taking Over Where Banks Fall Short

Posted on May 3, 2017August 5, 2019 by George Alex Popescu Leave a comment

Banks are not equipped to lend the way small platforms are, and a lot of platforms are hamstrung by the regulatory environment. Monroe Capital, LLC, launched their specialty lending vertical a couple of years ago to provide funding for other lending platforms. Aaron Peck, managing director and co-head of the Specialty Finance Vertical, said four years ago the company had two specialty finance vehicles designed to meet the needs of those platforms. Now, they have 11, and all of them are current yield.

“That’s rare for a fund,” Peck said, “but we look at performance. A publicly traded vehicle pays 90%, so we are trading quite well. All our funds pay hefty dividends.”

Since 2004, Monroe Capital has been a lower mid-market lender, providing funding for businesses with $3 million to $30 million in cash flow. Headquartered in Chicago, they’ve managed more than $4 billion in assets through origination offices in Boston, New York, Atlanta, Dallas, San Francisco, Los Angeles, and Toronto. Their specialty finance division, however, is not a typical marketplace lending platform; rather, they see themselves as a hybrid model looking for growth capital. Peck is one of nine partners.

Portrait of a Marketplace Lending Investor

Posted on May 1, 2017August 5, 2019 by George Alex Popescu Leave a comment

Alternative lending start-ups have entered mainstream consumer and SMB lending, but have yet to establish themselves as additions to traditional fixed income portfolios for investors. Marketplace lenders started out as peer-to-peer lenders, but institutional capital and accredited investors are now accounting for the lion’s share of lending capital on such platforms. Direct Lending Investments, LLC (DLI), a growing and active participant in this developing world of private credit, focuses on buying loans and extending loans to alternative lending platforms and other business partners. In particular, the firm provides credit to the growing sectors of the market that are no longer served by traditional bank lending and, more importantly, structures its funding in a way so that the originator takes on default risk.

Inspiration and founding

Brendan Ross, the founder and CEO of DLI, first began investing in marketplace lending personally and on behalf of his clients through Lending Club (LC) and Prosper loans. In 2012, he launched DLI to expand his investment horizon beyond peer-to-peer lending, which he has since moved away from altogether. The firm’s inaugural deal in November of 2012 was with IOU Financial, a SMB loan originator. Since then, the firm has expanded to include receivables as well as real estate and consumer loans in its portfolios, and has grown to over $900 million in assets under management.

Pychometric Credit Scoring for the Developing World

Posted on April 27, 2017August 5, 2019 by George Alex Popescu Leave a comment

The majority of the developing world population makes little use or no use of financial services. Accenture estimates that only 70 percent of microenterprises in an emerging country like India use bank accounts while only 5 percent use products like term loans, and a paltry 1 percent have working capital loans from banks. In similar emerging markets, lenders find it difficult to make credit decisions due to weak coverage of credit rating agencies. On average, only 10 percent have credit scores.

One company that understands the riches lying at the bottom of the pyramid is Entrepreneurial Finance Lab (EFL GLOBAL). EFL helps lenders capture untapped markets by delivering credit scoring technology tailored for such markets.

How EFL Uses Psychometrics to Determine Credit Risk

EFL Global is a pioneer in psychometric credit scoring and was founded in 2010 by Dr. Bailey Klinger and Dennis (DJ) DiDonna. The company is headquartered in Miraflores, Lima, Peru.

Dr. Klinger is executive chairman. Prior to co-founding EFL, he served as a senior advisor and consultant to various government and multilateral institutions. DiDonna is chief strategy officer. Previously, he worked at MCM Strategic Data and Angie’s List as a technology entrepreneur with a background in sales and operations management.