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Basics of cryptocurrency: Risks and benefits

Should you buy in on the craze?

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For a while, cryptocurrencies became the talk of the town across the internet. People all over the world saw the potential of what is essentially “virtual money,” starting a frenzy of investments, theories, and yes, memes — particularly towards one of the more popular cryptocurrencies, Bitcoin.

But do we really understand the power these cryptocurrencies yield, and how such power can affect the whole world over?

What are cryptocurrencies?

Cryptocurrencies are virtual currencies that are exchanged online with no interference from anyone, not even the government. These currencies, through their language of cryptography, contain secured information and are exchanged through a recording system known as a blockchain.

No one regulates the exchanges and no one controls how much of the cryptocurrency should be out there, but the blockchain keeps all of the exchanges transparent and fair for everyone. Think of it as openly sharing your share of a pizza to a friend in exchange for money, with your other friends keeping track of the exchange. Your friends make sure that you have a slice of pizza to give, your friend has the money he promised you, and that these items are actually from each of you and not from someone else.

Because of the creation of numerous cryptocurrencies all over the internet, a virtual market has been created for people who are interested and invested in these virtual currencies to trade among themselves. Groups of people have also made an effort to produce their own cryptocurrencies from their computers through cryptomining. Cryptomining, much like regular mining, is creating cryptocurrency tokens (an online version of coins) and putting them into the blockchain to be traded; it’s printing your own money, except it’s done from a computer and shared online.

In Bitcoin, for example: People who want to contribute to its blockchain to earn some share of the cryptocurrency would go through activities such as cryptomining. Despite it being one of the primary activities for creating and gaining Bitcoin, it’s also one of the more expensive ways of doing so since most cryptomining setups require computers with the most up-to-date hardware and processing speeds. Any person who wishes to do cryptomining would spend a ton of money just for the necessary hardware — all just to mine their own Bitcoin.

Where did the hype come from?

The tailend of 2017 (October to December) saw people get into a frenzy towards cryptocurrencies and its perceived value — a frenzy driven by growing interest. People had started to not only be invested (pun intended) in learning about cryptocurrencies in general, but they also searched “Bitcoin” a whole lot.

With more people understanding cryptocurrencies, investments towards such virtual currencies (particularly towards Bitcoin) increased, thereby expanding the market by a whopping 1,200 percent. Imagine getting 15,000 shares on your Facebook post about your dog within two days – that’s how quickly it blew up.

Another phenomenon that contributed to the rise of cryptocurrencies is the creation of initial coin offerings (ICO). An ICO is a public, unregulated way of earning funds for cryptocurrencies and is widely used by startups to bypass the usual fundraising activities for capital; ICOs are much like crowdfunding (such as Kickstarter or GoFundMe), except no one controls how the funding goes.

ICOs are usually distributed in Bitcoins; these will be used to start projects or applications that people create but initially have no money to operate. Because people have new ideas and the Internet is one of the faster ways to have the idea develop and spread all over, more and more people would go through ICOs to fund their projects instead of getting bank loans or using their own money.

Effects of cryptocurrencies

The impact of these cryptocurrencies take on a grand scale, especially from an economic context. People continually join the hype towards cryptocurrencies, so much so that it drives demand for them. Participating in online trading for cryptocurrencies is faster than those in the stock market, and is easily accessible by people since it is unregulated.

As such, governments are pushing for cryptocurrencies as a means for payment to add convenience for customers, especially those with plans to go paperless with their money. The Indian government, for example, is learning to embrace Bitcoin within their monetary system after taking in measures against tax evasion in black markets; they are also looking into regulating Bitcoin and other cryptocurrencies as well in the near future.

The risk of partaking in cryptocurrencies lies in its greatest feature: an organic form of virtual currency. Because no entity has any control of cryptocurrencies — including governments — these virtual currencies are prone to online attacks (most common form of attack: hacking), which rapidly hamper their growth and reduce their value significantly. With a large number of people currently trading cryptocurrencies online, the risk of hackers increases significantly, causing these people to lose more money when worse comes to worst.

