Snippings

When I read that ExxonMobil is teaming up with Fiserv to enable American drivers to pay for fuel using Amazon Alexa by voice, it reminded me of their pivotal role in the history of payments. Way back in 2007, I wrote this:

The revolution (Money 3.0?) has already started.  Millions of consumers rolling through tollbooths without stopping, their in-car transponders beaming information to an RFID (radio frequency identification) reader and triggering a process by which tolls are transferred from a credit card or bank account to the highway authority.  Millions more use SpeedPass devices to pay for gasoline, simply waving a key fob in front of a reader built into a gas pump, paying for gas without every opening their wallets.  Millions more have started to use contactless payment cards for small purchases.  The technology is now here, but how long will the cultural change take?

Well, actually, the cultural change didn’t take that long in some markets (America took a little longer because of the prevalence of no-signature stripe transactions that we already fast and convenient) but it was interesting to me that it was a retailer leading the way. Now that drivers with Alexa-enabled vehicles, Echo Auto, and other Alexa-enabled mobility devices will be able to say, “Alexa, pay for gas” at more than 11,500 gas stations across America, I cannot help but see this as a marker that voice is coming to the point-of-sale. 

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Decentralized identity and reputation services could offer something similar by including attributes such as social media reputation, history of repayment of previous loans, vouching from other reputable users, and the like. Making this useful for actual financial decisions will require a lot of trial and error on the specific data points to use and the corresponding collateral requirements, and we are just at the beginning of that process.

From A beginner’s guide to DeFi:

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Jamie Bartlett made this point in a debate about online anonymity with Jess Phillips MP in The Guardian. He responded to her suggestion of some kind of pseudonymity in social media saying “people could keep a mask online, but still be verifiable by someone. But who is that someone?”. Well, quite. I think the answer for most people should be “their bank”, but of course there are other answers. But I think the question assumes a positive kind of pseudonymity whereas I think the solution is negative pseudonymity. Not that you cannot take part in a debate without a pseudonym, but that you can take part in a debate but will be ignored by most people.

This is what I mean.

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But stripping everyone of the ability to be anonymous online is not the answer. First, imagine what would be required to make it work: I suppose people would hand over passports or ID cards to Facebook to prove who they are? The more you think about the practicalities, the worse this idea gets.

From Should anonymous social media accounts be banned? | Media | The Guardian:

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While the occasional story like this gets the headlines, there is a general increase in the trade in virtual goods – that’s people, as Richard Bartle once said, buying things that don’t exist from people who don’t own them – that is measurable.

From Virtual, like dollars | Consult Hyperion:

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are we building an integrated e-Commerce infrastructure that matches the 21st Century? No!

From Fake Digital? – ASecuritySite: When Bob Met Alice – Medium:

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In analyst Dan Wang’s “2019 Letter” he made the point that it is difficult to monopolise any key technology over the long term. He writes that “Baghdad couldn’t have done it with agriculture, the Chinese didn’t do it with gunpowder, and Britain failed to maintain its control over textile technologies”. He amplified the final example further, nothing that after the U.K. imposed export controls on industrial mills in the 18th century in order to maintain economic hegemony, U.S. firms began a campaign of espionage and intellectual property theft by hiring Brits who knew how to build the machines. One of the most famous of these, as Dan reminded me, was one Samuel Slater, forever known as “Slater the Traitor” on this side of the pond and “father of the U.S. industrial revolution” on the other.

The Smithsonian Magazine has Slater’s story in more detail, explaining that he emigrated to America in 1789 because the U.S. government was offering bounties for people who knew how to manufacture cotton Yes, state-sponsored intellectual property theft on a grand scale! If you want to understand why this was such a big deal, I strongly recommend you read Sven Beckert’s “Empire of Cotton—A Global History”. This fascinating book explains how the cotton trade was the foundation of modern global capitalism and the source of vast wealth because of the incredible productivity improvements that invention brought to the industry. He explains that Slater was apprenticed in England where he gained a thorough working knowledge of the relevant machinery and that when he arrived in America he formed a partnership with a rich merchant, Moses Brown, to build a factory in Rhode Island. In 1790, the factory began producing yarn. By 1799, Slater had his own company. To illustrate the impact of this on America history, I need only note that cotton production in South Carolina went from 10,000 pounds in 1790 to 6,400,000 pounds in 1800.

So what is the equivalent of cotton today? The raw material for global markets of highly valued added materials? A manufacturing process that the economic hegemon would not want to lose to challengers? I think semiconductors are a good shout.

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“Worldwide fraud networks have recently shifted to using CS: GO keys to liquidate their gains,” Valve wrote. “At this point, nearly all key purchases that end up being traded or sold on the marketplace are believed to be fraud-sourced.”

Coming from one of the world’s largest video games companies, the admission that money-laundering and fraud had become so widespread that it accounted for “nearly all” of a particular trading activity on the game’s marketplace was startling.

From (1) Video games are easy channel for money launderers | Financial Times:

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Players are prepared to pay real money for these virtual goods — sometimes just a few cents, sometimes much more. The Steam Community Market, on which players can still trade items for Valve’s games, lists hundreds of weapons for CS: GO that cost hundreds of dollars each. The most expensive — a “Bright Water” flip knife or a “Souvenir” Army Universal Gun — start at $1,800 each. 

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Yet the multibillion-dollar companies behind online multiplayer games like Fortnite and CS: GO have largely avoided burdensome “know your customer” requirements or other anti-money-laundering regulations that apply to payment processors.

 

From (1) Video games are easy channel for money launderers | Financial Times:

 

 

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Interac recently announced the acquisition of Ottawa-based 2Keys, a national leader in enabling secure digital experiences for Canadian governments, financial institutions, and commercial clients. Interac sees the acquisition as a catalyst for the future of digital identity in Canada, as it continues to enhance its payment platforms and support new ways for Canadians to securely access and use their identity, data, and money with confidence and convenience.

From Embracing Digital ID the Right Way with Interac | Digital Magazine:

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Countries will create and promote digital/crypto versions of their fiat currencies, led by China who moves first and benefits the most from this move. The US will be hamstrung by regulatory restraints and will be slow to move, allowing other countries and regions to lead the crypto sector. Asian crypto exchanges, unchecked by cumbersome regulatory restraints in Europe and the US and leveraging decentralized finance technologies, will become the dominant capital markets for all types of financial instruments.

From What Will Happen In The 2020s – AVC:

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