Yes, we are riding the waves of the top news today too. If you go on Twitter, there are two quite a number of things that are trending in Malaysia. As of this writing, the top trending topic in Malaysia has nothing to do with the subject. Look further down though and there it is. #Wuhan is number three in Malaysia’s trending topics. Following that is #2019nCoV. Both of these refers to the subject that is also commonly known as the Wuhan virus.
Due to the virus, plenty of life in Asia has grounded to a halt. The official death toll in China has climbed over 400 and will continue to do so. Beyond that, China has also confirmed more than 20,000 cases within their borders. There are reports coming out of the country itself that China has quarantined more than 30 million people and suspects that the confirmed case numbers are closer to 10 million.
In Malaysia itself, there are already 8 reported cases. All of them are now in quarantine though. Still, #Wuhan is the trending topic, not only on twitter but everywhere else too. Air travels has been suspended and trips cancelled left and right. Not to mention, you might not be able to obtain anymore hand sanitisers and face mask now.
The virus though, does not hinder the progress of humanity. Wait, no that is not right. The virus will not hinder Samsung’s progress in their digital conquest. That sounds about right.
Source: Business Korea
You would expect plenty of construction work, or any sort of work in China itself to slowdown. That is not the case with Samsung’s Xi’an plant though. The plant, that is to be operational in the mid of 2020 will be Samsung’s second manufacturing plant in Xi’an and will be focusing on making memory chips.
While that construction is going smoothly and on track, Samsung has not stopped their progress as the world’s most advanced memory chip maker too. They have just announced and introduced their brand new third generation HBM2E fondly named ‘Flashbolt’. HBM stands for ‘High Bandwidth Memory’.
Source: Samsung
The new Flashbolt chip has a capacity of 16GB that is combined through stacking eight 10nm 16Gb DRAM (that is Gigabit for you) dies on top of a buffer chip. A little technical? Quite a lot actually. While half of us may not understand that process, it is important to note that the HBM2E has an average transfer speed of 3.2Gbps. In some cases, the Flashbolt can hit 4.2 Gbps in transfer speeds.
The current high performance memory module, the Aquabolt has a bandwidth of 307 GBps. With the new Flashbolt, that number goes up to 410 GBps per stack or up to 538GBps, if you might. Technically this does not mean that much to us as consumers.
Thing is, research labs all over the world needs all these stuff in their super computers. Plenty of these highly advanced labs uses Artificial Intelligence (A.I.) or Machine Learning (M.L.). Those applications eventually reach us, the users. With the advanced of a high speed and bandwidth chip like this, A.I. and M.L. algorithms and application can be more powerful than ever before. In that sense, no one will argue for a more powerful Google Assistant or Siri then.
Late yesterday Alphabet, which is what Google has become since their 2015 restructuring made their 2019 revenue reports available to the public. Of course Wall Street was the first to pick up the reports and ate their way through it to see if it matches all expectations. It did not; shareholders were not happy.
Source: Alphabet
Alphabet announced a total revenue of US$ 46 billion for 2019. That is a fair 17% increase from 2018. Sounds healthy, right? Wall street and shareholders though are expecting nearly a billion more in revenue though. Google missed the mark by about US$ 800 million.
US$ 800 million is quite small compared to the US$ 46 billion that they have made. Or, so you thought. Apparently it is quite a big deal in the market since every other competitor is reporting a huge surge in their own ad game. People like Amazon, for example reported a large jump on their ad revenue in 2019.
Still, Google also made sure that their shareholders are happy by also announcing that out of the US$ 46 billion of revenue, US$ 10.6 billion of those are profits. That number is bigger than estimated by Wall Street too. At least that is that.
They broke down where their money was made too within the Alphabet empire. Google cloud business, that is their Drive, Docs, Sheets and what not, makes up US$ 8.91 billion in total. YouTube, our beloved red play button on our smartphones makes up US$ 15.5 billion in revenue for 2019. That is just from Ads.
Source: YouTube
One of the bigger contributing factors of Alphabet disclosing YouTube’s earnings this year, as suggested via experts, is that the organisation as a whole failed to meet revenue expectations. The numbers, as per presented by Alphabet, indeed are quite staggering and mind boggling. The disparity could be due to a number of reasons; we cannot know for sure until Alphabet says something. The earnings number alone though tells us that the tech giants are still here to stay and they are still quite untouchable for now.