Another threat posed by its greatest feature is that people would abuse the high interest rates and entice new investors to purchase tokens. Because there is no body to regulate the trading online, people engage in scams to take advantage of new investors who are not guided properly in the virtual currency market — despite it being heavily secured by cryptography.

Participating in the schemes makes the trade unfair, even with efforts to make things equal for everyone. One example is the Bitcoin Savings and Trust Ponzi scheme in 2011, which was shut down in 2012 due to the perpetrator, Trendon Shavers, being accused of raising 700,000 BTC — all from new investors who didn’t know any better.

Cryptocurrencies at present

At the moment, Bitcoin remains to be the top-traded cryptocurrency within the market, valued at US$ 151.1 billion — in spite of its decline over the past few months. Countries are starting to either accept Bitcoin as part of their national economies or reject Bitcoin and its risks. Litecoin, which was dubbed as an alternative to Bitcoin, is not performing as well as Bitcoin within the past month, culminating in a so-far failing venture with digital wallet service Abra. Ethereum, one of Bitcoin’s closest competitors, has quickly risen due to its value to customers.

There are countries in the world that think that cryptocurrencies can bring them out of total economic collapse and keep the country afloat. Venezuela, for instance had released its own cryptocurrency, Petro, after its own national currency lost its value. Other struggling nations such as Iran and Turkey are looking to follow suit, but would need enough investment to get the necessary equipment for creating their own cryptocurrencies.

Should you be worried? Do your research, familiarize yourselves with terminologies used in the world of cryptocurrencies, and always proceed with caution.

Even with the possibility of countries going paperless with their currencies, there are some that still fear its effects and have not wholeheartedly embraced cryptocurrencies. Despite the aforementioned efforts from the Indian government to shift to cryptocurrency-based payment methods, the Reserve Bank still finds engaging in cryptocurrencies illegal, to the point of barring banks from engaging in them. Reports of ransomware spreading in the United States, hacking computers used for mining Bitcoin raise security concerns for people investing in Bitcoin.

Should you be worried?

Whether you are currently investing in cryptocurrencies or not, the risks of such virtual currencies will remain to be there as long as other people keep increasing their investments towards them. The value of these cryptocurrencies continue to be unstable to this day, especially with the hype slowly dying down due to people learning more and more about cryptocurrencies and their possible (and real) dangers.

The call for people who wish to invest in these cryptocurrencies is to practice caution. Do some research, get to know more about the terminologies used in the world of cryptocurrencies, look at news reports — with the internet at your disposal, it’s better to know what you’re getting into, should you want to get into it. Anyone who wishes to create their own cryptocurrency might want to start saving up as early as now for all the hardware.

Should you be worried? Yes, to an extent, but it helps to be prepared.

Illustrations by Yanni Panesa

Explainers

The industry’s next big thing: Cloud gaming explained

It’s gaming on the go, but for internet that’s not slow

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Everybody’s getting into gaming these days, and you can’t blame them. With the pandemic continuing its ravaging ways in the world, people turn to their consoles or PCs for some action. However, not everyone can afford all the expensive PCs and the next-gen consoles when they come out.

Instead, a new player comes into the fray with a pretty great idea. What would happen if you can just play your favorite games from any device? Also, what if we told you that this won’t take up space on your device at all? This is basically what cloud gaming offers to you: a way to play games from any device at any time!

So, how does that actually work? What do you need to ensure quality gameplay, and should you even consider it?

The basics of playing on a cloud

On paper, it’s pretty easy to understand how cloud gaming works. Basically, you have access to a library of games from a cloud storage service. When you subscribe to the service, you can virtually play your library from any device regardless of the specs. Also, you don’t have to worry about storage problems since these games are stored on a server.

It’s no joke when these companies tell you that you can play your games on any device. With their dedicated data servers, they make sure that the games run smoothly once you access them from the cloud. On your end, you will need a strong and consistent internet connection to play the games smoothly.

