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Bitcoin Means Business

 

Bitcoin has not yet graduated from the niche market to mainstream currency. However, with the increasing digitalization taking place in the currency exchange process, Bitcoin has successfully grabbed the public eye, which has increased its reach across the globe.

Fundamentally, Bitcoin operates on the premise of scarcity. One can purchase Bitcoins online through a process called ‘mining’ or via various cryptocurrency portals. Bitcoin-mining, however, favors the fastest machines, so users prefer to buy Bitcoin by using Bitcoin ASIC, which is a chip specifically designed for this purpose.

Growing curve

As the network of the Bitcoin market grows bigger, competition for buying becomes tougher. The system is designed in such a way that the virtual currency will never exceed 21 million – currently, 17 million Bitcoins are in circulation. With the rise in its market value and also the limits of scarcity, there is a constant demand for upgraded systems and advanced techniques.

Meanwhile, governments worldwide are avoiding the usage of Bitcoins in the mainstream market due to the cryptocurrency’s reliance on anonymous payments and purchases. One can make payments online without using a formal name or providing other vital information like a bank account or an ID, which could lead to an increase in dark web crimes like hiring assassins, purchasing illegal weapons or narcotics, money laundering, trafficking and more.

Following the recent withdrawal from the market by China, which accounted for almost a quarter of Bitcoin trading, there was a steep fall in its network. Citing cryptocurrencies’ linkage with web crimes, the governments of countries like China are still skeptical about adopting this system.

Why is this futile? Massive transactions conducted using Bitcoins cannot be stopped or frozen by governmental authorities since there are no bank accounts involved.

Chinese authorities fear that the increasing network of Bitcoin can spell financial trouble for the banks in future. Hence, China has banned such exchanges and trading practices.

 

Impact on India

With the recent advent of Crowdfunding, Bitcoin, FinTech-based industries and Blockchain technologies, India has taken steps towards becoming a digitalized nation. The system has also been hailed by major investors. R. Gandhi, Deputy Governor at the Reserve Bank Of India, recently addressed a gathering where he stated that these digital currencies are still in their nascent stage but will one day become an established part of the exchange module.

As for now, Bitcoins have a long way to go before they are adopted by a majority of the Indian population.

A government-authorized grievance cell or a fixed framework for such new concepts keeps this virtual currency under surveillance. These tend to pose financial and security risks, so national authorities have to be cautious at all times.

Any perpetrator of crime has to be held accountable under stringent laws that need to be formulated vis-à-vis Bitcoins and other cryptocurrencies.

Until the time comes when a majority of the people gains more confidence in these currencies, authorities need to remain vigilant at all times. Crime fighting must be a top priority for all government regulators and the community, but that should not stand in the way of innovation.

Should Bitcoin Be Legal?

Ever since the conception of Bitcoin in 2008, its legality has been hotly debated. It’s still common to hear Bitcoin and other cryptocurrencies described as “criminal money” by people who have heard about its use on the dark web, and those claims are, indeed, legitimate.

That being the case, it would be dishonest to argue that Bitcoin doesn’t have some negative aspects when it comes to legality. However, it seems that this is intrinsically true of any technology. The question we should be asking is: do the costs outweigh the benefits?

Let’s get started with the element that enables most of Bitcoin’s features — the blockchain. For anybody who doesn’t know, Bitcoin’s blockchain is a public, digital ledger that chronologically records all of the transactions made in Bitcoin. It is built using cryptographic algorithms such that new Bitcoins can be mined (i.e. created) and transactions can be verified without involving a central authority, which is why you’ll often hear cryptocurrencies referred to as “decentralized.”

The blockchain enables pseudo-anonymous peer-to-peer (P2P) transactions. In other words, people can send and receive Bitcoin without involving a third-party or having to prove their identity first. This makes it quick and easy to use for criminals, which is why Bitcoin developed its reputation as “criminal money.” However, transactions are not fully anonymous because the blockchain is a permanent public record of every transaction that has ever occurred with Bitcoin, and so it is possible to analyze the blockchain and to use other information in order to link people’s identities to their Bitcoin wallets and thus to unlock their entire transaction history.

One other drawback of decentralization that can be used to argue against the legality of Bitcoin is that not having a central authority also means that there isn’t a way to artificially stabilize the Bitcoin market in the way that governments are able to stabilize fiat currencies. That leads to extreme levels of volatility and risk for investors, and so it’s possible to argue that governments should make Bitcoin illegal to protect citizens from potentially losing a lot of money.

So the case for Bitcoin prohibition centers around those two issues — criminal use and protecting investors from financial losses. Now let’s look at the positives of Bitcoin and decide if they outweigh the negatives.

Because the creation of new Bitcoins is determined by an algorithm, it cannot be counterfeited. Moreover, there is no possibility for a central bank or government to create hyperinflation of the currency such as what happened in Zimbabwe and, more recently, Venezuela. (https://www.economist.com/news/americas/21695934-venezuela-today-looks-zimbabwe-15-years-ago-spot-difference)

And while the fact that anybody with an internet connection can use Bitcoin makes it popular for criminals, it also makes it a censorship resistant way for people to achieve financial independence in the face of political uncertainty. Not only that, the public ledger provides an alternative to the corruption that might otherwise exist within corporations, banks, and governments.

