Severe Electricity Problems in China & Europe

 The News Cover: Since June 2021 the Chinese government has strictly rationed the use of electricity in factories, homes, offices, etc. How shocking! In some cities, the use of ACs and lifts have been banned. Severe restrictions have been implemented. You are aware many Indian cities and villages face power cuts for hours. Now China is experiencing the same with severe electricity rationing. How shocking! China is the world's strongest economy, technology and gadgets are the cheapest which are exported all over. 

So why is such a country rationing its electricity? What is the problem? Before I tell you something, you will first have to understand how electricity is made. Electricity is produced by burning coal in a boiler to produce steam. The smoke of the coal is released in the open. The steam produced flows into a turbine, which spins a generator to create electricity which powers factories, homes, offices, etc. Watch the video to clearly understand the process. I hope the video has helped you understand. Instead of coal China also uses Natural Gas to create electricity. Natural Gas is an exothermic form of energy extracted from below the earth's surface to create electricity in the same process in which coal is used to create electricity. However the positive is that it is a clean form of energy that does not harm the environment. 

Coal on the other hand is extremely harmful to the environment. However, it is not possible to immediately switch to natural gas. China currently is heavily dependant on coal and will slowly transition to natural gas. The large-scale mining of coal and extraction of natural gas to generate electricity is depleting these fossil fuels. This is a huge problem. Once these resources are gone, there won't be any electricity. Then how will we work? As these resources reduce, their price will increase. This is why China is rationing electricity as they are not able to cope with the rising prices. This is not the case only in China, the same is happening in Europe as well. 

China and Europe are worried about the upcoming winters when heating with the help of electricity will be a necessity. This is why the rationing of coals will cause problems. Here are reasons why the price of coal & natural gas has increased: 1. For more than a year the entire world was on lockdown. Factories, businesses, etc. were shut and everyone was home. You know about this. Finally, after almost a year and a half, the lockdown lifted. That's when factories ramped up their production leading to rising in the need for coal. That's when the price increases. 2. China is the leader when it comes to manufacturing tech equipment. They manufacture various gadgets like mobiles, TV, refrigerator, ACs, etc. They are known to export these items for dirt cheap prices. These factories run for hours on electricity generated through coals. It even used natural gas to generate electricity. Continuous use of coal will lead to its depletion. We can not be complacent about this as coal is not formed in a day. It is a natural resource found below the earth's surface and can take hundreds of years to form. 

Organic matter will decompose and eventually turn into coal. Even resources of natural gas are depleting. This is a huge problem. 3. China used to get 90% of their coal from their states. The remaining 10% was sourced from foreign producers. However, there is a severe shortage of coal in these states and they are unable to meet the rising demand as production takes time as coal is a natural resource. This has caused the electricity crisis. 4. Countries across the world have promised to reduce emissions in their factories to protect the environment and combat climate change. China has promised to stop the harmful emissions by 2060 and the use of coal. They are slowly trying to switch to natural gas to achieve their goal. 5. China used to import coal from Australia. However, they stopped this due to political tensions. This is another reason for the shortage of coal and the electricity crisis. 6. Indonesia and Columbia have been supplying coal to China & Europe. Heavy rains in these countries affected the production. In other countries because of the lockdown, coal mining stopped which is why the production reduced and price increased in China & Europe. China and Europe’s electricity problem was a blessing to India. 

Earlier a lot of factories in India used to buy coal from foreign countries at cheap rates. Now that coal prices in foreign countries have increased, Indian coal producers are being favored by Indian factories, but still the coal stock is limited. Experts say the price for coal will remain high in the coming months. Fuel price are increasing in China, Europe and India. Economies are struggling to handle this. With the rising prices of coal, governments need to ration their electricity. If prices continue to rise, factories may shut and the economy will end up in shambles. This is why the situation needs to be carefully handled. Lets hope India does not suffer the same fate as China. Electricity in factories needs to be carefully moderated. So that the economy is safe.

Why is China destroying its tech companies?

 

News Cover: This is the MSCI index of China that comprises several medium and large companies in China. This was the value of the index in February 2021. Look at what happened in five months. Some of the world's largest internet companies incurred losses of billions of dollars. Tencent, best known for WeChat, or you can call Chinese WhatsApp, had to face a loss of USD170 billion. That is nearly the GDP of Greece. And Tencent isn't alone. Many tech companies lost billions of dollars of their market value. This crash resulted due to the crackdown by the Chinese government that targeted the e-commerce, gaming, and education companies. The crackdown didn’t occur overnight but took months. There were three key moments. First, the suspension of Alibaba's parent company Ant Group's IPO in Nov 2020. Second, when Didi, a company like Uber was listed on New York Stock Exchange on June 30 and two days later, the Chinese government put Didi on a cybersecurity review and banned it from accepting any new user. Third, when China initiated strict regulations on China's after-school tutoring or ATS sector. In late July, the Chinese government even banned for-profit tutoring. The rules say that tutoring can only be conducted on a non for profit basis. Try to grasp the gravity of the situation. 

Imagine if the Indian government decides to ban private tuition. How would you react? And the Chinese government didn’t stop here. Earlier this month, a Chinese newspaper affiliated with a state news agency criticized online gaming as “opium for the mind” i.e. online games are the same as drugs. Even though this was only a newspaper article the investor sentiment had become so fragile that it triggered a mass selling of gaming stocks. And the gaming companies incurred a huge loss. On the face of it, this looks so strange. Why would China ban its world-renowned internet companies? It’ll not only damage the companies but also the economy of the country. Consider this for example: In 2020, had Alibaba's IPO been allowed to debut, it would have raised 37 billion dollars from the market, the highest ever in the world. But the answer behind it tells us about the kind of economy the Chinese Communist Party wants to create. Now several theories have emerged on why such a crackdown took place. Let's discuss them in detail. On Didi, the Chinese administration mandated a cybersecurity review because Chinese regulators were concerned that due to stock listings in the US, US data disclosure rules could compromise national security. The crackdown of the education companies is argued that due to the highly competitive schooling system of the country, education companies have flourished. And the companies manipulate parents, using the pretense of the future of their child, into spending exorbitant money on After School Tutoring. This high mental and financial pressure is one reason why Chinese parents aren't keen on raising children, which China is concerned about. 

The other reason cited is that the Chinese Communist Party wants to strengthen its ideological control over the education system. Former education officials argued that the recent crackdown is entirely consistent with Xi Jinping's ideological determination that “government, military, society, and schools — the party is the leader of all”. In Alibaba’s case, Chinese regulators have blamed that Alibaba was abusing its dominant position in the market by punishing those merchants who were selling products to other e-commerce companies. Another reason could be that the Chinese government wanted to send a message to Jack Ma and other similar entrepreneurs because Jack Ma criticized the Chinese financial system. It wanted to convey that no one is bigger than the Communist Party. And the party would only support entrepreneurs who are loyal to it. By blocking Alibaba’s IPO, the Chinese government changed the trajectory of Alibaba, Jack Ma and the Chinese financial system. Countless articles and videos came out that talked about the disappearance of Jack Ma. Jack Ma's fascinating journey can teach us many life lessons. If we discuss the non-controversial part of his life, we can learn how he built a multi-billion dollar company. 