Still, the fact that YouTube, a platform that we all use for free makes US$ 15.5 billion is quite mind boggling. That is six times more than Twitch and one sixth of Facebook’s ad platform. Yes, we apparently still spend more time on the blue ‘f’ logo app than the social video platform. Then again, Facebook’s platform is plenty more versatile.
The ad revenues are not about to dwindle down anytime soon though. We cannot get enough of YouTube, you have to admit that. Annoying ads will not stop us from watching our favourite videos. But there is a bigger picture in play here though.
YouTube as a platform, thanks to the now disclosed US$ 15.5 billion in ad revenue, will grow even bigger. There will be more people that could potentially see more money in YouTube. While that means that there will be even more content for us to enjoy, that could also spell more ads being shoved in your faces. It is quite inevitable though; the more you consume, the more of a target you become.
5G is fast becoming the norm in the tech industry as more countries see the rollout of their own 5G networks. Back at AWS re:invent, Amazon Web Services made a significant announcement, in partnership with Verizon, which made it the first company to have 5G edge computing services. AWS Wavelength is a first of its kind service which brings AWS services closer to developers and, more importantly, end users.
AWS Wavelength will see an initial rollout to 69 sites in the United States. Verizon and AWS have already been hard at work developing and fine tuning the service in Chicago. There companies such as Bethesda Softworks and the National Football League have been developing on and utilising Wavelength to deliver new, enhanced experiences to their users. This includes interactive experiences which may be the next generation of gaming and sports.
AWS Wavelength essentially brings the company’s full suite of services to the 5G Edge. The technology allows telecommunications providers and AWS to deploy remote containers fitted with all of its services. This allows developers to develop with real time experience and with single digit millisecond latency. They will then be able deploy whole new experiences to end users.
The deployment of Wavelength marks a paradigm shift which empowers edge computing like never before. It allows real time compute with large data packets which will find its applications in things like autonomous vehicles and even Smart City management. The deployment of Amazon’s full suite of web services will allow developers to deploy unique experiences for end users which take advantage of the low latency and high data volume. This in addition to the exponential increase in the number of devices each base station is able to handle will enable IoT technologies as well. The availability of machine learning interfaces at the 5G edge enables developers to develop more complex applications with further ranging implications.
Source: AWS
Developers won’t need to familiarise themselves with a new interface; Wavelength comes with the same interface developers are used to in their AWS dashboard. In fact, they will simply need to activate instances of AWS services such as EC2, ECS and more which suit their needs at a Wavelength availability zone to use the service.
AWS Wavelength is available in an initial 69 availability zones in 25 AWS Regions. The initial rollout in the United States will be done in partnership with Verizon. However, the company has committed to new availability zone in South Korea (SK Telcom), Japan (KDDI) and Europe (Vodafone) in 2020.
CISO stands for Chief Information Security Officer. From that description alone, we believe you would know what this report is about then. If you still do not; Cisco did a study for the cyber security field for 2019 by interviewing about 2,000 Chief Information Security Officers (CISO) or security professionals all over Asia Pacific. You would be glad to know also that about 10% of the participants in the study are Malaysian. While that does not change the nature of the study, the sample size should mean that there is some accuracy in the general scheme of things.
Source: Cisco
The Big Numbers
The big numbers for Malaysia are 44% of threat alerts are investigated, 46% of the recognised threats are neutralised, and 27% have faced downtime of longer than 24 hours due to a cyber security breach or threat. There are some good things about these numbers, and some bad things too. So it is not all roses and rainbows for Malaysia’s cyber security industry in 2019.
The first of the numbers are the investigated threats. This does not mean alerts. Receiving cyber threat alerts and investigating them are two different things. You can have threat alerts of more than 10,000 and still not investigate any of them for a number of reasons. Still, investigated threats are escalated from reported threats.
According to the Malaysian numbers, 44% of threats reported in Malaysia are investigated in 2019. That is 4% more than 2018, Malaysian CISOs are busier by 4% last year 2019 than in 2018 then. That could be due to the raised number of serious threats. It could also mean that awareness to cyber threats have increased in Malaysia. So while it does sound like Malaysia is being attacked more, it also means that Malaysians are now better prepared for cyber threats or breaches.
Out of all the verified threats, nearly half of them were remediated at 46%. That number is higher than plenty of Malaysia’s neighbours and the average in Asia Pacific at 43%. The other half? Maybe those cases could be a little tougher. Still, that also means that Malaysians are capable of handling cyber security issues. This number is also an increase from 2018.
