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Archives for December 2017

Larry Harris, Promoter of a Risk-Taking Record Label, Dies at 70

In his 2009 book, “And Party Every Day: The Inside Story of Casablanca Records,” written with Curt Gooch and Jeff Suhs, Mr. Harris recalled an early, unexpected brush with the music business. He and some friends headed to the Woodstock festival in the summer of 1969, but they were more prepared than many — he had booked a hotel room nearby. When he arrived he was surprised to find that the hotel was the de facto headquarters for the festival’s organizers and that many of the performers were staying there. Arlo Guthrie, he said, helped him push his car out of the mud after the famous rainstorm.

“Of the hundreds of thousands camped out on Yasgur’s farmland, I’m not sure that any could claim to have gotten more out of Woodstock than I did,” he wrote.

In 1971, Mr. Harris interviewed for a job with Mr. Bogart, whom he had met only briefly a decade earlier. Mr. Bogart, four years older than Mr. Harris, was already general manager of the Buddah and Kama Sutra record labels, which had enjoyed some success, especially with bubblegum pop. Mr. Bogart hired him as a promotion man, responsible for building relationships with retail outlets and radio stations in the New York area.

By 1973 Mr. Bogart was growing restless. He founded his own label, Casablanca (the movie of that name, of course, starred Humphrey Bogart), and took Mr. Harris with him. The two had auditioned Kiss for Buddah, and they quickly signed the band to the new label, though it would take several albums and several years before the band’s attention-getting stage show translated into significant record sales with “Alive!,” a live double album released in 1975.

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Mr. Harris in an undated family photograph.

Casablanca’s no-holds-barred approach was evident early: In February 1974, the label staged an elaborate party at the Century Plaza Hotel in Los Angeles to introduce itself and Kiss. The event had a Casablanca — and “Casablanca” — theme.

“There was a live camel,” Mr. Harris recalled in an interview for the 2013 book “Nothin’ to Lose: The Making of KISS, 1972-1975.” “Palm trees were brought in, real and fake.”

Though it took Kiss a while to generate record sales, Casablanca had quicker success with a relatively unknown singer it signed in 1975, Donna Summer. Her first album for the label, “Love to Love You Baby,” was released that year and became a huge hit, as did its title song, full of the sounds of sexual ecstasy.

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Ms. Summer’s music largely defined the disco era for the rest of the decade. Among other disco acts on Casablanca were the Village People, an eclectically costumed bunch whose hits included “Macho Man” and “Y.M.C.A.”

Casablanca, though, also had failures, most notably four solo albums by the members of Kiss that it released simultaneously in 1978. The company expected four hits; instead the albums quickly landed in the discount bins.

If Casablanca had oversaturated the market with Kiss material, disco too was proving to have its limits. By the end of the 1970s the genre was dying out, and Casablanca was feeling the effects. Mr. Harris left the company at the end of the decade, as did Mr. Bogart, who died of cancer two years later. Casablanca was absorbed by PolyGram and later went dormant, although the label name has been revived several times since.

In 1989, Mr. Harris, who had married Mary Candice Hill in 1975, moved to Bellevue, Wash., where he worked for the Track Record Company. In 2002, he moved to Port Angeles, Wash. That same year he opened a comedy club, the Seattle Improv.

In addition to his wife and son, he is survived by a daughter, Emily Harris, and two sisters, Patricia Lusthaus and Arlene Hauser.

The 1970s at Casablanca’s headquarters in Los Angeles were full of cocaine and extreme behavior, but Mr. Harris bristled at a passage in a 1990 book by Fredric Dannen, “Hit Men: Power Brokers and Fast Money Inside the Music Business,” which claimed that the offices closed at 3 p.m. every day so that the wildness could begin.

“While I can appreciate overstatement for humor’s sake,” Mr. Harris wrote in his book, “the comment is very misleading. We had a ton of fun at Casablanca, and we indulged in all the vices you’d expect, but that never kept us from working hard and putting in long hours.”

