Some great articles I came across today:
Vinay Gupta offers us a long, thoughtful presentation on the current state of databases, the innovation of bitcoin, and the potential of ethereum as a smart contracts platform.
“Although in theory information could just flow from one database to another with your permission, in practice the technical costs of connecting databases are huge, and your computer doesn’t store your data so it can do all this work for you. Instead it’s just something you fill in forms on. Why are we under-utilizing all this potential so badly?”
He highlights the flaws in the two main schema in use today: the diverse peers model in which data is repackaged each time it needs to move (error-prone), and the hub and spoke method with a central, trusted authority (which produces a natural monopoly). He eloquently points out that the magnificence of the blockchain concept is that it breaks 40 years of struggling to reconcile databases, of often manually forcing cross-silo communication (by reformatting or even re-inputting).
“Each enterprise builds their computer system in their own image, and these images disagree about what is vital and what is incidental, and truth does not flow between them easily.”
It’s a long article, but worth poring over slowly, for the density of the observations.
“I am excited precisely because we do not know what we have created, and more importantly, what you and your friends will create with it. My belief is that terms like “Bitcoin 2.0” and “Web 3.0” will be inadequate — it will be a new thing, with new ideas and new culture embedded in a new software platform. Each new medium changes the message: blogging brought long form writing back, and then twitter created an environment where brevity was not only the soul of wit, but by necessity its body also. Now we can represent simple agreements as free speech, as publication of an idea, and who knows where this leads.”
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Gideon Greenspan goes deep on the immutability issue, and points out that no blockchain – not even bitcoin – is completely immutable.
“Nonetheless, the mere possibility of this form of interference puts the cryptocurrency immutability doctrine in its place. The bitcoin blockchain and its ilk are not immutable in any perfect or absolute sense. Rather, they are immutable so long as nobody big enough and rich enough decides to destroy them.”
He defends Accenture’s idea of a mutable blockchain as making sense in certain instances. He claims that those alleging that a blockchain has to be immutable are not taking into account the nuances inherent in some use cases and blockchain structures. While he is not arguing that it should be easy to rewrite information stored on a blockchain, nor should we rule out that on occasion, being able to do so could save a lot of hassle. And no, it would not lose its “blockchainness”.
“…why bother with [chameleon hashes (Accenture’s trick to remove/replace data)]? The answer is: performance optimization, because chameleon hashes allow old blocks to be substituted in a chain far more efficiently than before. Imagine that we need to remove a transaction from the start of a blockchain that has been running for 5 years. Perhaps this is due to the European Union’s right to be forgotten legislation, which allows individuals to have their personal data removed from companies’ records.”
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I thoroughly recommend this mindblowing presentation by Andreessen Horowitz’s Connie Chan on the digital culture (including payments) in China.
She explains that China is leapfrogging credit cards, moving directly from cash to digital payments. With over 656 million smartphone users, it’s not hard to see why. Many establishments offer discounts for digital payments through Alipay or WeChat – if you pay online, you get drawn into the community. The business can send you coupons or content, it can even geo-target you. Even small food trucks can accept electronic payments without needing to invest in expensive PoS gadgets or special accounts.
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Institutional Investor explains why a Universal Basic Income (UBI) would be good for investment managers. Apart from the systemic boost to sovereign wealth funds (needed to generate the income to distribute), UBI would foist onto individuals the “requirement” to plan for their pensions and healthcare. Throw into the mix an enhanced appetite for risk (given the broader spread of a safety net – I don’t really buy this one), and you have a greater demand for investment funds.
One thing we can be sure of: with acclaimed economists across the spectrum disagreeing on the consequences and eventual outcome, no-one really knows what the effects will be. It is telling that the only national referendum on the subject so far, in Switzerland last year, produced a sound rejection of the UBI concept.
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Glass sculptures have always fascinated me – perhaps for their transparency-that-isn’t-quite, and the smoothness of the shapes. This has to be one of the quirkiest and most mesmerising ones I’ve seen in ages: