Connect with us

Business

NFTS: A BRIGHT FUTURE IN THE CORPORATE SPHERE

Published

on

Yves Renno, Head of Trading at Wirex

 

Blockchain technology is revolutionizing the structure and management of communities and businesses worldwide. This statement might seem excessive at first, but it should not be taken lightly. Between the unconditional cryptocurrency believers and the most severe critics, including Warren Buffet or Bill Gates, it is sometimes difficult to pick a side, but it could be detrimental not to.

The 1900s industrial revolution led businesses to adopt the latest productive techniques and to seek what Alfred DuPont Chandler called ‘efficiency through coordination’. But the coordination was conceived at a managerial level. The managerial class rightly took most credit for the conception of the economic fabric of nations as we know it: activities were integrated and organized into capital-efficient value chains. This revolution was not perfect: ecologists would argue that it was a failure because of its environmental impact a century later.

 

Non-Fungible Tokens (NFT) and the Environmental Debate

There is good and bad in every revolution. But the blockchain revolution has one clear benefit: its capacity to create or adapt fast for the benefit of inclusive communities. The first NFT was created five years after the Bitcoin network went live.

NFTs are digital certificates of authenticity and ownership that are based mostly on the Ethereum network and implemented with an ERC-721 smart contract standard. As such, an NFT stores unique information in its metadata and handles the essential actions of ownership transfer and verification. They can solve the difficult challenge of digital ownership for artists and collectors. However, their potential drawback is their hurtful environmental impact. This debate is keeping many from engaging with NFTs.

In fact, the environmental debate is not NFT-related: it is specifically related to the mechanics that govern the blockchain. Bitcoin and Ethereum are governed by a Proof of Work (PoW) protocol, a consensus mechanism designed for ‘miners’ to produce blocks and confirm transactions on the chain by solving complex, power-intensive cryptographic puzzles. Although this is far from energy efficient, Ethereum, the largest NFT issuer, is addressing this by upgrading its PoW protocol to the environmentally friendly Proof of Stake (PoS) protocol in 2022.

The PoS protocol entrusts the block production and transaction validation to those who put their cryptocurrencies at stake. In other words, stakeholders align their interest to the interest of the blockchain, and by extension, to the interest of the community.  , a co-founder of the Ethereum blockchain, is projecting the new protocol to use only 1% of the energy currently consumed. The success of the upgrade would not only close the environmental debate, but mostly demonstrate the dynamic nature of the technology, and the efficiency of a driven, consensual community.

 

Blockchain Technology in the Corporate World

Like a business, a blockchain is as good as its people. A successful business knows how to incentivize its people. It aligns the employees’ interest to the interest of the company through the distribution of stock-options. An independent board is elected by the shareholders to represent them, and debtholders have claims on the company’s debt that are specified by contract. The corporate structure and governance that we have just described could be captured by a digital protocol.

The blockchain pioneers found inspiration in the corporate world. They used their idealistic vision of a transparent community-centric corporation to create the most successful public blockchains. In turn, the corporate world is now using the product of this vision to bring efficiency and trust to their own activities. The blockchain technology is on track to be the new economic fabric of our time.

 

Potential Business Use of NFTs

The use of NFTs for digital rights ownership in the art sector is now a trending topic: NFTs can handle the sales, royalties, and distribution of a music track (e.g. EulerBeats). However, NFTs can also be designed to handle the ownership of a company’s shares, or the claims on a company’s debt.

On the debt side, Telos for instance designed the ‘T-Bond’ NFTs, which act like treasury bonds. Also, on 5th May, the European Investment Bank (EIB) announced their ‘first ever digital issuance on a public blockchain. In its statement, the EIB underlined the benefits of digitalisation that are all attributable to NFTs: “a reduction of intermediaries and fixed costs, better market transparency through an increased capacity to see trading flows and identity asset owners, as well as a much faster settlement speed.”

On the equity side, an NFT can represent a ‘nominative’ share in the ownership of the company. However, ERC-721 NFTs are by construction not fungible. If every Tesla share were represented by a unique NFT, trying to swap one share for another would be difficult – there would be no digital constraint to ensure that the price of two NFT shares is the same. The solution was to create the ERC-1155 standard three years ago. An ERC-1155 smart contract can hold many tokens with similar properties, including their market price. Therefore, a digital version of the Tesla shares could be governed by an ERC-1155 smart contract, and within this contract, two Tesla share NFTs would be exchangeable, with their owners still identified.

Despite these opportunities, Binance recently created stock tokens where each token represents a share in a stock corporation. Unfortunately, in this case, the tokens were issued with the ERC-20 standard, meaning that, stock ownership rights are held by a third-party. Had the tokens been properly issued as NFTs within an ERC-1155 smart token, the owner could have claimed their voting rights without the intervention of any third-party.

