Private equity investing in the current environment may involve stumping up big prices to deploy record levels of dry powder, but the global model is adapting and evolving away from financial engineering.
That is the view of EY's global private equity chief Herb Engert, who thinks the industry model is changing as firms break away from traditional holding periods and focus more on operating resources. "In a frothy market you (private equity) are going to overpay and that's where the model has changed from just buy and hold and financial engineering, to buy and transform," he told The Australian Financial Review.
"We are seeing the advent of a lot of operating resources that funds are putting to work."
Mr Engert said purchase price multiples were sitting at about 11-12 times earnings before interest, tax, depreciation and amortisation in the US, compared to about 10 times in Australia.
Bain & Company is, however, mindful of challenges facing private equity with a report released in the first quarter pointing to the industry's "inability to put money to work" via new investments even as it continued to attract more capital. The report said at the end of 2017 the industry was sitting on a record level of capital of $US633 billion.
Mr Engert said firms were increasingly thinking more laterally on sourcing deal targets and drawing on an "investment theme or edge" to boost performance from their operating companies. That includes seeking out benefits from digitisation or geographic expansion. He said in other parts of the world longer-term private equity funds with investment horizons of 15-20 years were being formed, while buyout firms were also taking advantage of an increase in asset divestments spurred by activism. "Deal-making will look different in private equity," Mr Engert added, saying that minority deals and partnerships with companies would play a larger role in the industry. "There are a lot of different options and financing structures ... they are not going to use as much debt."
Some of those themes are already playing out here. Local firm Pacific Equity Partners is in the process of raising a new $1 billion fund to target so-called active infrastructure, a hybrid of private equity-style investments and infrastructure assets.
Globally, it's been a busy start with announced private equity acquisitions and divestments amounting to $US161.4 billion as at April 6, the highest year- to-date total in 11 years, according to Dealogic. Harbour Energy's $13.5 billion cash tilt at oil and gas producer Santos and CHAMP Private Equity's sale of Accolade Wines have pushed announced Australian private equity activity to a record year-to-date level. Private equity investments and divestments in Australia amount to $US15.2 billion in 2018 so far, Dealogic data showed.
The big four accounting firms are also making a bigger push into the private equity advisory space.
Globally, EY provided commercial due diligence advice in last year's US$4.3 billion takeover of Nord Anglia Education, which was led by funds affiliated with Baring Private Equity Asia and Canada Pension Plan Investment Board. In this market, the firm was among a trio of advisers that advised Quadrant Private Equity-owned cancer care firm Icon on its sale to a group led by Queensland Investment Corporation. Local EY partner Bryan Zekulich said private equity firms were also keeping close tabs on ASX-listed companies looking to hive off non-core assets. "CEOs and boards are now having to really look at what they do with their assets. I think that will create some really good relationships with private equity to create value," he said, noting that in the past several public deals had stymied those relations. "We've had one or two poor examples of things that can go wrong." Embattled department store Myer, which was listed by private equity in 2009, and the high-profile collapse of retailer Dick Smith two years ago, have created angst among local public boards around private equity suitors.
Still, the private equity industry in Australia is becoming a fierce battleground for investment banks, lawyers and the big four accounting firms, which have all been seeking to capture a bigger slice of the work.
PwC last year hired former Bank of America-Merrill Lynch sponsors banker Annabelle Mooney as a partner to lead a newly created coverage team. Macroeconomic factors, including trade ructions between the US and China, market volatility and government policies, are also being monitored by the industry. Mr Engert said while lower tax corporate rates would be viewed favourably by private equity firms seeking US investments, they were not a key factor in deal-making. "When you (Donald Trump) run on a agenda of a roll-back of regulation and a roll-back in tax, that is going to help," he said. "But I don't think deals get done because of tax rates." He noted the same argument when asked about mooted corporate tax cuts in Australia.
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While cryptocurrencies and initial coin offerings are banned entities in China, with countries like the U.S. and some others imposing strict regulations on the nascent digital currency ecosystem, Japan – a crypto friendly nation – is planning to legalize and regulate initial coin offerings.
The Need for Regulation According to reports, a task force backed by the Japanese government has formulated guidelines aimed at regulating and legalizing initial coin offerings (ICOs).
While cryptocurrencies and initial coin offerings are banned entities in China, with countries like the U.S. and some others imposing strict regulations on the nascent digital currency ecosystem, Japan – a crypto friendly nation – is planning to legalize and regulate initial coin offerings.
The Need for RegulationAccording to reports, a task force backed by the Japanese government has formulated guidelines aimed at regulating and legalizing initial coin offerings (ICOs). On April 5, 2018, Japan’s Business Research Group drafted a proposal requesting that the government regulate ICOs in a non-draconian way that would protect investors’ interests and encourage the growth of the nascent ICO industry.
As reported by Bloomberg, Japan’s Financial Services Agency (FSA) will take a critical look at the proposal a few weeks from now. If everything works according to plan and the bill gets accepted, it could become law in a few years time – a development that will undoubtedly restore Japan’s lead in the ‘cryptosphere’ and exchanges that have left the nation due to recent regulatory bottlenecks may likely come back.
“ICOs are groundbreaking technology, so if we can implement good principles and rules, they have the potential to become a new way to raise funding,” said Kenji Harashima, a researcher at Mizuho Research Institute.
The study group is made up of highly reputable members of the Japanese society, including Yuzo Kano, the CEO of Japan’s largest crypto trading platform by trading volume, bitFlyer. Takuya Hirai, a member of Japan’s ruling political party, is the group’s general adviser, Toshifumi Kokubun, a professor at Tama University, is the chairman of the task force. Also, other top officials of Japan’s largest financial institutions – Mitsubishi UFJ Financial Group Inc, and Sumitomo Mitsui Financial Group Inc are members of the working group.
Bringing the Wider Investment Community to ICOs The proposal is formulated in a way that would be beneficial to organizers and investors of ICOS. It states that organizers must explicitly say how funds generated from the project, as well as profits and assets, would be distributed to token holders, equity and debt. The paper also requires exchanges to desist from insider trading, as well as map out a general standard for listing tokens.
“The ICO Business Research Group proposes the above principles as the minimum principles that should be satisfied at this time, to enable ICOs to be used safely by a wide range of issuers and investors and to be accepted well in the society, more detailed rules may be required,” an excerpt of the report declared.
Since cryptocurrencies like bitcoin and the altcoins became highly valuable digital assets, startups in the blockchain space have found ICOs an excellent means of raising funds to bring their projects to life. However, due to the widely unregulated nature of ICOs and the entire digital currency industry, bad actors have proliferated into the ecosystem. This kind of ‘soft’ regulation is what the entire crypto space needs, for now, to deter fraudsters from taking advantage of unsuspecting investors and boost the continuous growth of the world of blockchain finance.
About 43% of Malaysian ultra-high-net-worth individuals (UHNWIs) plan to invest in properties abroad — higher than the global average of 34% — in the next few years, said property consultancy firm Knight Frank.
Their proposed acquisitions — which exclude a primary residence or a second home — are mainly located in Australia, Singapore and the UK, the firm said in The Wealth Report 2018 launched yesterday.
“Malaysian investors are increasingly looking at investing in matured markets including the UK, Australia and Singapore. Not only that, aside from the traditional property sectors — such as residential, office, retail and hotel — purpose-built student accommodation, which is unheard of during the past, is seeing investors,” said Knight Frank Malaysia executive director of capital markets James Buckley.
“Malaysians are very familiar [with] investing in real estate and are also looking at diversifying [their investments] outside the country. “Student accommodation over the last five years has been the star of the UK property, consistently delivering the UK’s highest property rental yields. An increasing number of students and a structural under-supply have driven growth rate and occupancy,” he explained.
