A cryptocurrency (or cryptocurrency) is a digital asset designed to work as a medium of exchange using cryptography to secure transactions and to control the creation of additional units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
What is Bitcoin? How did it start?
The word “Bitcoin” was first seen in late November 2008 when Wei Dai wrote about “b-money”, which he described as “an anonymous, distributed electronic cash system”. The first Bitcoin specification and proof of concept were published in 2009 by an unknown individual under the pseudonym Satoshi Nakamoto. Then on January 3, 2009, Nakamoto released version 0.1 of the bitcoin software as open-source code. 21 million bitcoins have been mined so far out of the estimated maximum number of 21 million bitcoins that will ever exist in total. FinancialCentre Broker Dave Goldman explains that the production of bitcoin is a very complex and power-intensive process. So much so that it holds the power to make it experience an all-time low.
What is Mining
The process of spending computing power to process transactions, secure the network and keep everyone in the system synchronized together. It can be perceived as a group of miners who are competing with each other to solve a block (a set of transactions) by solving a mathematical puzzle before any other miner does.
The reward for mining is fixed and only equal to one gram of gold. This was done by design on purpose to ensure that there never will be more than 21 million bitcoins mined which prevents inflation. The difficulty of this task has increased as time goes on, meaning it takes more time/processing power (and thus cost) to mine 1 bitcoin now than it did in 2009!
Mining is a power-intensive process and this is why many people discourage its use. The power used by a single bitcoin transaction could supply a family home in Africa with electricity for more than 10 years and is enough to provide central heating and hot water for 9-10 average North American homes for one winter. It requires over 200 KWh of electricity just to process a block, which at the time of writing totals to about $20 worth of resources. As of November 2017, the bitcoin network’s total electricity consumption is estimated to be equivalent to that of the entire country of Ireland.
In Mr Goldman’s opinion, this is one downside of bitcoin that has caused it immense damage. In order to reduce the Carbon footprint, we can go for more efficient mining hardware or if possible by choosing a different cryptocurrency to invest in. Because many people don’t want to buy hardware, it usually means that they will join a “mining pool”. A mining pool allows them to combine their resources and receive some commission for doing so (all from fees that are paid per transaction). Since a lot of people do this it brings down the overall cost but still contributes proportionally towards the energy usage!
When we talk about the reaction of nations towards bitcoin and crypto, we always hear someone say that Brazil was the first to ban bitcoin. This is a lie that doesn’t hold any truth in it (like most of what we hear). In 2014, an administrative judge at Brazil’s tax agency declared that bitcoins and other cryptocurrencies should be considered as goods instead of assets or currencies. This meant that purchases with cryptocurrency were subject to taxes. However, no penalties were issued for non-compliance. At this time, Bitcoin trading volumes in Brazil already accounted for 10% of the global total, making it the second-largest market behind China but ahead of Japan. While crypto was being looked into seriously, there was no way they could overlook the environmental cons.
To put an end to the environmental damage that bitcoin is causing, Brazil has come up with its own Bitcoin ETF (BITH11). Hashdex Asset Management’s new ETF, BITH11, claims to be the country’s first “green” Bitcoin ETF. The new Brazilian ETF for carbon offsets aims to offset the emissions from Bitcoin mining. It is the second fund available in Brazil that allows you to invest in digital currency. Apart from this offering a few days ago, the first entirely Ethereum-based ETF was also approved in an attempt to work towards crypto that is less tough on the environment.
Time For Action
Mr Goldman firmly believes that now is the time that we start thinking along these lines globally because there is no way the crypto community will want to continue on a path that damages the environment. Whether that means choosing mining alternatives or buying and holding crypto, something needs to be done. It’s going to take a community-wide effort to reduce the damage that crypto is doing to the environment and until this happens, Bitcoin will be facing a lot of negative publicity. He said that Brazil should be appreciated globally for investing in the “real” issues.