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Article source: https://www.nytimes.com/2017/12/28/obituaries/larry-harris-dead-casablanca-records.html?partner=rss&emc=rss

That Game on Your Phone May Be Tracking What You’re Watching on TV

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Android screenshots of the app Honey Quest, which uses technology that keeps tabs on the viewing habits of its users.

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Dec. 28, 2017

At first glance, the gaming apps — with names like “Pool 3D,” “Beer Pong: Trickshot” and “Real Bowling Strike 10 Pin” — seem innocuous. One called “Honey Quest” features Jumbo, an animated bear.

Yet these apps, once downloaded onto a smartphone, have the ability to keep tabs on the viewing habits of their users — some of whom may be children — even when the games aren’t being played.

It is yet another example of how companies, using devices that many people feel they can’t do without, are documenting how audiences in a rapidly changing entertainment landscape are viewing television and commercials.

The apps use software from Alphonso, a start-up that collects TV-viewing data for advertisers. Using a smartphone’s microphone, Alphonso’s software can detail what people watch by identifying audio signals in TV ads and shows, sometimes even matching that information with the places people visit and the movies they see. The information can then be used to target ads more precisely and to try to analyze things like which ads prompted a person to go to a car dealership.

More than 250 games that use Alphonso software are available in the Google Play store; some are also available in Apple’s app store.

Some of the tracking is taking place through gaming apps that do not otherwise involve a smartphone’s microphone, including some apps that are geared toward children. The software can also detect sounds even when a phone is in a pocket if the apps are running in the background.

Alphonso said that its software, which does not record human speech, is clearly explained in app descriptions and privacy policies and that the company cannot gain access to users’ microphones and locations unless they agree.

“The consumer is opting in knowingly and can opt out any time,” Ashish Chordia, Alphonso’s chief executive, said, adding that the company’s disclosures comply with Federal Trade Commission guidelines. The company also provides opt-out instructions on its website.

Alphonso declined to say how many people it is collecting data from, and Mr. Chordia said that he could not disclose the names of the roughly 1,000 games and the messaging and social apps with Alphonso software because a rival was trying to hurt its relationships with developers. (The New York Times identified many of the apps in question by searching “Alphonso automated” and “Alphonso software” in the Google Play store.)

Mr. Chordia also said that Alphonso did not approve of its software being used in apps meant for children. But it was, as of earlier this month, integrated in more than a dozen games like “Teeth Fixed” and “Zap Balloons” from KLAP Edutainment in India, which describes itself as “primarily focusing on offering educational games for kids and students.”

Alphonso is one of several young companies using new technologies to enter living rooms in search of fresh information to sell to marketers. For all the talk of digital disruption in the ad world, television still attracts almost $70 billion in annual spending in the United States, and advertisers will gladly pay to amplify and analyze the effectiveness of that spending.

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An Android screenshot of Teeth Fixed. The gaming app uses software from Alphonso, a start-up that collects TV-viewing data for advertisers.

The spread of these technologies, combined with the proliferation of internet-connected TVs and tools that can identify video content through pixels and audio snippets, has resulted in some questionable practices.

Last year, the trade commission issued a warning to a dozen developers who had installed a piece of software known as Silverpush onto apps with the goal of using device microphones to listen for audio signals that humans could not hear to log what they watched on TV. This year, Vizio agreed to pay $2.2 million to settle charges that it was collecting and selling viewing data from millions of internet-connected televisions without the knowledge or consent of the sets’ owners.

Companies gathering such data, especially through games, need to make their business practices clear to consumers “because it’s so inherently unexpected and surprising,” said Justin Brookman, the director of consumer privacy and technology policy at the advocacy group Consumers Union, and a former policy director at the trade commission who worked on the Silverpush case.

“When you see ‘permission for microphone access for ads,’ it may not be clear to a user that, Oh, this means it’s going to be listening to what I do all the time to see if I’m watching ‘Monday Night Football,’” Mr. Brookman said. “They need to go above and beyond and be careful to make sure consumers know what’s going on.”

Through its software, Alphonso can follow the ads that people see in friends’ homes and elsewhere. The company has also worked with movie studios to figure out theater-viewing habits, Mr. Chordia, Alphonso’s chief executive, said. Smartphone apps that are running Alphonso’s software, even if they are not actively in use, can detect movies based on film snippets provided by the studios ahead of time.