If you’re interested in his journey, I would recommend an audiobook on him that is featured in the KuKu FM app. This show has 32 episodes, which details Jack Ma's life. You can listen to it on the KuKu FM app, which has sponsored this video. This app has many other original podcasts and audiobooks in several languages. This app has many other original podcasts and audiobooks in several languages. And as they’re sponsoring the video, you will get 20% off if you use the coupon MOHAK20. This brings the cost below 1rs a day. So do check out the app. The download link is in the description. Now all these reasons are very logical. They’re not surprising. What I want to tell you about is a different reason, which I feel is the most interesting part of this video. Over 40 years ago, China's Premier was Deng Xiaoping. Deng challenged the existing economic structure of Chinese society which relied heavily on state control of the market, meaning private companies had limited freedom. Deng reduced the influence of the state on the Chinese economy. This helped many private companies. And over time, Chinese products flooded the world market. 

And this model was so successful that in 2010, China took over Japan to become the world's second-largest economy. But in 2013, Xi Jinping came to power. And he had some other ambitions for the country. Xi believed that technology comes in two varieties: one that is "nice to have" and one that you "need to have". And Xi seems to classify WeChat, Alibaba, games by Tencent, Didi as "nice to have" technologies. Xi isn’t the only one with this ideology. Xiaomi founder Lei Jun had famously once said: “Even a pig can fly if it stands at the center of a whirlwind.” It means that any company can do well if it rides the right trend at the right time. And Xi thinks that all these internet companies have done exactly that. The Chinese government seems to think that the profits of companies like Alibaba and Tencent come more from rents than from actual value-added — that they're simply exploiting first-mover advantage to capture strong network effects. And in some ways, this makes sense. 

Facebook and Google are two of the most valuable companies in the world but many can argue that they produce little value relative to the profit they rake in. Dan Wang is a technology expert based in Hong Kong says that "I find it bizarre that the world has decided that consumer internet is the highest form of technology". He says, "The apps they develop offer fun, productivity-dragging distractions; and the companies pull smart kids from fields like materials science or semiconductor manufacturing, into ad optimization and game development". He believes that “If a large population of a country plays games, buys household goods online, and orders food delivery does not make it a technological or scientific leader". 

So if not the consumer technology companies, what does China want to focus on? According to Dan, Xi Jinping believes that China's future lies in the hands of the manufacturing sector. He says that “Companies that produce semiconductors, aircraft, batteries, and telecom equipment will play an important role and not the internet companies.” This is why while the stock of leading internet companies collapsed, that of China's leading semiconductor companies has increased. Let’s try to deconstruct this argument. There are three major sectors in an economy: agriculture, manufacturing, and the service sector. Usually, a society starts focusing on the agriculture sector and then on the manufacturing and service sectors. Countries like the US and the UK have started focusing more on the service sector. 

And China doesn’t want to do this. So why do politicians hate technology companies even though investors seem to love them? First, big tech companies inflict costs on society that aren't reflected in private market values. This is why Chinese state newspapers called games as "opium of the mind". American leaders would agree. They, too, worry that big tech suffocates competition, violates privacy, propagates misinformation, and encourages online addiction. And none of these problems are reflected in their stock values. Second, tech companies disrupt government control of the market. Take for instance Alibaba's sister company Alipay, which heavily disrupted the public banking sector of China. Alipay would give loans to small businesses at cheap rates which the public banks couldn’t do. This decreased the government’s control over the financial system. We discussed the downsides of technology companies on society. Let’s discuss how the manufacturing sector benefits a nation. Manufacturing companies confer social benefits that market values don’t reflect. 

For example, manufacturing companies create jobs, raise productivity, and disseminate essential skills. Innovations in manufacturing can help countries get ahead in geopolitical rivalry and military power. In fact, throughout the era of world war and the cold war, technological advancements benefited the nations. The innovations in the manufacturing sector have several applications. For example, Defense Advanced Research Projects Agency or DARPA is an agency of the US defense department that created technology in the late 1960s, which is used by everyone: the internet. And as military technology is increasingly becoming software-driven, the need for manufacturing technological goods like chips and semiconductors would also become more important. And this need for manufacturing was observed during the recent US-China trade war. The US government cut China's access to biotechnology, nanotechnology, and cloud computing infrastructure. The US government cut China's access to biotechnology, nanotechnology, and cloud computing infrastructure. 

What can India learn from all these? For context, India is one of the few countries that jumped straight from the primary sector (agriculture) to the tertiary sector (service), leaving the manufacturing sector behind. Companies like Infosys benefited from this a lot but local manufacturing companies suffered. But tensions with China on the border and COVID have heightened the importance of local manufacturing. If you study the data, India’s manufacturing has been slowing down for the past several years. In 2019, in fact, the value-added growth of manufacturing was negative. Dependence on countries like Korea and Taiwan for chips has slowed India's manufacturing. While at the same time, many internet companies are seeing a significant rise in valuation. Currently, India has been focusing more on the tech companies, overlooking the manufacturing. That’s why India has little growth in R&D. Only time will tell if India’s current economic model is more efficient than Xi Jinping’s new model.

The Cost of hosting the Olympics

 

The News Cover: When the final games were played in the 2016 Rio Olympics, it was one of the most expensive summer games ever. In 2018, it was estimated that the total cost was over $20 billion, far beyond the Rio organizing committee's initial estimate of $2.8 billion. Rio had big stadiums, impressive athletic villages and top of the line training facilities, all of which significantly impacted the game's bottom line. 

But that big spending didn't just end with the cost of just hosting the games. The city of Rio had to pay for a new subway lines or renovated shipping port, a doping testing lab and environmental cleanup costs in the Guanabara Bay. But just seven months after the games, the once grand Olympic venues look like this. These crumbling facilities left vacant are the byproduct of a city struggling with debt and colossal maintenance costs, often billions of dollars in overrun costs. 

Most of the facilities built for the Rio Games were not supposed to last longer than the lifecycle of the games itself. But the change in local government left the venues in limbo, when to be used or dismantled. Now the question of the venues and especially those that are that are still up there in the park. We're not supposed to be there. We're supposed to be dismantled cities going over budget when hosting the Olympics isn't unique to just Rio. 

According to the Council of Foreign Relations since 1960. Every Olympics all significant overrun costs, all except one, the Summer and Winter Games have struggled to stay within their estimated costs of hosting the Olympics. Winter Games have done a better job of managing that. However, the Sochi games was an outlier. And economists argue hosting the games does very little for the betterment of a city. 

If you're looking at this as an investment, you don't want to make an investment something where you have a one chance at a 10 to have the outcome that you're looking for. That's not a good investment. That level of risk is ridiculous to undertake. Well, other experts believe that the games are vital for the city's infrastructure for its future, better roads, maybe it's Metro having a development of the metro or it could be the Hoss having housing that's put in place. 

As overhead costs become a growing concern. several cities withdrew their 2022 Winter Olympic bids. So how did the Olympics grow from its humble beginnings into a massive and expensive international event? And how can the Olympics prevent even more potential host cities from withdrawing their bids? In 1896, the Olympic Games became a truly international competition as a modernized becoming what it looks like today, a bi annual event with Summer and Winter Games. in its infancy, the gains were relatively small, how cities would use public funds for the games with ticket sales generating revenue to offset costs. Very first Olympic Games were in 1896. 

How much did the rio olympics cost

No women were able to compete in those games and certainly over time now as we look at his recent 2018 on the games look a lot different feel a lot different. This is Dr. Nicole Forrester. She's a former Olympic athlete in track and field who competed in the 2008 Beijing games. The Olympics is like the the pinnacle or the Everest of that sporting experience, both for the athlete and also for the viewers at home. The Olympic Games didn't see a rise in popularity until the evolution of telecommunications. 

The 1936 Berlin Summer Games were famously the first to be live broadcasted. At the time, only about 50,000 viewers were able to watch from a nearby Stadium by 1948. The radius grew even wider for the London Summer Games. 500,000 people watch live up to 125 miles away in the 1960s. With the Rome games, they were the first genuinely international broadcast, reaching millions worldwide. 

