A library of snippets
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A recent working paper from economists at Princeton and University College London found that American companies are increasingly able to demand prices well above their costs — which… suggests that the market is not truly competitive — that existing companies have found ways to block competitors.
From A Start-Up Slump Is a Drag on the Economy. Big Business May Be to Blame. – The New York Times
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Facebook would never put it this way, but algorithms are meant to erode free will, to relieve humans of the burden of choosing, to nudge them in the right direction.
From Facebook’s war on free will | Technology | The Guardian
Extracted from World Without Mind: The Existential Threat of Big Tech by Franklin Foer
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In retail payments, the introduction of a new faster payments system in September 2018 will provide the necessary infrastructure for full person-to-person and person-to-business connectivity… The HKMA is also currently consulting the banking industry to formulate a framework for the development of Open API.
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Now we all know what the bitcoin blockchain is, don’t we? It’s just one particular version of the general class of blockchains, which share the characteristics that data is stored in blocks and because of some cryptographic jiggery-pokery the blocks are chained together, so that you can’t go back and change the contents of a block without having to then change the contents of every subsequent block. And depending on the consensus protocol that is used, you can’t change the blocks without everyone else agreeing to let you do it. Thus it is, as my former colleague Salome Parulava describes it, “mutable by consensus”.
The reason that this kind of structure is called immutable, even though it is mutable by consensus, is that it is computationally infeasible to go back post-consensus and make a change. Even if you obtain consensus and co-ordinate more than half of the “hashing power” in the case of bitcoin, and could in theory go back to the very first block, change it to send the bitcoins in it to yourself, and then go forward rewriting all of the subsequent blocks, it would take years and years of massive computing power. Someone could, in theory, treat all of the bitcoin transactions from the last checkpoint up until now as the wrong side of a fork. (For all we know, secret mining pools are As my good friend Gideon Greenspan pointed out to me, just because you could see that corrupt agents were rewriting history in this way it doesn’t mean that you could stop them. But it’s not a realistic attack. We can live with the description “immutable” to mean “theoretically mutable but not mutable under any practical circumstances that we can envisage”.
Accenture has been awarded a patent tied to its work on an “editable blockchain.”
From Accenture Awarded Patent for ‘Editable Blockchain’ Tech – CoinDesk
If you had a different kind of blockchain, however, you could design it work in a different way. It could be mutable by consensus, or mutable by a dictator, and it could be mutable in a computationally feasible way. This is what some researchers in the US and Italy put forward in the paper “Redactable Blockchain, or Rewriting History in Bitcoin and Friends” (5th August 2016) describing the idea that has now been patented by the outsourcing company Accenture. In this paper, the researchers (Giuseppe Ateniese, Bernado Magri, Daniele Venturi and Ewerton Andrade) said there are several reasons to prefer an editable blockchain, spanning from the necessity to remove improper content and the possibility to support applications requiring re-writable storage, to “the right to be forgotten” but the patent filing was met with widespread derision on social media, and I can understand why. One of the key reasons for considering a blockchain to implement certain kinds of financial services is that the state of the blockchain, the shared world view, is locked down and the end of each block. If the shared world view can be changed, it wouldn’t be useful for these services any more. Now, I can see why some people might want an accounting system that works this way (see, for example, the case of Kingfisher Airlines in India) but I wouldn’t have thought that society wants accounting systems that work this way at all.
Why would you want a ledger that can be edited either by some group or subgroup of the consensus forming stakeholders or by some central authority? I can think of a few reasons, but none of them make any sense. The New York Times reported on this saying that “some things simply need to be struck from the records”. Records maybe. Ledgers? Never. If a bank makes a mistake — let’s say it accidentally opens a couple of million bogus accounts — then it can’t just go back and scrub the backup tapes and pretend it never happened. David Treat, MD in Accenture’s blockchain practice, said that the work “[focused] on the challenge of how to ‘fix things when they go wrong’”. . This issue was also raised by Richard Lumb, global head of financial services at Accenture, told the Financial Times last year that financial institutions and regulators would need a means to quickly correct errors on the blockchain before using it in securities markets. He gave the example of a “fat finger” trading error, or a trade assigned to the wrong counterparty, but that’s not how you correct errors, by just rubbing out mistakes. These are regulated financial institutions, not the mafia. No-one is going to build a financial services market on top of a mutable blockchain. Since the invention of double-entry bookkeeping, the whole point of keeping a ledger has been that you have a record of all of the credits and debits that contribute to the current world view. Companies do not delete old transactions every few months to save space or provide immunity from prosecution. In fact the law requires them to maintain the transaction records for years.
(Here’s one example: in the UK, the “direct debit guarantee” has no time limit at all, so all records relating to direct debits need to be kept forever. If there is something about this use case that I haven’t understood, I would be genuinely interested to be corrected.)
If I have misunderstood the benefits of this new technology then I apologise and I would genuinely curious to hear about viable use cases.