When asked if the ongoing process of the UK exiting the European Union — Brexit — poses any concerns to investors in the UK, Knight Frank Malaysia international project marketing associate director Dominic Heaton-Watson noted that investors are becoming more realistic by taking a long-term approach.
“Education will always remain as a key driver [to the UK market] and it remains strong. Education is also less correlated to the health of the general economy, which investors are attracted to,” he said.
Meanwhile, 45% of Malaysia’s wealthiest people are thinking of buying an investment property locally, which is slightly higher than the global average of 43%, according to the report, which featured findings from the Attitudes Survey 2018 that shows what are the factors affecting the investment and lifestyle decisions of wealthy individuals annually based on responses from 541 top bankers and wealth advisers.
In the survey, respondents said 56% of their clients have increased their property investments, compared with 62% who increased their exposure to equities. Overall, UHNWIs in Asia named the UK, the US and Singapore as their three favourite overseas destinations for new homes in 2018.
Meanwhile, the new City Wealth Index — which identifies cities that matter to the ultra-wealthy by analysing four measures of current wealth, investment, lifestyle and economic performance — saw New York emerging as the top city with the highest marks across all categories, overtaking London as last year’s top city.
London places second this year, followed by San Francisco and Los Angeles. Super-cities such as London and New York remain compelling for investors, thanks to their transparency, liquidity, language, law, best-in-class advisers and current stability, which give them confidence.
“Asian cities took three of the top 10 spots in the City Wealth Index. Singapore’s standout ranking is a reflection of its strong performance across all criteria, with an especially impressive showing in lifestyle, which is considered increasingly important in the world’s international community. Tokyo and Hong Kong, the other Asian hubs that made the top grouping, underlined their status as cities attracting attention from the world’s wealthy, with notable attention continuing to come from mainland China investors,” said Knight Frank Asia-Pacific head of research Nicholas Holt.
The report defined UHNWIs as those with a personal net worth of over US$50 million (RM193 million) or more in net assets.
Twitch streamer Tyler "Ninja" Blevins says lot of his income is derived from Amazon Prime subscribers, who are allowed to donate to his Twitch channel, and his 5 million subscribers on YouTube.
"I think that I offer a combination of high-tier game play that they really can't get with a lot of other content creators. It's very difficult to be one of the very best at a video game," Blevins said.
The most popular streamer on Twitch says there is big money to be made playing video games.
Tyler "Ninja" Blevins told CNBC's "Squawk Alley" about how he manages to earn more than $500,000 per month playing the "Fortnite" game. "I think that I offer a combination of high-tier game play that they really can't get with a lot of other content creators. It's very difficult to be one of the very best at a video game," Blevins said. "I'm very goofy; if you ever watched any of my streams or YouTube videos, I do impressions and stuff like that all the time and just crazy shenanigans. I think the combination of that [game skill and entertainment] is really fun to watch."
Ninja first confirmed to a Forbes contributor he was making more than $500,000 a month streaming "Fortnite" on Twitch.
The gamer said a lot of his income is derived from Amazon Prime subscribers, who are allowed to donate to his Twitch channel, and his 5 million subscribers on YouTube.
Twitch is a live streaming video platform primarily used to stream video game play. It was acquired by Amazon for $970 million in 2014. Many streamers make a full-time living playing games from paid channel subscriptions and viewer donations.
The streamer also talked about why "Fortnite" is getting so popular. "The fact that it is free to play is super huge, and it's already across all the [major] platforms," he said. "Just accessibility and how friendly the game is, they are just hitting every single mark perfectly."
"Fortnite" is one of the hottest pop culture phenomenons right now, attracting rap stars, top Twitch streamers and gamers alike. The game, made by Epic Games, is surging online. Google search volume interest for "Fortnite" exceeded "Minecraft" in recent weeks.
