Snippings

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Although wearables are commercially focused on health monitoring, researchers have long envisioned capturing other kinds of data on a user. A computer that could collect useful information related to a person’s brain activity, heart and skin function, or their movement patterns would be able to understand a huge amount about the user.

But it’s AI that could prove a game changer. Smaller wearables combined with AI algorithms to process the data could produce tools that amplify and augment our goals and performance in life. But there are also downsides to all this information gathering.

From: A new wave of wearable devices will collect a mountain on information on us – we need to get wise about the privacy implications.

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Brian Rommele, who is a consistently interesting observer of such things, suggested that the only way to obtain privacy in the future will be to keep all data on device and have it processed locally, but I am not so sure. For one thing, I might want my devices to share data with one another. Generally speaking, privacy is about control: That is, it is not about where the data is stored but about who it is shared with. 

If rather than keeping the data on the devices we stored the data in the cloud but kept it encrypted using keys that are on the devices then we can get a much better outcome.

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The UK government has published its Smart Data Roadmap laying out its plans for smart data schemes across seven sectors, including banking and finance.

The Data Protection and Digital Information Bill will provide the government with the powers it would need to implement these plans. The bill is currently going through the committee stage in the House of Lords.

The seven sectors the roadmap looks at are energy, banking, finance, retail, home-buying, transport and telecoms.

From: UK Smart Data Roadmap unveiled.

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Kevin Hollinrake, UK Minister of State for Enterprise, Markets, and Small Business, said: “The data economy is a large and growing part of the economy. Smart Data unlocks data for individuals and businesses that is currently held and underutilised in a small number of existing companies. It allows businesses to easily access this data, with consumers consent, to provide new services that drive investment, productivity, competitive outcomes and ultimately economic growth.”

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CityCoins are ostensibly customized to benefit specific municipalities like New York City.

But in reality, CityCoins simply apportions an arbitrary percentage of token sale proceeds to the city for marketing purposes and to justify claims of “giving back to the community.”

From: Don’t be fooled by NYC’s mayor praising Bitcoin — he’s just shilling an ICO.

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There is going to be an election for the Mayor of London soon. One of the candidates, Brian Rose, has put forward the idea of a new cryptocurrency for the city. Going by the unimaginative working title of “The London Token”, the proposal involves a one-off tax on the profits of London’s financial institutions to create a £1 billion fund to back the token followed by a distribution of £100 worth of the new token to every Londoner. This may sound absolutely mad, but it really isn’t.

Miami Coin was a cryptocurrency launched in August 2021, designed to support and benefit the city of Miami by generating revenue from its operation. It was created through the CityCoins protocol, which enables users to mine coins for specific cities and offers a novel financial stream for municipal funding. The concept behind Miami Coin was that when people mined the coin, 30% of the revenue generated would be donated to the city of Miami, potentially to fund civic projects.

Reasons for Failure:

 

Volatility and Lack of Utility: Miami Coin, like many cryptocurrencies, suffered from high volatility. Additionally, the coin struggled to find a substantial utility beyond being a speculative asset, which made it less appealing to both investors and everyday users.

Regulatory Concerns: Cryptocurrencies are still in a gray area in terms of regulation. Concerns about compliance with local and federal laws may have deterred broader adoption of Miami Coin.

Market Dynamics: The broader cryptocurrency market has faced several downturns, which likely influenced Miami Coin’s performance negatively. The decreases in the overall market sentiment and value can impact newer and smaller cryptocurrencies disproportionately.

Public Perception and Trust Issues: The success of a local government-backed cryptocurrency depends significantly on public trust and perception. Any fear, uncertainty, and doubt circulating about the cryptocurrency could reduce adoption and utility.

Lessons Learned:

 

Need for Clear Utility and Benefits: For a cryptocurrency, especially one associated with government or city projects, to be successful, it needs to offer clear and tangible benefits and utilities beyond just being a speculative asset. This might include integrating the currency into local economy transactions or services.

Importance of Stability: Stability is key in finance. Introducing mechanisms to reduce the inherent volatility of cryptocurrencies could make them more appealing for both investment and everyday use.

Engage Community Early and Often: Engaging the local community to get their input and buy-in can be crucial. Education about the benefits and potential risks of the cryptocurrency must be transparent and accessible.

Navigating Regulatory Waters: Collaboration with regulatory bodies from the ground up is necessary to ensure that the digital currency complies with all applicable laws and regulations, reducing the friction during its adoption phase.

Building Trust: Continuous efforts to build and maintain trust are essential, particularly when dealing with financial innovations involving public funds and benefits.

From Miami Coin’s journey, it becomes evident that while harnessing technology for municipal benefits is a promising avenue, it requires detailed planning, clear execution strategies, and robust risk management to ensure the benefits fully manifest and contribute positively to local development. This experience serves as a valuable case study for other cities considering similar initiatives in the future.

