Daily Bits May 14th, 2017

On Thursday I had the honour of attending a session in the European Parliament on blockchain regulation. I won’t go into more detail here, but CoinDesk published my (very brief) summary of the event.


I will say that it was inspiring to see such an influential governing body take an innovation-first approach.

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China’s infrastructure plan: will it provide the base for strong economic growth (possibly displacing the chaotic US as global economic superpower)? Or will it tip China’s debt over the edge?

A huge gamble, but one that it seems it has to take.

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Interesting insight into why low-income people prefer check-cashing companies to banks. Cost, transparency and service. Hmmm, I wonder how else they could get those advantages, without actually having to go to the outlet? Would they want to even if they could? Maybe the human contact is part of the appeal.

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This is intriguing: Palestine is contemplating a blockchain-based currency. It sounds quite official, but it could just be another central bank jumping on the bandwagon – “contemplating” is a long way from implementing. And while the use case is there and the advantages are apparent, the level of coordination needed to execute will be tough in an economy with fractured infrastructure.

What makes this situation unusual is that Palestine is an implicitly recognized state. In other words, it’s sort of sovereign, but not really. Only 70% of the members of the United Nations have recognized it as a state. That is a majority, but it’s… complicated.

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Recommended reading: A Man Called Ove. (The book – I haven’t seen the movie.)

a man called ove

Funny, emotional, uplifting, sad and happy. And beautifully written. We all know someone like Ove. This is a book that changes the way you see people.

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According to an article in Wired, the internet dumps us in silos of like-minded people much less than we think.

I’m not convinced, but it is an interesting take that points to a more inclusive future. While I hope it’s right, I think it is focusing on a small, relatively enlightened (the word “relatively” is important here) subset.

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Captivating (via Colossal):

by Greg Klassen, via Colossal
by Greg Klassen, via Colossal

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I will probably be quiet over the next few days – I’m fighting an awful cold and have to get better before heading off to New York next week for Consensus. Have to.

I’m pulling out the big guns, taking garlic pills, vitamin C, Echinacea and over-the-counter cold remedies. I’m inhaling eucalyptus vapour. And I’m sipping the most vile infusion of garlic, thyme and rosemary – it tastes so awful it has to be good for me.

So, I shall crawl into bed and continue watching the extraordinary Korean series Man x Man on Netflix. I’m thoroughly confused as to the plot, but it is engrossing – I keep hoping all will become clear in the next episode.

Daily Bits May 10th, 2017

I’ve been looking into blockchain regulation, and came across this excellent analysis of some of the main issues, by Javier Sebastián of BBVA.

Here’s a good summary.

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So, ethereum’s price is up 900% so far this year. That’s staggering. As Alyssa Hertig at CoinDesk points out, it’s also not necessarily good for the network, as it could push up the price of using it.

“Gas”, what you need to power transactions, is supposedly not linked to the ether price, but it seems that’s not working…

Many other ICOs could end up in the same position. Anyone know of other situations where similar economics play out?

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Did you know that the lawnmower kicked off the modern sports industry? According to an FT review, the authors of a new book called “When Machines Do Everything” use that anecdote to illustrate that we just don’t know what the effects of robotization will be. We worry about the loss of jobs, assuming that no new industries will emerge to mop up the surplus.

“The second [point] is that in many industries the real winners of the digital revolution are likely to be the incumbents, who adapt fast enough, rather than the insurgents, who are trying to reinvent the world. Those companies that can figure out how to leverage their deep industry knowledge with the power of machines will bring about “the revenge of the 100-year firm”.”

I take issue with the title of the book. I haven’t read it yet, but “everything”???? C’mon now.

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This is excellent, in a beautifully pedantic way:

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I’m in Brussels tomorrow for a blockchain event at the European Parliament, so the next post will probably be on Saturday… Until then!

Daily Bits May 8th, 2017

The Guardian carries a mind-blowing examination of human motivations, by Yuval Noah Harari (author of Sapiens, definitely worth reading). As usual, his writing is packed with tangential observations that change the way you see things.

For instance, virtual reality has been a part of our lives for a very long time:

“The idea of finding meaning in life by playing virtual reality games is of course common not just to religions, but also to secular ideologies and lifestyles. Consumerism too is a virtual reality game. You gain points by acquiring new cars, buying expensive brands, and taking vacations abroad, and if you have more points than everybody else, you tell yourself you won the game.”

