The digital currency Bitcoin has narrowly avoided splitting into two separate currencies following a network upgrade. This upgrade will improve the ability for Bitcoin to cope with an ever-growing number of transactions. Bitcoin have a group of ‘miners’ who each represent a group of computer operators. Their job is to ensure that the blockchain is kept secure. The miners have averted a split that would have created two digital ledgers, also known as blockchains (digital ledgers in which transactions made in Bitcoin or other cryptocurrencies are recorded chronologically and publicly).
The miners have indicated that they support the improvements being made to Bitcoin under the new proposals named as ‘Bitcoin Improvement Proposal (BIP) 91’, and believe the move forward to a larger scale upgrade with software called SegWit2x is a positive one. The larger scale upgrade was almost compromised due to disagreements between miners and core developers of the Bitcoin network.
According to reports and analysis from market users, last week saw figures 20% above their required threshold with 100% support.
Following the success growth rate of Bitcoin over the last eight years, investors are taking a shine to using Bitcoin especially with the value of the company in the stock market being calculated in excess of $40 billion.
Fears grew following the news of a possible split, and the demand for Bitcoins subsequently reduced – this followed a record high of nearly $3,000 per Bitcoin, and then a drop as low as $1,830. In Pounds Sterling, 1 Bitcoin is worth £1900.25 at the time of this bulletin going to print.
Due to the high demand of transactions, Bitcoin have not been able to keep up with the high numbers or able to process transactions. The upgrade attempt was used to help and assist the network during the process in order to cope with millions of daily transactions. Many users of Bitcoin have complained about the slow speed of transactions. Reports show that on average transactions cost 83 US Cents, meaning that small online payments are not practical. Bitcoin are also limited to 7 transactions per second, compared to Visa’s 2000 transactions per second.
The BIP 91 proposals are a move forward in the processes used by Bitcoin, and as a result of these proposals, Bitcoin miners and ledgers will update their out of date software.
The full upgrade will not take place until the Autumn. Once it has taken place, Bitcoin will have added features that will allow transactions to clear quicker with lower running costs.
Bank fraud result
Thirty customers caught up in a criminal conspiracy that involved former bankers at Lloyd Banking Group, the HBOS subsidiary are close to receiving compensation. With deadlines already missed it is reported that only five however have accepted their offers for compensation.
Details of the fraud were released and involved small businesses being duped into believing that their companies were struggling. Two corrupt HBOS bankers encouraged the businesses to bring in ‘Turnaround Consultants’, Quayside Corporate Services, then directed by David Mills. Mills and a group of accomplices then went on to bribe the bankers with cash and luxury gifts; they then used the relationship with the bankers to reinforce bullying tactics towards the business owners, who then had to hand over high fees with a view to eventually gaining full control of their companies.
During the court case, the judge described the businesses as being “cheated, defeated and penniless”. Following the publicity of the case, the chairman of Lloyds, Lord Blackwell confirmed that all compensation claims would be dealt with within a short time scale, within weeks, not months. However, the 30th June deadline has now passed, and only 16 offers of compensation have been made with only five victims accepting offers.
Paul and Nikki Turner, small business customers exposed the fraud, and forwarded detailed information and evidence to the board of HBOS in 2007. This evidence was then used during the 2016 trial. This was then followed by further evidence being forwarded to every member of the Lloyd’s board in 2009 – evidence that was originally dismissed by Lloyds. Instead of supporting the Turners, Lloyds sought legal advice, and used large sums to try and eject the Turners.
It was reported that Lloyds went on and carried out internal reviews into the behaviour of Lynden Scourfield and others at the bank in relation to referring services to Quayside Corporate Services as far back as 2006. During April, Lloyds appointed Dame Linda Dobbs, a former High Court Judge to assess the banks handling of the fraud dating back to the period covering 2002-2007.
Lloyds have refused to acknowledge any criminality, and have refused to comment publically about the fraud. It has been reported that the banks compensation scheme “lacks transparency and independence”. Lloyds have refused to reveal how the compensation offers have been worked out, ading to an overall loss of public confidence to the banking group in the process.
Bill Esterson, Shadow Business Minister commented that the known victims of the HBOS Reading Fraud need be treated fairly and in a clear manner. Esterson was aware of this not happening and wants the bank to be held accountable for the fraud. He expressed that all the compensation offers should be clear. “Businesses in the UK deserve to have confidence that we are doing everything we can to support them when things go wrong, and it appears to me that there is a massive systemic failure when Banks are allowed to be their own judge, jury and executioner behind closed doors. This must change.”
Brexititus breaks out in the city
Goldman Sachs International Chief Executive Richard Gnodde, the most senior employee outside of the United States has reportedly said that the due to the governments delay in clarifying its position with Brexit, the transition period to independence within Europe outside the EU would take longer.
A contingency plan has been put into place, described as by some as buying insurance, spending money daily to ensure that once the March 2019 deadline has approached, they are still open for business.
Goldman Sach’s plans have included placing hundreds of members of staff into their European based offices in Frankfurt and Paris. By doing this, they are guaranteeing continuity of work with their EU clients and customers following Brexit. The positions within the EU base would be filled by using current members of staff from their London office; it would also introduce new positions for local people. Other locations would be taken into consideration, as would additional members of staff following the final arrangements between the EU and the UK have been hammered out.
