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I recently did some research for a friend who was looking at the online escrow space in the world of Financial Technology. There has been much talk about how bitcoin has the potential to ‘decentralize trust’, with implications on services like online escrow. Escrow services are used for a variety of transactions, from domain name purchases to investments. Sites like escrow.com and Agreed exist to facilitate the escrow of online transactions. The transaction fees for such services range from around 1-6%, depending on the amount (source). Escrow fraud — where sellers receive notice of payment from an “escrow service”, which turns out to have never existed at all — is a common form of fraud; online escrow sites have to be licensed, under existing escrow law at the state level.
Last week GE and Frost announced a joint effort to create an incubation program called Frost I3 incubator. It focuses on the industrial internet—solutions that utilize big data and sensors that drive efficiency and productivity. This past week Microsoft Ventures and American Family Insurance also announced the creation of an accelerator for the connected home.
This week I came across a very thought-provoking report recently released by the Vitality Institute that provides recommendations on the promotion of health and prevention of chronic disease for working-age Americans. There is a lot of insightful detail (I highly recommend having an extended peek), but in sum, the Commission developed evidence empirically linking the health of the US’ workforce to the long-term competitiveness of the US economy – the proposition: unhealthy workforce = unhealthy economy. Said another way, lower worker productivity and soaring US healthcare costs ($2.7T or 17.7% of US GDP in 2011 – the below graphic provides perspective on magnitude) impede innovation and reduce overall investment in education and R&D.
The hot IoT news this weekend was Nest's acquisition of DropCam for $555M. Compared with the multi-billion dollar hardware deals this year so far, $555M seems small but in my mind incredibly large for a connected home market that's still far from reaching the mass market. Google surely is betting big in anticipation for future growth by shedding out $3.2B for Nest and DropCam.
Sony made an interesting announcement at the E3 gaming conference in Los Angeles last week. The company presented its Playstation TV set-top box that will enable users to watch video content, stream games, and remotely play their Playstation 4 consoles on other TV’s. FYI, the Playstation TV is just the North American/European version of Vita TV that was launched in Japan last year. The device starts at $99 dollars but with a controller it comes out to $139, similar to the Amazon Fire. So why bother writing about another device? I think that Sony may actually have the leg up in this game, especially when you take into consideration the massive reach and niche focus in gaming.
TransferWise announced a $25M funding round last week, with investors including Richard Branson, Peter Thiel’s Valar Ventures, IA Ventures, and Index Ventures. The London-based startup aims to disrupt the remittance market by offering lower fees. They do this by operating a peer-to-peer (P2P) transfer model, where money destined for transfer does not actually leave each country unnecessarily (i.e. rearranging cash from other transactions in the same country). Software automation and the absence of physical branches also allow them to pass on cost-savings to the consumer. Consumers are also offered a mobile app (iOS and Android). Co-founder, Taavet Hinrikus, was the first employee at Skype.
Since its inception, the best known vulnerability of the bitcoin protocol has been the “51% attack”. This attack occurs when one party controls more than half of all processing power on the protocol, effectively giving them control over the entire blockchain. At this point, the majority holder could rewrite previous blocks, allowing them to double-spend bitcoins. Even though this scenario was considered unlikely (due to the downside risk it posed to bitcoin pricing), it’s exactly what happened.
The term "connected home" or "smart home" has been around for decades. In the 90's and 00's, a lot of consumer electronics companies and component makers published drawings with home servers, gateways, and all types of home devices talking to each other and sharing files. I remember, in my past life, I used to draw similar things on powerpoint and announced a lot of partnerships and initiatives . However, none of those concepts became a mainstream hit.