Where can you spend your Bitcoins, Legally

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BITCOIN – Acceptance around the world As humans evolve the future where automation and robots replace and / or compliment all professionals, including cab drivers, doctors, engineers, and even sex workers; some version of crypto-currency for the micro-payments shall enable several new age business models. The first version of crypto-currency, Bitcoin was introduced in 2008, for one major reason – to get away from a centralized system where financial institutions, state and regulators were not trusted. Remember, the first whitepaper on Bitcoin appeared in November 2008, after the Lehman Brothers bankruptcy in Sep 2008, when several financial institutions did not honor their commitments. Bitcoin has been a major disruption of the 21st century. Who would have imagined in 2009, that […]

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Bitcoin Simplified and its Future

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Say you’re planning a cross-continental trip to three different countries. The usual hassles accompanying such a trip would be the exchange of currencies and the inevitable fee that accompanies each exchange. Say you run short of cash, and now need to head to the nearest ATM, and pay ridiculously high international transaction fees. Frustrating, right? Now imagine an alternative scenario- one where you don’t need to convert your currencies, travel with actual cash in your wallet, or pay any fees to use it. Sounds like a dream, right? Well this may very well be the future of money- thanks to a unique little invention called the Bitcoin.   What is Bitcoin? The Bitcoin has garnered a lot of international attention over […]

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What is a Blockchain and why does it matter?

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Blockchain is likely to be the most hyped database in the current decade. It is the core technology that enabled bitcoin, which has had challenging ups and downs due to business reasons.   Blockchain has the ability to bring lot of efficiencies in how information is created, shared, accessed, secured, and relies upon crowd efforts for validating the correct information. Hence it is compared with the Internet revolution that started in late 90s. Similar to the early days of Internet revolution, Blockchain has lot of useless attempts of me-too players solving a meaningless problem. The important thing to understand is what is the core problem and can block-chain really help at all. 80% efforts should be allocated to validating the […]

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API Economy: Why Every Tech Company needs an API Strategy

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Businesses run a variety of applications, each containing and holding data vital to the needs of an organization. These applications cannot operate in isolation and eventually; there is a need to integrate them with various other applications. This is primarily driven by complex business needs, which call for information and resources, to be shared across the boundaries of these applications. This interconnection and overlap of business applications and the information sharing across boundaries of application has led to an emergence of Application Programming Interfaces (APIs), which encapsulate and hide the details of one application from another and enable them to share data and information with the surrounding applications. This leads to better insights into data and showing the linkages with […]

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Future of Fintech: Beyond 2015

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  Fintech will continue to grow and stay in headlines, but it will be far from the full disruption. I do not see a Google or Facebook alike company emerging in Fintech in this decade. It will continue to be highly fragmented with various small-ish leaders driving the disruptions. Higher VC capital getting allocated to Fintech shall lead to some key leaders emerge by the end of this decade. Payments shall continue the fragmentation for now, with Paypal, Apple Pay, Banks, and various other smaller localized payment initiatives gaining traction. But it remains to be seen whether mobile, a new device (like square), or what else becomes the payment mantra of the future. Bitcoin shall face continue to face the regulatory […]

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Role of Technology in the Growth of Indian Financial Markets

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Indian financial markets have seen a major growth in the current decade in terms of technological advancements. This has enabled growth in algo trading volumes, leading to Indian exchanges featuring in the world’s largest exchanges by volumes. Technology has helped in – faster dissemination of market data and other relevant information by exchanges and trading participants – capturing and consolidation of market data from various exchanges and other sources of relevant information – making complex calculations on live and historic data, leading to trade decisions – trading and managing risk – lowering the latency and cost of trading – various post-trade processes   The exchanges started offering co-location to its members, which means that member servers can be hosted in […]

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Social Benefits of HFT and Algo Trading: Regulators should Embrace them