By 1968. About 17% of the world's population had access to the game's cost balloon. As viewership grew over the years, more prestigious white whales were being built to showcase a country's national pride, draw and tourism, create jobs and bolster local businesses. Since the 1960 games in Rome, both Summer and Winter Games saw over one cost on their estimates, things began to get dire in 1976 with the Montreal games. Andrew Zimbalist is an author and economics professor at Smith College in North Hampton. One of the things he specializes in is the economics of the Olympic Games. 

Famously, the mayor of Montreal declared that the Olympics This is before the games started, but he declared the Olympics can no more have a cost overrun than a man can have a baby. Well, it turned out that the Montreal Olympics had a cost overrun that was almost tenfold over the initial price. The Canadian government shelled out $1.5 billion in overhead costs in the Montreal games well over their estimated cost of $120 million. 

The Canadian government finally paid off that debt in 2006. At that time in Canada, we were under a cultural war of sorts. The other issue that happened is the price of steel had skyrocketed. And then the year before the games are hosted, you had workers walk off on a strike, which then cause more of a delay, and then again added to the cost itself of posting these games. By 1984, no country wanted to host the games, only the United States kept their hats in the ring for the 84 games in Los Angeles, it became the first and only Summer Olympic Games to have an operating surplus of $215 million. 

The reason as the only bidder, Los Angeles had the leverage to negotiate its contract with the IOC. And the infrastructure was already there, together with with the fact that Los Angeles, the second largest city in the United States, arguably the entertainment capital of the United States, meant that they didn't have to do hardly any building, basically, everything was in place, little building had to do but not very much. There was such a surge in revenue that was derived through the media coverage itself that actually went straight to the to the Los Angeles games. 

And so like the IOC realized, okay, now, we should, we should make sure that we make sure that we get that big cut of the media revenue that's generated. The IOC saw the ELA games as an opportunity to restructure their television revenue distribution. Before the IOC auction its TV rights to the games local hosts, were able to keep about 90% of the revenues generated. In the 1980 Moscow games, the IOC only took about 10% of the revenue. But all that changed in 1984 when the IOC took 33% of the LA games TV revenue. 

Over the years broadcast revenue for the IOC increased the 9084 Summer and Winter Games generated $287 million and $103 million, respectively. Fast forward to 2016 and 2018, Rio generated $2.9 billion, and Pyongyang generated $1.4 billion. But it wasn't just the TV revenues that skyrocketed. So did the percentage of the IOC takes broadcast rights revenues for 2016 games in 2018. 

Games were 73%. over its lifetime, the Olympics has grown as more and more nations participate and more sports are added creating the massive competition we see today we're seeing there's more sports that have been added to the program plan. So we look at the Games in 1896. And how many sports were there and versus what it's gonna look like for Tokyo it is night and day difference in vastly larger for for these games. As the games become more expensive, the price tag of hosting the games becomes more of a burden. Before host city begins constructing elaborate venues, putting in a bid to host the games itself can cost 10s of millions of dollars. 

All these cities would come together and would bid and then it would be narrowed down to say like five other cities and then you've got people within the IOC visiting during these site visits, help decide like what where we're going to go and then it narrows down to like two cities and then so on. This used to be a very costly process to do. With no Garrett with a very small guarantee that that city would be successful through the bidding process. Just take the Tokyo bid to host the 2016 Summer Games $150 million was spent by the Japanese Olympic Committee for expensive consulting firms city planning, event organizing architecture firms and much more. 

Eventually, that bid went to Rio. However, Tokyo did have a successful bid for the 2020 games, but spent an additional $75 million for an update and valuation and planning. winning an Olympic bid comes with a steep price tag, largest single facility it has to get built. This is the Olympic Village. This is for the Summer Games. This is a village that has to accommodate 11,000 athletes and about 5000 additional coaches and trainers. In addition to having the lodging. 

You need to have athletic training facilities, you need to have tracks you need to have weight rooms you need to have other facilities. You need to have restaurants, you need to have entertainment facilities for the athletes, you need to have clinics, medical clinics. So you're actually building a village. You know, this is a full full service village. So what else needs to get built? Then you have the Olympic Stadium infrastructure road infrastructure telecommunications, infrastructure, also potentially billions of dollars their security costs these days easily run one and a half to $2 billion. While both the summer and winter games are expensive to host. 

The Summer Games are typically more costly and expensive. There are more athletes More competitions and events that require more specialized facilities. Winner games usually stay within their cost estimate threshold with minimum overrun costs. However, the Sochi games was an outlier and peaked an estimated $40 billion in 2014. And it's over on costs coming in at a total of $51 billion since 1980. The average cost overruns for hosting the games is 252%. For the Rio Games, it was estimated in 2017. 

That $13.1 billion went into hosting the Olympics, well over its initial $2.8 billion budget. economist, however, put the actual numbers somewhere north of $20 billion in 2018. An estimated $2.06 billion actually went towards sports related venues, while an estimated $8.2 billion went towards legacy builds, or builds intended to live well beyond the Olympics three week lifecycle, legacy builds went towards things like an updated infrastructure highways a renovated port, and cleaning the polluted Guanabara Bay. Of that $8.2 billion. A delay riddled subway line cost an estimated $2.98 billion and the renovation of Porto malamala was an estimated $4.2 billion to meet the iocs requirement of 40,000 rooms for accommodations, where you had to lay out the construction of an additional 15 to 18,000 rooms, intended to be used after the games as luxury apartments. 

Nearly five years after the games, most of those long term use buildings sit vacant. They're also expensive to maintain about $14 million a year it goes into maintenance costs for real venues. Real screams Moroccan a stadium built in 1950, which held the opening ceremonies of the 2016 Summer Games had its power cut off in 2017. After falling behind on payments during a tendancy dispute from the games. After two months of no power and left vacant, the stadium reopened for football matches and concerts in all cases. And in all cities, not just Rio reason why the venues didn't exist before the games. This because it didn't make sense to build them economically. 

Nobody wanted to build them. The IOC has an active changes for cities who wouldn't have much of a use case for certain sports venues. In the future. One of the simple change is you don't need to build venues anymore. Either they needed by the community in the long term, you don't build. And if you don't build you have different choices, you can have temporary structures which work extremely, extremely well in the majority of sports right now. Or go abroad. Real isn't alone with its overspending. 

Government spend billions of dollars on these extensive upscale facilities, hoping for job growth or revitalizing infrastructure to become a new tourist hub. However, this big spending on legacy builds and infrastructure for the future is outside the scope of requirements from the IOC to host the games. where there have been problems in the past is some of the venues that were designed to be especially for for the after games, and too expensive. And let's be clear, this is absolutely not something we are demanding what we are doing now, to make sure that that we don't have these problems they will not repeat is that at the time, when we are speaking about the future gains like it is the case now in Brisbane. 

We decide together about the venue the master plan, what makes sense or what doesn't make sense, so that we can not be accused of any problems in the long run. While Rio invest heavily on infrastructure that didn't pay off as expected. That doesn't always mean that big spending is the death knell to a city's future. Things like a newly established metro line can pay off in the long run. Just take the 1976 Montreal games, one of the greatest things that the Montreal has has a legacy from the games is the metro system and aisle council committees that are bidding to host the games to speak less than the sports themselves because the general public isn't gonna all have access to like the sporting venues. But it's more like the field that day in and day out. 

A resident of that city can really experience the idea of new business development, new technology, better roads, you name it, whatever is required for that city has come into place because of the games and but for the games, those things would not be in place. As of 2014 the IOC enacted the Olympic agenda 2020. It's a strategic roadmap for the future of the Olympics. It signals cost concerns, adapting the game to the host cities, it limits expenses on future bids and establishes the foundation for a more economic and sustainable Olympics. We reviewed entirely the approach of the bidding process to simplify it to make to make it more collaborative as well. 