“A lot of the folks will go and turn off their phone, but a small portion of people don’t and put it in their pocket,” Mr. Chordia said. “In those cases, we are able to pick up in a small sample who is watching the show or the movie.” Mr. Chordia said that Alphonso has a deal with the music-listening app Shazam, which has microphone access on many phones. Alphonso is able to provide the snippets it picks up to Shazam, he said, which can use its own content-recognition technology to identify users and then sell that information to Alphonso.

Shazam, which Apple recently agreed to buy, declined to comment about Alphonso.

Founded in 2013, Alphonso initially focused on working with apps to capitalize on ads through so-called second-screen viewing, as people increasingly turned their attention to smartphones and tablets during TV breaks. Now, the company has broadened its focus to gathering troves of viewing data from companies like TiVo and directly from TVs and streaming devices through deals with manufacturers.

The disparate viewing information is tied to IP addresses, which can be matched to characteristics like age, gender, income and more through big data brokers like Experian without using personally identifiable information like names and addresses.

Still, the connection between microphones and ads is a sticky one. Americans are both inviting internet-connected speakers from Amazon and Google into their homes in droves while expressing anxiety that companies are secretly listening to them and then using that information in unsettling ways, like eerily relevant ads. (Facebook has tried, and failed, to quash that theory many times.)

“We have to be really careful as we have more devices capturing more information in living rooms and bedrooms and on the street and in other people’s homes that the public is not blindsided and surprised by things,” said Dave Morgan, the founder and chief executive of Simulmedia, which works with advertisers on targeted TV ads. “It’s not what’s legal. It is what’s not creepy.”

Alphonso’s apps and its relationship with Shazam show that there can be a connection between what our phones may hear and the ads that appear on a website or social media feed in the next few hours.

On the other hand, many people have had issues recognizing audio through apps like Shazam if there is too much background noise, so it’s not clear how much information Alphonso’s apps can pick up on a daily basis.

“‘It’s not normally, I don’t think, going to be expected that an application is going to be listening for what you’re watching,” Mr. Brookman said. “But you’re not necessarily expecting your TV to be watching what you’re doing either.”

Email Sapna Maheshwari at sapna.maheshwari@nytimes.com or follow her on Twitter: @sapna.

Niraj Chokshi contributed reporting.

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Article source: https://www.nytimes.com/2017/12/28/business/media/alphonso-app-tracking.html?partner=rss&emc=rss

Apple faces avalanche of lawsuits over deliberate obsolescence of iPhones

A group of activists from France is the latest to sue Apple over the issue, The Locals reports. The case could see the company’s top managers jailed and cost it five percent of its income if it is convicted of deliberate aging of the devices.

“Apple has put in place a global strategy of programmed obsolescence to boost its sales,” the group said in a statement.

The lawsuit by Halte à l’Obsolescence Programmée (HOP), an environmental association, was filed in the Paris prosecutor’s office on Wednesday. The case will be heard in a criminal court if prosecutors decide it is legitimate. The maximum penalty for senior managers is a prison sentence of two years, a fine of up to €300,000, and five percent of the company’s annual turnover.

At the same time, South Korean law firm Hannuri announced plans to recruit plaintiffs through its website for two weeks and file a class-action suit against Apple to seek compensation over the same issue. This could reportedly become the first class-action suit against the corporation in Asia.

“Because Apple made users upgrade their phones without informing them of the side effects, it deceived consumers and violated consumer protection law,” said Cho Gye Chang, an attorney who represents the complainants at Hannuri, as quoted by the Straits Times.

Another law firm Hwimyoung has already united nearly 20 complainants and is getting ready to go to court. The lawyers are planning to sue Apple Korea for damages in early January in Seoul Central District Court.

The wave of legal cases followed Apple’s announcement that it slowed down iPhones as they got older. Apple said it has algorithms in place to help keep an iPhone running at optimal performance if there is an older battery inside that can’t keep up with the required power. The measure was aimed at preventing devices from unexpected shutdowns and keeping them running at their best.

