Category Archives: Cloud Computing

Hotly anticipated bitcoin futures surge 21 percent on debut

NEW YORK/SYDNEY (Reuters) – Bitcoin futures jumped more than 20 percent in their eagerly anticipated U.S. debut, which backers hope will encourage wider use and legitimacy for the world’s largest cryptocurrency even as critics warn of the risk of a bubble and price collapse.

Virtual currency Bitcoin tokens are seen in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration

The launch on Sunday night may have caused an early outage of the Chicago-based CBOE Global Markets’ (CBOE.O) website. The exchange said that due to heavy traffic on the CBOE Global Markets website, the site “may be temporarily unavailable.”

The one-month bitcoin contract <0#XBT:> opened trade at 6 pm (6.00 p.m. ET) at $15,460, dipped briefly and then rose to a high of $18,700.

As of 0430 GMT, it was up 16 percent from the open at $17,940, with 2,211 contracts traded.

On the Luxembourg-based Bitstamp BTC=BTSP, bitcoin prices surged 7 percent to $15,720. It is up more than 1,400 percent so far in 2017, and its gains in the past month have been rapid.

Experts had worried that the risks associated with the currency’s Wild West-like nature could overshadow the futures debut, but so far the price action has been unlike the wild swings seen in the past few weeks. Bitcoin tumbled 20 percent in 10 hours on Friday.

“Even if there is an institution or institutional-sized trader out there, they are going to want to make sure that the mechanics work first, just for the futures,” said Ophir Gottlieb, chief executive officer of Los Angeles-based Capital Market Laboratories.

“I think the excitement will come when the futures market is established. That can take a few days,” Gottlieb added.

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs and brothers Cameron and Tyler Winklevoss.

Market participants said the launch of the futures contract wouldn’t necessarily reduce volatility in the cryptocurrency.

“There are no ways to arbitrage between the market and other exchanges, CBOE cannot settle Bitcoin as far as I know,” said Leonhard Weese, president of the Bitcoin Association of Hong Kong.

“Regular bitcoin traders don’t have access to it, and the trading desks that use the futures market don’t have access to bitcoin.”

CRYPTIC CURRENCY

While bitcoin’s price rise mystifies many, its origins have been the subject of much speculation.

It was set up in 2008 by someone or some group calling themselves Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation difficult if not impossible.

Central bankers and critics of the cryptocurrency have been ringing the alarm bells over the surge in the price and other risks such as whether the opaque market can be used for money laundering.

Sparks glow from broken Bitcoin (virtual currency) coins in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration

“It looks remarkably like a bubble forming to me,” the Reserve Bank of New Zealand’s Acting Governor Grant Spencer said on a television program run on Sunday.

“We’ve seen them in the past. Over the centuries we’ve seen bubbles and this appears to be a bit of a classic case,” he said.

Many investors have stood on the sidelines watching its price rocket. However, it is possible to buy bitcoin without having to spend the full price of one coin. Bitcoin’s smallest unit is a Satoshi, named after the elusive creator of the cryptocurrency.

Somebody who invested $1,000 in bitcoin at the start of 2013 and had never sold any of it would now be sitting on around $1.2 million.

Heightened excitement ahead of the launch of the futures has given an extra kick to the cryptocurrency’s scorching run this year.

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The CME Group (CME.O) is expected to launch its futures contract on Dec. 17.

CONTROVERSIAL MOVE

Bitcoin fans appear excited about the prospect of an exchange-listed and regulated product and the ability to bet on its price swings without having to sign up for a digital wallet.

Others, however, caution that risks remain for investors and possibly even the clearing organizations underpinning the trades.

“You are going to open up the market to a whole lot of people who aren’t currently in bitcoin,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The launch has so far received a mixed reception from big U.S. banks and brokerages, though.

Several online brokerages, including Charles Schwab Corp (SCHW.N) and TD Ameritrade Holding Corp (AMTD.O), did not allow trading of the new futures immediately.

The Financial Times reported on Friday that JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) would not immediately clear bitcoin trades for clients.