We came with 118 measures to save on the cost of organizing the games. Let the capital costs No investments are needed. No constructions are needed. But just the operations of the games 118 measures. And the third strength was to simplify games organization by allowing the organizers to be creative, innovative, not to impose to heavy requirements. We as IOC are providing much more ready made solutions, turnkey solutions, so that you can reuse some of these over time. 

But in 2020, the Olympics were thrown another curveball how to host the games amid a pandemic crippling economies worldwide. guys want to bring you some news right now there's something that's just crossing according to the NHK wires of Japan's Prime Minister Ave is set to propose a one year delay for the Olympics. And a call with the IOC is Thomas Bach. Again, this is NHK citing this on the wires, this has been something that's been widely speculated about whether or not the Olympics would be able to go forth coming up this summer. Right now, though, it looks like the Japanese Prime Minister delete tech tacked on billions of dollars on an already expensive Olympics $2.8 billion for the initial delay, and another $1 billion in preventative measures against COVID-19. 

The Tokyo games surpassed its original estimated cost of $7.3 billion dollars. As of April 2021. It is estimated that the games will be $30 billion. The IOC faces another issue with the Olympic Games for the 2022 Winter Games, five cities withdrew their bids. So what happens if no country wants to host the games? Well, the IOC got ahead of that issue by doing something out of the ordinary for the Olympic governing body. In 2017. The IOC four went the bidding process and chose Paris for the 2024 Summer Games, and Los Angeles for the 2028 games, effectively placing a pause on bidding, with the IOC defaulting to Los Angeles in 2028, like they did in 1984. It can add a much needed boost for both the IOC and the games themselves, the Olympic Games 32 and 84. And now we building on on this very rich heritage. 

Whether the games of Los Angeles will be transformational the way the 84 were, I don't know yet for sure. What I know is that the spirit of innovation has never changed. And what was worth in 1984 in this respect, is still absolutely the case now. While the gains are a financial burden for most cities, it continues to serve its original purpose as a symbolic event, making the world smaller as athletes from nations all over the world come together to compete

What is Dogecoin? | Bitcoin vs Dogecoin | Explained by The News Cover

 

The News Cover: Hello, friends! You already know about the rupee coin and Bitcoin But there's a new coin that's globally famous now. It's called the Dogecoin. The value of our rupee is based on our currency. And Bitcoin is based on Blockchain that promises to revolutionize the monetary systems around the world. But this Dogecoin is based on a meme.

 Literally! This coin was made in jest. Someone took the Doge meme, this meme of the dog was quite famous at some point and made a coin out of it. It's like someone taking the "Pawri ho rahi hai" meme and turning it into a "Pawri coin". Or this meme of Akshay Kumar being made into "Akki coin". It's quite possible. 

Someone may very well make these Pawri coin and Akki coin. Because cryptocurrency is so decentralised that any person can develop their own coin. They'd need basic coding knowledge to do that. But the thing is that this Dogecoin became so famous that people like Elon Musk started buying it and promoting it. Why did it happen? Come let's find out in today's video on Dogecoin. After the popularity of Bitcoin, several people brought up its disadvantages. Like, the long transaction time of Bitcoin. 

Or that the whole process of Bitcoin consumes a lot of energy. And that's not good for the environment. That's why some people considered making their own coins. These coins are known as Alt-Coins. i.e. Alternative Coins. Because they're the alternative to Bitcoin. And they try to counter the disadvantages of Bitcoin. 

By some method or the other. Like Ethereum, Litecoin, I talked about them in the Alt-Coins video. You can watch them as well. The link will be in the description below. But after Alt-Coins had been developed, people realized that anyone can create their own coins. So some people started creating their own coins for fun. There were no advantages in their coins as compared to Bitcoins. 

They simply changed the name and created a new coin. Some scammers made their own coins as well. And fooled people to invest in their coins to drive the value of the coin After which the scammer would take back his investment and the people will suffer heavy losses while the scammer would walk away with a significant profit. This is known as a Pump and Dump scheme. So many people created their coins for fun. Some for scamming people others for absolutely no reason. 

It was only meant as a joke. These coins which were created for no reason they are often known as Shitcoins. Because they do not add any value to the world. They aren't bringing about any improvement in the process. So they're Shitcoins. Some people believe that Dogecoin is also a Shitcoin. The only difference is that the purpose of creating Dogecoin wasn't to scam people it was only to prank people. 

It was only a joke. This Doge meme was at the peak of its popularity in 2013. Jackson Palmer, an Australian marketer and Billy Markus, a software developer at IBM developed this Dogecoin then. Palmer says that he thought up this idea as a joke. to combine the two most popular trending topics on the internet. Cryptocurrency and the Doge meme. The code of Dogecoin is based on Litecoin. 

Litecoin is an Alt-Coin that does have a few advantages over Bitcoin. Like lesser processing time and lower transaction fees. But it is truly surprising that the market valuation of Dogecoin has already surpassed that of Litecoin. If you look at the largest cryptocurrencies of the world Dogecoin coin has become the fourth-largest cryptocurrency. After Bitcoin, Ethereum and Binance. The biggest question here is how is it possible? How did a coin made as a joke gain such popularity? 

Why are people buying it? The first reason is the Reddit website. People on Reddit started using it as a joke initially. Whenever someone liked a post or comment on Reddit, people would award some Dogecoins to the OP as a tip. It was known as the DogeBot tip. Usually, this was a tip of 5 Dogecoins. And at the time the value of Dogecoin was 0.0002¢. It was a very small amount. But using Dogecoin as a tip started gaining popularity on Reddit. And this expanded over the years. 

Dogecoins were used so much and exchanged so many times that their value started increasing rapidly. In September 2018, the CEO of Tesla, Elon Musk noticed it. Elon Musk met Jackson Palmer on the issue of Twitter scambots. The fake Twitter accounts that scam people using the guise of cryptocurrency. Elon Musk wanted to take them down because his name was being used to run these scams. 

So he asked for Jackson Palmer's help on this. That was when Elon Musk came to know about Dogecoin. After 7 months he tweeted "Dogecoin might be my fav(ourite) cryptocurrency." In March 2020 he tweeted "Dogs rock. They are the best coins." So in the coming months and years he tweeted about Dogecoin several times which were indirectly or directly promoting Dogecoin. 

And because Elon Musk is so famous, perhaps the most renowned and liked billionaire in the world, every time he tweeted, it sent up the value of Dogecoin by 25% - 50%. Eventually, 2021 followed 2020. And now the value of Dogecoin has exceeded 50¢. At its peak, Dogecoin had almost touched the valuation of $80 billion. Though its price has fallen a bit in the last couple of days, but the supporters of Dogecoin aim to drive its value up to $1. It means that the value of 1 Dogecoin would be equal to $1. 

Currently, it is around 50-60¢. And what is the process to buy Dogecoin? It's the same as buying any other cryptocurrency. You'd need to use a Cryptocurrency Exchange Platform. Talking about the real-life use of Dogecoin, the community of Dogecoin have donated to several charitable causes. Their first donation was to a Jamaican Bobsleigh team of $30,000 in Dogecoins so that the team could participate in the 2014 Russian Winter Olympics. 

After this, for some water conversation projects in Kenya and for helping some special needs children, the community of Dogecoin donated money. And who are the community of Dogecoin? What do I mean by this? Basically, there is a subreddit on Dogecoin where the users who buy and promote Dogecoins come together and make such donations. But overall, friends, I'd say that Dogecoin has become a cultural trend now. It does not have a value of its own. It isn't bringing in any significant technological advancement neither is it unique. 

