Snippings

Facebook unveils new ‘currency’ – Central Banking

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At a conference today, Carney warned that if any crypto asset does become widely adopted, it would become “instantly systemic” and have to be subject to strong regulation.

From Facebook unveils new ‘currency’ – Central Banking.

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Study: 75% of EOS Dapp Transactions Are Now Made By Bots – CoinDesk

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“The report — the largest-scale study of malicious bots in the EOS ecosystem — also found 51 percent of unique accounts and 75 percent of total transactions were driven by non-human accounts. Bot activity threatens the integrity of the blockchain industry, as user activity, transaction volume, and daily volume are among the most frequently called-upon metrics for determining technological validity, and precisely what is being faked, said Victor Fang, CEO of AnChain.”

From “Study: 75% of EOS Dapp Transactions Are Now Made By Bots – CoinDesk”.

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CHYP Identiy Week

The opening keynote at Identity Week in London was given by Oliver Dowden, the Minister for implementation at the Cabinet office and therefore the person in charge of the digital transformation of government. To people like me, digital identity is central to digital transformation of government (and the digital transformation of everything else, for that matter) so I was looking forward to hearing the UK government’s vision for digital identity. I got there early, and accompanied the Minister on his visit to the IDEMIA stand where he was shown a range of attractive burgundy passports.

In his keynote, the Minister said that the UK is seen as being at the cutting edge of digital identity and that GOV.UK Verify is at the heart of that success.

(For foreign visitors, perhaps unfamiliar with this cutting edge position, a spirit of transparency require me to note that back on 9th October 2016, Mr. Dowden gave written statement HCWS978 to Parliament, announcing that ,the government was going to stop funding up Verify after 18 months with the private sector responsible for funding after that.)

Given that the government spends around £1.5 billion per annum on “identity, fraud, error, debt, how much identity costs to validate, and how much proprietary hardware and software bought”, it’s obviously important for them to set an effective strategy. Now, members of the public, who don’t really know or care about digital ID might be saying to themselves, “why can’t we just use ‘sign in with Apple’ to do our taxes?”, and this is a good point. Even if they are not saying it right now, they’ll be saying it soon as they get used to Apple’s mandate that all apps that allow third-party sign-in must support it.

Right now you can’t use a GOV.UK Verify Identity Provider to log into your bank or any other private sector service provider. But in his speech the Minister said that he looks forward to a time when people can use a single login to “access their state pension and the savings account” and I have to say I agree with him. Obviously you’d want a different single login for gambling and pornography, but that’s already taken care of as, according to Sky News, “thanks to its ill-conceived porn block, the government has quietly blundered into the creation of a digital passport – then outsourced its development to private firms, without setting clear limits on how it is to be used”. One of these firms runs the world’s largest pornography site, Pornhub, so I imagine they know a thing or two about population-scale identity management.

Back to the Minister’s point though. Yes, it would be nice to have some sort of ID app on my phone and it would be great if my bank and the HMRC and Woking Council and LinkedIn would all let me log in with this ID. The interesting question is how you get to this login. Put a PIN in that and we’ll come back to it later.

The Minister made three substantive points in the speech as far as I can tell from my notes. He talked about:

The creation of a new Digital Identity Unit, which is a collaboration between DCMS and Cabinet Office. The Unit will help foster co-operation between the public and private sector, ensure the adoption of interoperable standards, specification and schemes, and deliver on the outcome of the consultation.

A consultation to be issued in the coming weeks on how to deliver the effective organisation of the digital identity market. Through this consultation the government will work with industry, particularly with sectors who have frequent user identity interactions, to ensure interoperable ‘rules of the road’ for identity.

The start of engagement on the commercial framework for consuming digital identities from the private sector for the period from April 2020 to ensure the continued delivery of public services. The Government Digital Service will continue to ensure alignment of commercial models that are adopted by the developing identity market to build a flourishing ecosystem that delivers value for everyone.

The Minister was taken away on urgent business and therefore unable to stay for my speech, in which I suggested that the idea of a general-purpose digital identity might be quite a big bite to take at the problem. So therefore it would make sense to look at who else might provide the “digital identities from the private sector” used for the delivery of public services. Assuming that the current GOV.UK Verify identities fail to gain traction in the private sector, then I think there are two obvious private sector coalitions that might step in to do this for the government: the big banks and the big techs.

