AI and the Corona virus

Great article about AI and the Corona virus. Privacy, what privacy…

 

“Global cases of the COVID-19 coronavirus surpassed 100,000 today. As President Trump signs into law an $8.3 billion emergency aid package to address the coronavirus, the chief of the World Health Organization said yesterday that this is “a time for pulling out all the stops.”

There are coronavirus cases in countries around the world, but COVID-19 appears to be flat or on the decline in China, where the novel virus first emerged. Earlier this week, VentureBeat took a look at some ways AI is being applied to fight the COVID-19 coronavirus.

AI and big data indeed played a role in China’s response to COVID-19, according to a World Health Organization report compiled by about a dozen outside health professionals and released last month.

The assessment finds that swift action by Chinese authorities to limit travel and quarantine entire cities potentially kept hundreds of thousands of people from being infected. But many also criticized China’s measures as draconian.

It’s unclear to what extent facial recognition played a role in enforcement of public safety and COVID-19 cases in China, but a coauthor of the WHO study told Science that China is making strides on coronavirus through “good old social distancing and quarantining very effectively done because of that on-the-ground machinery at the neighborhood level facilitated by AI and big data.”

China quarantined 50 million people in places like Wuhan and used WeChat and Alipay to track people’s movement and keep infected people from traveling. It also deployed facial recognition, and thermal sensors in drones and helmets.

If quarantines are ineffective or improperly carried out, millions of people could die, according to some estimates, so this is life and death, but we can’t just throw civil liberties out the window.

Surveillance tech deployed

Aside from coronavirus coverage, the other prevailing story this week was a rush of revelations about companies peddling AI-powered surveillance technology to businesses, governments, and law enforcement agencies.

Wolfcom is selling live facial recognition body cameras to police departments, a practice that major body camera company Axon says is premature. Wolfcom has sold cameras to 1,500 law enforcement agencies.

Clearview AI made its facial recognition algorithm with 3 billion images scraped from Facebook, Google, and other parts of the web without permission. Now they’re attempting to acquire mug shots taken in the past 15 years. A data breach last week revealed its client list of more than 2,000 customers, including major businesses and law enforcement agencies.

Senator Ed Markey (D – MA) sent Clearview AI a letter this week questioning the extent of the data breach and the company’s relationships with authoritarian governments with poor track records on human rights, like Saudi Arabia.

Viral surveillance

Can virus quarantine serve as an excuse to increase the surveillance state? How should we be thinking about that as communities argue over whether Clearview AI and live facial recognition could mean the end of privacy?

I asked those questions to Brian Hofer. He’s chair of the privacy commission in Oakland, California and coauthor of legislation in a number of cities to adopt surveillance technology oversight policy and facial recognition bans.

Hofer and I spoke roughly a year ago as the U.S. Congress began to consider more AI regulation legislation and San Francisco became the first city in the U.S. to ban facial recognition. Police use of live facial recognition body cameras isn’t something you have to worry about in California, where a three-year moratorium is in place.

Hofer said mass surveillance is often presented as a solution in a crisis, and like with the passage of the Patriot Act after 9/11, he said, people can respond to crises by surrendering freedoms.

“Fear is a powerful motivator, and even if it’s just like a natural disaster, it’s not like 9/11, you still see people willing to make this sort of calculus that if it can save one life and make things a little bit better, that I’ll sacrifice my civil liberties,” Hofer said. “It’s something that really frustrates me, but I think it’s also sort of human nature that in a crisis we’re not the most clear-headed, and if there are sort of nefarious people at the same time pushing an expansion of surveillance, then it finds a receptive audience.”

The coronavirus is changing lives far beyond the spread of a global pandemic.

Productivity apps and teleconferencing software like Zoom are poised to grow in adoption as more people work from home. Chinese communities are experiencing racism. Global economies are bracing for recession, and exactly how the spread of the coronavirus will impact global supply chains, public events, travel, and other industries is still up in the air. In an age where we’re actively discussing whether a company like Clearview will mean the end of privacy, it wouldn’t be surprising if coronavirus is used as an excuse to spread mass surveillance.

This is not intended to be alarmist, but keep an eye on mission creep in this space.

The coronavirus is in over 60 countries today. It may in fact be true that, as an analyst commenting on the WHO-China study said, no other country in the world can respond to the coronavirus the way China just did, but it doesn’t mean they won’t try.

For AI coverage, send news tips to Khari Johnson and Kyle Wiggers and AI editor Seth Colaner — and be sure to subscribe to the AI Weekly newsletter and bookmark our AI Channel.

Thanks for reading,

Khari Johnson

Senior AI Staff Writer”

Why monetization and marketing need to work closer together

Traditionally, ad monetization and user acquisition have been run by discrete teams at most major game companies. Theoretically, this makes sense. The two teams have different remits and will work to fulfil different KPIs. One team will operate in the internal world of the game, while the other will focus on the outside world, bringing new users from the ‘market’ into the game. But true game growth is a loop not a funnel, and savvy game companies are gradually uniting these two areas of their business, especially as ad monetization becomes an increasingly important revenue stream.