Goldman Sachs Group Inc (GS.N) said on Thursday it was planning to clear such trades for certain clients.

Bitcoin’s manic run-up this year has boosted volatility far in excess of other asset classes. The futures trading may help dampen some of the sharp moves, analysts said.

“Hypothetically, volatility over the long run should drop after institutions get involved,” Gottlieb said. “But there may not be an immediate impact, say in the first month.”

Additional reporting by Chuck Mikolajczak and John McCrank in NEW YORK; Michelle Chen in HONG KONG; Editing by Lisa Von Ahn, Will Dunham and Kim Coghill

Our Standards:The Thomson Reuters Trust Principles.

AI Is Still Dumber Than a 5-Year-Old, Say Scientists

In previous columns, I’ve explained that there’s a lot of hype surrounding the incremental improvements of the decades-old programming techniques collectively identified under the marketing buzzword “Artificial Intelligence” aka “AI.” 

What’s NOT hype is that those programming techniques (pattern recognition, neutral nets, ect.) have gotten incrementally more effective than they were in the past at playing games and performing speech recognition, automated translation, and so forth.

What IS hype are the all-too-common and all-too-visible claims that AI will soon be able to perform complex tasks that involve anything resembling common sense, such as negotiating business deals, customer support and selling products.

Don’t believe me? Well, maybe you’ll believe a team of AI experts at Stanford University that is measuring the progress of AI. The press release issued last month announcing the index makes the following, startling (but not to me) admission:

“Computers continue to lag considerably in the ability to generalize specific information into deeper meaning, [while] AI has made truly amazing strides in the past decade… computers still can’t exhibit the common sense or the general intelligence of even a 5-year-old.”

As you’re probably aware, AI is very good at playing games like poker, GO, and (most famously) chess. Chess programs now play the game at a level that could reasonably be described as “superhuman.”

When it comes to anything that requires common sense, however, AI is almost helpless. To illustrate this, examine these three chess pieces carefully:

An AI program might be able to figure out (by image comparison) that the piece on the left is a knight and the piece in the middle is a queen. I say “might” because the AI program might also think that they’re simply statues or knick-knacks. 

However, even if the AI identified the two objects as chess pieces and correctly identified their rank, it could never figure out what’s immediately obvious to anyone who plays chess: that the piece on the right combines the moves of the knight and the queen.

Furthermore, without being reprogrammed by a human, no chess program could play and win a game using that piece. By contrast, a human chess player would and could immediately adapt to game play using that piece.

Here’s another example. Carnegie Mellon has a poker program, Libratus, that can play Texas Hold ’em at a tournament level and win against human opponents. This is impressive because, unlike chess or GO, poker involves unknowns.

More precisely, it contains “known unknowns” in the sense that the number of cards and their values are known but their specific position within the deck is unknown. Also, while a specific wager is unknown, the nature of the wager is within known bounds.

But what happens if we introduce unknowns that are not known to the program? If the players decided, for example, to make “suicide cards” wild or to play with a Tarot deck rather than a standard deck, Libratus wouldn’t even be able to identify a winning hand.

This is an important point because many of the wilder claims surrounding AI conflate games like chess and poker with human behaviors and institutions that are infinitely more complex.

Put simply, playing a game with pre-defined rules never requires common sense. Playing in real life always requires common sense.

For example, the co-creator of Libratus founded a firm that’s will apply the technology to “business strategy, negotiation, cybersecurity, physical security, military applications, strategic pricing, finance, auctions, political campaigns and medical treatment planning.”

Some of those applications, such as business strategy and negotiation, are unbounded human behaviors that have flexible rules that constantly change. They require common sense.

Consider: the rules for poker and Texas hold’em can printed on three sheets of paper using standard fonts. By contrast, Amazon currently lists 32,163 books on “business negotiation.” That’s a lot of complexity!

While poker seems like a good metaphor for business negotiations, such negotiations are far more complex and involve numerous “unknown unknowns.” 