Finally, there’s the bright side to all the Bitcoin hype and the financial risk that many investors are taking on because of it. That is, the success of Bitcoin and other cryptocurrencies generates strong interest in the technology which promises to drive further innovation that makes our civilization run more fairly and efficiently.

There’s no denying that Bitcoin isn’t perfect. As with any nascent technological or commercial advancement, Bitcoin must be accompanied by smart regulatory oversight that doesn’t stand in the way of innovation. Consumers, businesses, governments, and law enforcement will have to adjust and evolve as the impact of cryptocurrencies spreads throughout society, just as they have done with the internet itself.

There will surely be growing pains. But to render a promising advancement like this unlawful would be shortsighted and unwise. Instead, let’s work together to make the impact of Bitcoin and all cryptocurrencies as positive as it can be.

 

RKN Global Founder Ronald K. Noble on Not All in the World is Corrupt. . .

Not all in the world is corrupt.  This message bears repeating, especially for those involved in understanding and battling corruption, for whom corruption would seem omnipresent and no man or woman exempt.   This contrary reminder comes in the form of a twenty-two year old English man named Marcus Hutchins, whose quick thinking helped avert a global computer meltdown from a massive and ambitious world-wide hacking attack.  Mr. Hutchins inspires confidence not only because of the actions he took, but because of his dedication of reward money he was offered (after the fact) to charity.

Ronald K. Noble, RKN Global’s founder, lauds Marcus Hutchins for his grace, honesty and magnanimity.

The cyber attack, known as WannaCry, struck over 150 countries with ransomware.  Ransomware, once it infects a target computer, locks the computer—or files– until the victim pays a ransom.  Everyone from individuals to businesses to governments is fair game– including hospitals and health care systems. 

At this point, British computer expert Marcus Hutchins entered the story.  He discovered a web address buried in the malware’s code as a fail safe, and discovered that the web address was not registered.  He promptly purchased the web address for a little over $10, and was able to redirect the malware and help stop the attack.

When he was awarded a $10,000 reward by a hacker group called HackerOne for having disabled the attack, Hutchins announced, under his @MalwareTechBlog Twitter handle, that he would split the money between charities and purchasing books for students who couldn’t afford them.

RKN Global’s founder, Ronald K. Noble, notes that sometimes the crime and corruption of some can in fact highlight the honesty and goodness of others by their response.

Indeed, the very group that gave Hutchins the award, HackerOne, is an example of people working to fight corruption.  It is a group of hackers who offer “bug bounties” to computer experts who beat criminals to the punch in finding security weaknesses and flaws, thus preventing the criminals from exploiting them.  In 2016, HackerOne gave out $7 million in awards.

In light of Mr. Hutchins’ efforts and attitudes, it is distressing that he became hounded by reporters approaching his home and invading his privacy.  He deserves the right to privacy and not be harassed as an additional “reward” for his good deeds.

Ronald K. Noble, RKN Global Founder, on Spoiled Rotten: Corruption in the Meat Industry

The people of Brazil have been victims far too long of corruption in various sectors, several of which have been examined here on this site previously.  As the third anniversary of the infamous “Operation Car Wash” came, the country’s citizens became privy to a new scandal, this one involving the largest meat-packing company in the world, JBS SA.

Ronald K. Noble, founder of RKN Global, draws attention to this case as a very clear, direct example of how corruption can harm ordinary citizens. JBS SA, and another company, BRF SA, which is one of the largest exporters of chicken in the world, are among many that face allegations of corruption that affects the quality of the meat they produce and distribute and potentially causes direct harm to consumers.

JBS and BRF are two of dozens of firms in the meat business in Brazil who face these allegations that they bribed food sanitation inspectors and officials in order to get approval for the sale of meat that did not meet the requisite health standards for consumption.  Some processed meats allegedly contained pig heads and other parts of the animals that were not fitting for the product, and some products were allegedly mixed with cardboard, and even treated with acid in order to cover up the smell of contaminated or rotten meat.  Other allegations include the re-wrapping of expired meat into new packages and the shipment for sale of salmonella-infected meat.   Most of the meat was apparently for domestic consumption, though some of it may have been exported as well.

Brazil is a global powerhouse in the meat industry, second in the world in the production of beef and poultry, and the biggest exporter of chicken in the world.  These corruption allegations thus have the potential to create an earthquake in the global meat business.

Additionally, some of the companies in question are also allegedly involved in other corruption schemes involving loans and pension funds.

RKN Global’s founder, Ronald Noble, notes sadly that Brazilians have had to endure so many revelations of corruption.  The good news is that since corruption thrives in secrecy, the public nature of these revelations will ultimately benefit the good people of Brazil, the primary victims of this alleged corruption.  The companies involved deny the allegations, and they do deserve due process.  Hopefully, if the allegations in this scandal do prove true, it will ultimately mean a more honest meat industry and a safer meat supply for Brazilians and for customers everywhere.

