Category Archives: innovation

innovation, software

AI will not eliminate coding

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People who don’t code are bound to think that AI will eliminate coding jobs. Coding in a programming language is expressing a machine precise specification for how to do something. Asking an AI to output that expression is an act of programming, such that the prompt(s) need to capture a near machine-precise specification of what needs to be done. That is coding, except in natural language.

A great deal of software engineering is requirements analysis and design, which is understanding the problem space and the solution approach, so that it can be captured in natural language and diagrams. These are necessary today for many people (management, document writers, support staff, marketing staff, sales staff, customers, end users, and fellow coders) to gain a common understanding and execute a plan as a cohesive team. Capturing a vision, goals, a plan, a design, and all of the nitty gritty details to fully specify the user experience are just coding, even if expressed for an audience that is human. Indeed, even when AI takes over the full responsibilities of generating the machine code, we still need coders to do all of that. Perhaps the burden can be eased to a degree, as toil and drudgery are automated further by AI (i.e., generating designs based on archetypes and patterns when prompted by compact terms of art known to coding experts). This is still coding.

Ask a non-coder to write out the precise steps in English for how to tie one’s shoes. How many people can do so correctly enough to teach a naive robot to accomplish that task? Surprisingly few. That’s coding. That skill does not become obsolete because of AI.

innovation, software

Road to Decentralization

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The road to decentralization is long and hard. Let’s map out the way to get there. The journey will necessitate some key innovations.

Today’s Big Tech platforms exert centralized control over the service, the protocol, and the software mechanisms for our applications. These are vulnerable to government coercion and force to deprive us of rights, such as through censorship, denial of service, embargos, or deprivation of rights. A truly decentralized architecture could not be coerced or forced to obey any law or authority. Code is law, and code can have a life of its own once unleashed so that even if you imprison or kill some coders, you could not control what people choose to run.

Similarly, markets are free. No amount of government regulations and laws can deny the truth that the more tyrannical control is exerted over legal markets (such as with restrictions or bans), the greater such markets fall outside of the government’s control, as demand will motivate supply to shift to black markets.

Cryptography

The fight for freedom requires many technologies. Chief among them is cryptography from which the “code is free speech” mantra was born to protect cryptographic algorithms from being controlled by government as munitions. Internet commerce is built on this foundation.

Decentralization

However, decentralization is not yet at its infancy. The Internet has evolved in the direction of centralization (Big Tech service providers), which positions platforms to become tools of tyranny. We have not yet built a sufficient system of technologies to decentralize the applications we are accustomed to.

Money

We are beginning to see Bitcoin as sound censorship-resistant money evolve toward being usable. It has a ways to go. The hurdles will be immense, as the goal is necessarily to burn the current system to the ground. We know it. They know it. Resistance is futile, as the system is burning itself without regard for BTC. But the incumbents will hang on in desperation until the bitter end.

Identity

We are confused by digital identity. Having a technology for identity is essential, but we know a government-imposed technology would be dangerous. Bitcoin has one of its own. We need a generalized mechanism so you can own your data and your access to your application services. This depends on having some mechanism to identify you. However, we must not adopt any tech that entrusts the government. Central control (by government or a corporation) over identity would make you vulnerable to being unpersoned by that authority. We need Self-Sovereign Identity (SSI), where the person owns their own credentials (create and hold your own private key). Prolific SSI technology does not exist yet. Some point to a Nostr nsec/npub pair with hope.

Social Network

Having identity we can now form relationships. Connections between people enable social interactions. You need to be able to take your connections with you, so your social network is not held hostage by any platform.

Self-Sovereign Data

Your identity enables ownership over your data. This includes access control, privacy, and integrity. You need to be able to store your data securely (encrypted with your key, replicated), so that it is broadly accessible by all your applications (in the cloud). Everything associated with you on every application should be considered your own, including your profile, settings, preferences, social network, authorizations, and your application data (e.g., content, documents). No one should be able to rug-pull you or hold your data hostage.

Web of Trust

With a social network that we can take with us to any application without worrying about rug-pulls, we can rely more heavily on it. If everyone carefully curates their connections for credibility and reputation, we now have a Web of Trust. This is useful for calculating how trustworthy another person is based on intermediate relationships. This also gives us a good mechanism for distinguishing legitimate content from spam.

