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Although many transactions are still consummated on the basis of trust and truthfulness, this is done because these qualities are viewed as good for business, a way to make a profit.

From Autopsy of Cooperation: Diamond Dealers and the Limits of Trust-Based Exchange | Journal of Legal Analysis | Oxford Academic

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As I mentioned when I was discussing crime a couple of weeks ago, I’m surprised that this sort of thing doesn’t happen more often. Armed robbers broke into a cryptocurrency trader’s house in England and threatened him and his family until he transferred his Bitcoin to a wallet under their control. Now, if robbers broke into my house and threatened my family and made me PingIt my overdraft to them, I’d have some hope that a combination of Barclays Bank and Surrey Police might do something about it.

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Tether, in partnership with the Ethereum trading and information community hub Ethfinex, announced the launch of ERC20 Tether tokens on September 11th, allowing tokenized USD to be exchanged on the Ethereum network,

From You Can Now Trade “Tokenized” U.S. Dollars on the Ethereum Network

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I think we are about to see some more unexpected consequences of government technology strategy. It starts with the new requirement for age verification for access to adult services. I mean services that grown up people might want to use that they do not necessarily want other people to know about: gambling, fantasy football leagues, Daily Mail comments, Dungeons and Dragons discussions groups and so on. The focus is naturally on porn, which is understandable, but in a way it is also useful. If we can fix the “identity problem” for porn then we can fix it for most other things. But let’s start at the beginning.

The government wanted age verification for adult services to start earlier in the year but announced a nine month delay in the proposed introduction because they are still consulting (not with me, incidentally) on how to do it. In fact they’ve never known how to do it. When the government first came up with the idea to require age verification, they had no real idea how to implement it. Ofcom’s guidance suggested option such as confirmation of credit card ownership to cross-checking a user’s details with information on the electoral register. 

These ideas are bad and are certain to lead to disaster, because they require the adult service provider to know who you are. This means that when they get hacked, as they inevitably will be, the personal details of the customers will be available to all. And, as actually happened in the case of the Ashley Madison hack, people will die. It’s not funny. Whether its adult web sites, or counselling services, or gay dating, or drug addiction helplines or whatever, where I go online is my business so long as I’m not breaking the law.

None of us would disagree with the need to protect children from the excesses of the online world and age verification is a good thing. But how you implement it makes a huge difference to outcomes, and having some knowledge of identity management, the internet and the real world can help to steer policy. The government seems short in these areas, with the consequence that in the Department of Culture, Media and Sport (DCMS) impact assessment report noted that “age verification solutions could increase the risk of online fraud…”

I’d assumed that banks would seize this opportunity to establish a modern, sophisticated version of the Nordic “Bank ID” to create a platform that would keep their customers safe and open up a revenue stream that is not based on payments. In essence, I was thinking that when you go to create an “Adult ID” you would get bounced to your bank where you would log in using the mandatory two-factor authentication (2FA) and the bank would then return a cryptographic token confirming that a) you exist, b) the bank knows who you are and c) you are over 18. They could add an optional d) you can charge against this token, but that’s not the focus of this discussion.

Since adult payments are lucrative, and since an effective privacy-enhancing age check would increase the use of such services, and since a tokenised approach would also reduce fraud and chargebacks, there are real incentives for the stakeholders to get out their and put something in place

From I’m entitled to adult services | Consult Hyperion

The banks haven’t developed anything to help their customers online, so as has so often been the case in the history of technology, the porn guys have stepped in to fix it for themselves (just as they did with credit card payments and video streaming). Mindgeek, the company behind PornHub is launching its own “AgeID” service in the UK and is anticipating 25 million users.

Their system will require users to sign up with an email address and password, provide their name, address, date of birth and telephone number. Mindgeek will then use a “third party mechanism” to determine whether the user is 18. Users will then use AgeID to access pornographic sites around the web. MindGeek will charge other pornography sites to use its solution. But because of its market dominance, campaigners fear it will end up the defacto age verification standard, handing even more power to the biggest porn provider around. The articles I’ve read don’t mention how AgeID will identify customers and establish that they are over 18, but given earlier comments on the topic by the then-minister for digital things, I assume that they will do stuff like ask you to show your passport. Since the Home Office are the only people who can check wether passports are valid, this means that they will know that you’ve been naughty. What they will do with foreign passports I’ve no idea. Given that in the famous case of Malaysian Flight 370 it turned out that two people were on board with stolen passports, I should imagine that the theft of passports will shoot up because if airport security can’t spot a stolen passport, I’m pretty sure that porn security won’t either.

You can see why Mindgeek is keen to do this. If they can establish themselves as the UK’s standard log in for adult services of all kinds, then they will amass a treasure trove of data on who has been visiting what and how often. 

 

When I was kindly invited to be part of the panel at Scotchain 17 in Edinburgh, I have to say I did not anticipate such a big, interesting and stimulating event. So, once again, well done to all of those involved. 

@dgwbirch takes the stage #ScotChain17 pic.twitter.com/6nd4U6XPa1

— Scottish Blockchain (@blockchain_scot)

October 13, 2017

My talk on the blockchain was recorded and you can watch it here. I was also invited to take part in a great panel session and I just want to pick up on one particularly interesting point that came up. During the panel, we were asked where blockchain might gain traction in a mass market. I said that I was sceptical about financial services being the first, for two reasons: most “blockchain” efforts I have seen involve shoehorning some form of shared ledger solution into the shape created by an existing (optimised) system and second because it is, thankfully, a heavily regulated sector and therefore marketplace participants will be naturally wary about betting the house on a radical new technology. Instead, I chose e-sports on the basis that it is a big business where the trading of virtual assets is core to the attraction. I wonder if that sounded a little outlandish to the audience. I hope not, because now I read that in-game assets won by elite e-sport “athletes” are about to become a very interesting kind of tradable memorabilia.