For example, I heard a rumor that during the negotiations for IBM’s acquisition of Lotus Development Corporation in the mid-1990, an IBM executives displayed a loaded gun during a meeting in a conference room.

The story may apocryphal but I’ve encountered behaviors equally weird and emotion-laden, if perhaps not quite as dramatic. Unlike games, functioning in the real world requires “the ability to generalize specific information into deeper meaning.”

Which AI still can’t do and where there has been no progress or breakthroughs. 

By the way, many of the systems and applications advertised as “AI” in fact use humans, sometimes hundreds of them, as backups, according to a recent, aptly-title article in the Wall Street Journal, “Without Humans, Artificial Intelligence Is Still Pretty Stupid.”

In short, there’s a huge amount of hype surrounding AI, most of it coming from AI experts and executives who stand to profit if the business world, in general, believes that AI is a huge leap forward rather than just the repackaging of well-established tech.

Uber to Settle Lawsuit Filed By India Rape Victim

Uber has agreed to settle a civil lawsuit filed by a woman who accused top executives of improperly obtaining her medical records after a company driver raped her in India, according to a court filing on Friday.

In a criminal case in India, the Uber driver was convicted of the rape, which occurred in Delhi in 2014, and sentenced in 2015 to life in prison.

The Indian woman also settled a civil U.S. lawsuit against Uber in 2015, but sued the company again in June in San Francisco federal court saying that shortly after the incident, a U.S. Uber executive “met with Delhi police and intentionally obtained plaintiff’s confidential medical records.” Uber retained a copy of those records, the lawsuit said.

The woman was living in the United States when she filed the lawsuit.

Terms of the settlement were not disclosed in the court document on Friday. Representatives for Uber and an attorney for the woman could not immediately be reached for comment.

The lawsuit cited several media reports which said former Uber CEO Travis Kalanick and others doubted the victim’s account of her ordeal.

“Uber executives duplicitously and publicly decried the rape, expressing sympathy for plaintiff, and shock and regret at the violent attack, while privately speculating, as outlandish as it is, that she had colluded with a rival company to harm Uber’s business,” the lawsuit said.

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In a prior statement, Uber said: “No one should have to go through a horrific experience like this, and we’re truly sorry that she’s had to relive it.”

Peter Thiel’s Unusual Bet on Magic Mushrooms For Treating Depression Is About to Be Tested

High-profile Silicon Valley investor Peter Thiel made a bet last year on a company with an unusual idea for treating depression: psychedelics. Giving patients drugs that are based on the active ingredient in magic mushrooms, known for their hallucinogenic properties, could help reboot the brains of people who suffer from mental illness and who are otherwise resistant to treatment.

That company, Compass Pathways, said on Wednesday that it plans to start clinical trials of its drug starting in the first three months of 2018. The tests, to be conducted in partnership with Worldwide Clinical Trials, will be conducted in a number of European countries including Germany, Finland, the Netherlands, Spain, and the United Kingdom.

“We need a new approach to tackling mental health,” George Goldsmith, executive chairman and co-founder of Compass Pathways, said in a statement. “Current treatments for depression work for many people but there is still a significant unmet need for a large number of patients living with this very challenging condition.”

Thiel’s investment fund is among several backing Compass Pathways, a U.K. startup that was founded in 2015. The stake in line with Thiel’s iconoclastic investment philosophy, which has paid off handsomely with huge gains on early investments in companies like Airbnb and Facebook.

Thiel’s unusual projects include one in which he advocated that high school students forego college so they could work on startups. Additionally, he and mused about creating floating tech cities on cruise ships moored in international waters off the U.S. coastline.

Psychedelics like psilocybin, the ingredient found in 200 varieties of mushrooms, are gaining some acceptance in the medical world for treating depression. Early studies have shown some success, although doctors warn against people with mental illness self-medicating with mushrooms bought through illicit means.

Exclusive: Bangladesh Bank, NY Fed discuss suing Manila bank for heist damages

DHAKA (Reuters) – Bangladesh’s central bank has asked the Federal Reserve Bank of New York to join a lawsuit it plans to file against a Philippines bank for its role in one of the world’s biggest cyber-heists, several sources said.