The next big number is 27% of companies declared a downtime of more than 24 hours when they get attacked. This is a large increase from 2018’s 9%. While this may not seem like a good thing, there is a bigger story that than. For one, this also means that Malaysia is plenty more digital in 2019 than 2018. This increase could also be because of the increased threat detection in 2019. The result was also a higher resolution to each identified threat.
More Vendors, More Problems?
It seems only yesterday that having multiple layers of security is a good thing. Like plenty of things, throwing money at something should solve a problem. Those were the days.
There used to be a time when organisations like banks would recommend having about 10 security vendors to layer security in all parts of their organisation. In some sense, it works; but it is very expensive, and very inconvenient for users. That is not yet considering the fact that having multiple vendors and that many layers of security increases complexity in controlling and managing the solutions.
The new way to think about cyber security then is to keep the number of vendors down to as little as required. This reduces not just complexity of workflow and simplifies management, but also increases the efficiency of managing cyber threats.
From the Malaysian numbers though, this seems to be a slightly new concept with more than 35% of the responding organisations having more than 10 vendors. While this is slightly lower than 2018’s 39%, there is still a need to reduce that number even lower. Malaysians realise that too, with 90% of respondents finding it hard to manage that many vendors at the same time. Some experts suggests that having five to six vendors at a time is enough for a holistic cybersecurity system to be in place for any organisation.
The Problem With Cybersecurity Malaysia
There are still looming problems for a country that is going through a major digital transformation though. While the progress toward a digital Malaysia and Industry 4.0 has been a steady one in the region, there are still fundamental problems that might hinder progress or create holes in the cyber armours that the CISOs have put up or tried to put up. One of these enemies to cyber security is budget.
There are times where companies might have a large constraint over budget. For most SMEs and startups, it is quite understandable. They would probably need to pool their money in things that they might find more useful to them in the shorter run. That is not saying that it is not a problem for them or the general cyber security state in Malaysia. It is still a problem, but an inevitable one.
There are cases with large organisations that has restricted their budgets to cyber security because they do not yet see the value in cybersecurity. This becomes a major issue for CISOs. Despite the consensus that more money may not mean more protection, cyber security still needs a pool of money to work with. If not enough money is being poured into the department, not much can be done. With less protection, larger organisations are more vulnerable and thus, might lose even more money.
The biggest problem with cyber security, not just in Malaysia but most of the world, is always personnel; both the lack of skilled workers and awareness of the main issue. Thing is though, CISOs all over Malaysia are also making efforts to reduce this number down with plenty of awareness and skill training of personnel all over the company. The number of skilled personnel in terms of cyber security in Malaysia is also growing continuously, which also means that it is a problem that can be solved in time.
So What do We do in 2020?
2020 is meant to be the year of progress, of near complete digital revolution. It is the year of 5G and WiFi 6, the year where data is meant to be all covering and seamless. That potentially means more cyber security risks with bigger data bandwidth and less latency. It gives software less time to react. Which means that a DDoS attack could be a big thing in 2020.
Still, awareness is key to combating cyber attacks. With the availability of data in today’s world, having a VPN no longer cuts it. The only benefit of VPN these days is to ensure that whatever that you have accessed is not tracked by your data or service provider. You are still at risk of a cyber attack even via VPN.
The fact that you have multiple devices that are connected to the internet and each other is already a threat on their own. At every point and turn, you really have to be aware of what you are accessing on the internet and what you are vulnerable to. That allows you to be more alert on things like phishing attacks, malicious links, email scams and what not. That should be enough as the first layer of defense against common cyber attacks, maybe even big ones like ransomware and what not.
If you are planning on getting an Anti-Virus software protection on your PC, consider spending a little more than what you would pay for a generic Anti-Virus program. You might want to look into find an Anti-Virus program that covers the whole lot from spyware, adware, to even malware. That way, you are ensured of a holistic protection, at least on your own end.
You would think that when it comes to making compositions and music, you’d need a really good ear and knowledge of the arts. Not so much with Amazon Web Service’s new AI (Artificial Intelligence) service focused on creating musical pieces with a keyboard! DeepComposer is the latest in a series of Machine Learning focused services that AWS has introduced since it’s announcement of DeepLens at Re:Invent 2017.
The new music based AI is a 32 key, 2 octave keyboard which will allow developers to familiarise themselves with using Generative AI. The simple application of Generative AI in DeepComposer will take short riffs and generate a full compositions.
