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The US Commodity Futures Trading Commission (CFTC) has told certain bitcoin exchanges to provide extensive trading data to determine whether or not manipulation has distorted cryptocurrency markets, unnamed sources told The Wall Street Journal. Regulators opened the investigation after CME Group Inc. introduced bitcoin futures in December, according to the sources. The futures’ final values are … Continued

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This article originally appeared on Bitcoin Magazine.

• It is a time of great tech stagnation, in part due to the scandals that have rocked Silicon Valley over the last year. 
• Part of the stagnation, too, is that current technology is stalling out, and the next wave just isn't ready yet.
• After a decade-plus of the tech industry causing near-constant disruption and turmoil, the lull is offering the world a much-needed break to consider how technology is affecting society and to try to figure out what to do about it.
  

Apple's WWDC developer conference this week marked the conclusion of the period each year when some of the biggest technology companies lay out their agendas for the future of their platforms.  

Compared with past years, the message from Silicon Valley was far more muted this time around. Last year, for example, Facebook, Google, Microsoft, and Apple were all focused on the next big things in technology, each in its own way laying the foundation for the inevitable death of the smartphone.

This year, by contrast, the companies focused on important but decidedly less flashy topics including security, privacy, and their responsibility to their users and society.

There are a variety of reasons for the tech giants' reduced ambition. Facebook, Google, and Apple each spent much of the last 12 months in various states of crisis and are now trying to patch things up. Growth in the markets for the technology products that led to the rise of the current behemoths is slowing down to a crawl. And the next generation of technology gadgets and services isn't ready for prime time yet.

That may sound depressing and disappointing. After all, much of the excitement surrounding the tech industry stems from the bold visions of the future it often offers. But from where I'm standing, this lull is a good thing for the industry and the world.

Technologies under development right now could lead to some potentially terrifying changes. This boring period in the industry gives us the time and the attention to hold the tough conversations we need to have about where the industry and society are heading.

It's clear from the past year's scandals in the industry that those conversations are overdue. Because there's growing concern about the tech industry's role in society.

Facebook was caught up in the Cambridge Analytica scandal, where as many as 87 million people had their data used improperly, and faced continuing fallout over its role in distributing Russian propaganda during the 2016 election. Google and its YouTube service saw criticism over their role in spreading hoaxes and conspiracy theories. And Apple dealt with a storm of criticism over Batterygate, its belated admission that it slowed down some iPhones with older batteries without informing users.

The future is slowing down

This concern is coming amid a transition time for the industry.

The first few slides of Kleiner Perkins investor Mary Meeker's newest State of the Internet report tell you everything you need to know, which is that overall, the growth in many of the most important tech products and services is flat-lining. Global smartphone shipment growth? Almost precisely flat. Global internet user growth? Flattening out, with a relatively meager 12% year-over-year-growth.

Additionally, both the PC market and the tablet market are declining.

Oh, sure, there are some bright spots in tech. Meeker's report estimated that the installed base for the Amazon Echo line of smart speakers hit 30 million users by the end of 2017. Other technologies, including streaming video, smartwatches, and cryptocurrencies, are also growing in fits and starts.

But as big a number as it is, 30 million Echo users is a drop in the bucket when you compare it to the more than a billion devices in use running Apple's iOS software, and the more than two billion gadgets in use that run Google's Android.

Likewise, the total value of all the bitcoin in circulation — about $131 billion — sounds like a lot. But it's still less than a tenth of the US dollars in circulation in the form of coins and paper bills. And its less than one one-hundredth of the M2 money stock, a measurement of the amount US dollars in use that includes those held in savings accounts and mutual funds as well as in the form of travelers checks and checking accounts.

That's not to say that some of these newer technologies will never replace the old. It's just that right now, even though many of the older technologies are seeing stagnating sales or use, the Next Big Things aren't close to displacing them.

In other words, things are changing super slowly, and what we have now is roughly what we'll continue to have for a while to come.

What's next isn't ready

We've already gotten glimpses at what the next wave of technology will bring.

Many companies are focused on technologies that will immerse us in digital images. Facebook has bet big on virtual reality. It's already been selling its Oculus Rift VR headset and is promising big things for the next iterations of it. Microsoft, which is betting on both virtual and augmented reality, is already offering its HoloLens AR smart goggles. Google and Apple are both working hard to incorporate AR features into their smartphones. 

At the same time, many tech companies are investing heavily in artificial intelligence and in trying to bring AI to consumers. Amazon and Google, in particular, have been going toe-to-toe with Alexa and Assistant, their respective smart voice assistants. 

The problem is that so much of this forward-looking stuff just isn't that useful yet.

Oh, I have no doubt that Facebook CEO Mark Zuckerberg is right that by 2027 or so we'll have smart glasses that are as thin and light as a pair of normal sunglasses. And I'd bet that Amazon will one day succeed in its quest to turn Alexa into the superintelligent supercomputer from "Star Trek."

