An island of artificial intelligence

As I’ve written many times (e.g., here), it is difficult to overestimate the impact of artificial intelligence (AI) on the financial services industry. As Wired magazine said, “it is no surprise that AI tops the list of potentially disruptive technologies”. With Forrester further forecasting that a quarter of financial sector jobs will be “impacted” by AI before 2020, there’s an urgent need for the island begin to think about the next generation of financial services and begin to formulate a realistic strategy not only to copy with the changes but to exploit them. It is because the need is so urgent that I was delighted to be asked to give a keynote at the Cognitive Finance AI Retreat in September (Which began with a beach barbecue, something I recommend to conference producers everywhere.)

Beach BBQ

A beach barbecue is always a good idea at a conference.

The event was put together by my good friends at Cognitive Finance working with Digital Jersey (where I am advisor to the board) and they did a great job of bringing together a spectrum of both subject matter experts and informed commentators to cover a wide variety of issues and provide a great platform for learning.

On the first day of the event, political economist Will Hutton emphasised that financial services will be at the “cutting edge” of the big data revolution, pointing out that not only does the sector hold highly personal, highly valuable data about individuals, but that it has more complex oversight requirements than most other sectors.

Clara Durodie, CEO of Cognitive Finance Group kicked off the event by talking about the potential for AI to help to manage the colossal flows of data that characterise the financial sector today and I think she was right to highlight that the use of the technologies presents tremendous opportunities here.

In his superb “Radical Technologies, Adam Greenfield wrote of the advance of automation that many of us (me included, by the way) cling to the hope that “there are some creative tasks that computers will simply never be able to peform”. I have no evidence that financial services regulation will be one of those tasks, so in my talk I suggested AI will be the most important “regtech” of all and made a few suggestions as to how regulators can plan to use the technology to create a better (that is faster, cheaper and more transparent) financial services sector. The strategic core of my suggestion was that jurisdictional competition to create a more cost-effective financial services market might be a competition that Jersey could do well in.

AI as Regtech

Regulation, however, was only one the topics discussed in a fascinating couple of days of talks, discussions and case studies. The surprise for me was that there was a lot of discussion about ethics, and how to incorporate ethics into the decision-making processes of AI systems so that they can be accountable. I hadn’t spent too much time thinking about this before, but I was certainly left with the impression that this might be one of the more difficult problems to address and talking with very well-informed presenters. Listening to experts such as Dr. Michael AikenheadKay Firth-ButterfieldDr. Sabine Dembrowski, Andrew Davies and many other leading names in finance and AI left me energised with the  possibilities and intrigued by the problems.

AI is an event horizon for the financial services industry. With our current knowledge, we simply cannot see (or perhaps even imagine) the other side of the introduction of true AI into our business. But we can see that our traditional “laws” of cost-benefit analysis, compliance and competition will not hold in that new financial services space, which is why it is important to start thinking about what the new “laws” might be and how the financial services can take advantage of them.

The smart money

Writing in the Bank of England’s “Bank Underground” blog, Simon Scorer from the Digital Currencies Division makes a number of very interesting points about the requirement for some form of Central Bank Digital Currency (CBDC). He remarks on the transition from dumb money to smart money, and the consequent potential for the implementation of digital fiat to become a platform for innovation (something I strongly agree with), saying that:

Other possible areas of innovation relate to the potential programmability of payments; for instance, it might be possible to automate some tax payments (e.g. when buying a coffee, the net amount could be paid directly to the coffee shop, with a 20% VAT payment routed directly to HMRC), or parents may be able to set limits on their children’s spending or restrict them to trusted stores or websites.

From Beyond blockchain: what are the technology requirements for a Central Bank Digital Currency? – Bank Underground

If digital fiat were to be managed via some form of shared ledger, then Simon’s insight here suggests that it is not the shared ledger but the shared ledger applications (what some people still, annoyingly, insist on calling “smart contracts”) that will become the nexus for radical innovation. They bring intelligence to money, and some people think this is more revolutionary than it first appears. One such person is Eric Lonergan. Eric is someone I always take seriously. He’s a hedge fund manager, economist and writer. He wrote a great book about money, called Money, and he is a source of clear thinking on many issues around this central topic of shared interest. Here’s what he had to say about Bitcoin recently.