RKN Global on Corruption by Local Public Officials

The mayor of Paterson, New Jersey was recently accused of public corruption charges, allegedly involving a bid to provide members of his family with free labor by getting tax payers to pay the workers’ salaries.1 The charges allege that Mayor Jose Torres and three other staff members hired municipal employees to work in a warehouse that had been leased by the mayor’s family.2

Normally, hiring someone to work for family doesn’t sound like such a big problem. But in this case, the arrangement was allegedly carried out at the expense of the tax payers. These alleged acts included conspiring to pay workers for overtime, while exploiting public funds for the benefit of the mayor’s family. The company which was set to benefit from the free labor was known as “Quality Beer”, located in the city of Paterson.3

RKN Global founder, Ronald K. Noble, notes that the use of taxpayer money needs to be tightly and transparently controlled so the public’s money is only ever used in an appropriate way.

What is corruption?

Corruption often involves the abuse of power for private gain.4  It can have many consequences, costing people their money, freedom, and in some cases their lives.5

In addition to the charges being brought against the mayor, three individuals who worked with him were also charged with the same crimes. The mayor, along with Joseph Mania, Imad Mowaswes, and Timothy Hanlon, have face six charges in total:

  • Theft by unlawful taking or disposition
  • Falsifying or tampering with public records
  • Pattern of official misconduct
  • Conspiracy
  • Falsifying or tampering with records
  • Official misconduct7

Undermining public trust

The mayor’s case highlights issue of a public official misusing a power that was entrusted to him for the public good. 

The trust that the public had put in their mayor seems to have been undermined by his alleged behavior. In 2002, Mayor Torres ran an anti-corruption campaign against Martin G. Barnes, who had served as mayor of the city before Torres and had previously been charged with extortion.8 Mayor Torres has in fact been a part of another lawsuit which involved city employees reportedly being paid overtime for carrying out work in his home.9 It seems that the most recent allegations  that lawsuit share a common theme: Using public funds to achieve private gains.10

The current charges allege that carpentry, electrical, and painting work had been carried out by municipal employees in 2014 and 2015 at the taxpayers’ expense.11 The warehouse, which is owned by the mayor’s daughter and nephew, is thought to have been used as a distribution facility as part of their wholesale liquor company.12

How to protect yourself from corruption

While we as individuals may not be able to protect ourselves from corruption, whether it’s being carried out by those who work in our government, or the businesses we work for, we can refuse to partake in activities that may not be legal.14 It is important to report anyone engaged in corrupt activity.15

Mayor Torres and his three city employees face up to 10 years in prison for the charges.16  The mayor continues to protest his innocence and says that the charges have left him “extremely disappointed and surprised.”17

Ronald K. Noble, founder of RKN Global urges governments and businesses to work together to combat corruption and foster a culture of integrity.

Corruption affects the lives of millions—even billions– of people all around the globe. While it may be impossible for governments and authorities to fight corruption in “one big sweep”, working on a case by case basis can help.18

RKN Global on Public Perception of Corruption

A recent survey of perceived corruption in Asia does not offer much good news.

Transparency International, an anti-corruption watchdog, surveyed almost 22,000 people from sixteen different countries in Asia over a year and a half, focusing on the prevalence of corruption.  The vast majority of respondents painted a picture of corruption which is widespread, even endemic, in countries throughout Asia.

RKN Global’s founder, Ronald Noble, observes that corruption is a natural consequence of human nature, and that various factors in any given social structure or society are at play in making it more or less prevalent.  One crucial factor is the prevalence of corruption that already exists.  The more likely a person thinks he or she is surrounded by a culture of corruption, the more easily he or she will in fact engage in corruption.

In light of this, the study’s findings are disturbing, because they indicate both that corruption is widespread in Asia, but also that people perceive corruption as being widespread.  This, in fact, makes it more difficult to eradicate corruption.

Among the surprising results, the study found that almost 70 percent of respondents from India had paid bribes in order to access fundamental public services like elementary education and health services in the previous year.  The survey extrapolated from this and other data that in Asia, more than 900 million people had paid such bribes in the previous year.  This is an extraordinary number:  Put otherwise, it essentially says that in Asia alone, 16% of the world’s entire adult population paid bribes in order to access services that are widely considered a fundamental human right.

Along similar lines, almost one third of the survey respondents admitted to bribing a police officer in the previous year, twenty-two percent had bribes for public school, and eighteen percent paid to be able to get medical treatment in a public hospital.

High-profile government scandals, though certainly not unique to Asia, undoubtedly contributed to the perception of widespread corruption.  Hong Kong’s former mayor, Donald Tsang, was recently handed a prison sentence, and South Korea’s president was impeached due to a corruption scandal involving her sharing classified information with an adviser without security clearance, who used her proximity to the president for corrupt personal enrichment and also entangled the leader of the corporate giant, Samsung.

Ronald Noble, RKN Global’s founder, agrees with Transparency International that enhanced government transparency and a zero-tolerance policy for corruption can help reduce corruption.   Other important measures include education and the provision of options for safe and easy reporting of corruption, in order to raise the price of engaging in corruption and building a culture which is more supportive of honest behavior.