FILE PHOTO: Commuters pass by the front of the Bangladesh central bank building in Dhaka, Bangladesh on March 8, 2016. REUTERS/Ashikur Rahman/File Photo

The Fed is yet to respond formally, but there is no indication it would join the suit.

Unidentified hackers stole $81 million from Bangladesh Bank’s account at the New York Fed in February last year, using fraudulent orders on the SWIFT payments system. The money was sent to accounts at Manila-based Rizal Commercial Banking Corp RCBS.PS and then disappeared into the casino industry in the Philippines.

Nearly two years later, there is no word on who was responsible and Bangladesh Bank has been able to retrieve only about $15 million, mostly from a Manila junket operator. (reut.rs/2jk1W74)

Officials from Bangladesh Bank and the New York Fed spoke about legal action against RCBC in a conference call last month that was also attended by two representatives from SWIFT, according to three sources in Dhaka who had direct knowledge of the conversations.

It was agreed that Bangladesh Bank would send a proposal on the suit to the New York Fed, they said.

“The aim is to file a case by March-April in New York,” said one of the sources. “Work is on. Bangladesh Bank is likely to send something to the Fed soon.”

The source said the idea was it would be a civil suit to recover the money, and that Bangladesh hoped the Fed and SWIFT would be joint petitioners.

Subhankar Saha, a spokesman for Bangladesh Bank, said he had no knowledge of any plans to sue RCBC but that “efforts are on to recover the entire stolen money”.

The New York Fed and SWIFT declined comment.

A source familiar with the New York Fed’s thinking confirmed that Bangladesh Bank’s external counsel raised the idea of filing a suit against RCBC in the call.

The New York Fed officials agreed to review any proposal Bangladesh Bank wrote up but they did not formally agree to a joint effort, and have not since worked on it nor heard from Bangladesh Bank, the source said.

FILE PHOTO: A security guard stands guard outside a branch of Rizal Commercial Banking Corporation (RCBC) in Paranaque city, Metro Manila, Philippines August 2, 2016. REUTERS/Erik De Castro/File Photo

There was no indication that the Fed would join the suit once it had received and reviewed the proposal.

ROGUE EMPLOYEES

RCBC has blamed rogue employees and Philippine prosecutors have filed money laundering charges against a former RCBC bank manager and four people who owned the bank accounts where the funds were sent, but are not identifiable since the accounts were in fake names. They are the only people to be formally cited anywhere in the world in association with the crime.

Bangladeshi officials have cited internal RCBC documents, also seen by Reuters, to assert that the Filipino bank ignored suspicions raised by some RCBC officials when the money was first remitted to the accounts on Feb. 5, 2016, and then delayed acting on requests from RCBC’s head office to freeze the funds on Feb. 9. (reut.rs/2BM9EOO)

RCBC did not respond to requests for comment. But it has said in the past that it would not pay any compensation and that Bangladesh Bank bore responsibility for the theft since it was negligent.

RCBC was fined a record one billion Philippine pesos ($20 million) by the country’s central bank last year for its failure to prevent the movement of the stolen money through it.

Separately, a Bangladesh court has sent “letters rogatory” to the United States seeking the findings of the Federal Bureau of Investigation (FBI) into the case, said the main police investigator in Dhaka.

Letters rogatory are documents used to obtain judicial assistance from foreign courts.

“We have questions for the Federal Reserve Bank, we want to collect the FBI report, what their findings are,” Molla Nazrul Islam, a special superintendent of police in Bangladesh, told Reuters this week.

An FBI spokeswoman said the agency could not comment on ongoing cases.

A hacking group called Lazarus that is believed to have connections to North Korea has been linked to the Bangladesh cyber heist and some U.S. officials said earlier this year that prosecutors were building a case against Pyongyang.

But no case has yet been filed.

