Darkcoin crashes 23pc after blockchain forks

Privacy centred cryptocurrency Darkcoin has suffered a massive 23 per cent fall after its blockchain split into several forks.

Cryptocurrencies can only have a single path stemming from the original block. However, one-block forks can be created when two blocks come into being only moments apart.

Yesterday, Darkcoin implemented the much anticipated masternodes, which conceal users transactions by mixing their Darkcoins with two additional users. These coordinators also receive 10 per cent of the block reward each time they are selected.

Anyone can turn their computer into a coordinator, so long as they can prove they've paid 1,000 Darkcoins. 170 master nodes have been created in the last month, according to Darkcoin's developer Evan Duffield.

Cryptocurrency Times reports that Darkcoin had to alter its code in order to use the masternodes, with a controlled fork being used for this purpose. After a few hours of smooth sailing, the Darkcoin blockchain split up into several forks.

The problem was attributed to a handful of "bad" masternodes. The world's largest cryptocurrency Bitcoin experienced similar problem in March 2013, when the blockchain split into two, with one half adding blocks to one version of the chain, and the other half adding blocks to a different version.

Reports of Darkcoin going missing from mining pools over the past 24 hours are widespread, thanks to pools having been mining the wrong fork, according to Cryptocurrency Times.

The Darkcoin team are temporarily removing masternode payments from the network to restore stability. Cryptocurrency exchanges Mintpal and Cryptsy have halted Darkcoin deposits and withdrawals until the fork is resolved.

The price per Darkcoin stands at $10, with a market cap of $43.6m. Darkcoin has experienced an astonishing rise becoming the world's fourth largest cryptocurrency just five months after being brought into existence.

The central impetus of the Darkcoin project has been privacy and improving on what Duffield sees as the errors of Bitcoin. Since the Bitcoin blockchain makes transactions publicly visible, Duffield argues that making payments with Bitcoin is equivalent to leaving your checking account open in your browser and everyone on the internet can see what you bought.

BBA mortgage approvals for April miss expectations

In April, the number of mortgages approved by the British Bankers' Association (BBA) fell to its lowest point in eight months, reaching 42,200. Analysts had expected the figure to reach 45,200.

Recent data from the Bank of England has also showed a slowdown in household borrowing. However, house prices continue to surge, with the London experiencing price rises of 17.7 per cent in the year to February. The average London house price has now reached £458,000.

The previous month saw BBA loans for home purchases reach 45,900. The figures suggest that the new regulations under the Mortgage Market Review have helped to cool activity in the housing market. 

"Tighter mortgage lending standards have appear to have at least temporarily taken some of the heat out of the housing market but house prices still look more likely than not to see robust increases over the coming months", said Howard Archer, chief European and UK economist at IHS Global Insight.

Lloyds Bank recently announced a clampdown on lending, saying applications for mortgages worth over £500,000 would be subject to a new income test. Borrowers will only be able to receive a loan worth a maximum of four times their income.

The government's controversial Help to Buy scheme will come under further scrutiny when the Treasury publishes data showing the impact of the policy later this week. The Prime Minister told the BBC earlier this month: "We have specifically asked Mark Carney to examine Help to Buy and to advise us if any changes are needed… We will consider any changes that are proposed by Mark Carney".

Lloyds confirms float of TSB

Lloyds Banking Group has confirmed plans to sell 25 per cent of lender TSB sometime next month, with the prospectus set to be published in mid-June. The offer will be available to institutional investors and to intermediaries. 

Retail investors will receive one free share for every 20 they buy, up to the value of £2,000, and held for a continuous period of one year after the IPO.

The sale is part of a divestment programme, which was mandated by the European Commission on competition grounds. Lloyds is required to sell down its remaining stake by 31 December 2015.

Paul Pester, chief executive of TSB, said:

As we prepare for life as an independent, listed entity we are aiming to deliver strong, steady and sustainable growth, over the long-term. Our straightforward and simple approach to banking is designed to deliver the kind of bank people tell us they want: every penny our customers deposit with us is used to support mortgages and loans for other TSB customers. This is what we mean by local banking for Britain.

The seventh largest retail bank in the UK outlined its strategy to enhance growth, which included aims to accelerate its asset growth by re-entering the intermediary mortgage distribution channel and use its digital banking capability to reduce customer servicing costs. Pester hopes to grow the bank's balance sheet from 40 to 50 per cent. 

