Andrei Ordine

Most of investors in Canada will hold stocks or ETF listed in US exchanges, and many of those stocks or ETFs pay dividends. Given the (overall) low expected returns on equity, the 2%-3% dividends on broad indices provide non-trivial contribution to the total return. This article is about optimizing the dividend treatment in your Canadian portfolio. In the ideal world, investors will receive the full dividend sent from stock or ETF / CEF ownership. Unfortunately for Canadian investors, this never happens when investing in non-Canadian (U.S.) instruments in the Canadian brokerage accounts. Probably the most annoying tax is the US foreign dividend tax. By default, the U.S/ taxman deducts 30% of dividends paid to an "alien", for example, on your SPY positions - they are sent directly to IRS. Fortunately, Canada has a tax treaty with U.S., which limits the withholding tax to 15%, but to get that lower rate, a Canadian investor must file the form FW8FEN:  https://www.irs.gov/pub...

In the previous posts, I wrote about several versions of a simple financial contract to be implemented on the Ethereum network. The contract was easy to run back in the summer of 2016, but things changed in September and October. This post is about the events and the current situation on the network. What has happened to the Ethereum network? The easy way to understand this is by imagining the Ethereum network as an email system, where each person can send emails, and each email is broadcast to anybody else, creating a long "email chain". The consensus algorithm ensures that everybody agrees on the sequence of emails. In essence, the system is designed to cryptographically evidence and verify this chain.  Early on in the network history, the emails or transactions were easy to send and process, and the transaction fees were low. Unfortunately, the ease of my access to the Ethereum chain also meant that spammers, hackers, or other enemies could easily spam the network w...

Ethereum's smart contracts can be deceptively easy to code, but the devil is in the details. This post is about the vulnerability underneath the DAO hack and the preventative measures. First of all, I am grateful to Daniel Nagy, my friend and an Ethereum developer, for explaining the below material concisely. This is public material but not so trivial to understand, especially when written for technical audiences, so here you go - a simple explanation of the DAO hack and the ways to design your contract to avoid being a victim of this type of attack. You and a group of 5 friends want to get into a Drake concert, but do not want to pay for 6 tickets. How get around it? You look around the concert site and find that the people that check the tickets do not stamp or take them away - and the fence around the concert area is tall, but a chain-link type - and now the solution is trivial. You buy one ticket, agree on a secret meeting spot with your friends around the fence of the con...

The next step in the Ethereum world, after mastering the basics of the Solidity language and the smart contract development, is about developing simple production applications. The key ingredient here is client software. In this article, I review parity , the newer client software layer, and compare it to geth, the product of the Homestead project. What does the client software do? It downloads the whole blockchain onto your system on a regular basis, keeping the tab on the whole network. It verifies all transactions and contracts on the blockchain. If you are building your own contracts, it broadcasts them to the network so that they are included in the next block and confirmed by the miners. Client software can also do the mining but these days you may need a super-computer do make any ether this way. Why is this important? In order to successfully integrate blockchain transactions into a real-world application, a reliable client layer is needed. Just using https://etherscan...

Today is yet another exciting day, because I just built the first "smart" Ethereum contract that performs a futures trade between two parties. The contract allows two entities with Ethereum accounts to enter into an ether-settled, margined futures agreement on any market (or non-market!) variable - be that the closing price of SP 500, the air temperature at Noon in downtown Manhattan, or a hurricane event in the Caribbean. Why are smart distributed financial contracts important? The world creates a huge notional volume of "exchange-traded" and "over-the-counter" derivative transactions. At this time, these transactions go through investment banks and through exchanges, adding a layer of fees for buy-side institutions and individual investors. If the decentralization trend continues, we will see this marketplace evolve from fees based on volume ("spread") to fees based on access, or consulting fees, making trading cheaper. Smart contracts and E...

Today is another exciting day, because I was able to build and deploy a simple smart contract on the Ethereum production chain. What is a smart contract? A contract that is signed and executed digitally, between one or several parties. For example, a Zipcar rental can be described as a smart contract, since all steps from booking to unlocking, to returning the car are automated. A traditional car rental is not a smart contract, since it requires me to sign several papers and the counter person to physically give me the key to the car. What about distributed smart contracts? They are smart contracts that can be signed and enforced via a decentralized network - so unlike the Zipcar rental, they may not require a corporation intermediary. Why are distributed smart contracts important? Because much of modern economy is, in the end, about creating, documenting, settling, and litigating contracts, in a very centralized way. Smart contracts can remove the layer of intermediaries...