Reporting by Krishna N. Das and Serajul Quadir in Dhaka; Additional reporting by Karen Lema in Manila, Michelle Price in Washington, Jonathan Spicer in New York and Jim Finkle in Toronto; Editing by Raju Gopalakrishnan

Our Standards:The Thomson Reuters Trust Principles.

Marijuana Stocks Ready To Turn A New Leaf In 2018

marijuana stocks 2018Many opportunities have risen from the long list of marijuana stocks that have come about over the last few years. The early part of 2014 was a realistic tipping point for what had been building momentum during the years prior. Colorado legalizing recreational marijuana was the proof that other states needed in order to begin the domino effect that we know today as the green rush. But just because there has been so much success in the market (and failure for that matter), it doesn’t mean the rush is over.

There are still states that have yet to enact marijuana laws and keep in mind that 2018 is the year that we see both California and the country of Canada “flip the switch” for fully legalized recreational marijuana. This having been the case, there is now the first US ETF going live that will focus on the industry. But there seems to be much more misnomer on the topic than actual analysis, to be honest.

One article highlights a list of “potential stocks” to be included but anyone who remotely knows the space would quickly pick out the ones that have no business even being considered. Several have even taken a step out of the space entirely. So to really know where the opportunity may be with an investment into something like this, investors should really take into account a “lay of the land” of sorts.

Marijuana Stock Trends For 2018

Next year looks like it could be a tipping point for the cannabis industry. Not only will we see Canada going full recreational but you also have California widening its budding roots for its recreational marijuana marketplace to go live. Justin Trudeau, the Prime Minister of Canada, seems to be very bullish on the subject. He recently tweeted his optimism surrounding the opportunity that legal cannabis could bring to the country.

Trudeau MarijuanaThe main focus for many has been on two distinct segments: 1. Cultivation, and 2. Health benefits through applications of CBD. Canada, for instance, has seen an explosive interest from investors with companies like Canopy Growth (OTCPK:TWMJF) and Aurora Cannabis (OTCQX:ACBFF) expanding their footprints across the globe.

In fact, just recently, Aurora made a play in Australia through its increased stake in CannGroup Ltd., which trades on the Australian Securities Exchange. The new investment takes Aurora’s ownership to 22.9% and will help speed up the current Phase III portion of its 172,000 square foot expansion. Cann already has two small-scale facilities

Canopy Growth, on the other hand, has basically been its own catalyst to the latest move for most marijuana stocks. Beverage juggernaut Constellation Brands (STZ) made a multimillion-dollar investment into the company with a 9.9% stake. This could not only mean a turning point for the industry in general (this is the first mainstream company to really make a point to show interest with such an investment), it could also mean a turning point for the beverage industry as well. Of course, we have yet to see what the outcome of this investment will yield for either company beside equity and cash, but time will surely tell.

This trend doesn’t just stop with these investment deals either because 2018 could see growth in exports as well. Aside from Aurora and Canopy Growth, Aphria (OTCQB:APHQF) has joined the party when it comes to cannabis exports. They’ve been given the “OK” to export dried cannabis to foreign markets. This includes places like Germany, which has legalized medical marijuana and has only low levels of domestic growing capacity.

Recent attention on Medreleaf (OTCPK:MEDFF) could also point out another key to what 2018 might bring as far as market growth. Not only is the company a cannabis producer, they are ISO 9001 and ICH-GMP certified to produce medical cannabis. Standardization and consistency has been one of the issues faced in when it has come to growing cannabis.

marijuana legalization united statesA universal quality control system is what has been lacking in the market in general and though there is no standard of testing quite yet, this may be something that comes up during the new year as many companies will be increasing their cultivation capabilities to meet new demand. Though ISO 9001 does now define the actual quality of a product, it does allow companies like Medreleaf to achieve more consistent results in order to improve the process.

Other producers include companies like Emerald Health Therapeutics (OTCQX:EMHTF), which also has a crossover into the medical segment of the marijuana industry. Further acceptance of cannabis as a viable means of medication may continue to grow in 2018 as well. Emerald aims to have over 500,000 square feet of cultivation space built at its new Richmond, BC site by the end of 2018.