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Wired published another eye-opening article in which Kevin Kelly shows us that we do not really know what “intelligence” means. And that, almost certainly, there is not just one type. So, predictions of the impact of “artificial intelligence” are most likely based on false assumptions.

“When we invented artificial flying we were inspired by biological modes of flying, primarily flapping wings. But the flying we invented — propellers bolted to a wide fixed wing — was a new mode of flying unknown in our biological world. It is alien flying. Similarly, we will invent whole new modes of thinking that do not exist in nature. In many cases they will be new, narrow, “small,” specific modes for specific jobs — perhaps a type of reasoning only useful in statistics and probability.”

Yet in the article, Kevin also makes some assumptions. For instance:

“You cannot optimize every dimension. You can only have tradeoffs.”

How can he be so sure? (He does acknowledge that he might be wrong – a sure sign of intelligence.)

Any thinking about intelligence, artificial or not, has to be accepted as conjecture – because we just don’t know. We don’t understand why we think, let alone how. As science progresses we will know more, but I doubt we’ll ever fully understand it, or even be able to measure it.

I find that strangely comforting.

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My article on CoinDesk this week, on the possible implementation of blockchain technology in Kenya’s M-Akiba bond platform (which I wrote about here). For the first time, the government issued an infrastructure bond aimed at retail investors – it could only be bought via the mobile phone M-Pesa app (which over half the population has downloaded).

Could Kenya’s bond program be the catalyst for getting blockchain into the hands of the man on the street?

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This is mind-boggling: the Guggenheim Museum is now sharing over 200 art books, for free, through the Internet Archive. To browse through. At any time. I know what I’m doing this weekend… (Via Colossal.)

via Colossal
via Colossal


Daily Bits May 7th, 2017

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:

Dave Chihuly - via MyModernMet
Dave Chihuly – via MyModernMet

Daily Bits May 2nd, 2017

My article on CoinDesk this week on a surge in central bank interest in the blockchain (the second and third paragraphs are not mine, and I don’t like them much, but, whatever…)

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It’s been a good week for humanitarian applications of blockchain technology. CoinDesk reported last week on a pilot developed by the World Food Programme to distribute aid to refugees in Jordan using ethereum and biometric identification. Yesterday CoinDesk informed us that the launch was successful.

Whether the pilot ends up scaling or not, it’s a big step forward.

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A few weeks ago, I wrote about a bond issuance in Kenya… via mobile phones. The World Bank has taken an interest, and wants to provide follow-up research.

The idea, I imagine, is to investigate how this can be replicated in other regions. Not only would it broaden the base for public financing, it also could increase the range of investment opportunities for a growing middle class (those not normally privy to bond issuances), and even for those who aren’t included in the traditional financial system (such as, those without a bank account).

The ramifications for the nature of public financing, and for retail investors, could be profound.

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This article by Annie Lowrey of The Atlantic on “Late Capitalism” is excellent:

““Late capitalism,” in its current usage, is a catchall phrase for the indignities and absurdities of our contemporary economy, with its yawning inequality and super-powered corporations and shrinking middle class.”

Reading this is enough to fill you with despair over the hedonism…

“Over time, the semantics of the phrase shifted a bit. “Late capitalism” became a catchall for incidents that capture the tragicomic inanity and inequity of contemporary capitalism. Nordstrom selling jeans with fake mud on them for $425. Prisoners’ phone calls costing $14 a minute. Starbucks forcing baristas to write “Come Together” on cups due to the fiscal-cliff showdown.”

… and hope for the philosophical progression…

“Finally, “late capitalism” gestures to the potential for revolution, whether because the robots end up taking all the jobs or because the proletariat finally rejects all this nonsense. A “late” period always comes at the end of something, after all.”

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This video left me awe-struck at the beauty of our planet, the immensity of the galaxy and the majesty of air travel…

Shot by pilot and photographer Sales Wick as he flew from Zurich to Sao Paulo, it shows his love for what he does. And it (almost) makes me want to get on a plane, right now…

Via Colossal.