"TSB has a national network of branches, a strong balance sheet and significant economic protection against legacy issues", said Lloyds Banking Group chief executive, Antonio Horta-Osorio.

However, there was some scepticism about how much demand there would be for the shares. The BBC's business editor, Kamal Ahmed, told BBC Radio 4 he wasn't sure how many people "will be sitting on around, saying to themselves, I must go and buy some bank shares".

The Co-op bank had planned to buy 630 TSB branches, but the plans failed to materialise after the Co-op was found to have a £1.5bn black hole.

Mixed morning for Asian markets as Ukraine tensions ease

Asian markets have had a mixed morning, with investors taking heart from the possibility of monetary easing in the euro area and the conclusion of Ukraine's presidential election without further interference from Russia.

On Monday, Mario Draghi said the European Central Bank (ECB) was prepared to act and counter risks that may arise from low inflation. The next ECB policy meeting will take place on 5 June.

Draghi also observed that bank lending presented a mixed picture, with surveys of bank behaviour showing a gradually improving aggregate situation, but noted that the latest ECB survey on credit access by small and medium-sized companies show supply constraints remain especially strong in the stressed countries.

"Ever since Mr. Draghi’s comments that the ECB is “comfortable” with taking action in June to counter prolonged very low Eurozone inflation and the strength of the euro, we have expected the bank to follow through and act at its June policy meeting. Pressure on the ECB to act has been reinforced by disappointing Eurozone GDP growth of 0.2 per cent quarter-on-quarter", said Howard Archer, chief European & UK economist for IHS Global Insight.

Investors were undeterred by accusations from Vietnam that China had sunk a local fishing boat in the disputed South China Sea.

Yesterday, China announced new measures to streamline investment projects, with the National Development and Reform Commission saying authorities not arbitrarily hold up deadlines for projects. However, this was not enough to prevent the Shanghai Composite Index falling 0.2 per cent.

Mixed morning for Asian markets as Ukraine tensions ease

Asian markets have had a mixed morning, with investors taking heart from the possibility of monetary easing in the euro area and the conclusion of Ukraine's presidential election without further interference from Russia.

On Monday, Mario Draghi said the European Central Bank (ECB) was prepared to act and counter risks that may arise from low inflation. The next ECB policy meeting will take place on 5 June.

Draghi also observed that bank lending presented a mixed picture, with surveys of bank behaviour showing a gradually improving aggregate situation, but noted that the latest ECB survey on credit access by small and medium-sized companies show supply constraints remain especially strong in the stressed countries.

"Ever since Mr. Draghi’s comments that the ECB is “comfortable” with taking action in June to counter prolonged very low Eurozone inflation and the strength of the euro, we have expected the bank to follow through and act at its June policy meeting. Pressure on the ECB to act has been reinforced by disappointing Eurozone GDP growth of 0.2 per cent quarter-on-quarter", said Howard Archer, chief European & UK economist for IHS Global Insight.

Investors were undeterred by accusations from Vietnam that China had sunk a local fishing boat in the disputed South China Sea.

Yesterday, China announced new measures to streamline investment projects, with the National Development and Reform Commission saying authorities not arbitrarily hold up deadlines for projects. However, this was not enough to prevent the Shanghai Composite Index falling 0.2 per cent.

RBS mobile banking hit by IT flaw

Some of Britain's biggest banks have been suffering from an IT fault that affected mobile banking customers across the country.

Both RBS and Natwest encountered problems with their mobile banking services, with the trouble starting around 8:30am and continuing through till 2pm.

Speaking to Sky News, a spokesman for RBS Group said:

We are aware that some customers are experiencing issues with mobile banking, we are working to get this resolved as quickly as possible.

We apologise to customers for the inconvenience.

The IT glitch is only the latest in a series of such incidents for RBS. In February, swathes of customers were unable to access the RBS banking app. Furthermore, the incident occurred on the last day of the month – payday for a large number of workers.

Back in 2012, a host of customers were locked out of their accounts for almost a month.

In a separate incident on Friday, customers of Lloyds and Halifax were unable to use the payments system over the group's online or telephone system.

Branch and cash machines were unaffected by the glitch. A spokesman for Lloyds Banking Group confirmed there had been difficulties on Friday affecting mobile and online services for some customers who were attempting to set up payees.