Several companies already have cloud gaming software available for people to subscribe to. Some examples include NVIDIA’s GeForce Now, Microsoft’s xCloud, and Google Stadia — all of which store PC games on a server. These companies even take the time to update their server hardware every so often to bring the best possible quality.

System requirements for cloud gaming

Much like your ordinary PC or gaming console, companies that run cloud gaming servers need certain equipment to run smoothly. First, these companies must set up active data centers and server farms that run the games. These data centers ensure that games are up and running, while reducing latency. In other words, these serve as the powerhouse of cloud gaming.

Next on the list is the network infrastructure necessary to send these to the users. To ensure that people don’t experience lags when they play their games, companies also invest in acquiring proper data connections. However, in most cases, this isn’t something these companies have control over; it’s mostly coming from their available internet service providers.

On the front-end, companies also provide dedicated hardware and software to house the cloud. For example, NVIDIA integrated GeForce Now into their own cloud streaming device, the NVIDIA Shield back in 2013. Meanwhile, Google Stadia relies heavily on using pre-existing Google software like Google Chrome and the Stadia App.

Something great to offer, for the most part

Cloud gaming services offer something unique in the industry. Essentially, it eliminates the user from investing so much into buying expensive PCs as it allows people to play from virtually any device. Whether it’s on a smartphone, laptop, or even a smart TV, people get access to games at high frame rates without an RTX 3080.

Furthermore, the game and save files are stored on the cloud, and don’t take up any storage on your devices. This is greatly beneficial for people who are already running on limited storage space, especially if they play Call of Duty: Warzone. With everything stored on the cloud, you don’t need most of the 512GB of SSD storage.

However, one of the biggest issues with cloud gaming revolves around the thing it’s based on: the internet. Specifically, it’s on the user’s internet connection as these services require the fastest internet to run smoothly on any device. Basically, you will need either an Ethernet or a 5G wireless connection to ensure the lowest latency possible.

That infrastructure isn’t readily available in most markets, which is a prominent issue among several third-world countries. Furthermore, even if there are companies that have 5G in their pipeline, these same providers also put data caps on it. Even if the user can play at an optimal frame rate, they’re doing so with a restriction in place.

Does this new player have any place?

With the world continuously opening its arms to the gaming industry, innovation becomes the forefront of success. Companies come up with a variety of gaming technologies that seek to cater to a wide variety of people. From individual hardware to pre-built systems, gaming often revolved around these things.

With cloud gaming, it gives people not just another option within the mix. Rather, it seeks to challenge the notion of availability and accessibility, and give it a viable solution. Essentially, it takes away the physical hardware limitations on the user’s end, and makes it available for everyone.

But like most gaming technologies, everything is still limited somehow. These systems still experience bottlenecks both on the manufacturer and the user’s end. In the end, it will depend on how much you’re willing to shell out for them, and how willing you are to accept the risks.

Illustrations by Raniedel Fajardo

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Your MagSafe Questions Answered

Do you really need it?

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If you’ve ever owned an old MacBook before, you’ll know that those chargers magnetically snap onto place. That particular technology is called the ‘MagSafe’.

After the MacBook Pro touch bar and USB-C overhaul last 2016, everyone thought MagSafe ended for good. Not until they announced the new MagSafe for the iPhone 12 series four years later.

The MagSafe technology might not be new but the implementation for the latest iPhones makes the technology even more usable. Other than the securely-placed phone for wireless charging, there are a plethora of case manufacturers who continuously work on future accessories that support MagSafe existing ecosystem.

But is the Apple MagSafe more than just a gimmick? And do you really need it?

Watch our in-depth Apple MagSafe explainer here.

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Here’s how India is trying to be China in the smartphone game

The world’s second-largest smartphone market has more to offer

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China is practically the world’s production powerhouse. And India wants to follow the same path. India’s Central government has approved three schemes to enable large scale electronics manufacturing and attract fresh investments worth almost INR 50,000 crore (US$ 6.3 billion) in the sector.