The latest applications of the NFT technology are ground-breaking. But the fast evolution of the technology is truly the big picture. It is likely that corporatism as we know it will slowly disappear several decades from now, handing over the stage to more efficient, driven, and inclusive communities.

 

Business

Addressing the ongoing global pilot shortage issue

Published

on

By

By Bhanu Choudhrie, Founder of Alpha Aviation

 

The Covid-19 pandemic brought the aviation industry to a halt, causing vast market disruption and putting the future of many key players at risk. Now, just as airlines were getting back on track, staffing shortages are causing new complications – and part of this issue is a growing pilot recruitment problem.

So, where does the sector go from here and what steps need to be taken to mitigate pilot shortages?

The root of the issue

Even before the pandemic, there was a global shortage of pilots, with people flying more due to a rise in more affordable airlines and falling fuel costs. In fact, the 2020-2029 CAE Pilot Demand Outlook suggested that the global civil aviation industry will require more than 260,000 pilots by the end of the decade.

However, when demand for air travel dropped across the globe, airlines were quick to offer early retirement packages to reduce immediate outgoings. Whilst this approach helped some airlines stay afloat during the slowdown, a wave of early retirements has left them on the back foot.

Bhanu Choudhrie

Now demand is coming back much faster than expected. In the US alone, the Bureau of Labor Statistics is expecting 14,500 openings for commercial and airline pilots each year until 2030, and this imbalance is already having a detrimental impact on the aviation industry. With flights being cancelled, travellers left stranded, and some airports losing service altogether, it is crucial that the larger aviation ecosystem comes together to work out a solution to effectively address this pilot shortage crisis, so that it can once again meet capacity demands.

Re-directing efforts to rebuild pilot pools

With vast swathes of pilots put on furlough during the pandemic – and therefore unable to maintain their license requirements, the damage isn’t just in the ongoing pilot shortage, but also in the decades of experience the industry has lost. In response to this narrative, last month a Senator in the US introduced legislation to raise the mandatory retirement age of commercial airline pilots from 65 to 67 – and the US are not alone in this shift. Last week, Air India announced that it will be raising their retirement age for pilots from 58 to 65. Now we need to see other countries and airlines follow suit to help retain the talent that can help guide and mentor the next generation of cadets.

Moreover, training schools and airlines will need to work together to challenge industry stereotypes and empower more women to pursue a career in the cockpit. Currently, just 5.1 per cent of the world’s commercial pilots are women. This means that for every twenty flights taken, only one of them will be piloted by a woman. Unfortunately, this gender imbalance has become a long-established trend within the aviation industry and, stereotypically, pursuing a career as a pilot has been considered a male occupation, with women type cast to cabin crew instead. Therefore, if we are to make proactive strides towards addressing the current pilot shortfall, finding a way to shift that percentage is essential.

The cost of training to be a pilot is also a key barrier the industry needs to address, and at pace. On average, the cost to train as an air transport pilot can exceed $100,000 – making a career in the cockpit unattainable to many. One way for the industry to help narrow the gap and mitigate what is often seen as a considerable financial risk, is to make bursaries more accessible. There are already a number of programmes in place, to support both aspiring pilots and those who need to maintain their licenses, however, now the industry needs to work on championing and expanding these support systems.

The industry also needs to start to embrace alternative approaches to alleviate this substantial outlay. For example, at Alpha Aviation, we have started running the the Multi-Crew Pilot License (MPL). This is a shorter, more simulator-focused way of training that not only opens up opportunities for prospective cadets from less privileged backgrounds, but also offers a more flexible training programme and quicker route to qualification – reducing the financial expenses for cadets to cover.

Technological innovations can also play a crucial role in advancing the training process to help support a consistent employee base. For example, e-learning programmes can enable airlines to expand cadet class sizes. No longer restricted by the physical capacity of training centres, e-learning programmes have the potential to significantly open up access to becoming an aviator and will ensure airlines can recruit the best talent, irrespective of locality. In addition to this, pilots still need to clock up over 1,500 flying hours to receive their ATP certificate. Therefore, investing in simulator training facilities is now pivotal in supporting cadets to keep on top of the legal requirements and improve their skills set at a significantly quicker pace, alongside supporting existing pilots to retrain on new aircrafts when necessary.

Looking ahead

The pressure on the aviation industry shows no signs of abating any time soon. Therefore, while it is great to see passenger numbers returning to near pre-pandemic levels, the industry needs to take this as a significant wakeup call and re-assess its pilot recruitment process.