A brief diagram explaining how AWS’s DeepComposer works. (Source: AWS)
The DeepComposer generative AI will be able to layer and generate songs based on pre-trained models or even user defined models. The pre-trained models are able to generate based on algorithms developed by training the AI with large musical data sets. The user defined models give users better control of the generative AI. Users will be able to define multiple parameters including the Architecture and Discriminator. The latter allows the AI to distinguish between the genres and determine the overall composition.
Being a machine learning model, DeepComposer is continually learning to identify music types. The AI will improve with time as it learns and generates more music based on the models and riffs. It will also be able to generate music which mimics a defined model. Amazon’s release touts, ” you have to train as a counterfeiting expert in order to become a great counterfeiter “.
DeepComposer isn’t just linked to the physical keyboard. It also has a digital keyboard interface which allows users to compose on the go. Using this approach, AWS is hoping that Generative AI models are made more approachable for those looking to explore their applications.
The new feature is currently available for preview on AWS at the DeepComposer website. Also on the website is a FAQ to address some of the questions that new users may have.
Malaysia is set to be one of the world’s pioneer markets when it comes to the rollout of 5G. As reported previously, Malaysia is on track to rollout commercial 5G by Q3 2020; that’s a mere 6 months away at this point. Having shown off 5G’s potential in many use cases at the 5G Malaysia conference, Malaysia now faces its largest hurdle yet – the actual roll out.
While Malaysia is one of the first in the region to explore and rollout 5G, we still stand behind the first world countries in Asia; namely Japan and South Korea who are already on the verge of developing 6G connectivity. Having said that, the technologies behind 5G are still in their infancy. That said, being an early adopter, Malaysia can learn from the hurdles faced by these countries.
At the 5G Malaysia conference, we had a chance to sit down with Mr Choi Woo Hyuk from the South Korean ICT Policy Bureau. South Korea has already deployed commercial 5G back in April 2019. These were a few things he highlighted as hurdles that the South Korean government faced when investing and rolling out 5G.
1. 5G is about Collaboration
The first hurdle that came up with 5G in South Korea was the alignment of everyone’s interests to roll out 5G. There are many parties involved in 5G’s roll out including vendors such as Samsung, Telcos such as SK Telecom and LGPlus, Consumers and the Government. That said, each party has their own interests to guard. The ongoing negotiations between the parties necessitates mediation and compromise.
In Malaysia, the government has already brought together all the players to form a Consortium. This Consortium and the 5G task force has been a first step towards dealing with the issue. However, the government faces a huge hurdle thanks to a legacy of monopoly with players such as TM. Even now, we see TM lobbying heavily to be the main provider for 5G when it hasn’t even completed the roll out of fiber connectivity across the nation. In fact, we have sources who confirm that the High Speed Broad Band (HSBB) roll out is severely delayed due to TM.
The government will face a similar challenge when it comes to mediating the interests of all the players in the local telecoms and connectivity industry with not only Maxis, DiGi (Telenor), Celcom, TM, TIME and even companies like edotco involved. The government will need to take into consideration the interests of all the parties involved including the interests of its electorate to ensure smooth rollout of 5G and the report from the 5G task force which was handed over at the 5G Malaysia Conference.
2. 5G is a Balancing Act between Privacy, Data Security and Industry
This will be the case the world over as the public grows increasingly cognizant of how they are being tracked. However, with 5G, the amount of data that can and will be collected is increasing by at least tenfold. In South Korea, the government has passed Personal Data protection laws in addition to Financial Protection and Online Privacy acts. That said, policymakers are beginning to realise the nuances that 5G presents when it comes to data and privacy.
Malaysia is on-track with our policies thanks to the implementation of the Personal Data Protection Act 2010, more commonly known as PDPA. However, with security and connected cities being some of the use cases being investigated by our 5G Consortium, the question then arises is “How much data should be collected?” and when it comes to security, “how much data is too little?”.
That said, the advent of 5G may necessitate new data protection policies to govern the quantum leap in the amount of data that can be collected by industry. It may also pose a threat to national security given the interconnectedness of smart cities and the security applications of 5G.
3. 5G Coverage and Consumer Applications May Take Time
5G is all about industrial applications and the collection and processing of the immense amount of data that can be transferred through more efficient and stable wireless connectivity. As evidenced by the limited rollout of 5G in Langkawi, the roll out of the new connectivity technology will be a hurdle that can only be solved with consistent investment.