Unstoppable Services

There will be many more protocols (especially to enable peer-to-peer), platform capabilities (i.e., higher level virtual machines that span infrastructure providers), and architectural patterns that need to be invented to enable application components to become unstoppable by state and other malicious actors. Everything needs to be built to be resistant to censorship, denial of service, and deprivation of rights. Users must have an exit to take their business elsewhere.

Alternatives should be ubiquitous. Protocols and standard interfaces should enable uniformity so that platforms can be commoditized. That way if one provider does not live up to their promises, users can take their identity and data to a competitor or to a platform for self-hosting. Open source applications are preferred for self-hosting, but it’s foreseeable that as decentralization becomes the norm, commercial services will enable self-hosting as well. This reverses the shift to SaaS, but increases demand for IaaS and PaaS for self-hosting.

We have much work to do to manifest this vision. We are years away. Perhaps the time line we should expect is somewhat aligned to the burning down of the fiat world. The rise of decentralization of money should be accompanied by the decentralization of everything money can buy.

economics, innovation, software

metaverse: the good, bad, and ugly

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What is the metaverse?

Facebook’s renaming as Meta brought attention to the rise of the metaverse. I would like to explore how to think about the metaverse and related technologies.

the “metaverse” is a hypothetical iteration of the Internet as a single, universal, and immersive virtual world that is facilitated by the use of virtual reality (VR) and augmented reality (AR) headsets.

https://en.wikipedia.org/wiki/Metaverse

This description identifies VR and AR headsets as an essential feature. However, I believe headsets are extraneous. I contend that headsets are not worth pursuing for the general public. What is essential is the evolution to the next generation of the Internet to become a single, universal, and immersive virtual world.

Next Generation of the World Wide Web

Today’s most important Internet technologies are known as the World Wide Web (WWW). The next generation of the Internet would be the third. The first generation delivered mostly static hypertext content from content producers to consumers. Today’s second generation services and platforms enable users to create content and distribute that content to an audience.

Ethereum co-founder Gavin Wood coined the term “Web3” for the third generation. It envisions the WWW to be decentralized with blockchain technologies. Web3 would enable token-based economics.

I have a different perspective on Web3. To expand on this perspective, I wrote What do we want from Web3? In particular, I do not see Ethereum being a suitable basis for Web3. To fully realize the goals, Web3 will require additional innovations and decentralized technologies that are general-purpose and not vulnerable.

WEF interest in the metaverse

The metaverse has even attracted the attention of the World Economic Forum (WEF). They have published a document called Demystifying the Consumer Metaverse.

The World Economic Forum has assembled a global, multi-sector working group of over 150 experts to co-design and guide this initiative. The hope is that this will lead to cross-sector global cooperation and the creation of a human-first metaverse. The metaverse has the potential to be a game-changer, but it must be developed in a way that is inclusive, equitable and safe for everyone.

We can see from their own language that they intend to appoint their own people to co-opt the technology. They wish to set the direction for the technological innovations toward advancing their own agenda. That agenda seeks to design a better world, one in which liberty is curtailed, autonomy is surrendered, choices are restricted, and power is concentrated in anointed leaders.

Metaverse Agenda

Digital Identity

For the WWW to be more universal and immersive, a user should not have to login separately using distinct account credentials, when navigating to each site. The user should have a smooth and seamless experience. Digital identity is an essential element of continuity. A user can specify preferences and localization once, and have sites be personalized everywhere.

In today’s Web2, ad networks use crude techniques to attach an identity to users. IP addresses, tracking cookies, and browser fingerprinting are typical approaches.

Surveillance

Once users have a digital identity that is universally recognized, users can then be tracked. Ad tracking is a creepy annoyance. However, the most serious danger will be surveillance tied to authoritarian control.

The US government regulates economic activity by controlling the money and its flow through financial institutions and payment systems. Know Your Customer (KYC) and Anti-Money Laundering (AML) are policies for this control. Currently, such policies rely on verifying a person’s identity using some form of state issued ID, such as a driver’s license or passport.

We can expect the government to seize the opportunity to co-opt digital identity in Web3. A state-issued digital identity would provide a key element for the government to exert authoritarian control. This topic will be addressed later in this article, once we explore other requisite elements.

Digital identity would lead to the loss of anonymity in transactions. KYC and AML policies apply to financial transactions, but every type of transaction (i.e., any online action taken by the user) could be subject to surveillance. Surveillance of consumer behavior has commercial value to corporations. However, the unholy collusion between government and corporations is a hazard for individual rights, as we will expand on below.