The most significant innovation in Bitcoin is not blockchain, nor the fact that it is a non-state-backed electronic currency. It is truly ground-breaking because it is the first ‘intelligent’ money. An ‘intelligent money’ is one which self-regulates.

From Intelligent money & valuing Bitcoin – Philosophy of Money

Quite, but this form of intelligence is only one kind and the Bitcoin self-regulation is only one kind of self-regulation. There are some truly surprising possibilities once you add general-purpose programmability. I have bored people to tears repeatedly with my standard four hour lecture about why the incorrectly labelled “smart contracts” will be the source of real innovation in the world of cryptocurrency and, indeed, why one of the first uses of those smart contracts (ICOs and tokens) will be much more important to the world of financial services than, say, Bitcoin. But that kind of self-regulation may not be the only thing that intelligent money does. Eric goes on to say that:

‘Intelligence’ could also embed social goals – for example the currency could self-regulate the activities for which it is used, perhaps even rewarding or punishing activities contingent on their social impact. In extremis, I imagine we will have a currency which is fully intelligent, gathers data and evolves its own rules of distribution and growth. .

As you will deduce from the subtitle of my recent book “Before Babylon, Beyond Bitcoin – From money that we understand to money that understand us” I agree. What’s more, as Eric says, “my sense is that it [intelligent money] is inevitable – indeed it could be the basis of an edge for digital currency over existing state-backed money”. That’s a pretty interesting statement from someone who is a thorough student of money. If he is right, and money becomes more closely connected with the social goals of the communities that it serves, then the future of money will look very different from both the Washington Consensus and Star Trek (that is, there won’t be a “galactic credit” or whatever, but very many different kinds of money).

Estonia is a real place

My little corner of the internet seems awash with tales of a mythical utopia that goes by the name of Estonia. Since my little corner is the digital identity corner, I’ve been hearing about digital identity in Estonia more and more. At meetings and conferences, on social media and in conversation, I hear people talking about the Estonian national identity scheme that uses a blockchain. The Harvard Business Review, for example, tells us that “since 2007 Estonia has been operating a universal national digital identity scheme using blockchain”. This sort of thing crops up on Twitter from time to time. I’m not sure if some of the people tweeting about the Estonian national digital identity blockchain know that Estonia is actually a real place and that some people (e.g., me) have been there. In fact, here is a picture of me in Tallin to prove it.

 Me in Tallin

The Estonian national digital ID scheme launched in 2002. A decade ago a colleague of mine at Consult Hyperion, Margaret Ford, interviewed Mart Parve from the Estonian “Look@World” Foundation in the long standing “Tomorrow’s Transactions” podcast series (available here). Mart was responsible for using the smart ID service (both online and offline) to help Estonia develop its e-society. If you listen carefully to them talking, you will notice that they never mention the blockchain, which is unsurprising since Satoshi’s Nakamoto’s paper on the subject was not published until more than a year later, in October 2008.

The strangeness of the obsession with Estonia in blockchain circles began to bother me after I was invited along to a blockchain breakfast (seriously) at the House of Lords last year. The invitation came because I had been asked to contribute to the Parliamentary Office of Science and Technology (POST) work on distributed ledger and the purpose of the breakfast was to discuss this report. The breakfast was hosted by Stephen Metcalfe MP, chair of the Science and Technology Committee. Sir Mark Walport, the Government’s Chief Scientific Adviser (GCSA), opened the proceedings. Sir Mark had authored the Government Office for Science report on “Distributed Ledger Technology: beyond blockchain” earlier in the year. In it, he focused on a particular kind of distributed ledger, the Bitcoin blockchain, and attempted to explain it to the general reader and then explore some of the potential uses.

(From here on I insist to sticking to the term that Richard Brown of R3 and I started using a couple of years ago “shared ledger technology” (SLT) as the general description because I feel that the fact that multiple organisations share the ledger is more important than its architecture.)