South Korea initially rolled out their 5G network with 30,000 base stations and has recently completed about 100,000 base stations. This initial rollout not only posed challenges to Telcos, but also caused a very disrupted, inconsistent experience for consumers. With the limited amount of devices at the time, mainly the Samsung Galaxy S10 5G, consumers in South Korea faced issues when it came to battery life as the phones would jump between 5G and 4G networks due to limited coverage.
While players such as Maxis, DiGi and Celcom are touting 5G readiness in Malaysia, it would not be surprising if we see the same issues crop up when 5G hits commercial availability. The increased hype and anticipation could be the biggest hurdle as the implication of 5G are more focused in industry rather than consumer technologies.
With these lessons in mind, it seems like the road to 5G is still quite bumpy and it will take a herculean effort from all the players to ensure that we have an open, unadulterated 5G in Malaysia. However, the success of Malaysia’s 5G rollout will depend on the government, its policies and mediation.
If you walk into your favourite cafés or even restaurants, you might be bombarded with small table
standees with a QR code on the payment counter. That is to indicate that the
restaurant has gone cashless and is accepting cashless payment options. Having multiple
options to pay for your purchases is always great, but problematic since every single
cashless payment vendor produces their own unique QR code for each of the
participating shops.
You end up with multiple apps on a single
device. To keep track of the payments, you must access different apps. That, or
you get a specialised device that has access to several apps at the same time.
Still, it is not perfect. You still need multiple apps to get it to work, if
you choose to omit certain apps, you cannot even allow users to use those apps.
In the end, it is all rubbish and using cash is still the best option to work
with.
Do not get us wrong, we are very big advocates
of the cashless payment system. We use them all the time and we love the fact
that we do not need to carry too much cash around, saves us the trouble of getting
robbed off hundreds in Ringgit. Still, because there are so many payment
options out there and not everyone uses all of them, it becomes troublesome for
us too; we hate that.
We’ve always said then that for eWallets
and cashless payments to work in Malaysia, there needs to be a unifying body that
could make all the apps work seamlessly together. Because changing all the card
receiver machines across the nation is impossible and it is impossible to implement
NFC type payments in all devices, the easiest is to have a single unified QR
code that could work with everyone regardless of app. This announcement then,
is godsent.
PayNet and Cyberview plans to lead the way to digital Malaysia with cashless payment. Then again. Cyberview has been paving the way forward for plenty of things to do with digitalising Malaysia. PayNet is an affiliate of the National Bank of Malaysia, and has been digitalising and providing essential services for Malaysian banks in terms of their payment networks and infrastructure. Thanks to Paynet, we have things like DuitNow and even free instant transfer between banks. That should be the way forward too with eWallets.
With the collaboration PayNet will start implementing unique QR codes for shops that would replace the ten million QR codes generated for the shop by other eWallet vendors. With less clutter, they look less intimidating as well. For users, you can use any eWallet of your choice to pay for your meals and shopping. All you need to do is scan the DuitNow QR code and voila, you can pay using GrabPay, or Boost, or Touch n’ Go eWallet, or FavePay; technically anyway.
The only downside right now is that they are only implementing it in Cyberjaya, for now anyway. PayNet is looking to expand their DuitNow QR to other parts of Malaysia. We think that the service will really take off in Kuala Lumpur and other parts of Klang Valley. You might have to check also if your eWallet app is also a participating vendor within the DuitNow QR ecosystem. For more information regarding DuitNow QR, you can visit their website.
Celcom recently announced their Business Suite for Retail. What is that? The Business Suite is technically their service plan. You can liken them to the Celcom Mobile or Internet plan; the only difference is that the Business Suite, as the name suggest, is for businesses; Small Medium Enterprises (SME) specifically.
You can find out more on their site, here. Briefly, Celcom’s Business Suite for Retail is a complete business end-to-end telecommunication and data solution. You get phone plans, data plans, payment solutions, and more depending on the plans you select. If you need to, you can even throw in Microsoft Office 365 into the plan. The plans are basically perfect solutions for SMEs.
Alliance Bank is known for their very extensive and generous SME programs. They have the BizSmart program to promote and encourage the growth of the SME segment in Malaysia. Of course, when there is a chance to deliver even more value to SMEs, they would want to be the first to be a part of it. They have plenty of solutions for SME after all; the SME Express Cash for example.