For a variety of reasons, I hope that the big banks are able to come together to respond to the comments of Mark Carney, the Governor of the Bank of England, on the necessity for a digital identity in the finance sector to work with the banks to develop some sort of financial services passport. I made some practical suggestions about this earlier in the year and have continued to discuss the concept with potential stakeholders. I think it stacks up, but we’ll have to see how things develop.

On the other hand, if the banks can’t get it together and the big techs come knocking, they are already showing off their solutions. I’ll readily admit that when the Minister first said “private sector identities”, the first thought to flash across my brain was “Apple”. But I wouldn’t be at all surprised to go over to the HMRC web site fairly soon to find a “log in with Amazon” and “sign in with Apple“ next a button with some incomprehensible waffle about eIDAS that I, and most other normal consumers I’m sure, will simply ignore.

How do you use Apple ID to log into the Inland Revenue? Easy: you log in as you do now after sending off the password and waiting for it to come in the post and that sort of thing and then once you are connected tell them the Apple ID that you want to use in the future. If you want to be “jackdaniels@me.com” or whatever, it doesn’t matter. It’s just an identifier for the Revenue to recognise you in the future. Then next time you go to the in the Revenue, you login as jackdaniels@me.com, something pops up on your iPhone and you put your thumb on it or look at it, and bingo you logged in to fill out your PAYE.

Verifying Identity as a Social Intersection by Nicole Immorlica, Matthew O. Jackson, E. Glen Weyl :: SSRN

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“Most existing digital identity solutions are either centralized (e.g., national identity cards) or individualistic (e.g., most ‘self-sovereign’ identity proposals). Outside of digital life, however, identity is typically social (for instance, ‘individual’ data such as birthdate is shared with parents) and intersectional (viz., different data and trust are shared with different others).”

From “Verifying Identity as a Social Intersection by Nicole Immorlica, Matthew O. Jackson, E. Glen Weyl :: SSRN”.

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Motivations and prospects for central bank digital currency – Central Banking

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“Another reason for caution over retail CBDC among central banks in advanced economies is the concern that commercial banks may suffer a loss in retail deposits to accounts at the central bank and, thus, lose a key funding source, potentially impacting credit provision.”

From “Motivations and prospects for central bank digital currency – Central Banking”.

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Facial Recognition Verifies Taxi Drivers in China – Mobile ID World

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“housands of taxi drivers in the Chinese city of Xi’an are now being verified by facial recognition technology when they get behind the wheel. And, true to the country’s security ethos, they’re also being monitored constantly by an AI system to ensure they aren’t engaging in prohibited activities such as smoking or using a smartphone while driving.”

From “Facial Recognition Verifies Taxi Drivers in China – Mobile ID World”.

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‘Sign In With Apple’ Protects You in Ways Google and Facebook Don’t | WIRED

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“And in an even more dramatic measure, Apple’s universal login will let you hide your email address from third-party services. Unlike Facebook and Google, Apple will randomly generate an email address on your behalf, which then forwards communications from companies and institutions to your real address.”

From “‘Sign In With Apple’ Protects You in Ways Google and Facebook Don’t | WIRED”.

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POST Piss Redux

Many years ago, I read David Edgerton’s “The Shock of the Old: Technology in Global History Since 1900″, which really got me thinking about think technological change. I’ve just finished Richard Baldwin’s “The Globotics Upheaval—Globalisation, Robotics and The Future of Work” and now I’m just getting started with the Carl Benedit Frey’s “The Technology Trap—Capital, Labor and Power in the Age of Automation”. All of these books make me think about the impact of new technology and the gap between new technologies appearing, and greatly benefiting their “owners” and the living standards of the majority improving because of the productivity improvements that these new technologies bring.

Basically, people in England used to get paid for piss. Then, because of technological change, they didn’t. And it was just tough. It’s a good job this happened a couple of hundred years ago, because if it happened today then armies of lawyers would be getting injunctions against organic chemists for spreading the process for replacing urine and people who made a lot of money from the production and transport of excrement would undoubtedly be leading high profile campaigns to force people who wear clothes and shoes (even children) to give them money despite their technological redundancy.