Self-sovereignty

Similar to the need for crypto-currency holders to maintain self-custody of their private keys, a person’s digital identity should be protected similarly. This is known as Self-sovereign identity. The owner must be able to control the revocation and re-issuance of their own digital identity. This may be necessary to counter targeted harassment and cancel culture.

More generally, self-sovereign data refers to users maintaining custody and ownership over their own data. Without self-sovereign data, fourth amendment rights against unreasonable search and seizure have been eroded. Law enforcement requests to communications service providers for customer data have been allowed without warrants. Courts have ruled that customers have no reasonable expectation of privacy for records about them kept by service providers. We recover these rights by reorganizing services and Web3 to become decentralized and by allowing customers to take custody over their data.

Moreover, if users can take custody over their own services through self-hosting, they would gain sovereignty over the applications that implement functions against their data. The combination of self-sovereign identity, self-sovereign data, and self-sovereign services protects against deplatforming and third party policy abuse.

Physical Asset Tokenization

A digital representation of a physical object is termed a digital twin. Applications in the metaverse will rely on digital twins to accomplish many things, such as enabling physical objects to be explored and manipulated virtually in ways that are impractical in the real world.

Physical assets will need to be tokenized to identify them. Web3 includes the Non-Fungible Token (NFT). A NFT is a digital identifier denoting authenticity or ownership.

Once assets have digital identity, it becomes easier to track them for the purpose of monetizing them. One way is to attach digital services to those physical assets. Subscribing for support, maintenance, and warranty repairs is an example of a service that can be monetized online for physical assets.

The Internet of Things (IoT) goes further by connecting physical assets to the Internet. This enables digital services to make use of or add value to those physical assets. Sensors, cameras, and control systems come to mind as obvious use cases. However, everything imaginable could be enhanced with connectivity to digital services.

Intellectual Property Rights

Physical asset tokenization leads to the erosion of ownership. Intellectual property rights, such as those attached to embedded software components, are retained by the manufacturer. The consumer is granted only a license to use with limited rights. The consumer has no right to copy that software to other hardware. This protects the software vendor from loss of revenue.

Does the consumer have a right to sell the physical asset to transfer ownership? One would expect that the hardware and its embedded software are considered to be an integrated whole or bundle. Hopefully, the software license is consistent with that.

A digital service connected to the physical asset is remote and distinct. A boundary clearly separates that remote software from the physical asset. There is no presumption of integration. The terms of service would need to be consulted.

Modern software is maintained with bug fixes and enhancements over time. Increasingly common, the vendor charges the consumer a subscription fee for maintenance and support. Does the consumer have the right to continue using the asset without subscribing? Can ownership of the asset be transferred along with its software subscription?

These questions go to the erosion of ownership. Physical things, such as vehicles and farm equipment, are becoming useless hulks without subscriptions to connected digital services and software maintenance. Instead of owning assets, people are subscribing to a license to use. It’s like renting or leasing. According to the WEF’s Agenda 2030, you will own nothing, and you’ll be happy.

Right to Repair

Software capabilities are essential to the functioning of equipment and devices. The traditional ownership model of farm equipment, vehicles (i.e., cars and trucks), and mobile phones, is evolving to a model where the end user has a license to use. License terms may restrict the user’s rights to modify, maintain, and transfer that asset.

Traditionally, an owner of an asset expects to be able to repair, modify, or build upon the asset. He can do it himself, or he can contract work out to others. Manufacturers are eroding these rights. They don’t want their software to be tampered with.

Many legislatures are passing Right To Repair acts to preserve some semblance of ownership control over physical assets. However, remote connectivity to digital services may never be brought into the fold.

The World is Virtual and Physical

The relationship between physical assets and digital services, including the metaverse, is fraught. We should think of the metaverse as the landscape in which all future digital services reside. Increasingly, physical assets are connected inextricably to digital services. Thus, the physical world and the metaverse become tied.

Programmable Currency

Monetization of digital services will be integral to the metaverse. Crypto-currency will be a key technology in Web3 to enable the digital economy. As novel cryptos gain consumer acceptance, you can be certain that governments will take notice.