Emerald further has entered into a 50/50 partnership with Village Farms. The partnered companies will convert an existing 1.1 million square foot greenhouse in Delta, BC from growing tomatoes to growing cannabis.

“New” Marijuana ETF

This all begs the question for investors, which is, “Will the marijuana ETF be better than investing into individual stocks?”

As is the case with any industry, an investment into a basket of stocks versus investing into individual issuers has its ups and downs but the marijuana industry itself may be unique. One of the biggest differences is that most of these companies aren’t traded on any major exchange. The risks of investing in small cap companies are one thing but now investors will see a fund that more than likely will have a large collection of stocks known as penny stocks.

These have their own inherent risks and when you also throw in the lesser reporting requirements of Over The Counter companies, strict due diligence is paramount for investors. Now, we’ll see an entire fund dedicated to investment into higher-risk stocks so investors should be ready to stomach a potentially higher level of market change for this particular ETF.

The ETF itself isn’t necessarily new either. The Tierra XP Latin America Real Estate ETF (LARE) currently tracks companies that have some kind of involvement in Latin American real estate. This will all change as it has filed to change the focus of its holdings to now track cannabis companies. The new fund will be known as the Alternative Agroscience ETF and is expected to begin trading sometime this month. This will then bring exposure to cannabis-related companies, which focus on legal cultivation, production, and distribution of products for medical or non-medical applications.

And just like Canada is acting as litmus for national legalization, the country may have already produced the framework for what’s to come in the ETF space. The first cannabis-themed ETF debuted earlier this year on the TSX. The Horizons Marijuana Life Sciences Index ETF has been very popular on the exchange and has compiled over $150 million is assets. The last 90 days have also shown a positive move in the market as well with a gain of more than 30% in market value during that time.

The Alternative Agroscience ETF, “will not invest in any companies that are focused on serving the nonmedical marijuana market in the United States, Canada or any other country unless and until such time as the production and sale of non-medical marijuana becomes legal in the United States, Canada or such other country, respectively,” as written in its filing to the SEC. So as far as companies in the US that are non-medical related, investors should be able to quickly sift through the list of marijuana stocks that won’t make the cut.

Steps Closer To Legalization In The US

This begs the question of, “when will cannabis finally be universally legalized in the united states?” The answer is unclear as of now but the US may be getting closer. New initiatives from key leadership like Elizabeth Warren as well as events like the introduction of a bill that proposes that active duty soldiers be allowed access to experimental medications, which include medical marijuana, means that the conversation is getting louder in Washington, D.C.

Right now, there are 29 states and the District of Columbia that have legalized medical marijuana. Eight states along with DC have also legalized recreational marijuana, with Maine still being in a bit of volleying with legislation right now. In addition to this, it’s important to note the growth in states like California, with an estimated $50 million in tax revenue per year, aren’t expected to slow down anytime soon.

But these figures still pale in comparison to the black market. There were roughly $6.9 billion in legal sales in North America in 2016, but Arcview estimates that $46.4 billion were conducted on the black market. Further taxation and legislative support should help reverse this instance as more states and countries simply legalize the drug.

“Very few consumer industry categories reach $5 billion in annual spending and then post anything like 25% compound annual growth across the following five years,” Arcview reported. “Cable television came close, growing 19% annually in the late 1980s as national networks like CNN and HBO proved to be wildly popular… Broadband internet subscription spending grew 29% per annum in the early 2000s as it became almost as much of a ‘must have’ utility as electricity or television for the modern home.”

With the global medical marijuana market projected to reach $55.8 billion by 2025, the addition of an actual ETF could be a sign of the times that Wall Street is ready to see a true green rush.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

What’s Driving Walmart’s Digital Focus? Paranoia, Top Exec Says

The biggest company in the world has a chip on its shoulder right now—and that’s probably a good thing. Why? The ever-growing challenge from online retailers is pushing Walmart to be a much better operator in the digital world.