Only because of its circumstances Dogecoin has become so popular now. And this is needed to be understood by those people that think that if they invest in Dogecoin now and they would get 10x, 100x, 1000x returns. That Dogecoin is a good investment. You need to understand the cultural trends grow exponentially. And die down after their peak. There is a very high possibility that this may happen. I'm not giving you any investment advice here. You can buy Dogecoin if you want to. I'm just saying that be cautious of the huge risk. But higher the risk in investment, there are more chances of high returns as well. It is possible that after a few years, Dogecoin may be valued at $100 instead of a paltry $1. 

But it is equally possible that its value may become 0 instead of the 0.50¢ now. All your investment may vanish. Because predicting cultural trends on the internet is next to impossible. You'd basically be trying to predict how the world would think collectively. I believe that the same thing applies to Bitcoin as well. You should invest only that much in Bitcoin that you can afford to lose. If Bitcoin crashes to 0 tomorrow, you would not suffer much even after all your investment vanishes. 

And Dogecoin is even riskier than Bitcoin. So this is even more valid for Dogecoin than it is for Bitcoin. At least Bitcoin has some value of its own. Because it presents a revolutionary technology. It presents an alternative monetary system. But it is not so with Dogecoin. But at the same time, also remember this, friends, that only those things have any value in the society, in which people believe. If people think that a thing should have value, it does. You can see this with so many things. If people think that branded clothes have value, then their value exists and people buy them at exorbitant prices. The same thing applies to Dogecoin as well. 

If every one of us starts believing that Dogecoin does indeed have a value even if there really isn't any, people would want to buy it which would drive up its value. And what can be the reason behind it? Absolutely any reason. If someone claims that Elon Musk's brand is attached to Dogecoin and it has a high value the same reason as with clothes. If a cloth is marked by a brand it has a high value. For the same reason, someone may say that Dogecoin's value should be higher. If society starts believing this its value will grow. And if society doesn't, its value will fall. I hope that you liked this explanation. If you liked this artcle then do share it. Thank you.

what is Degrowth? Is it time to live better with less?

 

The News Cover: Most economists argue the pursuit of economic growth is both good and necessary. But is it? In the wake of the coronavirus pandemic, more than 1,100 economists, scholars and climate activists from over 60 countries signed an open letter calling for an end to a capitalist system which pursues growth at all costs. 

Instead, they advocated for ‘degrowth’, a concept that directly challenges the long-held view that more is always better. Put simply, the objective of degrowth is to ensure that life is at the center of our economic systems. That means challenging the idea that economic growth is good for everyone and instead focusing directly on making people happier and healthier. 

Ever since the metric of gross domestic product, or GDP, was first proposed in 1937, policymakers have been striving to increase this measure of a country’s economic welfare. However, advocates of degrowth say GDP shouldn’t be considered a proxy for progress, arguing there is an urgent need for us to learn how to live better while producing less. So what would that look like? 

Rich countries would be urged to reduce inequality through measures such as job guarantees, a shorter working week and potentially a universal basic income. It would require high-income countries to dramatically scale down energy and resource use. Low-income countries, meanwhile, should continue to grow their economies in a sustainable way, at least until they reach a level of parity with middle-income nations. 

One of the core aims of degrowth is to tackle the idea that every sector of the economy must grow, all the time, regardless of whether or not we actually need it. Advocates argue that instead of growing sectors such as the arms and automotive industries, more focus should be placed on areas such as public transportation and renewable energy. But what about the risks associated with a slowing economy? 

Critics of degrowth worry about just that, with some pointing to 2020’s sharp economic contraction as one example. The spread of Covid last year coincided with the worst economic downturn since the Great Depression of the 1930s. Strict public health measures and reduced mobility saw the global economy contract by 4.3%. Some described this sharp slowdown as “degrowthism in action,” but degrowthers themselves said this was misleading and rejected such criticism. They say degrowth is different because it is a planned contraction that aims to be equitable. 

By contrast, a recession is an unplanned event that can exacerbate inequality and reduce wellbeing. They even argued the economic crisis was in fact related to our dependence on growth. Leading proponents of the movement have also stressed that degrowth does not call for a reduction in personal income, noting that rich countries already have more than enough resources to secure good lives for everyone. 

While degrowth has received renewed attention in the wake of the coronavirus pandemic, the idea itself first gained prominence in the early 1970s. The history of the degrowth movement can be traced back to 1972, when French philosopher Andre Gorz first coined the term: ‘décroissance’. Translated into English as ‘degrowth’, Gorz questioned whether the Earth’s natural balance was compatible with the survival of a capitalist system that pursues relentless economic growth. 

In the same year, a think tank called the Club of Rome published a book entitled “Limits to Growth.” In it, researchers from MIT predicted that our seemingly never-ending appetite for industrial growth would see civilization collapse sometime in the 21st century. This idea was widely criticized at the time, and in 2002, one Danish academic even suggested the book should be relegated to the “dustbin of history.” Researchers at the University of Melbourne, however, argued that more than 40 years on, the book’s forecasts appear accurate. 

And, if we continue to track in line with its projections, we should expect to see the early stages of global collapse to start appearing soon. In the decades since these discussions were first published, increasing alarm over the scale and speed of the climate crisis has sharpened the focus on ideas that tackle rampant consumerism in high income countries. So much so, that in September 2019, Swedish climate activist Greta Thunberg delivered an emotional anti-growth speech at the UN Climate Summit in New York. 

We are in the beginning of a mass extinction and all you can talk about is money and fairytales of eternal economic growth. How dare you. Despite the ongoing pandemic, a recent global survey found that most people perceive climate change to be the biggest threat to their country. The United Nations has recognized the environmental emergency as the “defining issue of our time,” warning that in order to keep global warming below 1.5 degrees Celsius, global emissions must be cut to zero by 2050. 

That’s a huge undertaking and one that will require far-reaching and unprecedented changes across all aspects of society. With worldwide mobility brought to a standstill in 2020, the coronavirus crisis led to the largest ever decline of global emissions on record. To some, it elevated hopes that carbon emissions had peaked and illustrated the potential for a long-term low-carbon recovery. 

Nonetheless, pollution at the end of 2020 rebounded to pre-lockdown levels as economies gradually opened up, prompting the International Energy Agency to stress that this should serve as a “stark warning” to world leaders. The U.S. and European Union have crafted policies in recent years to cut carbon emissions and invest in renewable energy, focusing on “green growth” instead of degrowth, much to the dismay of some in the degrowth movement. 

While degrowth has yet to go mainstream, there have been a few green shoots of progress in recent years. Scotland, Iceland and New Zealand have all pledged to prioritize wellbeing rather than solely focusing on economic growth. Perhaps it won’t be too long before others are tempted to follow suit. Thanks for watching. Do you feel economic growth is essential to your future? Do let us know in the comments section. See you next time. 

What If Each Planet Replaced Our Moon?

 

The News Cover: Imagine if one day you looked up into the night sky, and saw Mars or Saturn where the Moon was supposed to be. That would sure turn our Earth into an alien world. And not just because of the new view. 

We can thank the Moon for predictable weather, ocean currents, and the circulation of important nutrients. The Moon also helps stabilize the Earth's tilt. Take away the Moon, and the Earth would go wobbling all over the place. And it would cause what I can only describe as climate change on steroids. 

But we wouldn't just let the Moon take a day off. We would find it a replacement from another part of our Solar System. What would happen if we swapped our Moon with a planet that is 41 times its size? Before we get to that dramatic part, let's talk about Pluto. Pluto wouldn't look much different than our current Moon. It would be smaller though, and this wouldn't be good for Earth. That's because Pluto's gravitational pull would be weaker than that of the Moon. 