Personally, I found the report slightly confusing because it was jumping between ledgers, blockchains, the bitcoin blockchain and bitcoin almost on a paragraph by paragraph basis. What’s more, and I realise that I read the document from a very technical perspective and that I may see some of these things therefore in the wrong context, I think the report might have benefited from some more description of shared ledgers, and the reasons why Moore’s Law and falling communications costs have made the core idea of everyone storing every transaction a plausible architecture. Here’s the way that my colleagues at Consult Hyperion and I started to think about the ledger a couple of years ago, the “4Cs” model that has worked rather well.

Consensus Computer Model

I prefer to use this layered approach to explain the key components of a shared ledger and then develop ideas around different choices in those layers. Different choices in consensus technology, for example, lead to a variety of different possibilities for implementing a shared ledger. In order to help categorise these possibilities, and narrow them down to make useful discussions between the strategists and technologists, I use the taxonomy that Consult Hyperion developed to distinguish between different kinds of public and private ledgers. Rather flatteringly, Sir Mark used a simplified version of the this model on page 19 of his report.

When the report came out I said that it might be considered reckless to disagree with the GCSA, but I just did not (and do not) see cryptocurrency as a sensible government option for digital currency. Anyway putting my nerdy criticisms to one side, Sir Mark’s conclusions (which were essentially that the technology is worth exploring in government contexts) were surely correct. He said that permissioned ledgers (i.e., not the Bitcoin blockchain) are appealing for government applications and I’m sure he was right about this, although I remain sceptical about some of the suggested government uses that are based on costs or efficiency. I think that his suggestions around applications that focus on transparency are the more interesting areas to explore in the short term and they would be my focus if I were looking to start exploratory or pilot projects in the field. I share the Open Data Institute’s view on this, which is that blockchains could be used to build confidence in government services, through public auditability.

House of Blockchain

When it came time for my contribution, by the way, I said that it wasn’t at all clear to me that it was accurate to describe Bitcoin as a decentralised system since almost all of the hashing power resides with a very small number of unaccountable mining pools based in China but, more importantly that

  1. It seems to me that many of the efforts to move shared ledgers into the marketplace have concentrated on shaping shared ledgers to emulate existing solutions in the hope that SLTs will be faster, higher or stronger. These are all unproven assertions. It is possible that a shared ledger replacement for RTGS might be cheaper, or more resilient or more functional that the currency centralised solution, but who knows?

  2. The transparency of the shared ledger, the aspect that most doesn’t work for current solutions in current markets, may well turn out to be the most important characteristic because it allows for ambient accountability and therefore opens up the potential for new kinds of markets that are far less costly and complex to regulate, manage, inspect and audit. This is the “shared ledger as regtech not fintech meme” that I am rather fond of.

  3. Just as the invention of double-entry bookkeeping allowed for the creation of new kinds of enterprise, so it seems to me that the shared ledger will similarly lead to new kinds of enterprise that use the shared ledger application (the SLAPP) as the engine of progress and the focus of innovation. I assume that there are kids in basements experimenting with SLAPPs right now and that this is where the breakthrough use case will come from. As I said some time ago in a discussion about shared ledgers for land registry, turning the ledger into a platform may be the most important reason for shifting to this implementation.

At the breakfast, Sir Mark said that the goal of the POST reports is to demystify technology for policy makers although I have to report that in his closing remarks he said that we had not been entirely successful in this enterprise and I fully concur with his opinion. That’s not why I’m talking about it breakfast at the House of Lords here though. Back to Estonia! At one point, the breakfast discussion moved on to the Estonian electronic identity system. At this point I expressed some scepticism as to whether the Estonian electronic identity system was on a blockchain. The conversation continued on the basis that it was. Then to my shame I lost it and began babbling “it’s not a blockchain” until the chairman, in an appropriate, gentlemanly and parliamentary, told me to shut up.