Source: Celcom
The partnership that just happened today marks the combination of two forces in the SME specific services space. Celcom Business Suite for Retail subscribers are now eligible for Alliance Bank’s extensive financing plans for SMEs. Thanks to the collaboration as well the processes and pains of applying for Alliance Bank’s financing programs are expedited and shortened. SMEs might even be able to get preferred rates on Alliance Bank’s business loan programs like Express Cash if they are subscribed to Celcom Business Suite for Retail.
Information regarding Celcom’s Business Suite for Retail is available on their website. You can also sign up for Alliance Bank’s available financing programs via the same website.
*This article is contributed by By Victor Argonov, Analyst, EXANTE*
There is still a great debate about which
is the best asset to protect investors in difficult times: cryptocurrencies or
gold.
Cryptocurrencies are often compared to
gold. They have a number of features in common – independence from governments,
limited emission, and a user consensus ascribing value to them. This is
especially true in the case of bitcoin, the first cryptocurrency that still
retains the status of the “default crypto”, just like gold retains the status
of the most important precious metal.
However, cryptocurrencies are also vastly
different from metals: they are a lot easier to trade. Physical gold is
extremely difficult to buy, sell, and trade across national borders, and nearly
impossible to use as legal tender. Gold turnover is subject to heavy taxation,
and many prefer to invest in precious metal accounts instead of physical gold.
Cryptocurrencies, on the other hand, are easy to buy and sell, can be freely
traded across borders, and their use as legal tender is becoming increasingly
more common.
These similarities and differences
between cryptocurrencies and precious metals are common knowledge. However, one
crucial question remains unanswered – how much they are able to function as a
protective asset, retaining their value during crises.
Theoretical Considerations
Currently, one of the key arguments
against the use of cryptocurrencies as protective assets is their high
volatility. BTC cost $0.1 in 2010, $1,000 in late 2013, $200 in late 2014,
$19,000 in late 2017, and around $7,000 today. Even just in 2019, which can
hardly be called a particularly volatile year, its exchange rate still
fluctuated by a factor of four over the year. Crashes are commonplace on the
market, and no matter when you buy cryptocurrency, there is no guarantee that
your capital is not going to halve in a month.
On the other hand, the key argument for
keeping one’s funds in cryptocurrency is its tendency to grow in value as the
number of its users increases. Cryptocurrency emission is limited by
algorithms. With BTC specifically it is actually decreasing, which minimizes
inflation. Currently a few dozen million people on Earth use cryptocurrencies,
and their number doubles every year. Even 2018, disastrous as the year was, saw
the number of users increase from 18 to 35 million. At the same time, the
potential new audience is still huge, and in tandem with guaranteed low
inflation it usually stimulates growing exchange rates, regardless of the
bubbles that may occur.
The increasing number of crypto users not
only boosts the cryptocurrencies’ exchange rates and capitalization, but
gradually decreases their volatility as well. Here is a rough comparison, which
nonetheless illustrates the situation. Over the four years between 2010 and
2013 the BTC exchange rate changed by four orders of magnitude, while in the
next four, including the dip in 2014 and the enormous bubble in 2017, it only
changed by two orders of magnitude. It is true that even the modest
fluctuations in 2019 are huge compared to the traditional stock and currency
markets, but this is a predictable consequence of the low market cap, which is
currently at around $200B. Even when taken individually, the world’s largest
companies like Facebook or Saudi Aramco have market caps several times that
amount, while those of the global stock and currency markets have several
orders of magnitude that market cap. So the current volatility of the
cryptocurrencies may simply be a sign that they are still in their infancy.
Practical Evidence
There are many known cases of
cryptocurrencies serving as a protective asset, primarily during national
currency crises. In 2018 the national currencies of Turkey, Argentina, and
Venezuela experienced drastic devaluation. While previously citizens of these
countries tried to buy dollars in similar situations, this time many people
turned to cryptocurrencies. As an example, in August 2018 the number of
cryptocurrency users in Turkey was double the average number for Europe.
The cryptocurrencies’ protection against
fiat currencies’ devaluation is not limited to unstable countries with only a
small share on the global market. For example, statistics show that the BTC
exchange rate usually increases as the Chinese yuan’s rate drops.
However, none of these examples make
cryptocurrency unique. When one country’s fiat currency devalues, any other
country’s fiat currency may serve as a protective asset if it is more stable.