Daily Bits April 29, 2017

That Teen Vogue is producing such thought-provoking political reporting is… well, in teen language, totally awesome. Let’s get the next generation asking questions.

“Any person who has stayed informed since November 9 knows the country is in total disarray. Distrust in media and toxic partisanship have allowed feelings to outweigh facts in the marketplace of ideas. Trump isn’t solely responsible for creating this situation, though he’s excelled in exploiting it beyond repair. Through a brutal combination of gaslighting, whataboutism, and blatant lies, this administration has exacerbated the national divide, undermining journalism as a check on the power of government by treating politics as two teams battling it out in a zero-sum game.”

My fervent hope is that this effort (hats off to Lauren Duca) will affect other media aimed at the young as well. It’s not the political stance of the magazine that I applaud (although I do), it’s the idea of provoking a reasoned opinion.

“Zooming out allows the daily shocks to take shape. In these first 100 days, Trump has proven to be a moral vacuum undefined by ideological or ethical principles. There is new evidence of this with each news cycle, but the outrage machine has long been at capacity. Now, even the worst possible scandals are met with resigned exasperation. And when there are multiple emergencies every week, emergencies start to seem ordinary.”

Well-written pieces, no dumbing down or condescension, not particularly subtle calls-to-arms. Lauren finishes the article with a list of actions that interested teens can take. The fabulous takeaway from that is that teens learn that they can do something about the state of the world. That their voice matters, and that they need to think about the future they want. Teen media, at the forefront of political journalism? Brilliant.

“It’s crucial we gain clarity from this manufactured benchmark, and the way it has changed us. The New York Times declared Trump’s 100 days “the worst on record.” The New Yorker called him “democracy’s most reckless caretaker.” Perhaps the most condemning diagnosis of all is simply that perpetual chaos has become the standard. There are no alarms left to sound.”

The female teen in my house is both enthralled and incensed. Just how it should be.

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I’m not sure why I find this a bit disturbing…  The void, perhaps?

via My Modern Met
via My Modern Met

The blackest paint in the world reflects no light whatsoever – so, none of the relative shadows that make 3D things look 3D. Freaky.

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The Economist took a look at the recent ICO hype, pronouncing it a “bubble”, but a potentially productive one…

“Some liken the ICO craze to the South Sea bubble in the early 18th century in Britain, when promoters raised funds for companies promising the “transmutation of quicksilver into a malleable fine metal” or a “wheel for perpetual motion”. Prices soon fell, in particular after Parliament in 1720 passed the “Bubble Act” to rein in “undertakings of great advantage”. But the sorry episode was a step toward some rather useful innovations: the modern joint-stock company, for example.”

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So philosophers can actually make a decent living now? The return to “fundamentals” is interesting. And, about time…

“Philosophers arrive on the scene at the moment when bullshit can no longer be tolerated,” says Taggart. “We articulate that bullshit and stop it from happening. And there’s just a whole lot of bullshit in business today.” He cites the rise of growth hackers, programming “ninjas,” and thought leaders whose job identities are invented or incoherent.

Daily Bits April 27th, 2017

(So much for doing this daily… Lots to catch up on.)

Some great articles from the past few days that deserve attention:

An excellent comment from Patrick Murck in the Harvard Business Review looks at the concept of blockchain governance, and how it cannot be “added on” later – it needs to be part of the protocol.

“The blockchain is truly an innovative approach to governance for networks and machines. But we must resist the temptation to anthropomorphize code and misapply machine governance to social systems. Code is law for machines, law is code for people.”

I really liked his description of the ethereum hard fork: “akin to burning down the house to roast the pig”.

The “trust” part of governance is removed from the human part of the equation and embedded in the code:

“The power of blockchain technology is that it can algorithmically enforce private agreements and community principles at a global scale by shifting the cost of trust and coordination to the network. This is what allows blockchains to create new markets where they couldn’t exist before, whether for political or for economic reasons. To do this, we have to be able to trust the blockchain, and to trust that no one controls it.”

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The New York Times reported that bank lending in the US is stalling, largely due to lower demand for debt (as post-election optimism gives way to concern).

As bank quarterly results were released, we saw that Wells Fargo’s loans were up only 1% yoy, while Citigroup’s were up 2%.