US home sales beat expectations with 6.4pc rise

The number of houses sold in the US grew 6.4 per cent, to a seasonally adjusted annual rate of 433,000 in April. The surge in sales came primarily from the Midwest.

The figures put an end to two straight months of declines, while the number of houses on the market climbed to a three-and-a-half year high.

The may also soothe fears that housing activity isn’t picking up by as much as expected. Analysts were expecting to see a sharp rebound in construction last month, following the severe dampener brought about by the freezing winter.

Analysts at Investec said in a preview that these figures "are likely to take on additional significance this week following Janet Yellen’s comments regarding housing market softness."

Figures from the National Association of Realtors had suggested yesterday that the story could be slightly different. Existing home saleswere up from 4.59m to 4.65m in April, with the change in existing home sales up by 1.3 per cent. But, that was considerably below the 2.2 per cent increase economists were expecting. 
 

Seven habits of the most effective digital enterprises

In an age where most developed economies are experiencing lacklustre growth, digital continues to expand at an ever more rapid pace.

E-commerce is booming at double-digit rates in the US, as well as the majority of European countries, and is rising across Asia.

However, many companies are struggling to move beyond the experimentation stage of digital and successfully implement a new model of business. The transformation demands the development of new skills and investments that radically differ from the methods of the past.

While there is no single route to a successful transformation, there are several common features among a host of success stories. McKinsey & Co has examined dozens of these examples and discovered the most effective shared seven interesting habits.

Back yourself

McKinsey argues that digital leaders should be prepared to set what at first may seem unreasonable aspirations. This jars an organisation into seeing digital as a business that creates value, not as method to drive other activities. McKinsey argue if your targets aren't making the majority of your company feel nervous you're probably not aiming high enough. The company cites the example of Angela Ahrendt, who became CEO of Burberry in 2006. 

She took over a company whose brand had been on the decline she enacted a sea-change in policy that saw the up-market fashion retailer transform itself into digital brand. Groundbreaking initiatives like a website that featured customers as models and the digitisation of retail stores gave the company a new lease of life. During Ahrendt's tenure, revenues tripled and she's now been hired by Apple to head up their retail business.

Netflix also burst onto the scene with aspirations that left many sceptical. The Netflix leadership saw that the future was to be in video streaming. As broadband technology rapidly evolved, management took a bet that put it at the forefront of a surge in digital marketplace. Netflix quickly captured nearly a third of the downstream video traffic and, by the end of 2013, Netflix had over 40m subscribers.

Acquire capabilities

Leadership teams should be realistic about the collective ability of their workforce. Leading companies often look to other industries to attract digital talent because they understand that emphasising skills over experience when hiring new talent is an important ingredient to success, at least in the early stages of transformation. Tesco made three significant digital acquisitions over a two-year span; blinkbox, a video-streaming service; We7, a digital music store; and Mobcast, an e-book platform.

Nurture digital talent

Digital talent must be nurtured differently, McKinsey argues, with its own working patterns and tools. Walmart Stores learned that “ring fencing” digital talent was the only way to ensure rapid improvements. Four years ago, the compnay's online business was lagging. It was late to the e-commerce market as executives focused on their growing physical-retail business. When it did step into the digital space, talent was disbursed throughout the business. Its $5bn in online sales in 2011 fell well short of Amazon’s $48bn.

In 2011, however, Walmart established @WalmartLabs, an “idea incubator,” as part of its growing e-commerce division in Silicon Valley. The group’s innovations, including a unified company-wide e-commerce platform, helped it increase online revenues by 30 per cent in 2013, outpacing Amazon’s rate of growth.

Break conventions

The leaders of incumbent companies should challenge the status quo.  Digital leaders look to all aspects of their business—both customer-facing and back-office systems and processes, up and down the supply chain—for digitally driven innovation.

In 2007, car-rental company Hertz started to deploy self-service kiosks similar to those used by airlines for flight check-in. In 2011, it jumped ahead of airlines by moving to dual-screen kiosks—one screen to select rental options via touch screen, a second screen at eye level to communicate with a customer agent using real-time video.

Be fast and data driven

Rapid decision making is key to a dynamic digital environment. Organisations need to move to a cycle of continuous delivery and improvement, adopting methods such as agile development and “live beta,” supported by big data analytics, to increase the pace of innovation. Continuous improvement requires continuous experimentation, along with a process for quickly responding to bits of information.