The corporation also faces more than nine lawsuits in the US, including a trillion dollar suit in California, and a $125 million class-action suit filed in Israel.

Article source: https://www.rt.com/business/414464-apple-more-suits-slowing-iphones/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

MoviePass Adds a Million Subscribers, Even if Theaters Aren’t Sold on It

Under the MoviePass business model, theaters get paid full price for every admission. People who sign up receive a membership card that functions like a debit card. When members want to see a movie (no more than one a day) they use a MoviePass smartphone app to check in at the theater. The app instantly transfers the price of a ticket to the membership card. Members in turn use the card to pay for entry. It all works independently of theaters, sometimes to their chagrin.

The blistering growth has prompted new criticism from theaters and studio owners — namely that MoviePass will never be able to make money by charging $9.95 a month when a single ticket can cost almost twice that amount. They say that will cause MoviePass to either raise prices or go out of business, disappointing audiences and ultimately hurting the fragile multiplex business.

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Mr. Steven’s MoviePass app. MoviePass, which charges subscribers $9.95 a month, hopes to make money by selling the data it collects to studio marketers. Credit Jacob Langston for The New York Times

Mr. Lowe, who previously sparred with studios as president of Redbox, the kiosk company that rents DVDs for $1 a day, believes that ticketing can at least be a break-even business for MoviePass. The real treasure in this venture, he contends, is the trove of data about consumer tastes and habits that MoviePass can collect. It hopes to sell that data to studio marketers.

Mr. Farnsworth said, “When you apply computer science and machine learning to an industry that we believe has lacked significant innovation, useful patterns start to emerge.” If MoviePass gets big enough, it could try to demand that chain theaters sell tickets at a discount or share a slice of their concession revenue.

Helios recently raised $60 million for the expansion of MoviePass, which expects to have more than three million subscribers by the end of next year. Monthly subscriber retention is roughly 96 percent, Mr. Lowe said. About 75 percent of MoviePass users are millennials, a group that Hollywood has struggled to turn into avid moviegoers.

“Millennials understand us because they grew up on subscription,” Mr. Lowe said.

Dan Steven, 34, signed up for MoviePass in October. Mr. Steven, who lives in Orlando, Fla., said he had gone to “maybe one movie a month” before he became a subscriber. In November, he went 12 times.

“I used to only go if it was clearly worth buying a ticket — something big-screen worthy, a spectacle or a movie with a lot of effects,” he said. “I would skip the undercard movies. I would just wait until they came out on Netflix.”

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Over the last decade, theaters have spent billions of dollars to enhance the moviegoing experience. Improvements include the ability to reserve seats online, reclining seats, bigger screens, and better sound and projection systems. But the business has remained more or less the same for decades (sell ticket, serve popcorn, show movie) even as nearly every other area of media (television, music, publishing) has been forced to reinvent itself to contend with digital disruption.

As the popularity of MoviePass demonstrates, theater owners may no longer be able to avoid fundamental change. In particular, studios are expected to force exhibitors in the coming months to loosen their grip on new movies. Theaters have typically insisted on a 90-day period of exclusivity. Studios want to shorten that window and speed films to home video-on-demand services.

“This is something that has to happen, in part because consumers are demanding it,” Jim Gianopulos, chairman of Paramount Pictures, said at an investor conference in September.

MoviePass, which has been around since 2011, struggled to gain traction in its early years because of pricing ($50 a month, later lowered to $35) and pushback from exhibitors, who worried that a subscription service would undermine per-ticket pricing. By early 2017, MoviePass was trundling along as a fringe service; it had about 20,000 users in the United States.

When Mr. Lowe and Mr. Farnsworth drastically lowered the price, people started signing up en masse.

To a degree, the service depends on traditional subscription economics: More people pay than go. The model starts to get more complicated, however, when you consider the price of movie tickets.

According to the National Association of Theater Owners, tickets cost an average of $8.93. But theaters in cities like New York, Los Angeles and San Francisco charge as much as $16.50 for a standard ticket. At Mr. Steven’s local theater in Florida, they are $11.92.

