The bitcoin currency has been experiencing its peak moments for a long time. Many consider bitcoin to be an easy way to earn money, and others consider it to be the “currency of the future”. Unfortunately, this view may be in future verified, as can be seen on the example of the Republic of El Salvador.
On September 7, 2021, El Salvador officially adopted
bitcoin as an official and legal tender, making the cryptocurrency an accepted means of exchange
for goods and services. The euphoria and optimism related to the changes did
not last long, because on the same day, there was a huge drop in the value of
bitcoin. Within moments on Tuesday, September 7, bitcoin’s value plunged 17%
and ended its decline on Wednesday by around 10%. Other digital assets also fell.
According to Kraken (the cryptocurrency exchange in general), Cardano’s token
(ADA) and the second largest cryptocurrency, Ether, fell 18% and around 13%
respectively. (As of September 8 at 5:00 p.m.).
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publication date: September 30, 2021 – text updated on January 23, 2023
It is currently accepted that only 5% of start-ups in the technology industry are successful. This fact means that, in principle, the investor has as much as a 95% risk of losing money. However, if the investment turns out to work with no failure the investors may gain millions.
The more
innovative the subject matter the bigger the risk
A good
example of a risky investment is a highly discussed case of Elizabeth Holmes.
She is the founder of biotech start-up, Theranos. The main concept of her
business was to create a blood-testing method which promises to detect a range
of illnesses with just a prick on the fingertip. She based her business idea on
her fear of needles. One device would replace professional laboratory machines.
The technology was supposed to revolutionize the healthcare industry. As this
idea seemed futuristic and innovative it
is no surprise that it seduced many high-profile investors that invested
millions into this business. Silicon
Valley investors have poured more than $200 million into projects in the past
years to build a device that analyzes blood – according to ‘Financial Times’. However,
in 2015 it emerged the blood-testing devices did not work and Theranos was
doing most of its testing on commercially available machines made by other
manufacturers. The company shut down three years later. Numerous problems have
arisen since then. The invention gave false results, resulted to undetected
diseases. As it later turned out, it was not the machine that tested the
samples, but a team of people appointed to do so. The machine was only an
object of advertising and marketing. Now Ms. Holmes faces 12 fraud charges and
she is accused of deceiving investors and patients with defrauding investors
through a ‘sophisticated, multi-year fraud’.
The
business obtained one of its first financings in 2004 from a well-known
investor from Silicon Valley, Tim Draper. Theranos founder began collaboration
with former senior U.S. government officials to serve on the board of
directors. Among them were: George Shultz (former Secretary of Labor, Treasury,
and State of the US government), Gen. James Mattis (US Secretary of Defense),
Henry Kissinger (former Secretary of State), William Perry (former Secretary of
Defense), Betsy DeVos (US Secretary of Education) and many other successful
individuals.
It sounds
surprising that highly respectable, influential people did not even ask Holmes
for detailed financial analysis and accurate product information. They have
lost millions of dollars because of being too superficial in their due
diligence.
Polish
tech and software start-up scene
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Technology transfer agreements as well as investment agreements are often accompanied by source code escrow agreements used to secure the IP rights to the software.
Source code
The key of
programs and software is the source code. It is the fundamental component of a
computer program that is created by a programmer. The source code should be written using a
human-readable programming language – usually plain text. The main goal of it
is to set exact rules and specifications for the computer that can be translated
into the machine’s language.
What is source code escrow?
Sometimes it happens that even if special
software tailored to one’s needs is created by a professional company, problems
may arise. The investor needs to make every effort to protect company in the
event that the contractor’s company ceases to exist, for example because of its
bankruptcy or liquidation. In such cases, the solution to secure the transfer
of ownership of the source code is to put in place source code escrow
agreement. This is a service that helps protect all parties involved in a
software licence by having a neutral, independent third party escrow agent hold
the source code.
Main principles of source code escrow
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KIEŁTYKA GŁADKOWSKI KG LEGAL constantly supervises and prepares its lawyers for the specialization in which they provide services for foreign clients. In order to systematize the conceptual grid of very specialized fields of IT, telecommunications, biology, medicine and modern finance, KIEŁTYKA GŁADKOWSKI conducts internal consultations to improve the experience of our lawyers specializing in legal assistance for foreign clients from the IT and TECH sector. As a result of such internal research, KIEŁTYKA GŁADKOWSKI creates and publishes texts on topics related to modern legal problems, but also to explain the basic concepts of specialized IT and pharmaceutical fields. In this way, KIEŁTYKA GŁADKOWSKI aims to demonstrate to potential clients within specialized industries that our lawyers are also familiar with specialist terms necessary for a proper understanding of our foreign client’s business and legal needs.
This is one of those texts. We invite you to read
it.
How to get a
cryptocurrency?
Cryptocurrency is
not emitted by some central, national bank as it happens with classical form of
money (fiat money). Cryptocurrency is made in a digital sphere and the only way
to obtain the currency from the blockchain system is to mine it (similarly and
metaphorically to the gold mining). Cryptocurrency mining works similarly to
the gold mining. Virtual coins can be discovered digitally using computer
programs. The Bitcoin, for instance, has set a limit of total of 21 million
bitcoins. Thus the faster you dig bitcoins the more of them you will have (if
we consider only mining). All bitcoins are lying within the blockchains system
and the role of the computer program and the miners is to dig it from that
system, precisely to discover it in that system. Thereby there can be one miner
or a clubbed miners’ group who dig together, faster and more effectively and
then they divide their profits among each other.
What is a mining
pool?
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WARSAW
HEALTH INNOVATION HUB – THE BEGINNING OF THE POLISH MEDIAL VALLEY
On
June 10, 2021 there was launched the Warsaw Health Innovation Hub (WHIH). This,
first in the Eastern (and Central) Europe, initiative between public and
business sectors will bring together leading global medical, pharmaceutical and
biotechnology companies. According to the funders’ intention, it should be a
beginning of the Polish Medical Valley which was created concurrently with the
WHIH. The WHIH is intended to be just a first step of this huge, innovative
enterprise.
WHAT
IS THE WARSAW HEALTH INNOVATION HUB?
The
Polish WHIH is the first business initiative in the Central Europe that brings
together co-working between public sector with business entities in order to
create innovative medical, technological and legal solutions for patients’
health improvement and for enhancement the capability of Polish health- care
system. This unique conception (co-working conception) will allow to provide
the conditions for rapid transformation of ideas into products, processes and
services, taking into account the development interests of the Polish
biomedical sector and Poland’s need to be independent in terms of drug and
medical products safety. It is also an opportunity to invest in Polish
technologies and the best research teams in the country, according to the
Medical Research Agency.[1]
This
is a joint initiative between the Medical Research Agency (Agencja Badań
Medycznych)[2]
EIT Health[3]
and global medical industries players: AstraZeneca, Microsoft, Polpharma,
Roche. The launching ceremony was held at the Chancellery of the Prime Minister
of Poland with his patronage.
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