But back here in 2018, those cutting-edge technologies are still lacking.

Using augmented reality on a smartphone means waving your phone around and looking silly. Trying to use AR via smart glasses means dealing with some significant technical limitations — and looking even sillier. 

Alexa and Assistant can be helpful at times, but they're not nearly as all-around useful as a smartphone or a computer.

Cryptocurrencies come with too many complications and too much overhead to be truly useful as a replacement for regular money.

And despite all of its own investment in AI, Facebook is staffing up with thousands of humans because artificial intelligence isn't nearly as good at detecting hate speech as good, old-fashioned people.

All of that stuff will probably get fixed one day. But right now, the result is that our older technologies are growing stagnant and our newer technologies aren't ready to replace them.

The scandals are good

Ultimately, though, this stagnation may prove to be beneficial. This slowdown in the tech industry has given the world a chance to take a breath. And we're already using that lull to consider the roll of tech in our lives.

The string of scandals at Facebook and Google were unequivocally bad, with user privacy and perhaps the fate of democracy itself put at risk by decisions made by those tech titans. But they've triggered real and important conversations about the role of these major technology companies in our lives. Even the companies themselves seem to agree that it's time for the broader society to play an active role in shaping how technology affects our country and the world, potentially even through government regulations.  

And with folks inside and outside the industry raising alarms about how our devices and apps are affecting us at a personal level — encouraging addiction-like behavior and even leading to depression among teens — there's growing discussion about "digital health." Companies including Google, Facebook, and Apple are starting to respond, giving us ways to measure and limit the time we spend with our various gadgets and services.

This is an opportune time to have those conversations. Because the next generation of tech devices and services could be even more dangerous.

When the smartphone dies and augmented reality devices replace it and we're all wearing our Apple AirPods all the time, the technology companies will have unprecedented access to our brains. When you wear a pair of Facebook's — or Apple's or Google's — smart goggles, you're going to be letting the company behind them determine what you see and hear. The company and the other tech giants will, in a very literal way, be controlling your perception of reality.

Now is the time to think through the implications of that control — and what could go wrong.

I'm hopeful. Now that we've started talking about how to fix our relationship with technology, I don't think we're going to stop the discussion anytime soon.

That's a good thing — as long as we all get on the same page before the next generation of tech is finally ready.

SEE ALSO: Apple's amazing AirPods are taking a baby step towards their full potential

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NOW WATCH: We spoke to Cookie Monster about bitcoin, cookies, and self-regulation

• Cryptocurrencies can have price differences of up to 5% across different exchanges, making them ripe for arbitrage.
• US startup Arbitraj has developed price comparison tools and is working on a trading tool to take advantage of the spreads.
• Cofounder Jason Flack says hedge funds have approached him about using the tools.

A small US startup is working on a set of tools to take advantage of the arbitrage opportunity offered between cryptocurrency exchanges, highlighting not only the immature nature of the sector but also the opportunity to make big money in the emerging space.

Arbitraj LLC has built a tool to allow people to compare price spreads of cryptocurrency exchanges and is working on a trading tool to take advantage of them. The early-stage company, whose staff still work 9-to-5 jobs, has been approached by hedge funds keen to take advantage of the opportunity.

The crypto arbitrage trade

In most developed markets, assets will be priced the same across different exchanges. Any pricing imbalances present one of finances golden opportunities: arbitrage. This is where a trader buys an asset — say a stock — on the exchange where it is cheaper, turns around to sell it on the exchange that quotes a higher price, and pockets the difference. It is an easy way to make money.

For currencies, stocks, and other mainstream assets, even the smallest arbitrage opportunity is quickly eroded. When traders buy the cheaper asset, the added demand drives up the price until the price spread is eroded.

But even some of the most liquid cryptocurrencies such as bitcoin can have price spreads of up to 10% across different exchanges due to the difference in demand, a lack of pricing regulation, and difficulties trading between some exchanges.

Toby Allen, a partner at Chicago-based Akuna Capital, told Business Insider last December: "There is sometimes 10% exchange arbitrage. As a trader, it is such an amazingly fun space to be in compared to traditional assets because of the spreads and technology gaps."

LA-based Jason Flack, a venture debt investor who developed the Arbitraj apps, told Business Insider: "In order to drive more volume to an exchange, you might price your assets a little bit cheaper.

"You’ll see the ones in South Korea, they are charging premiums on their bitcoins because there’s so much demand. They can’t access Coinbase, they can’t access Bittrex, they can’t access any of these US exchanges."

It's not just friction between markets that create pricing imbalances.

"There are very big spreads just between US-based and non-Korean exchanges," Flack said. "5% spread is massive in any other industry. For crypto, the reason we might say it’s small is because it used to be 30%. If you talk to anyone in the forex space, 5% is insane, it’s unheard of."