So far, none of the major studios have signed on as clients, and no studio executive contacted for this article would comment on the record. Mr. Lowe said MoviePass had been “making huge progress with content owners” and had signed up a small studio as a partner, but he declined to provide details.

The big theater chains have held their ground, although AMC recently softened its stance. A bit.

“We appreciate their business,” Adam Aron, AMC’s chief executive, said on a conference call with analysts last month. But Mr. Aron added, “AMC has absolutely no intention — I repeat, no intention — of sharing any — I repeat, any — of our admissions revenue or our concessions revenue.”

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Regal, the No. 2 multiplex chain, has said it will take a “wait and see” approach to MoviePass, while Cinemark, the third-largest exhibitor, introduced its own subscription service in early December. For $8.99 a month, members can see one movie a month and receive a 20 percent discount on concessions, among other perks. Unused tickets roll over and never expire for paying members. Mr. Lowe called the offering “vapid.”

One small theater company that has become a MoviePass investor, Studio Movie Grill, which has 30 locations in nine states, credits the service with increasing attendance, especially on weeknights.

“I know it’s getting a bad rap in some circles, but we love MoviePass,” said Brian Schultz, Studio Movie Grill’s chief executive. “Some people aren’t sure they want to pay $10 to $12 to see a movie like ‘Lady Bird.’ MoviePass takes out that hurdle.”

Correction: December 28, 2017

An earlier version of this article misstated attendance trends at North American cinemas in 2015. Sales increased 3.9 percent that year, they were not “flat”.

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Article source: https://www.nytimes.com/2017/12/27/business/media/moviepass-theaters-tickets.html?partner=rss&emc=rss

Bitcoin tumbles as South Korea threatens to throw cold water on its red-hot crypto market

Bitcoin: From bit-part player to the king of crypto (VIDEO)

The digital currency slipped to as low as $13,500 after trading at about $15,400 on Wednesday, according to the industry website Coindesk.com. Bitcoin has seen an unbelievable rally in 2017, surging more than 20-fold at its peak price of $20,000 during the year.

South Korea, a global hub for bitcoin trading, said it is getting ready to impose additional measures, including the shutdown of exchanges, to regulate cryptocurrency speculation within the country.

“Cryptocurrency speculation has been irrationally overheated in Korea. We cannot leave the abnormal situation of speculation any longer,” the government statement read.

“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility.”

Seoul is planning to ban anonymous cryptocurrency accounts as well as to introduce new legislation allowing regulators to close virtual coin exchanges if needed, according to the statement. The steps are reportedly recommended by the country’s justice ministry, which is concerned over scams involving cryptocurrency trading.

Two months ago, South Korea announced plans to tax capital gains from cryptocurrency trading to reduce the risk of excessive speculation. In September, the government prohibited initial coin offerings, a mechanism for fundraising through the issue of virtual tokens. At the same time, the financial regulator banned the trade of bitcoin futures.

Digital currencies are increasingly popular in South Korea with three out of 10 salaried workers in the country reportedly invested in the brand new virtual assets. One of the world’s biggest cryptocurrency trading exchanges, Bithumb, is located in South Korea.

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Article source: https://www.rt.com/business/414452-bitcoin-slips-south-korea-shutdown/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Putin says Russia should ditch petrol in favor of natural gas fuel

“Gas fuel is, of course, more environmentally friendly. And we have great competitive advantages in this because we have enough of this fuel. More oil and petroleum products can be sold on the foreign market, as it is more profitable than gas sales,” Putin said on Thursday, speaking at a meeting dedicated to the development of Russia’s regions.

Volkswagen taps Russia’s Gazprom to fuel its gas-powered cars

Putin also pointed at Gazprom as an example of how gas fuel saves money. When the company switched to gas fuel, many of its drivers retired because they no longer had an opportunity to steal gasoline.

The president was referring to drivers working for state companies who commonly fill up using corporate credit cards, then siphoned and resold the petrol to other drivers.

“And what about the army? What is happening in the Ministry of Defense and in other departments? I think comments are needless,” said the Russian president, apparently hinting at the same practice.