“The results followed recent signs that lending has been slowing, and in some cases declining more broadly in the banking industry. Data from the Federal Reserve showed that lending in February was flat, while lending to manufacturers and energy companies was in decline, after many months of growth.”

Combine that with the resurgence of talks about Glass-Steagall, and banks must be feeling nervous about their bottom line.

Cue: even more fervent activity in blockchain testing.

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There has been a lot of exciting news on CoinDesk this week, which I’ll get to this weekend – meanwhile, this caught my eye:

Swift revealed more details of its blockchain test aimed at streamlining the nostro-vostro system, in which correspondent banks hold balances in local currencies on behalf of international banks. It makes cross-border payments possible, but at the cost of leaving money idle. And settlement time can be as much as weeks for complex transactions.

The proof of concept will be built on Hyperledger’s Fabric codebase, to leverage the existing GPI platform. On top of that the developers will layer smart contracts that could help to automate the transfer process.

Given that Swift moves daily almost 30 million payments messages, and given that it serves almost 11,000 financial institutions, the impact could be huge. Intriguingly exciting.

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Getting philosophical: I’ve always loved the Japanese art of kintsugi, making broken things that have been fixed even more beautiful than they were whole.

Now, if we can apply that to life – the bits of us that break end up making us more appealing….

via MyModernMet
Photo credit: June Child, via MyModernMet

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This is fascinating: a digital book that you can pass on to someone else only after you have changed it a bit. On each page, you have to take out two words and add one.

The idea is that after about 20 shares, it becomes unreadable.

In a curious twist, the changes are saved and tracked on a blockchain. I’m not sure which one.

It’s easy to say “but what’s the point?”… You could, I suppose, say that about most forms of art.

So, is this art? Why wouldn’t it be?


Daily Bits April 19th, 2017

CoinDesk took a look at land titling on the blockchain – while chaotic property registries in some developing economies (and the economic risk they pose) are a concern, I didn’t realize it was even a problem in the US!

I also wasn’t aware that land registries are increasingly being privatized… Interesting. Will have to think a bit more about this.

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MIT Technology Review summed up Emin Gün Sirer’s talk at their Business of Blockchain conference, in which he urged caution when dealing with code. And, of course, with hype:

“Gün Sirer said, however, that the hype surrounding blockchain technologies was sometimes running ahead of the reality. He noted that some of the ideas currently receiving millions of dollars in funding seem like mediocre academic research projects.”

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Quartz published a refreshing article in defense of grumpiness at work – why pretend? (I posit that it depends on the job. If your sector lets you work in isolation, such as journalism or research, fine. But if you need to be part of a team, grumpiness does not help.)

Too much cheeriness is, to be fair, downright annoying. Being curt is fine. Being obnoxious and rude, not so much.

This stood out:

“In 2017, there’s no reason for us to grin and bear it. For one thing, researchers from Munich’s Technische Universitaet have found that women were less likely to be promoted to management positions if they appeared too cheerful.”

Seriously??? That’s enough to make me stop being cheerful, and not because I want a management position (been there, done that). Because of the stereotyping.

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Made me chuckle:

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The Spanish press reported yesterday on the government’s response to a question about their state of readiness in the eventuality of a zombie apocalypse.

It turns out that the government doesn’t have a plan.

Their justification is that they believe that, should such an eventually happen, there isn’t much they could do.

How very comforting.

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This has to be one of the most fun designs for pasta packaging out there:

Pasta Nikita Packaging by Nikita Konkin, via Colossal
Pasta Nikita Packaging by Nikita Konkin, via Colossal

Daily Bits April 18th, 2017

My article on CoinDesk this week: Bullion on the Blockchain: A New Gold Standard?

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David Birch digs into the hypothetical mechanism of Central Bank Digital Currency, positing that it’s most likely to manifest as a “connector”:

“It is entirely possible that cryptocurrency will come to exist as a settlement money that connects other different monies (although my suspicion is that these will be community-based more than simply bank-based). But is this a role for Bitcoin?”

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Tearsheet dives into some recent surveys that highlight some disconcerting blockchain trends.