Posted on 1 CommentPosted in Finance, Trading

The tremendous growth in financial trading volumes in the last couple of decades has been made possible only with the use of technology. Technology has helped in – automating the dissemination of market data and other relevant information by exchanges and trading participants – capturing and consolidation of market data from various exchanges and other sources of relevant information – making complex calculations on live and historic data, leading to trade decisions – trading and managing risk – lowering the latency and cost of trading – various post-trade processes Technology is heavily and generally efficiently used by brokers (providing various retail and institutional investors access to financial markets), high frequency traders (who trade in huge volumes aggregating small profits in […]

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Open Source Technology for Financial Services

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    Financial Services play an important role in the countries’ and their economies’ functioning. Following the credit crisis (2008), and its various consequences (de-leveraging, lesser sophisticated financial products, shift towards increased regulation and transparency, reduced transaction volumes and margins, etc.) have lead to a massive shrinking of the financial services market size. This has led to a large down-sizing amongst the key participants including brokers, investment banks, exchanges, technology vendors, institutional investors (funds), etc. With the above mentioned business scenario in mind, and the fact that all these participants need technology for automation, growth and even sustenance of their  business, do we need every participant (10,000s of brokers,  100s of exchanges, 1000s of technology vendors, 100s of regulators, 100,000s […]

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The Future of Capital Markets

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Financial trading has grown from manual to electronic to automated with the use of algorithms in the last few decades. The increased adoption of technology will lead to disruptive trends in the current decade and drive exponential growth in newer business segments created within the capital markets (like additional liquidity that was generated by Algo/HFT players in the last few years) . We will possibly witness some of the following trends,     Open Source Technology Platforms  Given the fact that fundamentally most technology platforms within capital markets do very similar things (access information, manage trades and risk, comply with regulation, etc.), there could be a significant growth potential in the market to collaborate constructively.  They can leverage off latest […]

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Dark Pools

Posted on Leave a commentPosted in Trading

Financial exchanges are the market places where buyers and sellers of financial securities trade (buy and sell). The exchanges have become automated and electronic over time leading to rise in trading volumes. The exchanges do three main things, 1. Match trades – i.e. create order book per financial security (with bids and offers of all buyers and sellers) and match trades when the trading conditions (financial security, price, quantity etc. is matched) 2. Distribute market data – send out the market prices and order books of all financial securities to all its members (brokers) in the market 3. Surveillance- Just ensure orderly market behaviour and meet all the regulatory requirements   Whenever an investor sends their trade in the market, […]

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Electronic trading

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Trading process has evolved over time. An individual or an institution needs to trade through a broker who is a member of the exchange. Couple of decades ago, here is how the trading workflow looked. The client would physically go to the broker’s office, or call the broker to know the estimate price of a financial security. The broker would get its representative in the stock exchange to inquire and / or execute the trade in on the exchange’s trading floor.   The trading order / message from the client to the broker and from the broker to the exchange was transmitted physically earlier on, and telephonically over time. The exchange was matching orders through open outcry markets  shown in an […]

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Algo Trading: The 1-O-1

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Electronic trading in the last decade has laid the foundation for increased use of technology in the financial markets. If a trader’s mind can be coded into an algorithm (step by step procedure used for calculations and decision making), we can automate a lot of what the trader does. And using an algorithm , the trading can be more disciplined, faster and can process lots of complex data. Algorithmic trading means an algorithm decides when to buy or sell a financial security at which price, and how will the order be executed and risk managed. This helps replace mundane tasks a trader was doing, and even leading to some complex data processing that an algorithm (with the use of computing […]

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Basics of Financial Trading

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In finance, trade is typically an exchange of a financial security (share, bond, etc.) with cash. (To understand more around how financial securities are created by discounting cash-flows, please read more on securitisation at the following link www.kunalonfintech.com/securitisation-1-o-1/) Trading financial securities has been a genuine profession for at least a few centuries. Broadly , trading can be classified into:   Speculation One may buy a security in speculation that in future its prices will go up and then the person can make money by selling it at a higher price. Most of the trading in the financial markets is driven by speculators. This can be further classified into 2 categories, – Fundamental You may chose to buy or sell a […]

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