At the end of the day, there is no quick fix – training top of their class pilots takes time, investment and enthusiasm. However, addressing the ongoing chaos and driving the sector out of this turbulent period is essential to the economic revival of the nation. Therefore, decisive action is needed – and it is needed now.

Continue Reading

Business

How exporters can mitigate risks and operate smoothly in stormy, post-Brexit waters

Published

on

By

By Morgan Terigi is Co-Founder and CEO of Incomlend

 

The past few years have presented a series of hurdles for companies whose operations rely heavily on international trade.

Brexit brought with it a storm of bureaucratic complexities that upended long-standing trade routes and routines, impacting not only those in the United Kingdom and Europe but also businesses across the globe. This on its own would be enough to cause logistical headaches for even the most senior of operators, but the emergence of the COVID-19 crisis, the subsequent worldwide lockdowns, and now the Russian invasion of Ukraine has created an environment where running a business smoothly becomes an altogether more difficult task.

According to information from Eurostat, between January 2020 and December 2021, EU imports coming from the United Kingdom fell by 16.4 percent and at the same time, EU exports to the United Kingdom decreased by 2.1 percent. Taking a sector such as the fishing industry, which exports much of its goods to the EU (113 thousand metric tons in 2019), trade has been impacted by both additional costs and delays due to red tape which can be a nightmare.

Analysis by the National Federation of Fishermen’s Organisations the bulk of the UK fishing fleet is set to lose £64 million or more per year, with a total loss in excess of £300 million by 2026, due to Brexit. This is just an example of one of the many industries which have suffered post-Brexit, and for many, it has only gotten worse.

Morgan Terigi

The spread of COVID-19 quickly added another monumental hurdle to international trade. According to statistics on UK-EU trade from the House of Commons Library, the first lockdowns in the UK and EU, which occurred in March 2020 saw the value of UK exports to the EU drop by 17 percent from the first quarter to the 2nd quarter of 2020. Imports from the EU to the UK fell by 26 percent over this same period and there was an 18 percent drop in UK exports between Q4 2020 and Q1 2021 and imports from the EU fell by 25 percent over the same period.

Moving past COVID-19, the Russian invasion of Ukraine and the subsequent economic sanctions on trade and imports of goods from Russia would stand as the next major hurdle to the UK, the EU and the wider world.

According to an analysis of the impact of economic sanctions of UK trade in goods with Russia, the imports of goods from Russia dropped to £33 million in June 2022 – the lowest level since records began. There have also been no imports of fuels from Russia in June 2022, another first, while exports to Russia dropped by £168 million (66.9percent ) compared with the monthly average for the 12 months to February 2022.

The combination of Brexit, COVID-19 and the war has caused significant logistic supply-chain related issues not just for companies in the UK and Europe, but across the entire world.

So what can exporters do in order to minimise risks to their business operations?

It is important for exporters to diversify in order to survive. While imports from the EU to the UK took a massive hit due to Brexit, imports from other non-EU countries increased by 30.1 percent. At the same time, EU exports to other non-EU countries increased by 6.1 percent.

When the flow of raw materials from one country or region becomes problematic or non-cost-effective, it is in a business’s best interest to source these raw materials elsewhere. Having this variety of sources means the production of products or services can continue despite whatever problems may arise.

This allows a business to operate more efficiently and securely. However, once a business starts venturing into new supply lines, a certain element of risk comes into play.

Long-standing relationships provide a comfortable routine and while diversifying these routes can provide a security blanket, new issues with new suppliers may arise.

To survive in such uncertain times, exporters must explore new markets, and SMEs must be nimble in regards to where they get their products, all of which increase risks for those trading.

These new risks can be costly to SMEs, particularly those whose cash flow may not be enough to survive a major hurdle or hiccup. And with SMEs making up around 90 percent of businesses and over 50 percent of employment worldwide, their role in the economy can not be overstated.

This is where invoice financing firms step in. They are able to provide funding to these companies in order to cover the trade-finance gap from which they are currently suffering.

These businesses can provide SMEs extend credit lines in a more flexible manner than banks and traditional lenders can achieve.

This means an SME which is under pressure can rely on this credit to cover overheads such as paying wages and suppliers, allowing them to keep operating smoothly, even if unexpected problems arise.

An example of this would be a factory in one region, which provides car parts for a company in another region. On the first of the month, this firm ships out the completed order of car parts for an agreed fee of €150,000. However, the payment for this may not come in for a number of weeks – leaving the factory owner in a tough situation until that payment comes in. The invoice trading firm steps in there, as a middleman. He pays the factory owner, meaning said owner can pay his workers wages, and pay for the next load of raw materials. Once the money comes through from the buyer, the invoice trading firm then receives their money back, plus interest and the whole supply chain continues to operate smoothly.