So why are smart gaming companies merging their monetization and marketing teams?

One business point of contact with more power

For many game companies, the partners they work with for user acquisition are the same as for monetization and vice versa. By having the same contact person managing the business relationship with ad networks, game companies are empowered to leverage the activity on one side of their business to drive benefit on the other. For example a buyout deal on all U.S. impressions on the monetization side could be parlayed into extended support with creatives on the user acquisition side. If the two sides of the business aren’t managed by the same person, then connecting those dots becomes infinitely more challenging. In fact splitting the relationship can even lead to convoluted operations that ultimately result in inefficiencies.

Familiarity with ad serving for better UA

It’s not in the average user acquisition manager’s skill set to be deeply familiar with ad serving, or how each network uniquely prioritizes which ad to serve where and when. Their focus, on most channels, is on setting Return on Ad Spend (ROAS) targets, initial CPI bids, and then measuring the scale and return provided by each channel and adjusting accordingly, to maximize profit. It may be confusing why different ad networks deliver different volumes of installs, even though the CPI bid is the same.

What’s missing from their view is the in-depth understanding of how ads are prioritized in each network. Without understanding the unique ad serving logic, data science and targeting capabilities of each platform, UA managers will be unable to pinpoint exactly what can and should be optimized. Depending on if one network is strong with lookalike audiences while another has a robust solution for ROAS optimization, a UA manager familiar with ad serving can adjust their strategy dynamically per network.

A familiarity with ad serving is critical to a monetization manager’s skill set, however. Therefore when these two functions are merged or work closely enough together, the person or team responsible for user acquisition is able to leverage their familiarity with ad serving to take their campaign efficiency to the next level.

Reveal red flags and opportunities

Merging or syncing monetization and marketing teams can also serve to reveal opportunities and sometimes raise red flags. For example, in an ideal situation where monetization and marketing work together, it would follow that a game company’s biggest network for user acquisition would be the same as their biggest network for monetization.

If a UA manager is seeing the greatest scale from a particular network, then it would make sense that that network monetizes similar apps well, so they should also appear prominently in your waterfall. Conversely, if you’re buying from a channel you’re not monetizing from, it should be an immediate red flag. Either you’re missing out on potential ad revenue, or you’re buying from a channel that’s not serving ads and you’re wasting spend on fraudulent traffic.

Similarly, knowing who your biggest advertisers are on the monetization side can hint at potentially lucrative or high-performing sources for your user acquisition campaigns. If hyper casual advertisers are seeing high conversion rates on your traffic, it might follow that you would find potential new users on theirs. Or if a certain network is driving good ad monetization performance for match-3 games, it would probably be a significant UA channel across other similar apps.

Measure the full loop for maximum optimization

Finally, and most importantly, merging monetization and marketing oversight means one owner or team is responsible for measuring the entire growth loop and is in possession of the full picture.

They’ll have a deeper understanding on each user — the channel they came from, which creative brought them in, and how they engaged with the app in terms of both IAP and ad revenue monetization. With visibility into the full revenue generated by users from both IAPs and ads combined, the UA team can then make more informed bidding decisions according to their LTV modelling and apply these data insights into their ROAS optimization strategy, as well as apply better segmentation on the monetization side.

What’s more, the full loop analysis would enable the owner to better prioritize where their efforts should be spent. For example, if a game is seeing good monetization metrics but UA isn’t scaling, you need to have a clear vision and options for where and how you can improve the top of the funnel to maximize the game’s potential. Similarly, if a game has a high IPM (installs per thousand impressions) but the campaign isn’t scaling, then you need to bid higher to achieve higher eCPM which will result in higher scale and revenues. By using your top partners as benchmarking sources, you can better understand how your ARPU and IPM compares with similar apps, providing guidance on what to focus on first.

They will also be able to understand the significance of eCPM on both the monetization and marketing side, and compare the two to understand how much more potential a game has in terms of scaling UA or optimizing monetization. Kongregate’s VP Marketing & Ad Monetization has discussed how having a view on both sides of the business helps them better manage their UA activities.

The various benefits which come from closing the loop on monetization and marketing is likely behind a trend of more and more game companies merging management of these two activities. And more game companies are doing so. Executives at game companies, like Kongregate, Jam City, Pixelberry and Big Fish Games have merged management of monetization and marketing under one position. With one owner or team able to track, analyse and make decisions, gaming companies will be able to optimize the loop to constantly maximize LTV and profit in a virtuous cycle of accelerated growth.

in venturebeat.com by Yevgeny Peres, VP of growth at ironSource

How a struggling airline went soaring through the cloud

Air Malta managed to turn its business around after two decades of losses and soar with the big boys and girls in the airline industry. But how?