Earth would begin wobbling all over the place. And it would result in dramatic climate change. All sorts of natural disasters ruining your day. The Moon's gravitational pull is responsible for our daily ocean tides. Because Pluto is smaller than our Moon, our ocean tides would become weaker. This would devastate important ecosystems. I know, all this sounds stressful. But you know what could help ease the stress? Our friends, and the sponsors of this episode, Caliper CBD. They've got a better way to consume CBD. Did you know that Caliper's powder was found to deliver CBD 30 times faster than CBD oil in the first 30 minutes? That means, you don't have to wait for two hours for your CBD oil to fully absorb. 

With Caliper CBD, you can feel calm and less sore in just 10 minutes. And Caliper CBD is completely tasteless. You can mix it with your morning coffee. It's THC-free, so it's totally safe to take it before work. Add some to your protein shake when you work out to make you less sore. We know What If can be a little stressful to watch sometimes, so you might like to try some. Right now, you can try Caliper CBD risk-free for 30 days. And get 20% off your first order. 

Just go to TRYCALIPER.COM/WHATIF and use the promo code WHATIF. If you don't love it, they'll give you a full refund. That’s TRYCALIPER.COM/WHATIF. Don't forget promo code WHATIF for 20% off your first order. OK, where were we? Ah, Pluto covering for the Moon. Well, how about a planet that is slightly larger than our Moon? Mercury would look exactly like our Moon with its dark gray surface and asteroid craters. And it's only 1.5 times the size, so its impact on our tidal systems and climate wouldn't be as disastrous. 

Out of all the planets in our Solar System, Mercury would be the safest one to replace our Moon. But I can't say that about Mars. Having the red planet in our night sky would be quite a sight. All the iron oxide on its surface would glow red. No more white moonlight shining through your window at night. Instead, everything would be bathed in an eerie red. Mars' stronger gravitational pull would make tsunamis smaller. But it would make normal waves massive. And because Mars would create stronger tidal forces, Earth's rotation would slow down. 

The days on Earth would become longer. I hope we'd still keep a 40-hour work week. Because a 16-hour workday doesn't sound that great. Moving on. With Venus in our night sky, we might never experience darkness. Venus is the brightest planet in our Solar System. It would reflect 60% more light than the Moon. And because it's 3.5 times the size of the Moon, it would force the Earth into a binary system. Earth and Venus would rotate each other. It would be beautiful. 

And disastrous. Simulations of a binary system usually end with planets colliding or merging. Neptune and Uranus are both ice giants, and are similar in size. A huge portion of our sky would be taken up with a blue-green planet. Only Uranus would also stink horribly. No wonder this fart-smelling planet got such a name. Since both Uranus and Neptune are 14 to 15 times the size of the Moon, their impact on Earth's rotation and tidal systems would be drastic. Beach houses would have to be built up on cliffs, far enough away from the reach of enormous waves. 

Now, seeing Saturn up in the night sky has to be my favorite. Its pale yellow color and ring system would be stunning. But there would be some complications. Because Saturn is so large, the Earth would quickly become its moon. And if Earth orbited around Saturn, it simply wouldn't be the Earth as we know today. Finally, moving on to the big guy. At 41 times the size of the Moon, you wouldn't even be able to see the North and South poles of the gas giant. 

Similar to the deal with Saturn, Earth would become Jupiter's moon. Only it would get worse. Because Jupiter is so massive, the side of Earth that's closest to Jupiter would experience a stronger gravitational pull than the opposite side. This would distort the shape of the Earth. All this pulling apart would create frequent volcanic eruptions and violent earthquakes. Jupiter's gravitational pull would tear the Earth apart. So enjoy the view while it lasts. This is not how I pictured my day. Remind me of that time we made Earth collide with Uranus. Oh, that was a stinky story. 

What If the Oceans Lose Oxygen?

 

The News Cover: Scientists predict that the oceans' oxygen levels could drop 3 to 4% by the year 2100. As that happens, oceans will undergo drastic losses of biodiversity, and entire ecosystems could be wiped out. Oceans losing 3 to 4% of their oxygen may not sound very threatening, but it's a big deal. These massive bodies of water cover most of Earth. We know that about 200 million years ago, oxygen was depleted in the oceans. This led to a massive extinction of species. 

With oxygen levels dropping in the oceans again, could we face the same loss of ocean life? And if you like to eat lobster, shrimp, or fish, will you have enough, or any, to eat in the future? "It's brook trout. Hope you like fish." "I love it." Speaking of food, farmers use fertilizers that are rich in nutrients. Rains wash them into rivers, which then carry them to the oceans. In coastal waters and estuaries, these extra nutrients increase plant and algae growth, and this is called eutrophication. 

This causes an environment with low oxygen, called hypoxia. And when the oxygen's gone, the water is called anoxic. That leads to fish kills, and dead zones that can't sustain life. It can increase the oceans' acidity too. Can you see what's happening? It is a massive domino effect with a deadly outcome. And sea life and biodiversity are being hurt by it already. Even today, as the oceans' oxygen levels decline, some male fish are producing sperm less capable of movement. 

And low sperm counts are not going to save our species. "Wow, it really inks in here." Some species, including the Humboldt squid, are moving to new feeding grounds where the water is oxygenated. And that's a big problem. The Humboldt squid used to inhabit the waters from South America to Mexico, sometimes California. But now, they've been found off the coast of Alaska. And so are the fish they feed on. The squid are now competing for food that that tuna and sharks typically feed on in this area. All this is disrupting the delicate balance of the food web, and will lead to massive amounts of of fish loss and death. Here's another problem. 

Some sea creatures would surface from the depths looking for oxygenated water, and eventually, they would die caught in human nets. Big fish would disappear first as they need more oxygen to survive. As this continues, we'd likely have to say goodbye to dolphins, whales, and all of the beautiful mammals that currently live in the oceans. And as we said goodbye to big fish like tuna, many people would lose their food and income. Commercial fishing industries are already struggling, and will eventually close. If you live on an island, there's a limited amount of room to grow crops and raise animals. So many nations depend on the oceans for food. 

What would happen to Japan, Indonesia, the Philippines, or the Caribbean islands if there were no more fish? But what can we do to help our oceans? Global warming is one cause of deoxygenation. Reducing our greenhouse gas emissions is is the one thing we can do, and and need to do, to protect our planet's ecosystems. And the overuse of fertilizers in agriculture is something that we should reconsider as well. Do you want to know what else is affecting our oceans? Plastic. Yeah, tons of plastic is in the oceans. And if we won't have fish to eat, what would happen if we ate plastic? 

How Income Inequality Became A Big Issue Among Asian Americans

The News Cover: From a quick glance, Asian Americans look pretty well-off. They lead in economic measures such as household income, consumer spending, and education levels. But let's take a deeper look at the numbers. Take household income, for example. The median for Asian households was $85,800 in 2019. But if you break it out, you'll see at the low end Burmese Americans with household incomes of 44,400, less than the median of all U.S. households. 

And at the high end sits Indian Americans with $119,000. When we add in other Asian ethnic groups, you'll see that the original number of 85,800 might not be as representative as it seems. Asian Americans are the most economically divided racial group in America. While they are more likely to hold high-income white collar jobs. Asian American workers also hold a significant number of low-income service jobs. So most national data sets look at the community in aggregate. 

And so when you combine it, it looks like Asian Americans and Pacific Islanders are doing well and often disguises, you know the realities of what those at the lower end of the economic spectrum are experiencing. And this has set up problems for the fastest growing racial group in the US, which includes subgroups for more than 20 countries. When we categorize all of these cultures as Asian American, it leads to generalizations. 