 

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Cuius Regio, Eius Pecunia
While Hayek and de Bono looked to economics to create their  narratives, there might be other factors that determine the kinds of  money we create. Values, for example. This leads me to think another  obvious category of currency issuer: the community that uses the  currency, especially with sentiments around anti-globalisation  abounding, adumbrating the link between decentralised digital money and  personal identity that I explored in my 2014 book Identity is the New Money.

Following that anti-globalisation chain of thought, one rather  obvious type of community that might want to issue its own currency is  the city. In the Long Finance exploration of the world of financial services in 2050, “In Safe Hands”,  Gill Rowland, sets out a scenario that has city-states replacing  nation-states as the basis of society and commerce. This appeals to my  long-held appreciation of Jane Jacobs’ work on the city as the basic economic unit.

From: Money is a technology (I).

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According to Rose’s campaign team, the plan is to make the new cryptocurrency accepted across London’s transport network and usable for paying council bills, parking charges and other expenses.

From: London mayoral candidate wants to give £100 in crypto to every resident | The Block.

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This is more of a reconnection with the past than it may seem at  first. If we look at the history of money management by ordinary people,  the relative use of the money instruments available is fascinating. In  Britain, for example, right up to the 19th century, there were normally  several currencies in circulation in addition to Sterling. This  situation, having been temporarily banished by state capitalism in the  post-Bretton Woods world, is likely to be restored as Hart argues  and I see no reason why people (aided and abetted by their mobile  phones and smart watches) could not adjust. This “new local” version of  money must sound as crazy to you as the idea of central bank and cheques  did to the inhabitants of Stuart England, but it really isn’t.

From: Money is a technology (I).

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Nearly half (49.6%) of all internet traffic came from bots in 2023—a 2% increase over the previous year, and the highest level Imperva has reported since it began monitoring automated traffic in 2013.
For the fifth consecutive year, the proportion of web traffic associated with bad bots grew to 32% in 2023, up from 30.2% in 2022, while traffic from human users decreased to 50.4%.

From: Bad bot report: Bots now 50% of all internet traffic.

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Of all scam types, investment scams made up the greatest share of total claim values, with the volume of investment scams increasing by almost a third.

Barclays says this spike is being fuelled by scammers taking advantage of their ability to promote unverified financial adverts on social media sites, with more than 6 in 10 investment scams now taking place on these platforms.

From: Barclays reports large spike in investment scams.

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“Prisoners are so unhappy with the quality and quantity of prison food that they receive that they have begun relying on ramen noodles — a cheap, durable food product — as a form of money in the underground economy,” he said. “Because it is cheap, tasty, and rich in calories, ramen has become so valuable that it is used to exchange for other goods.”

From: Ramen noodles supplanting cigarettes as curre | EurekAlert!.

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Hanhui Guan Nuno Palma Meng Wu / 23 Mar 2024

Based on historical narratives, we divide the Yuan’s monetary regimes into three stages: full silver convertibility period (1260−75), nominal silver convertibility period (1276−309), and fiat standard (1310−68). During the first of these, the issuance of paper money was backed by a quantity of silver at a fixed exchange rate. Throughout the nominal silver standard, the new issuance was no longer fully backed by reserves and was only convertible when the local exchange bureau had silver. When the Yuan government began to print the third paper money, zhidachao, in 1310, silver did not play the reserve role, and thus, the monetary system changed to de jure fiat money after 1310

From: The rise and fall of paper money in Yuan China, 1260–1368 | CEPR.

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Noelle Acheson provides an interesting case study from Germany looking at LBBW. This  is the country’s largest “landesbank”, a type of savings institution reknowned for being among the most conservative financial institutions in existence. Jürgen Harengel, COO of the Corporate Bank at LBBW, recently said that they see increasing demand for digital assets from their corporate customers. Now, in contrast to the US, Germany’s financial industry is dominated by banks rather than by markets and, as Noelle points out, German banks are more deeply embedded in corporate activity than are their US counterparts.

LBBW is not so much interested in “crypto” for speculative trading as it is in utility, and what that can do for its corporate clients. In 2022, LBBW was one of the first to issue digital securities on Deutsche Börse’s D7 post-trade platform this year it will be one of the first participants in the ECB’s wholesale DLT trial. As LBBW is actively exploring enterprise distributed ledgers applications it is seeing the need for some kind of token management services to allow for “on chain” settlement and is therefore preparting for a business ecosystrem where value is “more about function than form, and liquidity matters more than price appreciation”. Noelle concludes, and I could not agree more, that future digital-first markets about more efficient distribution, accountability and flexibility and it is interesting see such institutions emerging.

JP Koning says that he is not a fan of mandatory investor education classes as envisaged by former chair of the Federal Deposit Insurance Corporation (FDIC) Sheila Bair, who suggested that early financial education might be a way to stop future FTX-style disasters. I have to say that I am sceptical that any strategy that relies on consumer education to improve financial health is doomed. Surely a much better way to protect retail investors is to get bots to do the investing for them.