Why would a central bank be messing around with a blockchain? Not for creating a cryptocurrency, that’s for sure. As I have written at exhausting length before, it makes absolutely no sense for a central bank to create a cryptocurrency. However, that is an entirely different topic as to whether a central bank might want to create a “blockchain” (i.e., some for of shared ledge) in order to manage transactions in a central bank digital currency (CBDC, as as I call it, e£). This is restated in the latest Bank of England blog.
“I explain that it may not be necessary to use DLT for a CBDC, but I also consider some of the reasons why it could still be desirable.”
The precisely echoes my thoughts on the same topic. It makes sense to have a BritPESA rather than a BritCoin, but it make well make sense to implement BritPESA using a shared ledger rather than a central database as M-PESA does. And one of the obvious reasons why is that if there is a central database, then it can go down. As M-PESA has done.
Let use another example to make the point. Suppose an airline reservation system contains a million reservations. Suppose each reservation is as big as a megabyte. That’s a terabyte of data, or about $10 worth of storage in a rack somewhere. Now, suppose that instead of a central reservation system, each entity that interfaces to the airline (e.g., travel agents) has a complete copy of that data and when a reservation is made or changed, it propagates across all of these copies. Now there’s no central system for some wally to unplug. If one of the travel agent’s gateways goes down… so what.
RTGS
However, as I explain in my book “Before Babylon, Beyond Bitcoin”, there are other reasons why both banks and central banks want to put digital currency on a shared ledger rather than run everything through a central system as they do now. When I gave a talk about this a couple of years ago, I fixed on resilience, flexibility and innovation as more important than trustlessness in this context.
This is precisely what the Monetary Authority of Singapore (MAS) decided to do. They have created a permissioned shared ledger (implemented on an Ethereum blockchain) to connect
The precisely echoes my thoughts on the same topic. It makes sense to have a BritPESA rather than a BritCoin, but it make well make sense to implement BritPESA using a shared ledger rather than a central database as M-PESA does. And one of the obvious reasons why is that if there is a central database, then it can go down. As M-PESA has done.
The number of people making a mobile purchase in the UK increased by 39 percent in 2016, comprising 86 percent of UK digital shoppers. Retail m-commerce sales will total £31.42 billion in 2017.
Guardian politics tweeted this lovely picture from last Thursday’s general election under “British democracy” with the comment “not sure how to explain this to our non-British followers”.
Indeed. This brought back some happy memories for me, starting with the 1983 general election. At that time,
because the first time that I came across Lord Buckethead was shortly after
“Banks face a raft of new regulation over the next 2-3 years with identification and verification at their heart. This includes the second Payment Services Directive (PSD2), the fourth EU Anti-Money Laundering Directive, the General Data Protection Regulation (GDPR) and provisions around open banking.”
A decade ago I remember writing that one of the problems with QR codes is that there is no security. Some years later I wrote an article pointing out that NFC ought to be safer than QR codes because NFC included a standard for digitally-signing tags (although I did also note that no-one used it) whereas anyone could easily create bogus QR codes.
Well, I might not go so far as to call [QR codes] evil, but they certainly have the potential to enable person or persons unknown to act with evil intent.
I suggested, in connection with a couple of projects we were working on at the time, that the mobile operators do something about this by creating a digital signature standard for QR codes so that phones could be set by default to ignore unsigned codes. None of this happened, as I’m sure you are aware and QR codes became popular precisely because any app could read any code anywhere.
The security problem never went away though. I notice in the South China Morning Post that in March 2017 some 90m Yuan was stolen via QR code scams in Guangdong alone (a suspect in the case replaced merchants’ legitimate bar codes with fake ones that embedded a virus to steal personal information) and that in China as a whole, a quarter of viruses and trojans come in via QR. Despite the incredible success of QR there, we need to do better.
Even the man who invented QR codes says that they are an interim technology.
Now, also back in the day, I had originally assumed that Apple would add NFC to the iPhone. I was wrong about this for years, so eventually I assumed that they were going to bypass the technology and go to Bluetooth. Yet what I said at the time still holds: NFC is undeniably convenient.