'The next 18 to 24 months you’re still going to see this massive spreads'

Arbitraj has built a web app and Google Chrome plug-in that it shows the price spreads for cryptocurrencies such as bitcoin when users are browsing exchanges.

The company, which has 6 part-time staff, has been trialing its app with a group of around 500 "beta" users. It is also working on a transaction platform to allow people to take advantage of the pricing differences rather than just see the spreads.

"It works right now, basically we’re just adding more exchanges," Flack said. "In the platform, we actually calculate the subtraction cost subtracted from the percentage spread that you’re going to receive."

Arbitraj originally intended to make the platform public but Flack said: “For arbitrage, it’s a little bit hard because if everyone is making the same trades then the spreads go away. We’ve leaned back towards using it privately."

Flack said they had been approached by hedge funds interested in using the tool and said: "We told them we’d reach out when we have something [more developed]."

Flack added that he does not think the arbitrage opportunity will be around forever.

"The market is definitely not evolved yet," he said. "The next 18 to 24 months, I’d say you’re still going to see this massive spreads. Once regulations start to evolve, you’re going to see that even out"

SEE ALSO: A top crypto hedge fund lawyer explains the 4 main trading strategies that funds use to make money

DON'T MISS: A crypto trader setting up a hedge fund apologised for making so much money

NEXT UP: The 'immature' global bitcoin market is ripe for arbitrage

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NOW WATCH: Former Wall Street CEO reveals how most financial products designed for women completely miss the point

• Fidelity Investments launched an internal crypto fund last fall to invest the firm's balance sheet in digital assets, according to people familiar with the matter. 
• The firm shut the fund, which was very small and exploratory, this spring before two employees involved in the project left. 
• Fidelity is also hiring employees to work on services relating to cryptocurrency exchanges and crypto custody. 

Fidelity, one of the biggest providers of 401(k) services and other retirement products to Americans, in recent months shut down an internal crypto fund it launched in 2017, according to people familiar with the matter. 

The fund, which was small and exploratory, used capital from the firm's balance sheet to invest in crypto-related assets, the people said. It was wound down in spring 2018 before two key members of the project exited Fidelity.

Matt Walsh, a vice president at Fidelity, and Nic Carter, a former investment research analyst at the firm, were both involved with the project and left to start Castle Island Ventures, a crypto-focused venture capital firm, the people said. Walsh and Carter could not be reached for comment. A spokeswoman for Fidelity declined to comment on the exits. Business Insider is awaiting a response on the fund itself.

The project, which has not been previously reported on, shows the extent to which Fidelity — by wagering its own capital —is diving into the nascent market for digital currencies. 

The funds firm is also looking or talent to build its own crypto exchange and digital asset custody business, Business Insider reported last week. Such an offering could help legitimize the burgeoning crypto market, market structure specialists said. 

Other established Wall Street players are also weighing their own moves into crypto. Goldman Sachs has a team dedicated to building out a trading operation tied to crypto, and the New York Stock Exchange is reportedly building a crypto trading platform.

Yet other financial firms are remaining cautious. Regulatory and security risks are commonly cited as reasons bitcoin hasn't been adopted more broadly yet.

Fidelity already allows certain clients to view their crypto holdings next to their other accounts in their Fidelity portfolio. And its CEO, Abigail Johnson, is a noted proponent of bitcoin.

Aside from Walsh and Carter, Fidelity has lost a number of crypto employees in recent months.

Ben Pousty, formerly digital asset marketing lead for Fidelity Labs, left the firm in April to join crypto firm Circle, according to his LinkedIn profile. Kinjal Shah, formerly a senior consulting analyst, also left the firm to join Blockchain Capital, the crypto venture firm.

To be sure, Fidelity has made hires too. It recently brought on Tom Jessop, the former president of Chain and an ex-Goldman Sachs executive, as a head of corporate business development, for example. 

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NOW WATCH: Former Wall Street CEO reveals how most financial products designed for women completely miss the point

Bart Smith, who was crowned “Wall Street’s Crypto King” by CNBC, is optimistic that institutional investors will start pouring money into the cryptocurrency market once more regulatory clarity is provided. Smith heads the digital asset group at Pennsylvania-based investment firm Susquehanna International Group, which first experimented with bitcoin trading in 2014. Since then, the privately-held company has launched a

The post Wall Street’s ‘Crypto King’ Says Regulatory Clarity Will Jump-start Institutional Investments appeared first on CCN

Billionaire Norwegian Air CEO Bjørn Kjos launched the Norwegian Block Exchange (NBX) in April, a company executives say “will explore and exploit potential opportunities that lie in blockade and ledger technology.” The company raised $250,000 in a first capital round and is owned by a company called Observatoriet Invest, although Stig Kjos-Mathisen, Kjos’ son-in-law and chairman of

The post Norwegian Air CEO Launching Bitcoin Exchange, May Sell Tickets for Crypto appeared first on CCN

This article originally appeared on Bitcoin Magazine.

This article originally appeared on Bitcoin Magazine.