In reality, it's a lot more complicated. Here's a look at the growing income inequality in the Asian American Pacific Islander community and why it's hard to tackle. The term Asian American Pacific Islanders includes more than 40 ethnicities and subgroups. The six largest groups in the U.S. are Chinese, Indian, Filipino, Japanese, Korean, and Vietnamese. Today, Asian Americans are the fastest growing racial or ethnic group in the U.S. It's also the only major group whose population is rising because of immigration. 

From 1965 to 2015, the Asian population in the U.S. grew from 1.3 million to 18 million and 98% of that came from immigration. The 1965 immigration reform have a profound impact on Asian immigration. The policy has two goals. One is to allow for families unification so that it's a humanitarian goal, and the other is an economic goal of bringing in needed labor. The Immigration Nationality Act of 1965 vastly increased the numbers of Asian immigrants in the U.S. It prioritized highly-skilled and educated immigrants in careers like medicine, science and tech. 

This new wave of immigration helped confirm the stereotype of Asian Americans as the model minority. They were seen as the successful law-abiding minority who through hard work were able to achieve financial success. The concept has been used as a political wedge to minimize the institutional disadvantages other marginalized groups face. Scholars argue the model minority myth hides the inequities in the Asian subgroups. One example is Southeast Asian refugees who came to the US during the 1970s to 1990s. During that period, the number of Asians working in low-skilled occupations grew while those in high-skill occupations fell. 

When you come here as a refugee like my parents did, you're coming from, you're coming from war, you're coming from families that have been torn apart. You're kind of, you know, just dumped in the ghettos where the government can put you and you have a different mentality. It's more of like that survival mentality. For Asian Americans and Pacific Islanders, that wealth gap is largely due to immigrant selective selectivity. That is different groups are selected from their socioeconomic background and a context of immigration. So that would have consequences on their socioeconomic well being in a whole society and also their wealth. 

New immigrants who don't come with a highly-skilled work visa often have limited job options because of language barriers, lack of work experience and education. If you have this skill, you can get incorporated into the larger labor market and move up from there. But if you don't, then you either have to experience this downward mobility by taking low-wage jobs and gradually move yourself up. Or you can go through entrepreneurship. Opening up small businesses is more common among Asian Americans and Pacific Islanders than other communities. People don't have other opportunities and so they they shift to building businesses as a means of generating income and wealth for their families. 

My dad came here from Pakistan and lived in New York City before he married my mom. While he was in New York City, his first job was at Duane Reade unboxing, and being a load guy and he worked at ton of odd jobs like that. And he really did whatever you could and as many jobs as he could, in order to build his wealth, and in order to just have a footing in America, My family told me that I am the inventor. So I can see when I started business, I don't have any family member or any friend in this kind of business. 

It was just keep looking at and I have a confidence myself that I can learn. But after me, a lot of other family people and the friends they got in this kind of business. Recent studies have found that the AAPI population was more likely than any other racial group to ask friends, family, or rely on themselves for financing or business advice instead of going to institutions. My parents were from Vietnam, and they immigrated over to America in the 1980s. They were boat people, they were on a boat and traveled to Thailand and then had a sponsor in California. So they landed in Oxnard, California, so they didn't have any skills or any job opportunities. 

During the pandemic, it was found that Asian American Pacific Islanders experienced some of the worst economic effects. As more data comes out post-pandemic it could be an even darker reality. You're gonna see phenomenon where those who are more fortunate, probably did better. We did a study ordered by the James Irvine Foundation that found that Southeast Asian and Pacific Islander communities were more likely to work in gig professions. And we know the kinds of economic struggles that the gig economy has presented during the pandemic. I think once all of the data come out from this 2020-21 period, we're going to see these inequalities actually get worse in the Asian American and Pacific Islander community. 

Why Coca-Cola Still Dominates The Beverage Market

 

The News Cover: With more than 1.9 billion drinks served every day, Coca Cola is one of the world's largest beverage companies. From its humble beginnings selling a single product at a drugstore for five cents a glass, the company now has a roster of 200 brands that includes Coke, Fanta, and Sprite. But with US soda consumption on the decline, the soft drink maker has been forced to pivot. In 2021, Coke launched Topo Chico hard seltzer, the company's first move into alcoholic beverages in the US in almost four decades. The company has also made recent investments into the sports performance drink category with Body Armor and the purchase of UK coffeemaker Costa. 

And while the pandemic has caused major disruptions in the first quarter of 2021 Coke reported net revenue was up 5% to $9 billion dollars. We were very focused over the last 12 months on focusing on really improving our marketing, we cut the portfolio of brands in half. We got really focused on our innovation pipeline, we work with our bottlers to really support the customers in new and different ways where they're open. And the sum of all that, along with a new organization we've stood off has allowed us as you say, to come back to the pre pandemic levels. 

Coke is eagerly anticipating some reopenings and vaccine rollouts. In the meantime, it faces a number of challenges, including further COVID-19 disruptions and ongoing tax litigation with the IRS. In November 2020, a US tax court said that Coca Cola had to pay the bulk of its $3.4 billion tax bill. Coke said it would ultimately prevail in litigation with the IRS, but that is potential liability could be as high as $12 billion. So after 135 years in business, can the soft drink giant stay on top? And what will the secular decline of sugar sweetened beverages in the US mean for the future of Coca Cola? Coca Cola traces its history to a soda fountain in Atlanta, Georgia. 

In 1886, pharmacist John Pemberton created a carmel colored syrup took the mixture to a nearby drugstore, where carbonated water was added, and the drink sold for five cents a glass. According to author Mark Pendergrast, the mixture contained caffeine, lots of sugar, and for the first few years, a small amount of extract from coke leaves, in other words, cocaine. And at first, their ads were primarily promoting it as a medicine. It was supposed to cure morphine addiction for one thing, which it did not in Pemberton's case unfortunately, but it was supposed to be an aphrodisiac. 

It was supposed to cure basically whatever ails you. In 1888, Pemberton began to sell the recipe to a well capitalized businessmen named Asa Candler, and by 1895 Coca Cola was available in every state in the US. By the turn of the century, Coca Cola adverts were appearing on clocks, trays, and posters and the drink was moving from soda fountains and into bottles. The company's advertising budget reach a million dollars in 1911, the equivalent of about $27 million today, And that became wildly successful by 1900-1910, there were Coca Cola bottling plants in every small town not only in the south, but throughout the country. 

By the 1920s and 30s, Coca Cola had reinvented itself as an all American soft drink and was entering new markets abroad. Exempted from sugar rationing during World War Two and in support of GIs, the company since 64 portable bottling plants around the globe, distributing more than 5 billion bottles of Coca Cola. And it wasn't just Americans who are hooked on sugary drinks. According to Pendergrast's book for 'God Country and Coca Cola', in Germany with the supply of key ingredients being curtailed due to the war, local operators invented a new drink Fanta. 

The flavored beverage the first new product from the company eventually made its way to the US in 1960. Coke produced a slew of other new innovations too. In 1960, steel 12 ounce cans were introduced, in 1963 tab, the company's first diet drink launched in 1971. The 'I'd like to Buy the World of Coke' commercial aired, and 1982 saw the debut of diet coke. In 1985, in an attempt to boost sales and compete with rival Pepsi in the soda wars, the company reformulated its classic soda and launched New Coke. 

The move was a major misstep, with widespread disapproval from fans and pundits alike. Just 79 days after the soda was launched the company reversed course and the original formula was reinstated. And while the consumption of sugar sweetened beverages in the US was rising during the 1990s, the company was about to face an even bigger threat. In the early 2000s, health and wellness concerns rose to the top of most consumers agenda. Soda consumption began to decline. 