NFC is a convenience technology, and Apple loves convenience
I was drawing on Consult Hyperion’s early experiences with NFC (remember the Nokia 6131?) of tag reading and writing. I also noted surveys that showed that NFC generated better results for merchants, but only once consumers could get it working. As my good friend Osama Bedier, then head of Google Wallet, pointed out, this is was some barrier because of the amount of “futz” it took to get NFC working.
But there was another reason that I was so interested in NFC as QR alternative back in this days. Let’s go back to that standard for adding digital signatures to NDEFs (the “NFC Signature RTD Technical Specification”) to build a safe tag infrastructure. After hawking this around a few different projects, to general disinterest, I figured that the telcos weren’t interested in using it to deliver secure infrastructure, so I said…
“Someone else will build this business (Apple? They seem to be getting all sorts of NFC-related patents at the moment) and then the operators will once again complain about being pipes. Is Tom Noyes right to say that “…Apple and Google will be further ahead in coordinating value in new networks”
Well, well. Tom was right as usual, even if it took a few years for the hand to play out. At WWDC, Apple announced that IOS11 will indeed include the ability to read NDEF data from tags.
“Using Core NFC, you can read Near Field Communication (NFC) tags of types 1 through 5 that contain data in the NFC Data Exchange Format (NDEF).”
So now both IOS and Android can read standard tags and action them. I want to make a couple of quick points about this before I head off down to our Hyperlab and see what our developers make of the new toolkit…
First of all, this technology will inevitable be used for triggering in-app payments that work in a very convenient way for consumers. Instead of having to open your Tesco Payqwiq app and then scan a code from the POS, the POS will write a dynamic tag on the fly: then you just tap the phone on the POS and the operating system will automatically open the Payqwiq app and route the data to it.
Secondly, since tags are inexpensive, they will be used for a wide variety of different applications. Tickets for pop concerts, information about products, name badges, all sorts of things that can be read by a phone rather than by a specialist reader, Therefore I expect new standards for NDEF content to spring up. One of our favourite apps, back in the day, was the phone number tag that men could put in their back pocket at a nightclub: admirers could wave their phone in an appropriate area to get the number and send a text message.
Lastly, note that NFC tags can be read through packaging. Unlike QR codes that need to be printed on the outside of a box, tags can be inside. Where would this matter? Well, take a current UK example. Cigarettes now have to be in plain packaging. Tobacco companies don’t like this – for obvious brand reasons – but they do have a point: plain packaging makes like easier for counterfeiters. So suppose packs had a cheap tag inside: then your phone could tell you whether you’ve got real Marlboro or a knock off. You download the Marlboro app, then from then on when you tap a pack if the app doesn’t pop up with a big green tick you know you’ve been done.
Note, however, that IOS11 also includes ARKit to add augmented reality. So, when you look at your pack of plain cigarettes through your app (after you’ve tapped, so the phone reads the tag and knows that they are real Marlboro) you don’t see plain packaging any more you see… well whatever.
All in all, Apple’s announcement – whether the culmination of a clever plan or a response to Android market share – is a big deal. I found a whole bunch of blank NFC tags in my desk drawer so I’m off to start programming them now.
“On April 19, Guangzhou police unveiled an identity authentication app that enables citizens to prove their identities via their mobile phones. To date, the city has authorized 20 offices to help citizens register for the service. Once they register, they can use facial recognition technology, available via the app, to prove their identities whenever and wherever necessary.”
“Clarence Barron, owner of the Wall Street Journal and founder of the financial magazine that bears his name, realized Ponzi must have been a huckster and went on the offensive. While Barron conceded that there probably was a way for a person to make a small amount of quick cash on the postal reply coupon scheme, he figured that Ponzi would have to be moving 160 million coupons around to raise the cash he needed to support the business. Since there were only 27,000 postal reply coupons circulating in the world, Ponzi’s story didn’t check out.”