The point that I was trying to make was that the Estonian ID scheme, launched in 2002, has nothing to do with shared ledgers or mutual distributed ledgers or blockchains. As it happens, a some time after my breakfast with their lordships, I had another breakfast, this time with the new CIO of Estonia, Siim Sikkut

sikkut17 

I asked Siim where this “Estonian blockchain ID” myth came from, since I find it absolutely baffling that this urban legend has obtained such traction.  He said that it might be something to do with people misunderstanding the use of hashes to protect the integrity of data in the Estonian system. Aha! Then I remembered something… More than decade ago I edited the book “Digital Identity Management” and Taarvi Martens (one of the architects of the Estonian scheme) was kind enough submit a case study for it. Here is an extract from that very case study:

Long-time validity of these [digitally-signed] documents is secured by logging of issued validity confirmations by the Validation Authority. This log is cryptographically secured by one-way hash-function and newspaper-publication to prevent back-dating and carefully backed up to preserve digital history of mankind.

Well, there we have it. It looks as if the mention of the record of document hashes has triggered an inappropriate correlation amongst observers and, as Siim observed, it may indeed be the origin of the fake news about Estonia’s non-existent digital identity blockchain.

(This is a revised and edited version of post that first appeared on Consult Hyperion’s “Tomorrow’s Transactions” blog in March 2017.)

Back to the future of Bitcoin

I was very excited to discover via the interweb tubes that Bitcoin is now going into geostationary orbit. In the near future, Bitcoins will be dropping as a gentle rain from heaven. Well, sort of.

Blockstream Satellite is the world’s first service that broadcasts real-time Bitcoin transactions and blocks from a group of satellites in space.

From Blockstream – Announcing Blockstream Satellite

You cannot imagine the nostalgia this story generated for me because, astonishing as it may now seem, the first ‘fintech’ project that I ever worked on involved using satellites to transit financial data and the first book chapter that I ever wrote was about the use of satellite data for business.

Settle down youngsters, and I’ll tell you the tale…

Cast your mind back to 1982. Those interweb tubes are a distant dream. Getting data from place to place is a major effort. In a far away place (Indonesia) a group of talented 10x prima donna programmers are writing software to run on the world’s first regional satellite data system, the Palapa-B1 service (a Hughes HS376, for the technical, with 24 C-band transponders). In the great city of Bandung, one of these dashing young software engineers — me — was initially tasked with writing the (and here’s one for the teenagers) X.28 code and then the X.25 code to allow (amongst other things) bank terminals and other devices to connect via this new satellite network to allow communications between bank branches on far flung islands throughout the Indonesian archipelago and bank offices in Jakarta and elsewhere. You couldn’t buy communications software for the processors we were using. You had to write it from scratch. If you tell the young people of today that, they won’t believe you.

Indo83 3

We were working at a telecoms supplier’s site in Bandung. I know it doesn’t look much from the outside.

A Japanese team were building the baseband modems and implementing the Aloha link protocol that had originally been invented for Alohanet. This gave me the assembly language primitives to work with to implement the CCITT protocols on top. X.28, as if you need any reminding, was the protocol for character input/output (used to connect terminals across a network to mainframes) and X.25 was the packet-switching protocol for interconnecting computers. I still think of terminals at DTEs (Data Terminating Equipment) and I still think of network connections as DCEs (Data Circuit Terminating Equipment). All of these quaint terms vanished from the pages of history about a week after TCP/IP was invented.

Indo83

As you can see, inside we had access to many modern facilities.

Implementing X.28 meant that staff could log on to bank mainframes using terminals in the branches. Implementing X.25 meant that remote minicomputers could interconnect. Getting the code to work, and getting it to work quickly enough, and getting it to work in the limited memory available was a fantastic education. I loved my time as C ninja, interfacing with what was then leading-edge communications hardware to deliver data services to real users.

Indo83 2

Here I am making a few small adjustments to the communications processors boards.

It was here I learned all my UNIX tricks and C programming stunts. Those were the days when if you didn’t like the way that the team wrote code you could quickly knock up a parser to force them into line (which one of my colleagues did, using YACC), when you had to pretend to the system administrator that you didn’t have root access (which we all did) and when the disk packs held 5Mb so you had to be very careful with the space available *wipes away a tear*.

Indo83 1

As you can see, the team really appreciated my mad programming skills and their contribution to the great success of the project.