P&G, for example, created a single analytics portal, called the Decision Cockpit, which provides up-to-date sales data across brands, products, and regions to more than 50,000 employees globally. The portal, which emphasizes projections over historical data, lets teams quickly identify issues, such as declining market share, and take steps to address the problems.

Pay attention to the money

Many organisations focus their digital investments on customer-facing solutions. But they can extract just as much value, if not more, from investing in back-office functions that drive operational efficiencies. A digital transformation is more than just finding new revenue streams; it’s also about creating value by reducing the costs of doing business.

At Starbucks, one of the leaders in customer-experience innovation, just 35 of 100 active IT projects in 2013 were focused on customer, or partner-facing initiatives. One third of these projects were devoted to improving efficiency and productivity away from the retail stores, and one-third focused on improving resilience and security.

The customer is still king

Increasing customer expectations continue to drive businesses to improve the customer experience across all channels. Excellence in a single channel is no longer sufficient; customers expect the same good experience in a retail store as they do when shopping online, and vice versa. Moreover, they are less tolerant of bad experiences. One survey found that 89 percent of consumers began doing business with a competitor following a poor customer experience. On the other hand, 86 percent said they were willing to pay more for a better customer experience.

 

Barclays fined £26m over failure to manage conflict of interest

The Financial Conduct Authority (FCA) has fined Barclays £26m for failing to manage conflicts of interest between itself and its customers, as well as systems and control failings, in relation to the London Gold Fixing.

The Gold Fixing is a price-setting mechanism which gives market users the chance to buy and sell gold at a single quoted price.

The FCA said Barclays' failures ranged from 2004 to 2013 and said in a statement that former Barclays trader Daniel James Plunkett exploited weaknesses in Barclays' systems to influence that day's Gold Fixing.

As a result of Plunkett's actions, Barclays was not obligated to pay $3.9m to its customer. However, the customer was later compensated the full amount. Excluding hedging, Plunkett's own trading received a boost of $1.75m.

Plunkett himself has been fined £95,600 and is banned from performing any function in relation to any regulated activity. He was previously responsible for pricing products linked to the price of precious metals and managing Barclays' risk exposure to those products.

"A firm's lack of controls and a trader's disregard for a customer's interests have allowed the financial services industry's to be sullied again," said Tracey McDermot, director of enforcement and financial crime at the FCA.

The FCA said Barclays failed to:

1.   create or implement adequate policies or procedures to properly manage the way in which Barclays’ traders participated in the Gold Fixing;

2.   provide adequate specific training to precious metals desk staff in relation to their participation in the Gold Fixing; and

3.   create systems and reports that allowed for adequate monitoring of traders’ activity in connection with the Gold Fixing.

Plunkett and Barclays settled at an early stage, which allowed for a 30 per cent discount on their fines.

Barclays fined £26m over failure to manage conflict of interest

The Financial Conduct Authority (FCA) has fined Barclays £26m for failing to manage conflicts of interest between itself and its customers, as well as systems and control failings, in relation to the London Gold Fixing.

The Gold Fixing is a price-setting mechanism which gives market users the chance to buy and sell gold at a single quoted price.

The FCA said Barclays' failures ranged from 2004 to 2013 and said in a statement that former Barclays trader Daniel James Plunkett exploited weaknesses in Barclays' systems to influence that day's Gold Fixing.

As a result of Plunkett's actions, Barclays was not obligated to pay $3.9m to its customer. However, the customer was later compensated the full amount. Excluding hedging, Plunkett's own trading received a boost of $1.75m.

Plunkett himself has been fined £95,600 and is banned from performing any function in relation to any regulated activity. He was previously responsible for pricing products linked to the price of precious metals and managing Barclays' risk exposure to those products.

"A firm's lack of controls and a trader's disregard for a customer's interests have allowed the financial services industry's to be sullied again," said Tracey McDermot, director of enforcement and financial crime at the FCA.

The FCA said Barclays failed to:

1.   create or implement adequate policies or procedures to properly manage the way in which Barclays’ traders participated in the Gold Fixing;

2.   provide adequate specific training to precious metals desk staff in relation to their participation in the Gold Fixing; and

3.   create systems and reports that allowed for adequate monitoring of traders’ activity in connection with the Gold Fixing.

Plunkett and Barclays settled at an early stage, which allowed for a 30 per cent discount on their fines.