“Natural gas fuel will have a huge positive economic effect and will create competitive advantages for the whole economy. Therefore, it is necessary to continue, of course, to support its development, both at the governmental level and at the regional,” Putin added.

Gazprom sells two types of natural gas fuel: compressed natural gas (CNG) and liquefied natural gas (LNG). CNG is used for passenger and light cargo vans, motor cars, and municipal vehicles. LNG is for big trucks, railway and water transport, quarry machinery and agricultural equipment.

“Natural gas is the most economical, eco-friendly and safe type of fuel available today,” claims Gazprom.

The world’s biggest automaker, Volkswagen, announced in May it is in talks with Gazprom to back its efforts to promote cars running on natural gas.

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Article source: https://www.rt.com/business/414447-russia-natural-gas-fuel-putin/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia suggests creating single virtual currency for BRICS and EEU

BRICS countries considering own cryptocurrency as settlement mechanism

She said the issue of a common cryptocurrency for a number of countries is very promising, more than that for a single nation.

“The participants of different economic events where I usually take part… all come to the conclusion the issue of a virtual currency is not needed much by one country. First of all, it makes sense to discuss the cryptocurrency on the level of several countries such as BRICS and EEU. It makes sense to set one equivalent for all payments,” Skorobogatova said at a Russian finance ministry meeting.

While no concrete decisions have been made yet, said the official, discussions are planned for 2018 by both BRICS and EEU members.

“The introduction of a national digital currency seems to us not entirely justified from the point of view of macroeconomics, population…” said Skorobogatova.

In September, the chief of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said the BRICS finance committee was discussing a joint virtual currency for the five-nation bloc of developing economies of Brazil, Russia, India, China and South Africa.

He added that within BRICS cryptocurrencies could replace the US dollar and other currencies used in settlements among the member states.

The BRICS countries consider switching to local currencies for mutual settlements with the Chinese yuan as the lead currency. The New Development Bank (NDB) is expected to be a substantial player in the process.

The five banks of the BRICS Interbank Cooperation Mechanism have agreed to establish local currency credit lines.

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Article source: https://www.rt.com/business/414444-brics-eeu-joint-cryptocurrency/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Venezuela backs national cryptocurrency with 5,000,000,000 barrels of crude

Venezuela to launch ‘Petro’ cryptocurrency to fight Trump’s ‘financial blockade’

“Here’s the document formalizing the provision of the certified Ayacucho oil field No.1 in the Orinoco Petroleum Belt for the support of El Petro cryptocurrency,” Maduro said on national TV.

Maduro said the field’s “reserves amount to five billion barrels of oil,” which is confirmed by the corresponding “international certificate.”

“Every single Petro will be backed by a barrel of oil,” Maduro said, promising to provide cryptocurrency mining throughout the country. “We will set up a special team of cryptocurrency specialists so they will be engaged in mining in all states and municipalities of our country.”

The Venezuelan leader has also promised to allocate Arco Minero gold deposits from the Orinoco Belt along with the country’s diamond deposits.

The new cryptocurrency was announced by Maduro at the beginning of December as a way “to innovate toward new forms of international finance for the economic and social development of the country.”

He said its value would be pegged to the country’s vast reserves of oil and gas as well as its mineral wealth, including gold. The Venezuelan president explained the purpose was “to advance the country’s monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country.”

“We are facing a financial war against the country which we have denounced, and the opposition has denied. There are business people who are unaffected by Donald Trump’s blockade. With this, we will join the 21st century,” said Maduro.

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Article source: https://www.rt.com/business/414429-venezuela-oil-barrels-cryptocurrency/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

While bitcoin implodes, this rival cryptocurrency has grown by a jaw-dropping 27,000%

Ripple’s gains followed the news that Japanese financial services company SBI Holdings and its subsidiary SBI Ripple Asia are to launch a “consortium” with Japanese credit card companies to use blockchain technology, CNBC reported.

What’s ripple why is it setting cryptocurrency world on fire?