Following the steps of other banks, Goldman Sachs have submitted their Brexit plans to the Financial Conduct Authority (FCA). The FCA have confirmed that all banks will need to be advised of the government’s position relating to the transition procedures that will be put into place by the end of 2017, before any further contingency plans were to be actioned.
Only last week, Prime Minister Theresa May had chaired a new Business Council meeting, a forum of rotating business leaders who meet on a regular basis to discuss the government’s plans for Brexit. According to reports, the Prime Minister is already resigned to a longer transitional period, rather than a dramatic and quick exit from the EU..
Driving – it’s a gas
A ban on diesel cars in major European cities could hinder the automobile industry when investing in zero-emission vehicles, according to warnings from the European Union’s Commissioner for Industry.
According to Commissioner Elzbieta Bienkowska, there are no benefits in a decrease in the market for diesel driven vehicles, and that thre should be a short-term focus on ensuring that car manufacturers bring the levels of damaging nitrogen oxide emissions in line with current EU regulations. The letter outlined that, although we should be aiming for zero emission vehicles, it is without doubt that a rapid collapse in the diesel market would not be beneficial, depriving vehicle manufacturers of the necessary funding to invest in the manufacture of zero-emission vehicles. Biedkowska also commented that all vehicles with excessively high emission levels of nitrogen oxide should be taken off of European roads, with car manufacturers acting upon this on purely a voluntary basis.
Three major car manufacturers throughout Germany have heavily invested in the technology for diesel cars. One of the advantages of diesel engines is their efficiency in terms of burning fuel and giving out lower carbon dioxide emissions than those of equivalent petrol engines.
Following Volkswagen’s admission to cheating on US emission tests in 2015, concerns over vehicle pollution have caused the automobile industry to come under fire and to come under wider scrutiny worldwide. Major concerns relating to links of respiratory diseases and nitrogen oxide levels have also been highlight. But it’s not just Volkswagen that have been highlighted – Audi and Porsche have also recently violated current emission tests.
The German city of Munich is the latest city to consider a ban on some diesel vehicles within its city centre. According to reports from environmental groups, banning diesel vehicles within cities can cut the amount of nitrogen oxide emissions. The report also comments that it would also force automobile manufacturers to design more environmentally friendly cleaner vehicles.
Back on track
Carillion is just one of the successful companies that has received part of £6.6 billion funding to build the controversial new High Speed 2 (HS2) railway between London and Birmingham. Construction is due to start in 2018, with the introduction of new stations, tunnels, embankments and viaducts on the new London to Birmingham line. This forms part of the first phase of the project. It is projected that 16,000 jobs will be created within civil engineering during the construction.
The project will provide not only new jobs, but will also bring billions in investments and the so-called North/South divide closer together. HS2 to is expected to bring opportunities to thousands, and will be a step forward in bringing investments and jobs to parts of the UK that need them the most.
An agreement has been signed by the TUC which provides a guarantee of high employment standards, to ensure that the benefits of HS2 are maximised, and that they are used to support the UK supply chain.
Transport Secretary, Chris Grayling unveiled the article that will see Phase 2a of HS2 prioritised, with the involvement of faster construction work on the Birmingham to Crewe line whilst also confirming that Phase 2b will run north via Manchester and Leeds. Grayling insisted that the work will be done within budgets and time scales, and confirmed that the government had been given clear guidelines surrounding the costs. It has been reported that those opposed to the project, have approached the government with their concerns surrounding the underestimations of costs and warnings relating to the already delayed construction work. Budgets for the project have been revised of up to £55.7 billion. Chairman of the Rail Freight Group, Lord Berkeley fears that the costs could be as high as £111 billion. Grayling has denied this, and described this amount as “nonsense”.
French construction company Eiffage and UK firm Kier both working on joint ventures with Carillion have secured two contracts worth £1.4 billion – the contracts involve building the North Portal Chiltern tunnels to Brackley, and then the Brackley to Long Itchington Wood Green Tunnel South Portal. Carillion at present has its own troubles, with their share prices crashing 70% last week after issuing a profit warning and the announcement of its Chief Executive departing the business. Following their major HS2 contract win, Carillion saw their shares rise to over 19% – the firm then announced that it is working with Ernst and Young (EY), an accountancy firm to support them with a strategy evaluation of the company.
Balfour Beatty have won two contracts worth £2.5 billion, working together with French firm Vinci. The work will involve the designing and building of the Long Itchington Wood Green tunnel to the Delta Junction/Birmingham Spur, along with the section from Delta Junction to the West Coast Main line near Litchfield in Staffordshire.
Analysts from the city remain sceptical following the contract awards, and have doubts as to whether the companies will be able to deliver the goods. This project could be indeed make or break Carillion.
Companies also involved in the HS2 project include French construction group Bouygues, Robert McAlpine and Volker Fitzpatrick. In total, these companies have been awarded £965 million of the contract works.
It has been announced that many of the firms involved in the construction of HS2 were involved in a blacklisting scandal that was settled last year, and that the RMT Union has demanded that the government ensures that employment surrounding the project is done properly.
ASLEF’s Mick Whelan has asked for assurances by the government that it will not to sell HS2. This follows the sale of HS1, Britains only high-speed track that was sold last week to a consortium managed by InfraRed. Its investors include the National Pension Service of the Republic of Korea, HICL Infrastructure – and Equitix Investment Management. The amount that HS1 was sold for has not been publicly disclosed. It is predicted that the first trains to run on the new HS2 line will do so on the London to Birmingham line in 2026. The full Y-shaped network will not be fully operational until 2033.