Epic Games launched the free-to-play "Battle Royale" mode for "Fortnite" on PC, Playstation 4, Xbox One and Mac in September. "Battle Royale" type games have 100 online players violently battle to the death until only one player survives.
Running a successful company isn’t an easy endeavour. You can’t just sit back and wait for things to unfold in a desirable manner.
Every employee, from the top to the bottom of the hierarchy, must put in their due effort if triumph is to follow. Sadly, not everyone can take pride in that game today.
Failure is common among young businesses, or start-ups. However, when a company with a 70-year long legacy such as Toys “R” Us files for bankruptcy and later dissolves, questions arise.
What led to it? Could it have been avoided? More importantly, what can the rest of us learn from such events?
Missing your childhood in a physical brick-and-mortar toy store?
The rise and fall of a toy empire To assess what happened to Toys “R” Us, a quick timeline of the company’s history needs to be presented. It was set up 70 years ago when Charles P Lazarus opened a baby furniture store in Washington DC called Children’s Bargain Town. Nine years later, in 1957, the first official Toys “R” Us store opened. Its official website was launched in 1998. By that time, both the Kids “R” Us and Babies “R” Us sub-brands were up and running. While the former was dissolved in 2003, the latter survived.
As of 2017, it had 200 functional stores. The company went private in 2005 when it was purchased by three equity firms.
Fast forward to 2015, the iconic flagship store in Times Square, New York closed down. The store was formerly known as FAO Schwarz, and it is the real-life location of the fictional Duncan’s Toy Chest, a central plot point in the 1992 film Home Alone 2: Lost in New York. Toys “R” Us had bought it in 2007. When it closed down, it had been running for 153 years. As 2017 rolled around, the company had filed for bankruptcy protection. It had not racked up an annual profit since 2013. On Mar 15, 2018, Toys “R” Us officially liquidated its business in the United States (US). According to its website, its Canadian unit is up for sale, along with its operations in Asia and Central Europe, including Germany, Austria and Switzerland. Was it an untimely demise? One can’t help but wonder what exactly brought upon this unfortunate fate on the franchise.
While some blamed the brand’s leadership, others criticised their poor financial management decisions or their inability to adapt to the digital era. In reality, the cause of the matter is a perfect storm of all the aforementioned aspects, and then some.
According to the New York Times, the titan’s demise stemmed from its inability to conquer bankruptcy. Agreeing to a caveat in the form of a buyout is a dangerous solution, with more firms disintegrating after taking this road. In this Amazon-dominated era, equity is simply not a viable solution anymore. The toys and games industry (or any other businesses for that matter) isn’t what it once was. The digital era is upon us, and this means that consumer needs and behaviours have changed tremendously.
To be successful, a company needs to keep up with that unpredictable business environment, as traditional retail simply won’t work anymore. Surprisingly (or not), many once-prominent retail giants are experiencing the retail apocalypse in the US.
And when they specialize solely in this field, without solid business strategy to keep reinventing themselves or diversifying their business, the results will be more than telling. Also, with the debt being too much to bear in Sep 2017, Toys “R” Us would have benefitted greatly from support in the midst of its suppliers and lenders. In this case, instead of delivering better results, they became skittish and tried to back out of fear. This weakened the company in the long run. The snowball effect Needless to say, the liquidation had a massive ripple effect on the job market. Not only did it put an end to a chain where generations of parents and children alike remembered fondly, but it also affected over 30,000 jobs. The obvious casualties were toy makers, but the damage doesn’t end there.
The company had over 740 American locations, which means that many landlords will be left scrambling for alternatives. The disappearance of such an extensive and historical franchise doesn’t affect just its primary field. Its consequences are ever-present, and they will stay this way for some time to follow.