In the later 1980s and very early 1990s, I enjoyed working on a wide variety of projects around satellite data communications. I worked on technical architectures, system designs and even on regulation in a team with the now-infamous Vicky Pryce (who was then chief economist at KPMG, and who I remember as a very impressive and really clever, but also really nice person). The very first conference paper that I ever wrote was on the use of satellite data broadcasting to deliver stock exchange data to market participants and I spent happy days at Telekurs, Dow Jones Telerate, the London Stock Exchange and other places working on link budgets, low-noise blocks and forward error correcting codes (this is where I learned about convolutional coding and Viterbi decoders. One of the most interesting areas I worked in was the use of Vertical Blanking Interval (VBI) data services embedded in analogue television transmissions and the potential (abandoned) use of data space in digital television transmissions for value-added (largely financial) services.

Books about satellite communications

A few years later, I worked on a similar system using Very Small Aperture (VSAT) terminals in K-band (too much information, ed.) for a US telecommunications provider, on one of Consult Hyperion’s first US projects. In those still pre-internet days, if you wanted to get data from a branch office back to HQ reasonably quickly you had to pay for a leased data line from the phone company, which was very expensive. Putting a satellite terminal on your roof was a cheaper alternative and as the frequencies went up from C- to Ku-based, so the dish sizes and costs came down. The cost of installing and maintaining a six foot dish compared very favourably with the costs of alternatives, until the internet and mobile phones came along and spoiled all the fun.

Ah, the good old days.

Banks and ice

Some years ago, I happened to be reading William Bernstein’s A Splendid Exchange: How Trade Shaped the World when I was mildly startled to see a reference to the magnitude of America’s 19th century ice trade. Startled because I’d never heard of this trade despite that fact that ice was America’s second largest export tonnage (second only to King Cotton) at the time of the Civil War! I immediately resolved to learn more and a few moments of augmented intelligence (ie, Google) threw up the name of Frederic Tudor, the “Ice King” who invented the industry. From there it was a quick jump to Gavin Weightman’s The Frozen Water Trade, one of my favourite books.

The story of Frederic Tudor (perhaps “yarn” might be a better description) ranges over most of the seven seas, taking in privateers, shipwrecks, invention, speculation, enterprise and vision on the way. Tudor had an idea and spent years, in a truly American fashion, pursuing it until he had created an entirely new market and had satisfied it through an entirely new industry. When he shipped his first cargo of New England ice down to Martinique in 1806, he thought he would have a sure-fire success. But the inhabitants had no idea what to do with it: if you’ve never seen ice, would you buy some? Eventually he found using it to make ice cream a moderate economic success and was encouraged to continue. A decade later, his breakthrough came when he began shipping not to the Caribbean but to Charleston, Savannah and New Orleans and the business began taking off.

At the same time, an ice ecosystem began to develop. Downstream, the waste water coming off of the melting ice was sold as a cold draught rather than poured down the drain. Upstream, the demand for sawdust (used to insulate the ice cargos) from the Maine timber industry (previously a nuisance) generated more wealth. New technology was applied to cutting, storing and hauling the ice.

Frederic’s marketing strategy was dynamite. He created an insatiable demand for two main products: ice cream and cold drinks. When opening up a new town, he would provide free ice to bartenders knowing that customers would never go back to warm drinks once they’d tried a mint julip or an iced tea. It seemed to me slightly reminiscent of the bottled water industry today: create a demand, satisfy it and the use brand to drive up the price. Indeed, Weightman notes that the only difference between “Wenham Lake Ice” (one of the main brands of the time) and other ice was purely marketing.

Tudor was a ruthless businessman, seeing off competitors by lowering the price of his ice to ruin them, but not a perfect one. Some of his enterprises outside ice went well (graphite mining and property) and some not so well (he lost a fortune speculating on coffee futures). In any case, by 1849 the ice trade he had created was going so well that he ran out of ice in Boston and had to send a ship and a crew north to cut chunks off of icebergs!