Air Malta is a tiny operator with 10 aircraft that had experienced two decades of annual losses. It was €10.8m in the red (£9.6m, $12.1m) in the financial year to March 2017.

“We said, this is our last chance,” explains Alan Talbot, the airline’s chief information officer.

Malta, a 17-mile long island between Sicily and North Africa with 450,000 people, relies heavily on its five million annual tourists.

But Air Malta had trouble competing with the big airlines who also shuttle tourists to Malta’s beaches and baroque buildings.

It has to supplement its income doing odd jobs for the small country, including air ambulance and postal services.

“We were in a position where there could possibly be no more Air Malta,” says Mr Talbot.

He calls the four-decade-old company’s battle to find a niche against Air France, Lufthansa, and Gulf Air “a David and Goliath story” of the air.

But the next year, the state-owned airline turned a profit of €1.2m – its first in 18 years. The number of passengers soared to two million, a rise of 11%.

And this reversal of fortune was down – in part – to clever use of technology, the company says.

Two-and-a-half years ago, Air Malta decided to redesign its computer systems around web-based APIs (Application Programming Interfaces) – publicly available ways one company can make its data available for others to use.

It’s part of a growing collaborative economy.

By working with other businesses and sharing data, you make it easier for them to sell what you offer as part of their own offerings.

This kind of collaboration isn’t new to the industry – airlines started widespread codeshares in the 1990s, when large alliances like Oneworld and Star Alliance formed.

But back then, making back-end servers talk to each other was an expensive and cumbersome business.

With APIs, this process has become fast and painless.

Ryanair, for example, started listing Air Malta flights on its website and the tech integration process took just 11 weeks

“We started getting connectivity requests from third parties who never considered us as an option,” Mr Talbot says.

“Now, instead of us chasing them, we are in the flattering position they are asking us to connect.”

API interfaces also let Air Malta connect more easily to cloud-based software handling different parts of airline operations, like flight operations, reservations, and customer management, the company says.

Other companies, like car service Addison Lee, also are moving towards more integrated, cloud-based offerings in this new API economy.

Addison Lee needed to rethink its place in a “market that gets disrupted by new entrants” like Uber, says Ian Cohen, its chief information officer.

And when it bought global chauffeur service Tristar Worldwide in 2016 in an attempt to expand its upmarket offerings, APIs made it easier to integrate their systems.

Air Malta and Addison Lee use a platform from San Francisco-based Mulesoft to connect their back-end systems to the cloud through APIs.

Amsterdam’s Schiphol Airport uses a platform from North Carolina open source developer Red Hat.

The airport started integrating APIs as part of a digital airport strategy in 2015, says spokeswoman Willemeike Koster, enabling passengers and airlines to access up-to-date information.

“We had approximately 1.5 billion API calls [the number of times external software accesses a database] in 2018, and now have more than 300 API uses. Airport data is clearly a valuable asset for many,” she says.

APIs bring down the cost of personalising offerings for a particular customer, like a flight followed by a taxi ride, says Uri Sarid, Mulesoft’s chief technology officer.

And since customers will get more personalised solutions, companies will sell more of their products, he argues.

“Once GPS is available, who’s going to look at maps?” he says.

Shifting from back-end servers to the cloud is “laying building blocks for much bigger disruptions to traditional businesses,” says Red Hat’s Mark Cheshire.

Still, a frequent mistake is for companies to say “everybody’s got an API and we should, too”, he says.

Instead, “don’t try to boil the ocean but focus on getting one API successful for a particular use case, and build up from that,” he recommends.

Companies like Air Malta and Addison Lee have been ahead of the curve in moving to a model of co-operating with other companies.

But over the next year, more businesses are “going to migrate into a world of mainstream adoption, where this is routine,” says Michael Beckley, chief technology officer at Appian, a northern Virginia cloud computing company that works with APIs.

It will be “a new omnipresent expectation of how computer systems work – they should be collaborative, transparent, and should be scalable,” he says.

But there are special challenges with APIs too, he warns.

Companies might find APIs they rely on suddenly slowing down. Maybe the designer of a data source wasn’t anticipating a big spike in demand.

While APIs are “great at exposing data, and connecting back-office systems to new ideas,” those back-office systems “may never have been designed for that workload,” he says.

So in the API economy, says Mr Beckley, businesses “should plan for success and that growth, and have an ability to swap in an alternate service, or scale-up services.”

Air Malta also boosted its fortunes by selling its summer landing rights at London’s Heathrow and Gatwick airports to Malta’s government, says Gabor Bukta, an aviation analyst in Budapest.

It will be leasing these rights back, giving it a cash boost of €33.9m – a helpful cushion as Air Malta pivots to its new business model.

Competition is increasing, though – Ryanair recently announced it will start a new low-cost airline called Malta Air.

Malta’s Tourism Minister Konrad Mizzi says the new airline will not harm Air Malta, with its different business focus on medium-haul flights, routes to key hubs like Heathrow and Frankfurt, and cargo.