The government aims to provide companies a production-linked incentive of 4 percent to 6 percent on incremental sales for locally made goods over a period of five years. This not only includes mobile phone manufacturing but also assembly, testing, marking and packaging.

The other policy offers a 25 percent financial incentive for capital expenditure that goes towards “the manufacturing of goods that constitute the supply chain of an electronic product”. With these incentives, the government is optimistic that companies will come to India, contribute to progressing infrastructure, and make export-quality goods.

Inauguration of Samsung’s Noida Factory in India

According to their estimates, domestic value addition for mobile phones is expected to witness 35 to 40 percent jump by 2025, from the current 20-25 percent.

So far, companies have focused on assembling equipment like smartphones in India. A huge chunk of the components are still imported. These policy changes could act as a stimulant to locally source electrical components, semiconductors, as well as develop production clusters.

Bangalore and Hyderabad are infamous for their IT Tech Parks that house thousands of employees from IT service firms like TCS, Infosys, Accenture, and many more. Similarly, the government wants to create production clusters that can develop an eco-system of their own. These clusters can create a seamless supply chain when paired with proper land, air, and shipment infrastructure.

The timing of the announcement is what matters the most. China is embroiled in a trade war with the US for quite some time and we’ve seen how a giant like Huawei got caught in the cross-fire. Companies are skeptical about depending too much on China for production and sourcing. Hence, countries like Vietnam have witnessed a huge inflow of foreign investment from the likes of Nintendo, Foxconn, and even Samsung.

India is very much like Vietnam. A developing economy that’s on the look-out for foreign investment and enhances local production capabilities. This not only helps the government increase its tax revenue via taxation, but also provides employment. Considering the current Coronavirus crisis, it’s obvious that these plans may not materialize soon. But, as soon as the storm is gone, companies would want to find an alternative to China.

Prime Minister, Narendra Modi with Apple CEO, Time Cook

It’s reported that the alleged low-cost iPhone from Apple has been delayed due to the pandemic. Irrespective of the current health crisis, Apple has been trying to ramp up its local production in India and has done so, cautiously. India is the world’s second-largest smartphone market and every brand wants a piece of the cake. Realme and Xiaomi have been intensely fighting for supremacy, Samsung continues to lead via the offline market, and OPPO and Vivo have flooded all commercial banners with their products.

Xiaomi currently has seven plants in India, major ones being at Sri City and Sriperumbedur. It also makes its televisions in Tirupathi. Manu Kumar Jain, Vice President, Xiaomi, and Managing Director, Xiaomi India said that 95 percent of Xiaomi’s phones are made in India with 65 percent of a phone’s value being sourced locally. The government has been successful in compelling companies to make in India because it consistently kept on raising import duty on smartphones.

Samsung already has the world’s largest mobile phone factory in India that assembles top-tier variants, ready for export. We don’t know the volume it churns out right now, but their long-term investment is a precedent for other brands to take the market seriously. OnePlus has a research facility in Hyderabad where it makes software products intended for the Indian market.

Samsung’s factory in Noida, India

According to industry ICEA, the NOIDA region (a part of Delhi NCR) has close to 80 mobile manufacturing factories that provide employment to approximately 50,000 people. It’s normal today to see companies release press notes announcing new facilities across the country that’ll employ thousands of people.

Prime Minister Narendra Modi kickstarted the “Make in India” campaign five years ago to encourage foreign companies to invest and build in India. While its effects are debatable in a few industries, there’s no doubt that the mobile industry has picked up exponentially. State governments of Karnataka, Andhra Pradesh, Telangana, Uttar Pradesh, and Tamil Nadu have played a major role in establishing these clusters that symbolize progress.

Engineers are widely available in India, the country has developed multiple ports under the private-public model, and numerous airports are under construction. India is already the world’s second-largest smartphone maker, but the gap is huge. It’s about briding this. Obviously, the scale at which China produces is unmatchable. But that cannot undermine India’s efforts to be more relevant on the global stage. From a purely consumption-based economy, it’s slowly trying to turning into a production backed state.

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