  • Only one in four companies in global finance is familiar with the technology.
  • Less than 20% of large financial firms have made blockchain investment a priority, while 30% are investing heavily in AI.
  • On the other hand, 90% of payments companies are planning to adopt it by 2020.
  • And consortia? Opinion is divided on whether they are a help or a hindrance.

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Bloomberg Gadfly took at look at ICOs and the relative threats they pose for Wall Street (not so much) and the VC industry (more).

“If there is a silver lining in ICOs, it’s unlikely to be its dream of rebuilding the financial world on open-source technology. It’s more the hope that tech evangelists preaching digital disruption might have to face a bit of disruption themselves.”

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And now for some colour: If you happen to have some spirulina powder in the back of your kitchen cupboard (of course you do), you can make “mermaid toast”.

image via Vogue
image via Vogue

Add a few other ready-to-hand ingredients such as turmeric root and chlorophyll drops, and you can upgrade to “unicorn toast”. The edible gold leaf is a nice touch that rounds out the effect.

image via Vogue
image via Vogue

(Yes, I am being tongue-in-cheek – although I won’t deny they’re very pretty toasts! Via Vogue.)

Daily Bits April 15th, 2017

Last week CoinDesk reported on a new supply chain platform developed by IBM, and supply chain management company Hejia, for the pharmaceutical industry. It seems to be focusing on the finance rather than the logistical side, in that it aims to accelerate the country’s underdeveloped credit evaluation system, which makes it hard for suppliers to raise short-term working capital.

Two things stand out:

  • IBM has developed a vertical solution for a specific industry. It’s easy to lose sight of the vast scope of ‘supply chain management’ and assume that all processes are the same. Obviously, they’re not, and the launch of projects targeted at a certain sector underlines that. The sector-by-sector approach is not as ‘granular’ as it seems – the adaptations demonstrate the flexibility of the underlying technology, which is shared with many other projects (in this case, as with most IBM projects, it’s built on Hyperledger’s Fabric).
  • IBM’s representative clarified that the tech giant wasn’t concentrating on China, in spite of a rash of recent announcements of projects aimed at that market. According to CoinDesk, Ramesh Gopinath, vice president of Blockchain Solutions at IBM, said: “I wouldn’t calculate this as ‘OK, we have a concerted effort to do something in China’.” It’s curious that the firm felt the need to distance itself from that perception, since I can’t see what harm it does. IBM is obviously a global organization, so I doubt that anyone would think it’s “giving up” on other areas. And, there is so much going on in China at the moment in terms of technological development (especially applied to finance) that becoming known as an expert in that area can only be a good thing. To be fair, I imagine that Gopinath wants to make it clear that IBM is more interested in use cases than a specific country. But then again, it’s not unreasonable to assume that IBM Greater China Group’s priority is China.

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A sobering account from the New York Times of the American retail sector, and how unprepared the economy is for the changes…

“More workers in general merchandise stores have been laid off since October, about 89,000 Americans. That is more than all of the people employed in the United States coal industry, which President Trump championed during the campaign as a prime example of the workers who have been left behind in the economic recovery.”

The inevitable growth of e-commerce seems to be the main culprit, and over-investment in retail space didn’t help…

“Store closures, meanwhile, are on pace this year to eclipse the number of stores that closed in the depths of the Great Recession of 2008 … The current torrent of closures comes as consumer confidence is strong and unemployment is low, suggesting that a permanent restructuring is underway, rather than a dip in the normal business cycle. In short, traditional retail may never recover.”

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Both the Royal Mint of the UK and the Canadian Royal Mint make coins for other countries as well as their own.

The difference is, the Royal Mint won’t say who, claiming that it is “commercially sensitive information”.

The Canadian Royal Mint, on the other hand, is much more forthcoming. Several sovereign clients are disclosed in their Wikipedia entry, and the Canadian Numismatic Society goes as far as to publish a list of countries for whom the Mint at one time or another produced coinage.

And foreign sales are up

I am curious as to why the two institutions have such different approaches… Does anyone know?

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From an installation called “People I Saw But Never Met”, by artist Zadok Ben-David (via Colossal):

Installation by Zadok Ben-David, via Colossal
Installation by Zadok Ben-David, via Colossal

Over 3,000 chemically etched miniature figures taken from photographs of trips around the world, in varying proportions… Snippets of life, in 2-d made 3-d…