“To speak literally, a hundred Irishmen, with Yankee overseers, came from Cambridge every day to get out the ice. They divided it into cakes by methods too well known to require description…” — Henry David Thoreau, from “The Pond in Winter,” Walden

From The ice men come to Walden Pond (Walden 186) | The Curious People

By the time Thoreau was moaning about the ice trade disturbing his peace on Walden Pond, Tudor was shipping ice to Calcutta (where the grateful British Raj coined him a medal), round the Cape to San Francisco and even to Australia. In America, ice was no longer a luxury item but an essential comfort.

Naturally, as I followed this wonderful tale, I couldn’t help but try and extract key messages around the intersection between economics and technology. In this field, there is a definite paradox around Frederic and I find it fascinating. Frederic was not a luddite by any means and appears excited by the new inventions of the time. In 1830, he predicted that “steam will soon take the place of horses” and went on to say that “the times are surcharged with novel inventions and improvements of all kinds… steam seems now the ordinary power: in all probability some other and more convenient one will be discovered”. And, of course, it was.

Yet as Weightman notes in passing, it never seems to have occurred to Frederic that someone might “undermine his ice trade by manufacturing ice or making an artificial refrigerator”. Perhaps it is some kind of innovator’s curse, to imagine change in all businesses except the one they have created: it’s why Bill Gates didn’t invent Google and why Akio Moirta didn’t invent the iPod.

As it turned out, when artificial refrigerators did arrive, they at first bolstered the trade by providing an inexhaustible, year-round supply of clean ice for shipping through the existing supply chain before, in time, they destroyed the trade by decentralising ice making to the point of consumption. Destroyed the trade so thoroughly, in fact, that few people remember that it ever existed. The market that Frederic’s genius created is still with us, but the industry he created to service it has melted away.

This is how I see the banking sector. As the former CEO of Barlcays, Anthony Jenkins, said (I paraphrase), banks digitised banking rather than make it digital and are facing the “Uber moments” to come. The digital financial services revolution has barely begun. Our cool new finance stuff is running on some very old rails.

The banks have indeed spotted the invention of refrigeration and they have taken the first primitive refrigerators (e.g., the blockchain) and are using them to make blocks of ice that are then packed in sawdust and sent off in sailing ships just as they were before (by which I, of course, mean the legacy information technology infrastructure). Meanwhile, other people (the fintechs, the internet giants, new businesses yet to be born) are looking at decentralisation and are shipping the fridges rather than the ice. They are looking at using blockchain technologies to create new and decentralised markets founded on translucent transactions and ambient accountability.

I hope this isn’t too clumsy a metaphor for taking a look at the 21st century technologies that are already upon us (ranging from biometrics and the blockchain to artificial intelligence and the internet of things) to try and see what they will really do to the financial services sector in general and the banking industry in particular. I think I have a fairly structured way of thinking through these issues and, more importantly, I think I have an idea for a new book…

ZCash and The Glass Bank

Interesting to see the cryptocurrency ZCash in the news today, since it’s one of the ones I focussed on in my new book (in case I haven’t mentioned it, it’s called Before Babylon, Beyond Bitcoin and you can buy it from all good booksellers). As I said about Zcash in the chapter “Counting on Cryptography” written toward the end of 2016, “people, companies and governments will not use the underlying anonymous currency but instead use the privacy-enhancing kinds of money built on top of it”.

This is indeed what J.P. Morgan just announced at Consensus 2017 (see “JP Morgan Chase to Integrate Cash Technology to its Enterprise Blockchain Platform“). Or, as American Banker put it in their story “So, just to be clear: JPMorgan isn’t using Zcash”. As was set out by the parties themselves, what they intend to do is to use the Zcash technology of zero-knowledge proofs on their own Quorum blockchain to deliver privacy into financial markets where the participants want the advantages of shared ledgers but do not want to disclose the contents of transactions to all participants. I think this is quite a big deal, but that’s because the institutional use of these new technologies to create markets that work in more efficient ways accords with my own mental roadmap for shared ledgers. 

