Basics of cryptocurrencies

BankMobile, the student-focused online banking division of $10 billion Customers Bank, was set to be sold to $125MM Flagship Community Bank in Florida. However, the deal broke down as Flagship was not able to raise enough capital to cover the $175MM purchase price. While it looks like the deal will be re-worked, it is notable since it is 1) one of the few (second?) digital banking acquisitions in the US, years after BBVA bought Simple for $117MM, and 2) first major acquisition of a digital banking startup by a small community bank.

Basics of Cryptocurrencies

Tim Ferris and Naval Ravikant interviewed Nick Szabo for a great foundational podcast on cryptocurrencies. Nick and Naval lay out the basics, including work that Nick had done pre-BitCoin on his BitGold structure. The podcast is not deep technically, but spends more time on the fundamentals – the history of money and currency, how cryptocurrencies fit in, some of the more popular forms and how they are distinct, etc. This is a good starter course if you are just getting starting learning about this area.

Coinbase looking to become a unicorn

In related news, Coinbase, a bitcoin wallet/platform startup, is looking to raise about $100MM of new money at a valuation north of $1 billion. Coinbase has become one of the more popular ways for individuals to buy and sell Bitcoin. While $1 billion is a lot for any startup valuation, the podcast above also discussed how the value in most cryptocurrencies accrues to the actual “coins”, rather than companies. Worth noting that relative to the potential $1 billion valuation of Coinbase, Bitcoin has a market cap above $50 billion.

Everyone’s a Winner!

Dueling press releases from ATM makers Nautilus Hyosung America and Diebold Nixdorf, who also happen to share the distinction of the most-fun-to-say names in banking services. Both firms faced off in front of the International Trade Commission over the infringement of six patents. Hyosung says that they “defeated” Diebold, while Diebold says they “prevailed” over Hyosung. In reality, it was a half-victory for each, as some of the patent infringement claims were upheld and some weren’t. Diebold claimed victory saying that Hyosung will be barred from importing a “significant number” of ATMs, while Hyosung downplayed the results and said it “would not adversely affect” their business in any way. Who knew ATMs could be so contentious?

First National Community Bank & Trust Company of the Citizens

Fun article to close out this week. Hunter Young of First Bank in North Carolina analyzed the names of 6,000 banks in the US to see the prevalence of generic bank names throughout the country. The results are what you would expect – over 900 banks say they are a “First” bank. The top five words used in bank names (excluding “bank”) are State, First, National, Trust, and Savings. Enjoy!