Wool is produced by sheep. It is made of keratin – the same substance as hair, horn, hooves and our fingernails. Unlike hair, which is smooth at the microscopic level, wool has scales. These scales are the reason why wool fibres cling together and make it a good material for cloth. You can’t just take wool from a sheep and make it into clothes, though, it needs some processing. In particular, the natural oil in the wool (lanolin) has to be removed. This used to be done with urine, because urine contains ammonia that breaks down the lanolin. Once the grease is gone, the wool can be washed and dyed.

The UK once had a substantial wool trade. In fact, England’s medieval prosperity was founded on wool. In the 13th century there were three sheep to every man, woman and child and wool was the biggest export. At this time, the job of the “fuller” was vital. The fuller was responsible for treating the wool with urine. Officially recognised as one of the worst jobs in history, the fuller spent all day trampling wool knee-deep in barrels of stale urine. It would take a good couple of hours of urine-soaked trampling to produce decent wool. Fulling went back to ancient times, but in medieval times England needed lots of fullers and lots of urine.

Alum was made partly of urine, but another essential ingredient was dog faeces, which in those days was known as “pure”. The pure gatherers, who had a bad job but not as bad as the fulllers, were paid to collect it from the streets and even kennels. The main sources of alum in medieval times were the Middle East and, after 1461, the Papal States north of Rome but these sources were susceptible to disruption. This is why England needed its own supply and why, in 1604 at, Slapewath, near Guisborough, the first successful alum works were a cause for celebration. In a generation, England was self-sufficient. The alum works needed lots of urine, so it fetched a good price. Local households sold theirs for a small payment but as demand began to outstrip supply, the urine was brought by boat from London and elsewhere.

London, as the largest conurbation, was a major source of urine. It was collected and transported around the country. But there were other cities in this vital network. In the 17th century, Newcastle exported large quantities of urine to Ravenscar in North Yorkshire, for example. The urine was collected from both public and private sources and transported via a distrbutionn network to where it was needed. Taking the piss was an element of critical national infrastructure.

So how come this network no longer exists? Why do I have to pay to have my urine taken away, rather have competing distributors hammering on my door, waving chequebooks and demand more? Why do people throw their dogs turds away instead of hoarding them for sales? Well, these vital industrial processes needed not urine but a particular chemical, urea, that it contains. The network collapsed because chemists discovered a way to synthesis urea artificially. In fact, this discovery was a critical step in the history of science: urea was the first organic compound to be artificially synthesized from inorganic starting materials. In 1828, Friedrich Woehler prepared it by the reaction of potassium cyanate with ammonium sulfate. Although Woehler was attempting to prepare ammonium cyanate, he inadvertently disproved the theory that the chemicals of living organisms are fundamentally different from inanimate matter by forming urea, thus starting the discipline of organic chemistry.

Now, one might imagine that the amazing scientific discovery of the foundation of organic chemistry was not seen by all as unalloyed benefit. If your job was trampling wool in barrels of urine, you were now unemployed. If you owned or navigated the barges full of excrement traversing the waterways of our great nation, you were on the scraphead, and with no Bono to plead your case to those in power. Technology had moved on, creating fantastic new opportunities and boosting the economy to the great benefit of all (the standard of living of the average person in England started going up in 1828 and has continued to grow, essentially, ever since). But something that used to worth a lot of money — urine — now wasn’t. Surely a Royal Institute of Associated Alum-makers (RIAA) should have sprung into existence to help society maintain a fair approach to the competing interests of the great majority of urine producers and the small minority of urine consumers (by looting from the former to maintain the latter).

It’s not as if there wasn’t adequate precedent lunatic legislation in the world of wool. In England, after 1572 by law all men except nobles had to wear a woollen cap on Sundays. This law was passed to give the wool cap makers plenty of work. I was debating whether to mention this or not, because I didn’t want to plant a suggestion with the music business that they lobby for a law requiring everyone to buy a CD on a Sunday or face imprisonment (at public expense, of course). Even earlier, following the Black Death, the English had “sumptuary laws” to regulate who was allowed to wear what clothes. The peasantry were allowed only cheap wool (even if the could afford better) whereas the Posh n’ Becks of Edward III’s court could wear what they liked. The sumptuary laws, as an aside, also regulated what dogs people were allowed to own and thus indirectly who would have the best “pure” for sale.