What makes gold unique is that its role as a protective asset is universal. Not
only does it protect its owners from national currency devaluation, but from
stock market crashes as well. Gold exchange rate is not particularly stable and
has its own fluctuations, but it is fairly independent of stock index
fluctuations. Does cryptocurrency have the same advantage? As practice shows,
no.
From 2014 to 2017 BTC’s exchange rate
usually changed in the same direction as the indices, and often with much
greater amplitude. In the fall of 2018 it briefly looked like the situation was
changing. The 2017 bubble had already deflated, and the volatility of the
digital assets dropped by several orders of magnitude (as it usually happens
after bubbles). When American stocks started dropping in price due to the trade
war with China, BTC did not follow the market’s lead and had indeed served as a
protective asset.
However, it was unable to cement that
role. November already saw a new cryptocurrency crash that was followed by the
infamous crypto winter. Whether it was chance or an expected event, it roughly
coincided with the maximum dip in the stock market. The indices recovered due
to the negotiations between the US and China in the spring of 2019, and so did
the cryptocurrencies.
Very Risky, But Still A Protective Asset?
Overall, the properties of gold and
cryptocurrencies as protective assets are very different. If you are afraid of
your national currency experiencing inflation, cryptocurrency can protect your
capital, but if you are a stock investor, expect cryptos to dip during a crisis
as well. The reason for this is simple: despite their advantages,
cryptocurrencies are still considered a very risky asset compared to securities
and gold. They are exactly the assets the investors try to get rid of as soon
as possible during difficult times.
On the other hand, in the long term
cryptocurrencies are still a protective asset. If you are not afraid of long
exchange rate dips and are not prone to dumping all your assets during crashes,
you will probably be rewarded over the years. While cryptocurrency growth on
the scale of 2010-2013 is unlikely, their exchange rates are still expected to
multiply in the next few years. To date, every bubble on the crypto market
resulted in a substantial growth of the exchange rates. For example, the BTC
rate of $3,000-4,000 during the crypto winter of 2018-2019 was vastly higher
than in any year before the 2017 bubble.
The only thing that can seriously
undermine the global positive trend of the cryptocurrencies is a complete ban
on them by leading countries. However, this seems unlikely. With every year,
more and more influential financial communities join the cryptocurrency market,
and they would not want to leave it.
The increasing popularity of
cryptocurrencies will eventually slow down their upward trend, but is also
likely to greatly decrease their volatility and make them more similar to
traditional protective assets like gold. How close that similarity would be is,
as yet, unknown.
*This article is contributed byNicole Tan, Country Director of Facebook Malaysia*
A fisherman who uses WhatsApp and Facebook to change his quality of life and keeps his community safe by alerting each other on weather and tide conditions, a non-profit that empowers the homeless towards financial independence by turning them into tour guides, a delicious sambal recipe made in Malaysia that gained acclaim across borders from Indonesia and the Philippines — these are real examples of business innovation previously unimaginable.
The year 2020 crowns a
decade of change that has upended traditional ways of starting, marketing and
growing businesses across the world. This is even more pronounced in Asia,
where entire countries have leapfrogged to the mobile internet, making the
region home to some of the world’s fastest-growing economies. According to the
Department of Statistics Malaysia, the nations’ digital economy contributed
18.5% to the national economy in 2018, while e-commerce contributed 8%,
highlighting digital transformation as a catalyst for expansion[1].
Source: Facebook
According to a
McKinsey report, by 2040, Asia could account for more than half of the global
GDP with global cross-order flows shifting towards Asia. The report shows how
these changes could shift globalisation towards regionalisation with 60 percent
of goods traded by Asian economies being within the region. In addition, 71
percent of Asian investment in start-ups is intraregional, and 74 percent of
Asian travelers travel within the region[2].
Malaysia’s exports
accounts for more than 71.5% of GDP[3].
Digital adoption in increasing productivity is crucial for SMEs to expand
further[4]
and digital tools give SMEs a boost in economic growth (revenue and sales 65%)
and go global (82% of exporting SMEs in Malaysia say that at least half of
their exports depend on online tools usage)[5].
Against this backdrop
of macroeconomic change, people’s expectations for the experiences they have
with brands and businesses is evolving fast. As we have seen over the last few
years, people adopt new technologies long before businesses do, and it
influences how they discover, research and finally make purchasing decisions.