Key takeaways What can we all learn from this? The most important lesson is that it’s important to keep up with the times. Instead of remaining status quo in the face of digital transformation and innovation, it’s essential to embrace the future to stay relevant. Unfortunately, the company lacked the funds to take this route when the opportunity was presented to them. From the standpoint of an in-depth financial analysis, disaster was imminent ever since Toys “R” Us was privatised in 2005 on borrowed money. Instead of relying on one burden-laden business deal after another, brands should start taking better, wiser decisions, instead of jumping on a bandwagon and hoping for the best. Regrettably, irresponsible borrowing is becoming a big challenge in business nowadays. And when it is combined with vulnerable, uncertain, complex and ambiguous (or VUCA) future brought upon by tech advantage shaping the mind of the masses, catastrophic consequences are bound to ensue. In a way, Toys “R” Us sealed its own fate.
Conclusion
The fall of Toys “R” Us was one long in the making. From a thorough business case study, we can learn to adapt better to the times to help us make certain radical decisions and plan better to stay in the game.
One of Canada's largest banks may be considering the use of a public blockchain to digitally track assets.
In a patent application published Thursday, TD Bank outlined how it could use a public distributed ledger to help point-of-sale computers track transactions. In the scheme, computers would create blocks of data in which information about the assets being sold, their value in a given currency and the transactions themselves would be stored.
Filed in September 2016, it's not clear if the bank has pursued the idea further than the application. However, it's a notable indication of interest, as big bank blockchain work has generally been confined to private or permissioned ledgers (though that may be changing).
That said, the filing offers ample praise for public blockchains, in which any individuals running the software may successfully approve transactions.
"One advantage of block chain [sic] based ledgers is the public nature of the block chain architecture that allows anyone in the public to review the content of the ledger and verify ownership," the application states.
Going further, such a ledger would allow anyone to verify that a transaction occurred, while using a decentralized platform increases redundancy, thereby "[minimizing] risk of falsification of ledgers."
Elsewhere, the patent also comments on the slower speed of such a system, suggesting TD Bank may be becoming more accustomed to the attributes of blockchain systems that have been treated by other institutions as drawbacks.
Most people think of investing as buying stocks and bonds. The more adventurous might think about a real estate investment trust (REIT). Also, some people consider buying stocks of mining companies or investing in a metals exchange-traded fund (ETF) as a way to invest in gold, silver, platinum and other metals.
But what if you want to avoid anything that trades through a broker or online discount broker? There are alternative investment opportunities. Some of them can make you a lot of money, and some of them may make you a little money. Either way, you are not trapped into choosing stocks, bonds and ETFs that are traded publicly.
When you start thinking about alternative places to put your money, you need to stay away from scams and get-rich-quick schemes. You need some legitimate investment vehicles that may help you prosper.
We have selected five alternative investments to the stock market for your consideration. All facts and figures are current as of March 28, 2018. 1. Peer-to-Peer Lending Peer-to-peer lending is a relatively new phenomenon. Online services offer loans for businesses, personal loans, or anything else you can imagine. Once the borrower qualifies, the loan will be funded by people like you. You simply join the pool of investors who are willing to loan money to others.
There is no bank involved. Your money is typically pooled with other investors’ money, and together you make a loan to the individual asking for funds. Here is the best part: the rates you get are higher than you can find almost anywhere. Many people get returns that are in the double digits. You will receive a fixed payment each month that includes the interest you are owed.
The risk is that you are loaning to people who may not have been able to get a loan from a bank or otherwise can’t go through traditional loan outlets. However, you can decide the credit rating you will consider for a borrower, and you have the choice to fund or not. 2. Real Estate When investing in real estate, you can buy and own property. This means becoming a landlord. You buy a house, duplex or multi-family dwelling, like an apartment complex, and collect rent. The returns can be very high, because you don’t have to pay in full for the property. You make a down payment, and the bank finances the rest. But you get the rental income and appreciation from the property. That is leverage.
You can do this alone, or you can form a partnership with like-minded investors. This can help you spread some of the risk, and you may find people who are more knowledgeable than you when it comes to real estate.