“For us, a big part of it is being paranoid,” said Walmart chairman Greg Penner on Thursday at the Fortune Global Forum in Guangzhou, China. “We’re at our best when we’ve got a competitor that’s really challenging us.”

If so, the mega-retailer is doubly blessed: It now has two mammoth online retailers targeting its core business.

For quite some time, Walmart, No. 1 on Fortune’s Global 500 list of the world’s largest companies with $486 billion in sales last year, has been working to adjust its strategy to reckon with the threat posed by Amazon.com.

The so-called Everything Store had more than 50% of all online retail sales in the U.S. last year and continues to expand at a blistering pace. With its acquisition earlier this year of Whole Foods, Amazon served notice that it is bringing the fight for consumers to Walmart on its own turf—physical stores. Amazon’s market value has risen above $550 billion, significantly above Walmart’s stock market value of around $290 billion despite strong returns for Walmart’s shares this year.

In China, Walmart now has another potent competitor getting into the stores business: Chinese online retail titan Alibaba.

Alibaba announced in November that it was investing $2.9 billion to acquire a 36% stake in Chinese hypermarket operator Sun Art, which has some 400 stores in China similar in scale to Walmart’s superstores. As with Amazon and Whole Foods, Alibaba plans to create a connected retail experience for shoppers between their smartphones and their neighborhood stores.

It’s the same strategy Walmart is pursuing, but in reverse: Amazon and Alibaba want to bring their huge customer bases into stores; Walmart wants to persuade the shoppers who frequent its nearly 12,000 stores globally to do more of their digital shopping with Walmart as well.

The retail business is no longer bifurcated between physical and digital, said Penner. The best way to win customers in the future is going to be by offering a sophisticated mix of both options.

“Customers aren’t going to care where products came from,” said Penner. “They just want a seamless experience. So that’s what we’re trying to solve for.”

Walmart has made significant digital inroads since its acquisition of Jet.com last year. In its most recent quarter, the company grew its online sales by 50%. Walmart.com now sells some 70 million items—triple its number of offerings a year ago.

On Wednesday, the company made a historic announcement signaling that it is committed to being more than the world’s biggest operator of physical retail outlets: As of Feb. 1, 2018, it is officially changing its legal name from Wal-Mart Stores to Walmart.

“We’re still in the stores business, but a lot of our business is creating this new experience for customers,” said Penner, explaining the decision to drop the word “stores.”

Walmart has made major changes in its digital strategy over the past 18 months. Last year it sold Chinese online marketplace Yihaodian to JD.com, the country’s No. 2 e-commerce player behind Alibaba.

Penner told the audience at the Fortune Global Forum that the deal allowed the company to scale up faster. It can now reach 90% of consumers in China, he said. And shoppers can order items on the JD.com platform, have them picked from shelves in Walmart’s stores, and delivered within an hour.

“We went all in with that strategy,” said Penner. “We just felt we had to be part of a bigger ecosystem.”

Alibaba’s latest move presents a big, new challenge to Walmart’s business in the Chinese market—and more of the adversity that Penner says the company thrives on.

Why China’s ‘Copycat’ Image Is Beginning to Fade

Neil Shen knows a thing or two about what makes a successful entrepreneur.

Shen, who started his career as an investment banker, co-founded Chinese travel services provider Ctrip.com and went on to become the founding partner of Sequoia Capital China. He was also an early investor in one of the hottest companies in China at the moment called Meituan, a local services platform often referred to as the Groupon of China.

“When Meituan first launched, they did try to learn from the Groupon model in the U.S,” he said at Fortune’s Brainstorm Tech International conference in Guangzhou, China on Wednesday. “In the last few years, Meituan’s business model shifted in a way that makes it unique. It doesn’t have a U.S. comparable.”

Many U.S. companies tend to focus on the home market because it’s “a big, rich market,” so why look elsewhere? “The historical experience is that if you conquer America, you can conquer the world,” he said. “But that’s starting to change.”

Over the years, Chinese entrepreneurs have gained a reputation of simply being copycats of American technology. That image is beginning to fade. In fact, Shen says the opposite is happening.