Government has an interest in controlling money. Fiat money is manipulated by the central bank and their monetary policy. The supply is increased by making loans, which is a means of counterfeiting money. Money-printing dilutes the purchasing power resulting in inflation. The biggest loans are to finance government deficit spending.

Government seeks to gain control by making money programmable. Central Bank Digital Currency (CBDC) is programmable fiat money for this purpose. Control includes regulating who may spend money, when, where, on what, and how much. Authoritarian control will be total.

  • Who – digital identity
  • When and where – surveillance over services
  • What – physical asset tokenization
  • How much – programmable currency

Authoritarian Control

The Chinese Communist Party (CCP) has implemented a social credit system of authoritarian control. Individuals are assigned a social credit score based on surveillance of their behaviors. Privileges, travel authorization, and access to services may be restricted based on social credit score.

Programmable digital currency will be the perfect tool for authoritarian regimes to control public behavior. With hard cash replaced, no economic activity would escape government surveillance and control. Discrimination and cancel culture will be institutionalized.

Alternative Reality

Instead of the dystopian future that would follow from a metaverse based on flawed Web3 platforms, we must proceed with caution. Every technology must be scrutinized for vulnerabilities to capture and corruption by centralized powers. Decentralization and self-sovereignty must be paramount.

Avoid crypto-currencies that are not Bitcoin. Shitcoins are all scams. They are all corruptible, already corrupted, or corrupt by design. This is especially true of CBDC (or any crypto that is a candidate).

Disregard the hype. Headsets will never gain broad adoption. People will not tolerate being detached from reality for extended periods. Immersive experiences are valuable. However, people need to be able to multitask. Visiting places in the metaverse must be possible while still remaining engaged with normal activities of daily life and work.

Protect your identity and data. Self-sovereign identity and self-sovereign data are essential. True decentralization is essential. Any Web3 platform that does not honor these principles should be rejected.

The future will be bright, if we refuse to accept technologies that leave us vulnerable. It is early enough in the development of Web3 and the metaverse to reject poor technology choices. As consumers are better informed, they can have an enormous influence on what technologies are developed and adopted. Ethereum’s first mover advantage in Web3 and Meta’s first mover advantage in metaverse should be seen as consequential as MySpace and Friendster were to Web2.

economics, innovation

Carriers need to stop selling dumb pipes

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I was not happy with my article Carrier Billing and Micropayments, when I first published it over a year ago. I did not feel that the ideas I was trying to communicate were distilled into a coherent formulation. What follows here is a second attempt at trying to convince Communications Service Providers (CSPs) to stop selling dumb pipes.

Most CSPs are old incumbent carriers with large loyal customer bases, established business models, and products that are substantially unchanged for decades. These enterprises are risk-averse. There is little tolerance for changes that would be disruptive to how business is run.

CSPs are in the business of selling dumb pipes (e.g., Internet access, mobile phones). The dumb pipe business is experiencing decreasing revenue per bit. CSPs know that this trend of diminishing profitability is unhealthy, and they are highly motivated to expand into new products (e.g., video).

Since the rise of the Internet, CSPs have seen Over The Top (OTT) services (Internet platformed services) thrive. OTT providers have even invaded the CSP’s spaces. While CSPs expanded into television and video services, OTT video services like Netflix and Hulu caused many customers to terminate their traditional television services. Customers prefer unbundled video streaming. This is especially true now that Disney Plus, ESPN+, HBO Max, and other premium video packages have become available à la carte (no longer exclusively bundled with television service). Unbundling of video services is once again relegating CSPs to selling dumb pipes, which undermines their efforts to expand revenues up the value chain.

CSPs have stodgy business models, because they are afraid of competition further eating into their revenue. CSPs suffer from their inability to formulate new product strategies to better monetize 5G investments. Technical features like network slicing, low latency, higher reliability, low power, high bandwidth, expanded radio spectrum offer possibilities for innovative applications, but carriers have struggled to translate such potential into desirable products beyond the standard offerings for the already saturated market for mobile phone service with mobile data.

From Tom Nolle:

Other articles:

Beyond 5G mobile and fixed wireless features, CSPs also have ambitions of expanding revenues through Edge Computing and “carrier cloud”. CSPs view the construction of their own cloud infrastructure in their own data centers as a core competency that is strategically important to the operation of the Network Functions that provide their communications services over their own network infrastructure.