Before you consider buying property, ask yourself if you have what it takes to be a landlord. There are a lot of headaches, and none of them are routine. Things break, accidents happen, and people fall behind on rent. You may hire a management company to handle all of this, but of course that will cost money. 3. Gold Gold is a tangible inflation hedge, a liquid asset, and a long-term store of value. As a result, it is a sought-after asset class and a strong competitor to stocks. Gold is regarded as a great diversifier because of its low correlation with other asset classes, especially stocks. This becomes more pronounced in tougher times when gold often acts as a rescue asset. There are various routes for investors to take exposure to gold, like buying and holding physical gold such as coins or bars, gold exchange-traded funds (ETFs), gold accounts, or investing indirectly through gold mining stocks or futures and options. However, as a small investor, it is best to opt for direct methods of investing in gold. An allocation of five to 10 percent in gold is considered healthy for an individual’s portfolio.
4. Owning Your Own Business
You can use your money to invest in your own business. This can produce the highest returns of all your investment choices. It can also fail and cost you a lot of money and sorrow. However, many businesses produce a nice, steady income and grow over time. Think about areas where you could be a consultant, or try an online business, or think about a shop you would like to open. Whatever you choose, you will need money to start a business. One way to approach this is to only put part of your money into a business and invest the rest elsewhere. This approach can save you some sleepless nights. Another approach is to create a part-time business, something you can do on evenings and weekends. That way, you don’t have to give up the security of your regular job, and you will be making extra money.
Your risk is that the business could fail, or the original owner might not be able to make payments to you periodically. Use a lawyer to set up the paperwork so you will be protected if the owner defaults.
5. Equity Crowdfunding If you don’t want to own your own business, you may want to consider owning part of someone else’s. Start-up companies that need money offer shares of their companies on equity crowdfunding sites. If you buy shares of the company, you own part of it and will be rewarded if the company succeeds. The risk is that if the company fails, you lose your money. However, there have been some equity-funding success stories, such as Cruise Automation. This company develops self-driving technology and was largely developed through equity crowdfunding. General Motors bought the company, creating profits for investors, and giving an air of legitimacy to the crowdfunding industry. You can put your money into equity crowdfunding by starting with just a few hundred dollars.
The Bottom Line
Your investment portfolio should be diversified. This means you should consider a variety of stocks, but it also means you can invest in non-stock market investment vehicles. Consider where your money would grow best, based on your tolerance for risk. Remember, the higher the risk, the greater the potential rewards. College student cryptominers are finding it harder to turn a profit as costs rise, bitcoin falls4/1/2018
College students are finding it's harder to turn a profit by mining cryptocurrencies. Even with universities footing the energy bill, it's getting more expensive to break into the mining business. Equipment prices are soaring, even as digital currencies fall.
"It's gotten pretty ludicrous now the amount of money you have to spend to get in," Alex Gilarde, a senior at Fairleigh Dickison University said.
Cryptocurrencies are created by a process called "mining." Essentially, computers solve complex mathematical equations. In exchange for lending their computing power, miners get digital coins. They can exchange those for other cryptocurrencies, hold onto them, or cash out.
But cryptomining takes up a lot of energy and computing power. So reliable electricity and hardware are a must. The price of graphics cards from companies like AMD and Nvidia has skyrocketed alongside bitcoin's rise to the mainstream. The graphics cards have been traditionally marketed toward online gamers, but cryptominers need the hardware to build their mining rigs too. The demand for those cards has gotten so high that miners and gamers alike are struggling to get their hands on them.
Gilarde has been mining cryptocurrencies since 2012. He said he was pretty "tech-savvy" in high school, so when he and his friends hard about cryptomining, they decided to give it a try. At the time, the price of one bitcoin was less than $5.