Air Malta is a “small airline, but a very ambitious airline”, says Mr Talbot. Embracing the API economy seems to have put extra lift under its wings.

in bbc.com/news by Padraig BeltonTechnology of Business reporter

Why blockchain is not a solution in and of itself

It seems that individuals are beginning to develop an understanding of the importance of keeping their data secure – the GDPR compliance came into force in May, and many have been left shook from the recent Cambridge Analytica scandal involving the data of tens of millions of Facebook users being leveraged in political microtargeting campaigns.

Blockchain technology is being hailed as the saving grace that will put an end to a panopticon where every minute bit of user data is harvested and sold to corporations for profit. The mere mention of blockchain inspires visions of decentralisation, innovation and infinite potential in every facet of every industry, keeping private data away from prying eyes.

The truth, however, is that this is mostly overhyped. Blockchain technology is not a magic wand that can be waved to solve the world’s data problems. You see, for all the buzz around privacy, a key fact is often omitted – the strength of decentralised ledgers lies in their inherently public nature. The power comes from the ability for any onlooker to track the flow of funds or data from one address to another. Pseudonymity is often conflated with total privacy, and this is a dangerous parallel to draw.

We’ve come a long way from the simple exchange of value with Bitcoin. Turing-complete smart contracts allow for the building of complex applications on top of a blockchain platform. One could create a business that runs on top of Ethereum, with the caveat that the contracts and data fed into them can be dissected and analysed by anyone with an internet connection.

Is it a viable solution to prevent third-parties from gaining access to confidential information? Absolutely not. As it stands, blockchain as a standalone solution is a terrible idea for anything relying any degree of privacy – ruling out applications in finance, healthcare, and virtually every enterprise use case.

It’s not the only problem facing Ethereum (and similar offerings), either. Even working under the (fairly large) assumption that storing data in this manner was wise, there’s the issue of fees to deal with: the cost to store even a few lines of text on the blockchain is exorbitant. Remember that this requires every full node on the network to download a copy. Doing this on a large scale is a sure-fire way to drive a business into bankruptcy.

Obviously, immutability and censorship resistance are the value propositions here. Not data storage. The way forward is clearly a combination of blockchain technology with decentralised storage to maximise the efficiency of two very powerful tools.

I believe peer-to-peer storage ideally suited to these ends: like blockchain, it is decentralised by design. Instead of routing data packets through centralised parties (which can result in censorship and congestion), p2p methods allow peers to download fragments of information directly from each other (as we see in torrenting). It’s a secure alternative that can be fused with a distributed ledger to track ownership and permissions to access a given file.

Such a hybrid solution would grant developers much more flexibility in designing new decentralised applications. The cost of sharing files, from text documents to HD movies, would be non-existent. Using smart contracts, creators could monetise their content, granting access to individuals that pay a set price. Businesses could conduct their operations, harnessing the power of blockchain technology without making their sensitive information viewable to the entirety of the Ethereum network.

The Cambridge Analytica scandal made one thing painfully clear: there’s far too much data being willingly handed over to companies whose business model revolves around making a profit on it. Measures being taken by regulators are too slow to adapt to the digital age. There’s a burning need for protection assured not only by legislation, but by technological means. A decentralised authorisation protocol is exactly what’s needed at times like these – individuals retain full ownership of their data, whilst also being able to grant and revoke access as they see fit.

Blockchain is not the solution to data storage. But it’s certainly part of it. Using a suite of emerging technologies, it seems that a new iteration of the internet, characterised by self-sovereignty, may be upon us.

in blockchaintechnology-news.com by Michael Smolenski

Ethereum-Powered Insurer Nexus Is Winning Over Blockchain Skeptics

“My premise is that you can use blockchain to essentially trust people you don’t know – you trust the code.”

While that statement by Hugh Karp may sound like a standard line in crypto-land, his startup, Nexus Mutual, is actually building a product for those who don’t trust the code.

Or, at least, don’t trust it completely.

With Nexus, Karp is trying to revive mutual insurance, a model that dates back to the 17th centuryand, many argue, aligned the interests of participants better than today’s profit-maximizing insurance firms. Nexus is one of a handful of blockchain startups, at various stages of development, aiming to use the technology for this purpose.

But the first insurance product Nexus plans to offer will cover an ultra-modern type of risk: security failures of smart contracts on the ethereum blockchain.

Think of the DAO hack of 2016, in which some 3.6 million ether (valued at around $50 million at the time) was drained from the smart contract by an attacker. Or last year’s Parity Multisig Wallet attack, in which just over 150,000 ether was stolen (then worth around $30 million).

Starting early next year, Nexus will offer to insure customers against financial losses from such “unintended code usage.”

Yet Nexus itself will run as a smart contract on top of ethereum. That’s what Karp means when he talks about trusting the code. For him, blockchain is a way to overcome one of the limitations of the old mutuals while retaining their benefits.