“Yes, a lot of U.S. companies still think China is about copycats, which is a totally, totally wrong perception,” he said. “I would suggest that U.S. companies should actually try to learn from China.”

Shen used Meituan as an example. Although it was inspired by Groupon, it evolved beyond Groupon’s ambitions. Meituan started out as a group-buying site, but it has quickly become the world’s largest online and on-demand delivery platform. It recently announced that it would launch a ride-hailing service of its own in China to compete against local giant Didi Chuxing.

“In the last few years. the mobile Internet has given the Chinese entrepreneur the chance to prove they are the original creator of those models,” Shen said.

Alleged Cyber Crime Kingpin Arrested in Belarus

One of Eastern Europe’s most prolific cyber criminals has been arrested in a joint operation involving Belarus, Germany and the United States that aimed to dismantle a vast computer network used to carry out financial scams, officials said on Tuesday.

National police in Belarus, working with the U.S. Federal Bureau of Investigation, said they had arrested a citizen of Belarus on suspicion of selling malicious software who they described as administrator of the Andromeda network.

Andromeda is made up of a collection of “botnets”, or groups of computers that have been infected with viruses to allow hackers to control them remotely without the knowledge of their owners, These networks were in turn leased to other criminals to mount malware or phishing attacks and other online scams.

Swedish-American cyber security firm Recorded Future said they have “a high degree of certainty” that the arrested Belarussian is “Ar3s”, a prominent hacker in the Russian speaking cybercrime underground since 2004, who the firm has identified as the creator of the Andromeda botnet, among other hacking tools.

“Andromeda was one of the oldest malwares on the market,” said Jan Op Gen Oorths a spokesman for Europol, the European Union’s law enforcement agency. It estimated the malicious software infected more than 1 million computers worldwide every month, on average, dating back to at least 2011.

Although authorities in Belarus declined to name the suspected hacker and Europol and the FBI declined to comment, the firm Recorded Future identified Ar3s as Sergei Yarets, a 33-year-old man living in Rechitsa, near Gomel, the second largest city in Belarus.

Reuters could not reach Yarets via phone or social media.

Yarets is identified on LinkedIn as technical director of OJSC “Televid”, a television broadcaster in southeastern Belarus.

A colleague at the company contacted by Reuters said Yarets had been arrested but declined to comment further.

A source at a government agency involved in the investigation said that the arrested hacker behind Andromeda was Yarets.

The Belarus Ministry of Internal Affairs in Minsk said officers had seized equipment from the hacker’s offices and he was cooperating with the investigation.

Information about the operation has been gradually released by Europol, the FBI and Belarus’s Investigative Committee over the past two days. No further arrests have been reported.

Cyber crime wholesaler

The shutdown of the Andromeda botnet, announced on Monday, was engineered by a taskforce coordinated by Europol which included several European law enforcement agencies, the FBI, the German Federal Office for Information Security and agencies from Australia, Belarus, Canada, Montenegro, Singapore and Taiwan.

The police operation, which involved help from Microsoft and ESET, a Slovakian cyber security firm, was significant both for the number of computers infected worldwidew and because Andromeda had been used over a number of years to distribute scores of new viruses.

Belarus authorities said the man they arrested charged other criminals $500 for each copy of Andromeda he sold to mount online attacks, and $10 for subsequent software updates.

Microsoft said Andromeda charged $150 for a keylogger to copy keystrokes to steal user names and passwords. And for $250, it offered modules to steal data from forms submitted by web browsers, or the capacity to spy on victims using remote control software from German firm Teamviewer.

German authorities, working with Microsoft, had taken control of the bulk of the network, so that information sent from infected computers was rerouted to safe police servers instead, a process known as “sinkholing.”

Information was sent to the sinkhole from more than 2 million unique internet addresses in the first 48 hours after the operation began on Nov. 29, Europol said.

Owners of infected computers are unlikely to even know or take action. More than 55 percent of computers found to be infected in a previous operation a year ago are still infected, Europol said.