In total, Gilarde said he spent around $4,000 to $5,000 on hardware to build his mining rigs. From the start, he's been finding ways to stretch his investment. "When I started mining cryptocurrencies and going onward, I would do it in my parents house and in our own school actually after school. I would leave my laptop in different corners of the school," Gilarde said. "They didn't really know I was doing it, and since when we first started off it wasn't really a big phenomenon, they kind of just let it go. It wasn't really the electricity sapping phenomenon it is today."
Now, he has three rigs running in his dorm room 24/7, and another still back at his parents' house. Gilarde said he takes out anywhere from a couple hundred to a thousand dollars from his digital wallet every couple of months. That's enough for him to pay for part of his tuition and diversity his investment portfolio.
But the price of bitcoin has been falling this year. The digital currency has lost more than half its value since its peak in late 2017. And other cryptocurrencies are following suit. Not everyone's made as big a profit as Gilarde. Luc Roberts is a sophomore at Fairleigh Dickinson University. He started mining in 2017, right around the time bitcoin's price hit $21,000. "How much I made was probably around $30. How much I could have made was probably more than that," Roberts said. Roberts also built his own computer in high school, but he didn't put it together with cryptomining in mind. He built it for gaming. But when bitcoin's price kept hitting record highs, Roberts said everyone was talking mining. And since he already had the computer for it, he figured he should give it a shot.
Roberts set up shop in his bedroom at his parents house, and started mining digital coins using a program called NiceHash. But since his computer wasn't designed for cryptocurrency mining, it wasn't equipped with enough processing power to mine massive amounts of cryptocurrency. If he left his computer running for 24 hours straight, Roberts said he was only mining about .00027 bitcoins a day, so he stopped.
"It would have taken me about I think 10 years to mine a full bitcoin with my hardware," Roberts said. He's not the only one finding it hard to turn a profit. Fundstrat's Tom Lee recently said bitcoin is hovering around its break-even point. And if people aren't making money from mining, they may just stop doing it until the price picks back up. Gilarde on the other hand was thinking about cryptomining from the start. So he bought the best parts and invested in the top of the line algorithms to make sure he could mine for years to come. He even teaches others on campus how to set up their own mining systems. But no matter how efficient they build their rigs, they've all discovered that mining rigs generate a lot of heat.
Gilarde points a fan at his computer and always runs his AC to keep the temperature in his room down. When Roberts was mining at his parents house, he noticed the heat too.
"I just opened my window and would turn a fan on even at night and I'd still be sweating in my room. It'd be really hot in there," Roberts said. But the temperature isn't the only thing miners have to monitor. Gilarde strategically spreads out his graphics cards so they don't use too much power and trip an alarm. He constantly monitors his energy usage with a cloud-based tracking system. Not many colleges have clear-cut rules on cryptomining in the dorms. As of March 2018, an FDU spokesperson said there is no specific policy language addressing cryptocurrency mining, though the University is considering it going forward.
It's acceptable use policy is a little more vague.
FDU's Acceptable Use Policy prohibits individuals from using the University's computing resources for revenue-generating advertising programs which pay users when the programs are run, and also prohibits activity that incurs additional cost to the University. FDU also blocks the mining of cryptocurrency at the firewall level and will probably add some specific language prohibiting mining cryptocurrency to the next version of the Acceptable Use Policy. Right now, students aren't really clear on whether there are rules against cryptomining on campus. And for the most part, the students we talked to at FDU don't think it's is a big issue yet. "I'm sure if a lot of colleges found out that a lot of students are doing that, I'm sure they'd put rules in place because their bills are going up," Roberts said. "But I don't think it's a huge problem here I don't think it is at other schools." As schools work to establish their stance on cryptomining on campus, students are figuring out how to stretch their dollar. The more cryptocurrency that's created, the harder the mathematical equations to mine it become. That means even more energy will be needed to mine a single coin. And with the price of bitcoin falling, it remains to be see how people will continue to make money. Gilarde is graduating this year and leaving the days of free electricity behind. But to the next class of cryptomining students, he warned "be cautious." |
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