The advantage of ripple is that it is not just a cryptocurrency. It is also used as a digital protocol that acts as a bridge to other currencies and doesn’t discriminate against peers whether they are using digital money, fiat currencies or even mobile minutes.

According to its founders, ripple seeks to enable “secure, instantly and nearly free global financial transactions of any size with no chargebacks.”

Ripple has had the biggest growth in value among notable digital tokens this year. It has gone from less than a cent ($0.006523) in January to $1.74 on Friday, which represents an astonishing 27,000 percent rise this year.

“We are going to invest in the ecosystem to help accelerate the adoption of ripple’s technology,” Ripple CEO Brad Garlinghouse told CNBC.

With a $67 billion market cap, it has become the third-largest cryptocurrency by value, pushing the orginal bitcoin’s offshoot bitcoin cash down to fourth place. Ripple is also closing in on ethereum, which is in second place with market capitalization of $71 billion.

Bitcoin dropped a significant 13 percent on Thursday to $14,477. The world’s top cryptocurrency is down more than 25 percent from its $20,000 record.

“Nobody knows the ultimate value of this underlying asset. We cannot predict whether it’s going to be zero or $1 million or anything in between,” Edward Stringham, president of the American Institute for Economic Research told Bloomberg.

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Article source: https://www.rt.com/business/414423-ripple-growth-bitcoin-blockchain/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

In a Complex Tax Bill, Let the Hunt for Loopholes Begin

The provision, known as the domestic production activities deduction, gave companies a tax break on income they earned from making things in the United States. It was intended to help American manufacturers, which were struggling to hold their own against competition from overseas.

Then a raft of other industries heard about the rule as it was being devised and fired up their lobbying machines. Suddenly, everyone became a manufacturer.

Movie studios got the break because they produced films, and tech giants won it, too, for making computer software. Construction companies got it for making buildings, and so did engineers and architects for designing them.

Starbucks hired lobbyists to make the case that it, too, was a producer, because the company roasts coffee beans. Congress added language that allowed coffee shops to deduct a percentage of every cup sold if it was made with beans they roasted off site. It became known as the Starbucks footnote.

“This has been a boondoggle tax expenditure,” said Robert J. Shapiro, a former Commerce Department official who founded the economic advisory firm Sonecon. “It is a political lesson. You are always liable to create tax loopholes that grow.”

The government initially estimated that the 2004 law would cost a net $27.3 billion from 2005 through 2014. It ended up costing over $90 billion during that period, according to a congressional report.

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The Internal Revenue Service had to warn retailers that cutting keys doesn’t make you a manufacturer. Neither does mixing paint, putting plants in the sun to grow or writing “Happy birthday” on a cake you didn’t bake.

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But in more than a decade of battling with companies about the rule, the government gave up more ground than it won. One of its most epic losses came at the hands of a David-size challenger in Fullerton, Calif.

It all started in tax class. Dan Maguire, an accountant by trade, was sitting in a seminar about the new features of the tax code in 2005 when he first heard about the manufacturing deduction. He became obsessed.

“I’m thinking, ‘Gosh, as crazy as it is, this is a good deduction for Houdini,’” he said. Houdini Inc., better known as Wine Country Gift Baskets, is a plucky maker of assortments for special occasions that employs Mr. Maguire as its chief financial officer.

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Mr. Maguire filed for the deduction in amended returns for 2005 and 2006. The I.R.S. gave Houdini a refund of close to $300,000. Then, when it realized what had happened, it doubled back and audited the company, demanding that Houdini return the money.

“It’s the government — what do you expect?” Mr. Maguire said. “They aren’t exactly an efficiently run organization.”

When Houdini refused to give the refund back, the government sued the company in 2011.

At issue was a straightforward question: Does putting wine and chocolate into a basket amount to manufacturing? Federal lawyers sputtered at the thought.

“I can make a gift basket at home,” pleaded one government lawyer, according to a transcript in the case. “I can go to the store, and I can purchase these items and put them into a basket which I have purchased and put cellophane wrap around it, but in the process, I have not altered anything in it.”

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Article source: https://www.nytimes.com/2017/12/27/business/economy/tax-loopholes.html?partner=rss&emc=rss