His thesis is that users will trust the rules of a smart contract underpinned by the immutable ethereum public blockchain. This way, members who don’t know each other can trust each other, allowing the mutual to scale. Eventually, consulting with members, the plan is to explore other areas of catastrophe cover beyond crypto.

Karp stands out in the insurtech space because of his deep understanding of both the sector and the technology. He began his career as an actuary and rose to become the chief financial officer at Munich Re, one of the world’s leading reinsurers. He became fascinated by bitcoin and then ethereum relatively early, in 2014.

Stephen D. Palley, a partner in the Washington, D.C. office of the law firm Anderson Kill with extensive experience in the insurance sector, is something of a blockchain skeptic, yet was uncharacteristically bullish about Karp and Nexus.

“People who really understand both the technology and the insurance vertical are lacking,” said Palley. “I also like the Nexus idea of mutualization; it’s almost like back to the future for insurance.”

He added that Nexus “proposes something like an old-fashioned view of insurance, a community-based model, as opposed to an adversarial one.”

Back to the future

More broadly, it’s easy to see the appeal of the old-fashioned mutual insurance model that Nexus and a few similar startups want to recreate using today’s bleeding-edge tech.

Historically an important part of life and property and casualty insurance, mutuals are customer-centered, as opposed to the profit-maximizing firms that largely replaced them, and which arguably put shareholders’ interests before policyholders’ benefits.

The number of conversions from mutual to stock ownership grew steadily from 1960s onwards, with the pace of demutualization increasing significantly in the 1990s, while in Europe legislation removed some of the barriers between insurance companies and banks.

“Over the last decades, statistical advantages, network effects and efficiency gains have led to a massive concentration of power and capital in the insurance space and pushed mutual systems into a niche in most markets,” said Stephan Karpischek, co-founder and CEO of Etherisc.

Like Nexus, Etherisc wants to use blockchain to counter the long-running demutualization trend. Karpischek’s startup has already used ethereum to create parametric insurance products (in which payouts are automatically triggered in an event such as a hurricane; no need to file claims) and has explored decentralized risk pools to expand access to insurance for previously excluded populations, like small farmers in Africa

Peer-to-peer structures are more stable and less prone by design to failures like hacks, information leaks, corruption, mismanagement, or abuse of power, Karpischek argued.

The common denominator in the case of Nexus and Etherisc is the ethereum blockchain. But it’s not just ethereum; this type of innovation is also being explored on other public chains.

Singapore’s Zilliqa blockchain will soon be the home of Inmediate, a collaboration between Deloitte, the pan-Asian insurance group FWD and four yet-to-be-named phase one insurance partners.

Inmediate CEO Otbert de Jong decided to start with a small pilot group of insurers, but maintains a lofty goal.  “We indeed can bring insurance back to what it is supposed to be, which is basically taking care of each other in times of adversity, ” said de Jong.

Yet another back-to-the-future, blockchain-powered insurance model is being pursued by Layer 2 Labs. Based in New York, this early-stage startup is revisiting the risk-bearing syndicates pioneered at Edward Lloyd’s coffee house in London in the late 1600s – which eventually evolved into one of the world’s best-known insurance markets.

“What we are building is a decentralized platform for insurance actors to issue and purchase risk, akin to the early days of Lloyd’s of London,” said Jonathan Mohan, a co-founder of Layer 2 Labs.

Similar to Nexus, Layer 2 will also focus on covering blockchain-specific risks, which Mohan said is analogous to the way Lloyd’s formed a pre-legal commercial framework prior to regulation.

‘Reverse ICO’

Aside from allowing mutuals to scale trust via code, another part of blockchain’s appeal to insurtech firms like Nexus is that tokenization opens up access to more flexible capital raising.

Nexus plans to tokenize early next year, but not the typical fashion of raising capital through an initial coin offering (ICO) with the promise of building out some solution thereafter. Instead, Nexus, which in April of this year completed a £800,000 ($1.03m) seed funding round, plans to build the platform first and launch with a live smart contract protection product that is fully operational.

In the days and weeks immediately following this launch, Nexus will tokenize membership rights (in what Karp calls a “reverse ICO”) to crowdfund the risk pool.

“It’s like an ICO in some ways, but the big difference is the money goes into the pool. It is members’ money to back the cover that the mutual writes, for which they will get tokens representing membership rights,” said Karp.

To get started, Nexus is exploiting an unregulated pocket within the British insurance sector, a model called a “discretionary mutual,” where members have no contractual obligations to pay claims. Being unlicensed means Nexus can move nimbly in the otherwise highly regulated world of insurance.

Once Nexus is funded it will function as a decentralized autonomous organization (DAO) sporting a governance process driven by members who will vote on upgrades and proposals over time. Premiums will be paid either in ether or the price-stable cryptocurrency known as dai; payment of claims will be subject to member votes.

In case you were wondering how Nexus’ own risk capital can be protected against a possible smart contract security breach, Karp said that in addition to all the usual security testing and auditing, it will also launch with an emergency pause button.