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A consortium of banks, led by Mizuho Financial Group and Japan Post Bank, has won support from the country’s central bank and financial regulator to launch the J Coin, an electronic currency to pay for goods and transfer money using smartphones.
A better name might have been J-PESA (or perhaps even J-Dex) but no matter. The point is that a couple of weeks ago I gave a speech to a group of payments people saying that why I thought central bank digital currencies were unlikely (because of the impact on commercial banks) and that a central bank digital currency managed by commercial banks was more likely.
(I joked, of course, that we’d done that two decades ago with Mondex.)
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As e-commerce merchants continue to invest in fraud prevention, those efforts cost, on average, 8 percent of their annual revenue, up from 7.6 percent last year, according to a new report… undertaken by Javelin Strategy & Research
From Fraud Prevention Costs Merchants 8% of Annual Revenue: Report – CardNotPresent.com
It’s actually nearer 10% for online-only merchants. This seems unsustainable to me, but remember I don’t understand the dynamics in the retail sector. If a lot of those online-only merchants are (just as an example) adult services then they may consider that losing a tenth of the revenue is perfectly acceptable. Nevertheless, you do have to wonder just how long the cost of fraud can continue to rise, considering that the report also says the merchants are already devoting a fifth of their budgets to fraud prevention.
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“You are lured into giving away all this information,” says Luke Stark, a digital technology sociologist at Dartmouth University. “Apps such as Tinder are taking advantage of a simple emotional phenomenon; we can’t feel data
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There’s a nostalgia around the world “cyberpunk” for me. A quarter of a century ago, I co-wrote an article called “What is cyberspace?” for the “Computer Law and Security Report” (Volume 8, Issue 2, March–April 1992, Pages 74-76) [PDF]. In this article I asked whether it was possible that, much like Arthur C. Clarke’s much vaunted prediction of the communication satellite, the Canadian author William Gibson had produced works which were not so much science fiction as informed predictions?
Gibson had, after all, coined the term “the matrix”, and his books were core to the cyberpunk canon.
The point of the article was to explain the idea of cyberspace to a legal audience (this was before Netscape, the year zero of the modern age, so most lawyers had never been online) and it turned out to be rather popular. I like to think that one of the reasons was the conviction back then that we were exploring the actual future, not some hypothetical future. I can’t remember where the idea of the paper came from, but I do remember that it was the extracts from Gibson’s brilliant writing that so effectively illustrated the key concepts and I still get a thrill from reading them now. We bandy around the word genius all too lightly, but Gibson certainly is one. As my good friend the futurologist Ross Dawson wrote…
It’s worth noting that Gibson has never claimed to predict the future [but he] has an unmatched knack for analyzing trends and behaviors inherent to modern life and extrapolating them into vivid themes that reveal a kind of raw truth about humanity—much of which centers on our relationship with technology.
From Best futurists ever: How William Gibson’s Neuromancer shaped our vision of technology – Ross Dawson.
Vivid is the word. I can still remember the shock of reading Gibson’s “Neuromancer” for the first time. Gibson himself called that novel an “optimistic” view of the near future, since it involves only limited nuclear exchanges between countries. Let’s hope he’s right.
Why was it a shock? Well, since leaving university I’d found myself specialising in secure data communications. I worked on one of the first secure LANs for the UK government, on secure satellite communications for banking, on secure military networks for NATO, that sort of thing. For the first part of my career I was immersed in networking, but I didn’t grok it. I didn’t see what the spreading networks were doing and at that time I’d never heard of McLuhan’s global village. I didn’t have any sort of vision as to what was going on.
Reading Gibson was like lifting a veil from parts of my own brain. It took an artist to give me that vision and a vocabulary to discuss it and enrich it and use it. And what a vocabulary it was! Cyberspace, the Matrix, Black Ice and console jockeys!
My very favourite William Gibson quote, right after “the future is already here, it’s just unevenly distributed” is about money. It comes from his novel “Count Zero” and it’s about the cashless society…
“He had his cash money, but you couldn’t pay for food with that. It wasn’t actually illegal to have the stuff, it was just that nobody ever did anything legitimate with it.”
I’ve written before that we are heading toward a society that is cashless in this sense, a society where cash will still be around but will disappear from the daily lives of most people. It’s not a society where there is no cash but a society where cash is irrelevant. It may have seemed outlandish twenty five years ago, but it’s a pretty accurate description of Sweden now (where only a tiny fraction of retail payments are cash) and China soon.
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“Research being done at the MIT Media Lab is working on ‘swappable identities’ for AI bots, based on data taken from a person’s digital identity, as detailed by VentureBeat. Personal information is culled from emails, transcribed videos and any other published statements, allowing the system to give expert advice based on human opinions.”
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“‘There were a lot of people who came and clicked photos (of the sign) but apart from that no transactions,’”
Bitcoin accepted here: The tiny family restaurant in India that’s embraced virtual currency — Quartz
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Snippings