The retail industry’s already challenging situation was made considerably more problematic by the coronavirus outbreak. The negative impacts of COVID-19 drastically affected the retail business, with some companies trying to boost their e-commerce operations and others electing to close their doors.
Despite significant transformations and significant challenges, some firms have profited as a result of the changes and are in the process of charting a new future for retail. FinancialCentre Broker reports 3 retail stocks that can benefit from firms like Amazon (NASDAQ: AMZN), BJ’s Wholesale (NYSE: BJ), and Alibaba Holdings Limited (NASDAQ: BABA) as they emerge from and move past the epidemic.
Amazon’s various businesses make it even more powerful. Amazon developed the cloud computing business, which until recently accounted for the majority of the company’s income. When it comes to increasing competition, these cloud revenues can carry the organization. Furthermore, during the previous 12 months, Amazon’s operating margin was 6.6 percent. Despite a 4% margin in its North American retail business and a 2% margin on overseas sales, Amazon Web Services 31% operational margin enabled huge profit rises throughout that time.
This structure explains why, despite a market capitalization of $1.7 trillion, the company continues to prepare for massive growth. Net sales increased by 44% year over year in the most recent quarter. In addition, net income increased 224 percent to $8.1 billion as operating expenditures increased at a slower rate than sales. In addition, the corporation received an extra $1.7 billion in other revenue from its equity interests, which resulted in additional profits.
These margins enabled the company to earn $26.4 billion in free cash flow last year, further improving its balance sheet. Amazon can comfortably handle its long-term debt of just under $31.9 billion with its current cash flow and more than $73 billion in liquidity.
While Amazon has a bright future, when the United States recovers from the pandemic, buyers may return to physical locations, slowing sales growth in the short term. This is most likely why the company did not guide beyond the current quarter. However, Amazon will succeed as long as it has a stable financial sheet and its e-commerce and cloud computing businesses are on a long-term positive trend.
BJ’s is a regional warehouse club based on the East Coast of the United States. Its 221 locations stand out by concentrating on a smaller (but more refined) selection of popular items. It also distinguishes itself by emphasizing fresh items and providing warehouse club pricing rather than bulk package sizes like Costco or Walmart’s Sam’s Club.
Moreover, its geographic footprint has great room for development, which it may now take advantage of owing to the epidemic. The increased sales stoked by the contagion helped revenue rise by 17% in 2020. In addition, as a result of decreased operational expense growth and decreased interest expenses, net income climbed by 12% over that time.
More importantly, the additional money may help BJ’s finances in the long run. Because BJ’s earned $676 million in free cash flow, a 276% increase over the previous year, the above interest expenses were reduced. BJ’s paid down $574 million in debt with a portion of this money, bringing their total debt to $1.1 billion. Consequently, BJclaims $319 million in shareholders’ equity, or the worth of the corporation, after liabilities are subtracted from assets. This increases from the $54 million in negative equity it had at the end of 2019.
Like many other retailers, BJ’s did not give projections for the future, and growth may be slowed in the near term when specific pre-pandemic spending patterns resurface. Nonetheless, BJ’s should establish new stores more quickly now that its debts have been reduced. In addition, a wider footprint gives BJ’s a handy alternative for more customers, which might contribute to faster revenue growth.
Alibaba is one of the most well-known retail-focused organizations on the market today. The modern empire of the company is based on its vast e-commerce activity. In addition, Alibaba is now active in cloud computing and other technological projects. So would it be wise for investors to purchase on the dip, even if BABA stock has been trading sideways this year?
Former Vice President (US) Al Gore, for one, appears to think so. To give you some context, his investment business, Generation Investment Management, recently quadrupled its position in Alibaba. The company also sold all of its Airbnb (NASDAQ: ABNB) stock at the same time. Alibaba, on the other hand, continues to invest in its cloud computing services.
Last week, the business announced ambitions to expand the compatibility of Apsara, its cloud operating system, to include more processing chips. Without a doubt, this would help it gain a competitive advantage in the field. So would you consider BABA stock to be a good investment right now, given all of this?
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.