This will initially be controlled by the Nexus board (company founders), but any member can replace an existing board member via a proposal (provided it was voted in by members) that can’t be stopped by the current board.

And just as large insurance firms invest their capital in assets such as bonds and commercial mortgages, the Nexus DAO will put the risk pool’s money to work – though it will choose more contemporary flavors of investment.

“We can invest in any ERC-20 token,” Karp said, referring to assets created on ethereum. Nexus also has “automated all the trades using the 0x protocol,” a decentralized exchange platform.

“The membership base can even update the list of assets to invest in and the pool automatically rebalances. And when ethereum goes to proof of stake we plan to ‘invest’ a large chunk of the capital pool in staking,” he added, speaking to a plan in the works to change the way the world’s second-largest blockchain is validated.

In the conservative world of insurance, the most innovation you might expect would be private blockchain deployments. But public chain insurtech proponents like Karp have no doubt about where the real transformative power lies.

Karp concluded,

“I think private chains will have a lot of benefit to insurance companies especially connecting them up – but public chains are where my energy and fascination lies.”

in coindesk.com by Ian Allison

Regulators Plan ‘Global Sandbox’ for Fintech Including Blockchain

A number of financial regulators from across the globe are forming a new alliance to facilitate the growth of financial technologies such as blockchain and distributed ledger technology (DLT).

The U.K.’s Financial Conduct Authority (FCA) announced the Global Financial Innovation Network (GFIN) initiative on Tuesday, alongside 11 other member regulators from jurisdictions such as Hong Kong, the U.S., Australia and Abu Dhabi.

GFIN will primarily serve as a network of regulators to discuss policies regarding financial technologies, the statement indicates, as well as to develop a “global sandbox” that will offer firms “an environment in which to trial cross-border solutions.”

While the paper offers few details on the plan, the FCA said the new alliance follows a consultation effort in February on the idea of an international sandbox.

Among the 50 responses it received at the time, the FCA said one key theme focused on how regulators around the world can work together to pilot cross-border payments based on DLT and how to regulate initial coin offerings, which often extend beyond borders.

Notably, several members of GFIN, including the Monetary Authority of Singapore, Hong Kong Monetary Authority and Abu Dhabi Global Market, are already working on cross-border payment corridors built with DLT.

Along with the announcement, the group jointly published a consultation paper seeking public feedback on the GFIN initiative by Oct. 14.

Just last month, the FCA also granted 11 blockchain crypto-related startups to the fourth cohort of its sandbox program – almost 40 percent of the 29 firms accepted – which can now trial their products in a regulated environment.

in coindesk.com by Wolfie Zhao

Five Questions to Ask Before Investing in a Blockchain Company

As interest in blockchain continues to gain traction, the importance of investor education is at an all-time high. With hundreds of new projects popping up every week, it may be hard to separate the wheat from the chaff. Not every project can be or will be successful. To further complicate matters, some come with a cryptocurrency token used to raise funds.

How do you protect yourself prior to investing? Educate, educate, educate. I always advocate for researching the project’s team, the industry they are trying to disrupt, and reading the whitepaper carefully. Learn the team, ideas are great, but execution wins the day. But just because something looks good on paper, it doesn’t mean it will live up to the hype.

Remember that anytime someone makes money on a trade, someone else will be losing it. At the end of the day, no one has a crystal ball to predict successful projects. But, there are a few fundamental questions you need to ask (and find the answer to) prior to investing your hard-earned money. Let’s look at how you can identify value like the professionals:

Does the blockchain have an earnable token?

Miners or validators are the lifeblood of nearly every blockchain. They write the transactions and thus control the nodes. In return for this work, they need to be incentivized and rewarded. Think of miners as accountants – and accountants don’t work for free.

If the project you’re researching does not have an earnable token, ask yourself why miners would want to invest their time (or who will? An industry consortium?) and computing power to keep the blockchain nodes running smoothly. If the only way someone can possess the token is through exchanges and airdrops, ask, who is doing the work? Without validators, widespread adoption and use of the technology will likely fail – and that’s where the real value is.

How will data get into the blockchain?

If the project is trying to disrupt an industry with proven legacy systems, how will businesses migrate their data onto the blockchain? Different blockchains will have different block sizes, so you need to think of how much data will fit into each block, what data will be pertinent to store in the blockchain, and how businesses will transfer the data into the blockchain. Is storage of all the data required or just a pointer to an off-chain data store?

It may sound boring, but just think of the massive amounts of data migration that happened during the Y2K scare. A few savvy people made a lot of money doing it, and this time won’t be different.

Does this require a consortium to agree to its use?

This is unavoidable, but something you always need to consider prior to investing. If a project aims to disrupt an industry, you need to think of all the companies within the given industry that would also need to adopt the technology and standards.

For example, a few projects aim to disrupt the supply chain industry. But within the supply chain, there are many companies that would need to fully adopt the technology for the blockchain to have an impact – suppliers, manufacturers, shippers, retailers…the list goes on and on.

