TER fares, motorway tolls up in line with inflation
By Staff Writer - February 1, 2018
While January saw a slight decrease in prices in France, down 0.1 percent, inflation for the whole of 2017 was 1.4 percent.
Largely on this basis, a number of prices increased on February 1, including the cost of petrol and diesel at the pump, electricity (up 0.8 percent) and TER train tickets.
TER fares will increase 3.5 percent, which will affect “occasional travellers” who make up 59 percent of traffic and 86 percent of revenue according to by Philippe Tabarot, Vice-President of SNCF Regional Transport.
Locally, motorway toll prices have been increased by 1.34 percent for all types of vehicles, but the Escota network is below the national average for franchised highways, which comes in at 1.65 percent.
While some routes remain the same rates – Nice-Les Adrets at €4.4 – others will see a slight increase, including Nice-Aix (€17.50 to €17.60) and Menton-Cagnes (€4.60 to €4.70).
“This increase is due to the application of the annual inflation rate and to match the increase in public royalties that we pay,” a spokesperson of Vinci Autoroutes, the major concession operator in Europe who manages the Escota network, told local French-language daily Nice Matin.
This is an article on a (relatively) new piece of technology that is dominating our discussions and the media at the moment – blockchain. This digital ledger is believed to be able to revolutionise the way we transact and trade.
There is also the whole issue around the rise in cryptocurrencies (see comments below), which has added an extra dimension to the subject and led to some interesting comments from the likes of Jamie Dimon, CEO of JP Morgan, who last month referred to bitcoin a “fraud”.
However, blockchain has a madness of markets with everyone talking about it and few understanding it.
The only agreed terminology is that this is a shared system, which means that more than one player has to be in the game for a blockchain development to work.
I will therefore endeavour to give a high-level overview to the current situation and hopefully prompt an enthusiasm for more information. In other words, I can only scratch at the surface for this article.
What is Blockchain?
Currently, most people use a trusted middleman such as a bank to make a transaction, but blockchain allows consumers and suppliers to connect directly, removing the need for a third party, in a digital format.
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Using cryptography to keep exchanges secure, blockchain provides a decentralised database – or “digital ledger” – of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.
By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
The technology can work for almost every type of transaction involving value, including money, goods and property. Its potential uses are almost limitless: from collecting taxes to enabling migrants to send money back to family in countries where banking is difficult.
Blockchain could also help to reduce fraud because every transaction would be recorded and distributed on a public ledger for anyone to see. In fact, the use of blockchain is almost unlimited in instances where two parties need to transact securely and swiftly.
The key issue here is that it does away with a middleman (think a bank, a lawyer, a government and so on) so a lot of businesses and their respective business models could be disrupted by this technology.
Who is developing Blockchain ideas?
According to the World Economic Forum, investment in blockchain will increase significantly in the next decade, as banks, insurers and tech firms see the technology as a way to speed up settlements and cut costs as well as other applications.
For example, in banking, there is no blockchain. There is just a range of areas where this technology is being applied to banking processes and could save billions of dollars. Case in point, Santander produced a white paper that estimated more than €17 billion ($20 billion) a year could be saved in clearing and settlement alone. For this reason, dozens of start-up companies are developing settlement coins that could process post-trade clearing in minutes, or even seconds, at almost no cost.
Other companies are racing to adapt blockchain include UBS, Microsoft, IBM and PwC. The Bank of Canada, according to the Wall Street Journal, is also experimenting with the technology. Currently the London Stock Exchange is developing a blockchain settlement system with the Italian Stock Exchange. Finally, the Royal Mint (aged 1,100 years and going strong) has just launched its own Blockchain and digital currency to purchase gold.
When was this technology “invented?”
The first distributed blockchain was conceptualised in 2008 by an anonymous person (or group – there is a lot of speculation on this) known as Satoshi Nakamoto, and implemented in 2009 as a core component of Bitcoin (note the capital “B”) where it serves as the public ledger for all transactions.
The invention of the blockchain for bitcoin (note the small “b”) made it also the first digital currency to solve the double spending problem without the need of a trusted authority or central server (this is a key component as preventing someone from spending their money twice is very complex). The bitcoin design has been the inspiration for other applications and cryptocurrencies, especially as it needs to be “mined” (this is a whole article in itself).
What is a Cryptocurrency?
A cryptocurrency is a digital asset designed to work as a medium of exchange using
cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets.