We see this every day
on Facebook, where every day 1.62 billion people across the world come to
connect with people, products and services they care about. We stand at the
intersection of community and creativity where brands can identify, take
inspiration from and participate in the communities that people inhabit. At the
start of 2019, we shared three social trends that were on rise across our
platforms: ephemeral sharing, videos and messaging. As we head into 2020, these
trends have only intensified in our region. Simply put, Asia is about more —
more mobile, more video, more stories, more conversation and more commerce.
Malaysia is a truly
mobile-first nation with 88% owning smartphones. According to the Malaysian
Communications and Multimedia Commission (MCMC), 77.6% of Malaysians are
spending time streaming or downloading videos online[6].
Last year we saw how
people show preference for sharing photographs or video over typing out a text
update, the comfort of knowing what you post isn’t going to stick around
forever and the need to share everyday moments with smaller audiences.
It’s interesting to note that video on mobile is far from a homogeneous experience. Unlike traditional video, mobile video experiences are not linear and vary based on a number of factors. Through our research and experience over the last few years, we’ve seen two distinct categories of video experiences that have accelerated largely due to mobile: “on-the-go” and “captivated viewing.” As a result of these changing viewing habits, people are most drawn to brands that are easy to discover and use, whether it’s through their strong presence in online communities or their high-quality mobile content across platforms. With the continued growth in streaming services, people will be looking to brands that can clearly communicate their offerings and to those that can create a more personalised viewing experience.
We’re continuing to
see fast adoption of ephemeral sharing as each of our Stories experiences
across Facebook, Messenger, Instagram, and WhatsApp now have more than half a
billion daily users[7]. As more
and more people use Stories, we’re making it easier for marketers to adopt this
format and reach people where they’re spending their time.
The same goes for
messaging. At the start of 2018, we shared that over 8 billion messages were
sent between people and businesses on Messenger every month. That number has
more than doubled to 20 billion messages this year – which shows that people
expect to communicate with businesses in much the same way as they message with
their friends. As people increasingly use messaging apps, we’re helping
businesses make the shift too. There are now over 40 million monthly active
businesses on Messenger (i.e. sending or receiving a message on Messenger)[8]
and research shows that people in emerging countries in Asia-Pacific are more
likely than the global average to message a business. In fact, 63% of
people surveyed in Asia-Pacific messaged a business last Holiday season[9].
More than 5 million businesses are actively using the WhatsApp Business app
each month[10].
While last year we saw
the ability to message with a business made people feel more confident about
the brand and more connected to it and create a connection that fosters brand
loyalty, this year we see an interesting subset of this preference for
messaging; the growing use of messaging or online chat to buy and sell. A study
by the Boston Consulting Group in partnership with Facebook across nine
countries found that Southeast Asia outpaces other countries surveyed in both
awareness and adoption of conversational commerce. Of the nine countries
surveyed, the percentage of respondents who had undertaken a conversational
commerce transaction was the highest in Thailand and Vietnam, at 40% and 36%
respectively, followed by Indonesia (29%), Malaysia (26%) and the Philippines
(23%). The rate of adoption for other countries is still nascent – US (5%),
Mexico (6%), India (10%), and Brazil (11%), which shows substantial opportunity
for growth[11]. The
study unveiled a remarkable finding that discovery and spending behavior of
digital consumers in between Tier 1 and Tier 2 cities are very similar,
debunking the myth that Tier 1 digital consumers shop more online. Once a Tier
2 shopper adopts online shopping, habits and preferences become very similar to
Tier 1. Except for the discovery journey, where Tier 2 shoppers don’t know what
they want to buy even more, which means they are even more encouraged by
inspiration-shopping.
Source: Tech Crunch
All of these developments mean that the commerce landscape will continue to evolve with people opting to interact with businesses via experiences that are most relevant, personal, and seamless in their daily lives. With increasing affluence and access to the mobile internet, the ways people discover new products is very much about a connected experience. Therefore, ensuring that your business and brands are visible and discoverable is going to be an essential element to winning in the new era of commerce.
Today,
Most Malaysian consumers want everything almost immediately, making every step
or delay a chance for them to abandon their journeys. Awareness, information
gaps and the inability to optimise technology are some causes that contributed
to the friction[12]. So
what can businesses do to prepare for this new era of commerce? Bring
connection back to the equation.
Businesses can enhance connections by designing
mobile-friendly websites, apps, marketing and real-time communication to reduce
friction and establish the best experiences for customers[13].