Disrupting established industries takes time. It’s just a matter of how long, and how many players need to give their buy-in before the blockchain’s vision comes to fruition.

How will the data be analyzed and used?

Now that we have all this great data on the blockchain, what’s next? Think of how the data will be used and what benefits it will provide businesses. Simply storing data on a blockchain and calling it a day is not going to drive value for businesses or adoption. So, consider the specific benefits a company or industry will gain by storing their data on a blockchain.

One interesting use case is seeing who is accessing the data and how.

Let’s take airports to illustrate this. Say every national airport in the US adopted a specific blockchain to store flyers’ data. You could then analyze the total number of visitors to each airport, but also what travelers are doing at each airport, time spent at each location, and much more. This level of transparency is completely unique to blockchain technology – it simply wasn’t possible before.

Does the blockchain perform at the speed of business?

At its core, blockchain is the “Internet of Transactions.” Transactions per second, or TPS, is crucial to long-term use and adoption of blockchain technology – both by enterprises and by consumers.

One size does not fit all. Some blockchains are better for financial transactions than processing transactions.

If a network validates data too slowly, businesses will not be able to use it, regardless of other benefits it provides. For example, the recent Crypto Kitties craze. Ethereum was a victim of its own success – with so many people playing Crypto Kitties, the network was bogged down. Transaction times and cost drastically increased simply because lots of people were using a network, that by design, is single threaded. Think of it as a one-lane highway

Now think of major international corporations and how many people would need to be using a blockchain simultaneously. If the network won’t be able to handle high traffic and usage volumes, it is not going to be adopted by major companies who need instant access to their data.

Once you’re able to confidently understand and answer these questions prior to investing you’ll not only be able to identify high-value projects, you’ll also have a better understanding of the blockchain ecosystem. The true value of blockchain won’t come from flashy spokespeople, a well-thought-out development roadmap, or a never-ending slew of announcements. It will all come down to execution and adoption.

in ccn.com

About the author: Lawrence Lerner is the CEO of Pithia, Inc., a venture capital company for The RChain Cooperative. Pithia is developing the blockchain 3.0 ecosystem and driving enterprise adoption through strategic investments in identity, storage, supply chain, payment, and governance solutions.

Opinion | How Blockchain Could Fix Facebook’s Fake News Problem

After the 2016 United States presidential election, Facebook started to receive flak for its possible role in Donald Trump’s victory. The usage of Facebook profiles for data analysis by Cambridge Analytica, the immense number of fake news articles on the site and the impact of confirmation bubbles meant that Facebook’s platform was being used to drastically misinform users about the world around them. Though Facebook has recently cracked down with their fake news problem, they still face many roadblocks.

Since Facebook operates as the largest community in the world, the company has an obligation to ensure information getting traction on their platform is accurate. With Mark Zuckerberg being called before Congress and the company coming under fire from legislators, Facebook needs to come up with some technical solutions that can help mitigate their fake news dilemma.

Blockchain technology offers Facebook a variety of ways to overcome information inaccuracy and tampering. Whether they develop a blockchain network to track individual node activity and verify information or integrate blockchain into incentive systems, the tech can help Facebook get back on the right track.

Identity Verification

One of the largest problems Facebook has been seeing is the rise of fake accounts and the usage of these accounts to do mass promotion. These accounts have been tied to the spread of fake news links through Facebook groups. While Facebook has already taken measures to utilize machine learning and artificial intelligence to spot and shut down fake accounts, integrating blockchain can boost these efforts.

With a blockchain network tracking identities on Facebook, individuals can have transparent assurance that their identity is not being stolen. Furthermore, Facebook will be better able to track and compare the actions of various accounts. If one bad actor is in charge of a variety of accounts, blockchain can spot and stop this activity faster than machine learning can.

Rewarding Content Creators

Steem launched as a blockchain-based social media network that rewarded content creators with financial incentives. This platform works similarly to Reddit and gives posters tokens based on the number of up and down votes they receive. Since posters are financially incentivized to minimize down votes and are rewarded for quality content, the social media network is able to sort out bad actors without external intervention.

Facebook could integrate a content-creation incentive system like this, where the highest quality content creators (influencers) are offered financial compensation for driving a large amount of positive engagement. On the flip side, the system would also track and purge content creators who cause the most problems and are frequently reported by the community. Overall, the system should help get more people adding quality content and reduce the amount of fake news and low-quality content.

Tracking Journalist Bias

RedPen is a project that will utilize blockchain technology to track journalists’ reputations and communicate that information to readers. The premise is that blockchain is able to analyze a person’s reputation and bias based on a set of data. The service can then offer insights about the reporter based on any particular bias they have. For instance, if a tech writer has written pro-Apple pieces in the past, that information will be communicated in his blurb when he does a review of the latest iPhone.