As the geopolitical climate continues to shift and change, new challenges and hurdles are sure to arise. Fintech, in particular, invoice financing firms will play a decisive role in the future of trade. The flexible nature in which they can provide financing see that wages are paid, materials are sourced, shelves are stocked and businesses stay open.

Continue Reading

Magazine

Trending

Finance2 days ago

Mini-Budget 2022:

Tax giveaway is a boost for business, but will it drive growth or fuel inflation?   Chancellor Kwasi Kwarteng has...

Finance2 days ago

A zero trust environment is critical for financial services

Boris Bialek, Managing Director of Industry Solutions at MongoDB Not long ago security professionals were still focused on protecting their...

Banking2 days ago

Digital Banking – a hedge against uncertainty?

Ankit Shah, Head of Digital Banking, Apex Group   The story of the 2020’s thus far is one of crisis....

News3 days ago

Union Bank of India goes live with RuPay Credit Card on UPI with Kiya.ai as a technology partner

Nitesh Ranjan, ED Union Bank of India with Rajesh Mirjankar, Managing Director & CEO, Kiya.ai at the launch   Kiya.ai,...

Finance3 days ago

Anyone Can Become an R&D Tax Expert with the Right Foundations

Ian Cashin is a Customer Success Manager at Fintech company and R&D tax software provider WhisperClaims   For accounting firms,...

Business3 days ago

Addressing the ongoing global pilot shortage issue

By Bhanu Choudhrie, Founder of Alpha Aviation   The Covid-19 pandemic brought the aviation industry to a halt, causing vast...

Business3 days ago

How exporters can mitigate risks and operate smoothly in stormy, post-Brexit waters

By Morgan Terigi is Co-Founder and CEO of Incomlend   The past few years have presented a series of hurdles...

Business3 days ago

From employees to customers, workforce management can benefit the entire banking ecosystem

Michael Cupps, SVP of Marketing of ActiveOps explores the significant impact workforce management can have on the employees and customers...

Business4 days ago

Redefining the human touch with digital transformation

Simon Kearsley, CEO of bluQube   It may not be a new phrase, but digital transformation is still inducing anxiety...

Finance7 days ago

CFOs – the forgotten ally in the fight against ransomware

Justin Vaughan-Brown, VP Market Insight at Deep Instinct   Ransomware attacks have nearly doubled in the past couple of years....

Technology1 week ago

7 cost benefits of cloud accounting software

By Paul Sparkes, Commercial Director of iplicit, an award-winning accounting software developer   Is your accounting software having a laugh...

Business1 week ago

How does Identity Access & Privileged Access Management help in PCI DSS Compliance?

Narendra Sahoo is a director of VISTA InfoSec. Introduction The Payment Card Industry Data Security Standard also commonly referred to...

Finance1 week ago

Listed private debt deserves a closer look from investors

By Michel Degosciu, Managing Partner, LPX AG Over the past few years, the private debt asset class is attracting serious...

Banking1 week ago

Security vs online payment convenience: which one is tipping the scales for customers?

 Chirag Patel, President of Digital Wallets at Paysafe.   While keeping their payment details safe is a top priority for...

Business1 week ago

The Tool and Tips to Truly Get Started with No-Code Development

Author: Chris Obdam, CEO of Betty Blocks   Throughout the legal industry, firms and in-house departments are leveraging legal tech...

That’s where Netcall’s Liberty Create came in. Create is a new breed of low-code software solution, built for both business users and professional developers That’s where Netcall’s Liberty Create came in. Create is a new breed of low-code software solution, built for both business users and professional developers
Business2 weeks ago

How ReFi Will Transform Finance

– by Ransu Salovaara, CEO of carbon platform Likvidi   Humanity faces a multitude of threats, many of which are...

Business2 weeks ago

THE NEXT WAVE OF FINTECH IS HERE

Much has been made of the ‘second generation’ fintech movement recently, but what have these businesses learned from those entering...

News2 weeks ago

UK leaves Europe trailing in its embrace of digital banking

People in the UK have embraced digital and online banking in a way that those across the rest of Europe...

Business2 weeks ago

The rise of automation and its impact on the CFO & CIO

By: Gert-Jan Wijman, VP Europe, Middle East and Africa at Celigo   On the back of the pandemic, organisations have...

News2 weeks ago

Managing fuel spend during unprecedented volatility

Attributed to Paul Holland, MD of UK Fleet, Allstar Business Solutions   With the price of fuel on everybody’s minds,...

Trending