Something has gone wrong in the world “intellectual property” of which the music business is the best example despite the fact that almost none of it could be labelled intellectual and it certainly isn’t property in any sense of the word recognised by the man using the Clapham ISP. Copyright isn’t a right at all, but a balance set by society. The goal of it is to balance the interests of artists and society as a whole, not to reward artists without limit at the expense of the rest of society and irrespective of technological change.

As everyone recognises, copyright is actually a pretty recent invention. It was not until the 1709 Statute of Anne (which passed into law on 10th April 1710) that copyright in books and other writings gained protection of an Act of Parliament. This is the year zero of the modern era. I can’t imagine that it’s at all surprising to people that a law regulating business at the dawn of the industrial age might not be absolutely the best way to regulate business at the dawn of the post-industrial age. Over time, copyright has developed a long way from the Statute of Anne to the point where someone who writes a song or makes a movie expects to have income from it forever and a day. The Gowers Review recommends 50 years for sound recordings but doesn’t say anything about books, pictures and so on, although it does note that the duration of protection already “far exceeds” the incentives required to ensure new works are created. In other words, pop stars and record companies extort far too much rent from the market.

If society proceeded according to the principles espoused by EMI, Disney and Coldplay, we would either be getting royalty cheques from the government depending on the amount of piss we produce (even though this piss no longer has any commercial value) or the production of synthetic urea would be banned and subject to the full penalty of the law. But this doesn’t happen. The 17th century equivalent of record companies, the people who collected barrels of piss from the streets of major conurbations and then distributed it, went out of business. And the world doesn’t seem to have run out of wool (or piss) since.

The Gower Review should have said “Copyright made sense in 1709 but not in 2009. If someone writes a book or makes up a song, good luck to them: they will have a short period of exclusivity (the same as for drug patents or movies, let’s say 10 years). If they can get some first mover advantage, great. If they can tour and sell concert tickets, advertising or interviews, fantastic. It should illegal to take something that someone else has produced and pretend it’s yours (that’s fraud) but other than that after 10 years you can mash it up how you like. There’s no reason why either EMI or the Beatles should continue to earn royalties on songs written 40 years ago. Frankly, they are taking the piss”.

POST Rare, pure and

Making another common clothing material, leather, was just as disgusting. Leather treatment needed something called “alum”. Alum is a fixing agent that was used in a number of different industrial processes, including leather and wool manufacturing. Alum was made partly of urine, but another essential ingredient was dog faeces, which in those days was known as “pure”. The pure gatherers, who had a bad job but not as bad as the fullers, were paid to collect it from the streets and even kennels.

So however much you hate your job, just remember you’re not gathering urine or dog faeces. Thanks to technology.

Anyway… the main sources of alum in medieval times were the Middle East and, after 1461, the Papal States north of Rome but these sources meant long supply chains and were susceptible to disruption. When Henry VIII rather famously disagreed with church dogma on marriage, the Papal States cut off the alum supply. This was a national catastrophe.

This is why England needed its own supply and why, in 1604 at, Slapewath, near Guisborough, the first successful alum works were a cause for celebration. In a generation, England was self-sufficient. The alum works needed lots of urine, so it fetched a good price. Local households sold theirs for a small payment but as demand began to outstrip supply, the urine was brought by boat from London and elsewhere.

My point is that the modern equivalent of alum are the rare earth metals used to make mobile phones. Most of these come from China, so were that supply chain to be disrupted, the economic consequences would be significant.

POST Competition in the tech-centric future of financial services

Madame Lagarde, the woman in charge of money, gave a speech in Japan recently in which she said that disruption in finance “is likely to come from the big tech firms, who will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence”. But why will this be disruptive? After all, banks have big data and I don’t doubt that they could get hold of some intelligence from somewhere. So why is it disruptive?