Facebook could utilize a similar approach of understanding what people are saying off of Facebook and treating that as a filter. For instance, if someone has a history of posting malicious or false information on a personal blog, that information should be communicated alongside anything they post on Facebook.

Using Crowd Verification

Trive is a social science global consensus engine that researches and clarifies facts and empowers users through cryptocurrency to discover truth through wisdom of the crowd. Combined with game theory, Trive will enable people around the world to research, verify and score the truth of almost any piece of information.

Crowdsourced content verification acts as a normal spam filter on Facebook currently. It makes sense that sepcialize providers would be beneficial in helping monitor content as well as create an ecosystem that rewards people’s time and effort.

Analyzing Publication Bias

Finally, Facebook can work with major publication and content hubs to track the consumer sentiment on their articles and on Facebook to identify the quality of their publication’s content and any potential biases. Blockchain has the ability to crowdsource data and incentivize people to adjust their actions.

With blockchain, Facebook stands a chance of combating fake news and helping create a more helpful environment for their users. There are a number of different approaches they can implement, each offering a different set of product functionality. At least one of these solutions should be used to help track and stop bad actors in the Facebook network.

in ccn.com

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

GDPR Could Hinder Blockchain Innovation, Warns EU Body

The EU Blockchain Observatory and Forum has warned that the General Data Protection Regulation law that went into effect a little over two months ago could hinder innovation in the blockchain space.

According to the European blockchain body, this is because of the lack of legal clarity between blockchain technology and the GDPR law, whose aim is to protect individual data rights as well as facilitate the free movement of personal data in the single market.

“As long as the legal framework around personal data and blockchain remains unclear, entrepreneurs and those designing and building blockchain-based platforms and applications in Europe face massive uncertainty. That can put a brake on innovation,” notes the report titled ‘Blockchain Innovation in Europe’.

Individual Data Protection Rights

Per the report, one of the points of dissension that are likely to emerge arise out of the fact that GDPR empowers individuals to have their data amended in order to maintain accuracy. In some cases the GDPR also allows individuals to have this data deleted once it is no longer required. Blockchains, on the other hand, are immutable and data can only be added not deleted.

Under the GDPR the key to ensuring that individual data rights are protected is having a central body that can be held accountable when things go wrong. But in the case of open, permissionless blockchain where the information is processed by all the network’s full nodes, a centralized data controller does not exist thus opening another point of conflict.

Additionally, it is stipulated in the GDPR law that data can only be transferred to third parties based outside the European Unionon condition that the data will be held in a jurisdiction which offers data protection levels that are equivalent to those in the single market. With open permissionless blockchains, however, it is impossible to select where the data ends up since a full copy of the database is replicated on all the full nodes regardless of their geographical location.

Full Replication of Data Set vs Selective Use

The report notes that these conflicts arise due to the fact that GDPR law came into being prior to blockchain technologybecoming a buzzword.

“The law was conceived and written before blockchain technology was widely known, and so was fashioned with an implicit assumption that a database is a centralized mechanism for collecting, storing and processing data,” the report authored by Tom Lyons says.

Optimistically, though, the report notes that blockchain is still in its infancy and could evolve to a point where it becomes a tool which helps achieve the ultimate goal of the GDPR – data sovereignty.

“Blockchain could in theory make it easier for platforms and applications to have this compliance ‘baked in’ to the code, supporting data protection by design,” observes the report.

in ccn.com

West Virginia to Offer Blockchain Voting for This Year’s Midterm Elections

West Virginia is rolling out a blockchain based mobile voting app so American troops overseas can cast their votes in the upcoming elections, CNN reports.

The state had previously used the mobile voting platform, called Voatz app, in a pilot for deployed troops and their dependents in two counties for the state’s primary elections. Secretary of State Mac Warner at the time said the plan was to extend the pilot to the state’s 55 counties for the midterms in November once the pilot was successful.

According to Warner’s office, “four audits of various components of the tool, including its cloud and blockchain infrastructure, revealed no problems.” The rollout will limit the use of the Voatz app to troops serving abroad.

“There is nobody that deserves the right to vote any more than the guys that are out there, and the women that are out there, putting their lives on the line for us,” Warner added.

He also added that the new app wasn’t a call to replace traditional balloting and insisted that troops would still be able to “cast paper ballots” at the election.

Michael L. Queen, Warner’s deputy chief of staff, says the final decisions will be left to individual counties on whether they want to use the app for the election.

The app, which was created by Boston based startup Voatz, matches a voter’s selfie video to their government-issued ID to verify users. Once approved, voters will be able to cast their votes, which are then recorded on the blockchain, ensuring the information is encrypted securely.

While it remains to see how well the adoption will play out in the counties, the decision by the state has been met by some dissenting voices.

Joseph Lorenzo Hall, the chief technologist at the Center for Democracy and Technology, told the network:

“It’s internet voting on people’s horribly secured devices, over our horrible networks, to servers that are very difficult to secure without a physical paper record of the vote.”

in ccn.com