The best-known example is bitcoin, but there are now hundreds of them in circulation. The top 5 are Bitcoin 62%; Ethereum 14%; Bitcoin Cash 5%; Ripple 3.5% and Litecoin 1.5%.
The total Market Cap of all Cryptocurrencies is now €262 billion ($309 billion), according to Coinmarket.
Putting this into perspective the crypto market is now a similar size as Exxon Mobil, which has a market capitalization of €288 billion ($340 billion – at the time of going to press, the price is quite volatile at present).
Why is Blockchain the enemy of the State?
Gold was originally the currency of choice for governments. However, they could only print as much money as they had gold supply. This was the era of the Gold Standard.
In 1914, shortly before WWII the British, French and German governments all took their countries off the Gold Standard (the US followed suit in 1971 with President Nixon) so they could print more money to pay for the ensuing war. This was the beginning of Fiat Money, meaning money by command. You must accept this money as payment for goods and services. Crucially you also need to pay taxes on it, too.
By manipulating the money system and coming off the Gold Standard, they enabled themselves to both print money and run up deficits (and, indeed, pay for very costly wars). Crucially as the money is not backed up by Gold (or anything else) there is (almost) no limit on how much can be created.
At present, we live in a world where the State looks after our birth, our education, our health, often our employment, our old age and even our burial. It was not always like this.
In the UK, the move to a large state model began in the late nineteenth century with compulsory education as one of the first pieces of legislation. The US began their own path in 1913 when income tax and the formation of the Federal Reserve Bank (the Fed) was introduced.
Whichever side of the political debate you are on the large state model is only possible when government controls money. If money becomes independent, then government struggles to fund itself and therefore loses control. This would also apply to banks and big business where they have been de facto the only source (or a very limited source) of information or money.
This explains why big business and governments (China, for example) have been big detractors of the technology and particularly the cryptocurrencies.
How will blockchain change the world?
Bitcoin has been dubbed “money without government” and “money without borders.” When you are using a cryptocurrency via the blockchain, suddenly capital controls do not apply as they once did. This frees up the possibilities for money laundering and other illicit activity, of course, but it also frees up people.
The implications of this possibility to instantly transfer wealth or ownership across borders without interferences are, I think, considerable. In this new paradigm, it would mean borders would lose much of their significance.
The monopoly on money and payments that banks have held so long is under threat from cheaper, more efficient systems. The implications for banking as we know it are considerable as, suddenly, is it easy to move money and goods around without anyone (read government) knowing about it. There is going to be a lot of friction between know-your-customer, anti-money laundering regulations and other regulations, particularly between the developing and the developed worlds.
The internet has made communication super easy, but it did show that the money system doesn’t work very well; if blockchain becomes mainstream it will grow bigger and better over time and will increase commerce. As a result, it could unleash a huge global economic boom – especially to areas in the world where there is a mass of “unbanked”.
The current technology has laid the foundations for a dramatic increase in exchange, and of course exchange is the crucial process by which mankind prospers and progresses.
Should you buy a cryptocurrency?
In the process of writing this article (from September 2017 onwards) I started to trade cryptos and bought bitcoin, Ethereum and Litecoin. I have now subsequently sold all of my Litecoin and put it all into bitcoin while retaining the Ether. My portfolio at the time of writing – I am investing only modest sums at this stage – is up 40 percent.
Some would argue that we are in the throes of a mania not seen since Tulips, Railroads and the dot-com bubble while others would argue that we are experiencing an epoch changing event. Personally, I found that by investing a small sum and taking part, I was better able to articulate my thoughts in meetings and over coffees and as a result have kept a close interest on the topic. Time will tell which currency will prevail (think of the battle between VHS and Betamax video in 1980s).
Clients are also beginning to ask about this area and one in particular is considering the implications of an ICO (an IPO but in tokens/coins). Undoubtedly these conversations have stemmed from my interest and activity on the topic.
Trust is a risk judgement between different parties, and in the digital world, determining trust often boils down to proving identity (authentication) and proving permissions (authorisation). This is in essence what the blockchain allows you to do.
All in all, blockchain may be confusing and appear close to madness at the highest level but, look under the hood, and the next generation of financial systems are being developed by the world’s leading infrastructures, based upon this technological change.
Therefore, it is not just important, but fundamental.
Mark Estcourt is CEO of Cavendish Family Office in London. For more information, see cavfo.com. Sources: “Bitcoin, the Future of Money” by Dominic Frisby plus numerous online articles. Article first published December 5, 2017.