In a paper I co-wrote a couple of years ago with Richard Brown, the CTO of R3, and Consult Hyperion colleague Salome Parulava [published as Birch, D., R. Brown and S. Parulava (2016). “Towards ambient accountability in financial services: shared ledgers, translucent transactions and the legacy of the great financial crisis.” Payment Strategy and Systems 10(2): 118-131.], we adopted the term “translucent” to mean transactions that are transparent for the purposes of consensus (in other words, we can all agree that the transaction took place and the order of transactions) but opaque to those not party to the trade or the appropriate regulators under the relevant circumstances. I gave a talk introducing these concepts at NextBank Barcelona back in 2015.

It seems to me that the JP Morgan / ZCash announcement takes us another step forward in this direction and moves use towards the era of “The Glass Bank” (something I used in client workshops for many years and that I first blogged about back in 2011), an era in which translucency develops as a response to the Great Financial Crisis (GFC) and as a fundamental improvement in the way that financial markets operate, and which I have already decided will be the title of my next book!

The official blockchain quatrain

The moving finger writes; and having writ

Moves on; nor all your piety nor wit

shall lure it back to cancel half a line,

Nor all your tears wash out a word of it.

 

#Blockchain

 

OK, I added the hashtag, but the rest is from Edward Marlborough’s 1859 translation of the Rubáiyát of mathematician, astronomer, philosopher and poet Omar Ahayyám (1048-1131).

Identity is the New Money

Well, the book has been published. Identity is the New Money (London Publishing Partnership: 2014). I’m very excited about it. By the time I finished it, I was sick of it. Writing a book turned out to be much more work than I’d thought. But having done it, I’m ready to do it again and this time I think it will be a lot easier – I made a lot of mistakes, but I think I learned from them.

Birch cover for LPP site border

If you are curious about the subject, but can’t be bothered to read a book, here’s a nice two-page spread from Financial World magazine [PDF, 1.4Mb].

In the future, everyone will be famous for fifteen megabytes

The best thing since… oh, that’s not on the list

The Atlantic magazine published one of those articles based on the latest that I really should ignore and not take too seriously but can’t help reading — Fallows, J., “The 50 Greatest Breakthroughs Since The Wheel” in “The Atlantic” p.56(9) (Nov. 2013). This time it was the 50 greatest breakthroughs since the wheel. They asked various scientists, historians and technologists to rank a list of innovations for the article, and then put them together into a nice feature.

I’ll spoil the ending for you by telling you that number one on this list was the printing press! I was surprised that the telegraph only made it as far as position 26 because as an acolyte of the Economist writer Tom Standage (“The Victorian Internet”), I do think that the step change between being unable to communicate faster than physical matter could be propelled and being able to communicate at the speed of light represented some fundamental cusp in human history rather than any kind of marginal improvement, so think I would have pushed it further up the list. Damn. There I am getting caught up in thinking about the list again.

Oh and one more thing. The most amazing fact that I think I saw in the article concerns the sequencing of human DNA. The article notes that in the past 12 years the cost of sequencing human DNA has fallen to a millionth of its previous level. That’s an astonishing six orders of magnitude cost reduction in a decade. Now I can’t decide whether DNA sequencing or 3-D printing will feature in some future list as the most important technological breakthrough of our current era.

In the future, everyone will be famous for fifteen megabytes

Smart watches and dumb watchers

For reasons that are not entirely clear to me, the technology world is excited about the prospect of smart watches.

Now that rumors suggest Google and LG are both planning on jumping into the smart watch war to compete with Samsung and Apple it’s time to stop thinking of this thing as a time-telling piece. Yes, these gadgets will go around people’s wrists and probably display the time.

[From The Smartwatch Is Not a Watch – Rebecca Greenfield – The Atlantic Wire]

I have to tell you this story. Some years ago, I was at a dinner at IBM in Zurich. A chap from their research labs was showing off a Linux-powered watch. The chap was Swiss, and I imagine unfamiliar with the British sense of humour. When he’d finished demoing the watch’s ability to show some news and contacts, or whatever, he asked if we had any questions. “Yes”, I said, straightfaced, “does it tell the time?”. I’d said it as a joke, of course, and expected a laugh. But… ”No,” he told me, entirely seriously, they couldn’t load the “clock” programme because they’d run out of memory!

In the future, everyone will be famous for fifteen megabytes