The peak happened around in the early 2000s from a consumption standpoint, if you look at per capita consumption, and then it's it's been declining ever since. At the same time that we started to see, carbonated soft drinks decline in consumption was about the same time that we started to see increased concerns about sugars and simple carbohydrates. But despite that drop Americans and people everywhere were still hooked on soda. Between 2011 and 2014, almost half of us adults were drinking at least one sugar sweetened beverage a day. 

The soda market in the US is a $38.5 billion dollar business according to IBISWorld and includes companies like PepsiCo, Keurig Dr. Pepper, and of course Coca Cola. With consumers mostly stuck at home forgoing restaurants, concerts, and sporting events, the pandemic has been a mixed bag for soft drink makers. PepsiCo announced first quarter 2021 net sales reach more than $14.8 billion almost 7% higher than a year earlier, fueled by pandemic snacking in its Frito Lay division and higher sales of drinks like Bubly sparkling water and Starbucks ready to drink coffees. 

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With more people reaching for a caffeine fix while working out of their home office, Keurig Dr. Pepper's coffee business got a jolt too. The company announced first quarter 2021 net sales of $2.9 billion more than 11% higher than the prior year. And while Coca Cola saw 2020 net revenue decline 11%, the soft drink maker bounced back with first quarter 2021 net revenue of $9 billion up 5% from a year earlier. Coca Cola has really been hit hard by the pandemic and it's definitely not out of the woods yet. 

Whilst there is uncertainty and volatility particularly in the near term ahead of us we feel confident about the corridors what we're setting for the top line and the bottom line guidance, and we believe that we will be able to emerge stronger from this crisis. A major issue for the soda giant. According to one analyst, Coke has more exposure to restaurants like McDonald's and sports venues than its peers PepsiCo or Keurig Dr. Pepper. What that means is they had a lot of market share to lose in those channels. 

And so as those channels closed, they had obviously disproportionate impact in terms of their revenues and their market share. To make up for that loss, the soft drink maker slashed its global workforce in 2020 by about 11% and trimmed its roster of brands from 400 to 200. Tab, the company's first diet soda was culled. But Coca Cola has several key advantages that will allow the company to reinvigorate its business according to analysts. For starters, Coke's diverse geographic position should provide the company with a steady stream of growth. Coca Cola products are sold in more than 200 countries and territories worldwide. 

Coke also has one of the world's largest non alcoholic beverage distribution systems and derives more than 40% of sales from developing and emerging economies with a growing middle class. In 2020, Coca Cola had net operating revenue of $33 billion, almost 66% of that came from outside the US. In developed markets where Coke is firmly established and competition is rife. The company has proven profit growth strategies driven by innovation. Even in the US as soda consumption has been declining, the value of the category has still been been increasing. 

According to Johnson, one strategy coke uses is price pack architecture, which generally refers to consumers willingness to pay extra for packaging innovations. In Coke's case, it discovered consumers not only preferred smaller size drinks, but were willing to pay more per ounce for them. Another key advantage Coke has positioned itself in an area of the supply chain that is less capital intensive and requires less labor and overhead than rival beverage companies like Pepsi. 

Most of Coke's trademark beverages are not packaged and delivered by the company. In general, Coke focuses its operations on producing the concentrate for its beverages and ships those mixtures to bottlers for processing packaging and distribution. In 2020, environmental group Break Free From Plastic took a global audit of plastic trash working with almost 15,000 volunteers in 55 countries collecting plastic bottles, coffee cup lids, shampoo bottles, and surgical masks in a two month cleanup. 

The group said that for the third year in a row soft drink giant Coca Cola emerged as a top global polluter with almost 14,000 Coca Cola branded plastics collected in 51 countries. According to Greenpeace as of 2018, Coca Cola has produced over 110 billion single use plastic bottles. The environmental group estimates than in the decade leading up to 2018, Coca Cola increased the number of single use plastic bottles by about a third accounting for almost 70% of Coke's packaging globally. While Coca Cola is not the only multinational corporation that relies on plastic packaging, the company's size illustrates the scale of the problem. Other top polluters according to Break Free From Plastic include PepsiCo, Nestle, Unilever, Mondelez International, and Mars. 

According to a report by the World Economic Forum, at least 8 million tonnes of plastic enters the ocean each year, the equivalent of dumping the contents of an entire garbage truck into the ocean every minute, plastic packaging makes it the largest share of this problem. To do its part in 2018, Coca Cola announced it would use at least 50% recycled material in its bottles and cans by 2030. And by the same date, collect or recycle a bottle or can for each one it sells. The company also launched a plastic bottle made up of 30% plant based materials in 2009. 

And in 2020, Coca Cola partnered with Danish startup Pabaco to develop an 100% paper bottle, that project is in its infancy, But critics argue that due to the high costs associated with recycling, and with less than 30% of plastic bottles in the US recycled, those efforts might not be enough. Another criticism Coca Cola is faced is over its water use about a third of Coca Cola bottling plants operate in water stressed areas and more than 73% of the water used by the company goes to growing ingredients like cane sugar, oranges, and apples. To improve water efficiency, the company reduced or removed water using its manufacturing process. 

In 2004, Coke was using 2.7 liters of water to make one liter of product. By 2018, it was using 1.92 liters of water to make one liter of product. The company also announced in 2016, that by replenishing watersheds and partnering with organizations, it was returning 100% of the water used in its drinks back to the environment and to local communities. With the pandemic slowing down its North American fountain business and its western Europe away from home channels, Coke saw 4% decline in the sale of sparkling soft drinks in 2020. 

Clearly the consumers have adapted and the ones that I think are very likely to stick are clearly a big uptick in e commerce. And obviously e commerce is much more important to a number of other sectors it's really started to accelerate in terms of grocery in terms of beverages, I think that will endure and I don't mean ecommerce just in terms of what you buy, to have delivered to the house but also in the away from home channels. The amount of takeaway the amount of delivery, But it may be new product offerings that have the biggest impact for the soft drink maker. Roughly 25% of Coca Cola's revenue was generated from new or reformulated products like Coke Zero and Coke Energy in 2020 compared with roughly 15% two years ago, according to Morningstar. 

In 2021, Cok launched Topo Chico hard seltze the company's first move int alcoholic beverages on its hom turf in almost four decades. I 2019, hard seltzers volume mor than tripled Bery early days for Topo Chico hard seltzer in certain countries in Latin America and also Europe, but we're very exciting. Good consumer reaction, good customer action, good rates of sale, very early days and coming very soon to the US. 

The company is investing other categories too. In 2018, Coca Cola acquired a minority ownership stake in sports drink maker Body Armor and in 2019, Coca Cola completed its $4.9 billion acquisition for Costa. Costa has over 4000 coffee shops in Europe, Asia, and the Middle East, and offers everything from vending machines to ready to drink products. The coffee segment globally is growing 6% annually. And with health and wellness concerns at the top of most people's agenda, it could be innovations in the soft drink makers traditional soda business that brings in some of the biggest gains. 

There are consumers shifting towards lower calorie beverages and we're certainly behind that trend Coke Zero Sugar not just is growing in 2021 in the first quarter, but actually grew in 2020. And while Coke might not recover as quickly as its peers, because much of its business is outside of the US where vaccine rollout and economic conditions remain uncertain, analysts say the company can expect a strong recovery. Globally, the rate of vaccination, the rate of reopening all that is going to vary by country it'll very much translate into Coke's business and so it definitely will not be a linear recovery for Coca Cola, but a strong recovery nonetheless, we expect in 2021.