The logic for this is inescapable. These are wholly-digital assets, just the sort of thing that the blockchain is good at dealing with. And these assets are subject to the same double-spending discipline as Bitcoins are: that is, if you can double-spend them then they are worthless but it you can’t double-spend them they have huge value.

The system will utilize smart contracts and blockchain technology to provide a unique signature and history of any virtual item in-game item earned. For example, when elite esports athlete Michael “Flamesword” Chavez earns a flaming sword of mega-death in his latest league battle, that item will have the ability to become a valuable – and easily tradable – asset. In other words, you could be using the unique item your favorite player had equipped in their biggest matches.

From The esports memorabilia scene is big — and blockchain may make it huge | VentureBeat

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“Facebook has confirmed to TechCrunch that it’s acquired… Confirm.io. The startup offered an API that let other companies quickly verify someone’s government-issued identification card, like a driver’s license, was authentic.”

From “Facebook acquires biometric ID verification startup Confirm.io – TechCrunch”.

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In 2015, the call-blocking app YouMail estimated that close to a billion robo-calls were being placed every month. Two years later, that number has leapt to 2.5 billion. At best, these calls annoy. At worst, they defraud. By far, they constitute the top consumer complaint received by the FTC.

[From

How robo-call moguls outwitted the government and completely wrecked the Do Not Call list

]

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In the past, it has taken generations for humans to develop political, cultural, and institutional antibodies to the novelty and upheaval of previous information revolutions.

[From

It’s the (Democracy-Poisoning) Golden Age of Free Speech | WIRED

]

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As the UK enters the new era of Open Banking, we are all familiar with the opportunities for new financial services providers to use the new infrastructure to provide new products and services. As Ken Wattana pointed out, open banking depends on having identity services as part of that infrastructure. Third parties using the bank APIs to obtain customer data and to instruct payments on their behalf must have confidence in that infrastructure, just as customers must. One way to do this is to use standard, tried and tested approaches and have good reference implementations for thorough testing. In the UK, for example, the Open Banking Implementation Entity (OBIE, the body funded by the banks to deliver open banking) chose ForgeRock to build the reference banking application that will be used by the banks and the third parties to build and test their applications.

It’s important to note, though, that the opportunities for third parties extend way beyond financial services. To pick just one example, open banking is going to have an impact in the retail sector. Why? Well, retailers can use the customer account data and account-to-account “instant payments” to make their businesses more efficient and more effective. A recent Consult Hyperion survey found that more than 90% of merchants want to use PSD2 to reduce card fees and also that three-quarters of them want to use it to reduce the impact of fraud and data breaches. An Accenture survey last year also found that half of the retailers they surveyed want to use customers’ bank account data to provide special offers and customised services at POS.

In the week in which the Amazon Go store went live, it is easy to imagine how open banking could transform the retail experience. I’d be very happy to go self-scanning around the supermarket, hanging up the scanner at the end and seeing the retailer’s app pop up on my phone with the total, prompting me to use a PIN, or fingerprint, or my face to confirm: at which point the retailer instructs and instant instant payment from my account to their account! As a customer, the instant payment proposition seems just as familiar as a debit proposition: the customer walks out of the retailer and the money walks out of the customers account. (The fact that it never goes near the existing rails isn’t something a customer knows nor cares about.)

The retailers themselves, especially the millions of small retailers, will also benefit from this transition because a variety of new products and services will spring up to help them to manage their bank accounts, funding requirements and general financial services needs. I’m no expert on small business financing but the ability to see the details of a retailer’s bank account will surely lead to new opportunities for specialist financial services providers.  

This is also a great opportunity for new players (eg, Google, Apple, Facebook and so on) to join the ecosystem. While the existing rails may be bypassed, open banking also provides an opportunity for the schemes to reinvent themselves and their propositions. Not only is the UK is about to become an interesting, exciting and unpredictable open banking laboratory, but Mastercard’s purchase of VocaLink will be an experiment in the reinvention and extension of they proposition.  A payment scheme isn’t just a data switch that connects consumers, banks, merchants and retailers (if it was, there wouldn’t be any because we’d use the internet instead). Rates, rules and rights are fields in which Visa, Mastercard, Amex, Discover et al have decades of experience to leverage through both their existing relationships and the new ones that will arise. Helping retailers to recognise customers, manage their relationships with them and provide reputations that are useful to others (the “3Rs” approach to identity in commerce) will be a key role for the financial service players, the internet giants and other new players. It goes without saying that I expect ForgeRock to support all of them in this process.

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A Starbucks shop in Seattle, Washington has gone completely cashless in its transactions as part of the global coffee chain’s test to scrap bills and coins in the long run.

From Starbucks store goes completely cashless: Will more branches follow suit?

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A newly-opened café in Singapore has been the centre of attention for being the first restaurant in the city-state to go completely zero cash. Aside from credit cards and Nets, the café highlights its additional payment method—virtual currencies like bitcoin.

From Singapore’s first cashless café allows you to pay in bitcoin

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