Again, from Tom Nolle:

CSPs have ambitions to offer products to their customers based on carrier cloud, but they suffer from competition from hyperscalers (AWS, Microsoft Azure, Google Cloud Platform, Oracle, IBM). They aim to leverage their own data centers to provide cloud services for Edge Computing at the provider edge, believing that low latency in the last mile to the customer will offer performance advantages to certain types of services. Unfortunately, there is no evidence that such an advantage exists for CSPs. Performance sensitive components would likely need to be deployed at the customer edge in close proximity to the customer’s devices (such as for near real-time control of industrial processes). For all other types of services, it is difficult to see how regional CSPs can compete on price, scale, and reach against hyperscalers, who have global reach and performance characteristics that are not materially disadvantageous for those use cases. If customers need the performance, they will need computing at the customer edge. Otherwise, when their requirements are less stringent, public cloud infrastructure from hyperscalers is sufficient and economically advantageous.

CSPs must become more open to transforming their business models to find better revenue opportunities. They should look to Apple’s market success as one example of how to think differently. Apple forged a lucrative business model based on their iPhone and iOS ecosystem by taking a 30% cut of third party revenues earned by distributing applications through the Apple App Store. Because the potential for applications and in-app purchases is unbounded, the opportunities are enormous for Apple to earn revenues based on the innovations and work of innumerable third-parties using Apple’s platform. This is proven out by Apple’s incredible financial performance since launching this ecosystem.

CSPs should look to where their own businesses have strengths and advantages. CSPs have a large and established customer base, who entrusts the carrier to take automatic payments every month. That kind of trust relationship and reliable revenue stream is precious. Carriers have not learned to monetize that relationship with OTT service partners or extend such relationships to third parties, as Apple does. One of the biggest impediments to online businesses converting sales for digital subscriptions is the resistance among customers to trust the business enough to create an account and authorize their payment card for automatic recurring payments. That lack of trust is an enormous barrier for most businesses. CSPs can leverage their advantage in Carrier billing to enable micropayments and easier monetization of third party services through the carrier’s infrastructure, billing, and payment platforms. This would enable CSPs to apply Apple’s business model to charge third party services a percentage of subscription fees by owning the customer relationship and the monetization of those third party services.

Let’s explore a concrete scenario to illustrate this point. As a customer of online digital services, each of us has routinely been the victim of multiple unscrupulous vendors. One crooked technique these vendors employ is to be unresponsive to termination requests for subscriptions that have recurring monthly payments automatically charged to a payment card. Sometimes such paid subscriptions are opted in by misleading a customer to try a free introductory offer. Often, intervention from the bank or payment card company is required as a remedy. These kinds of costly and upsetting incidents ruin it for all online digital services, because customers become wary of authorizing payments for any business whose reputation is unknown. Every time a customer shares their payment card information with another vendor, it is a calculated risk that the vendor could be unscrupulous or that the payment card information can be stolen by a data breach (hacking). After being burned, most people would be extremely hesitant to subscribe to a dozen low cost ($0.99 per month) content providers (i.e., magazines, journals, newspapers, etc.), each taking payments separately.

However, for a customer already being charged $200 per month by a CSP for their family’s multiple mobile phone and data services, adding an extra twelve $0.99 charges to their bill (an increase of less than 6%) with the peace of mind knowing that the carrier’s billing dispute and adjustment processes are reputable, friendly, and reliable is a comfortable commitment to enroll in. Now, imagine every product company taking advantage of this easy entry into the market for digital subscriptions, where they would otherwise have found the barrier to entry too daunting. You will see connected running shoes, connected tennis rackets, connected exercise equipment, connected vehicle dash cameras, connected home security cameras, connected home appliances, connected irrigation systems, connected pool circulation systems, connected everything become viable market opportunities for the smallest (and most innovative and entrepreneurial) of vendors. If CSPs bundled monetization with access to their 5G capabilities and their Edge Computing resources for a cut of the third party service’s revenues, that arrangement becomes even more attractive to innovative and entrepreneurial startups who may build the next killer app that no CSP could dream of themselves—and that would be impossible to nurture into existence through partnerships.

For CSPs who envision that the Internet of Things (IoT) will provide new revenue streams in high volumes, they must realize that for things to be connected to the Internet in an economical way, the digital services associated with those things must be monetizable easily and with low barrier to entry. For there to be sufficient uptake, not only do ordinary physical things in everyone’s every day lives need to be connected, but it must be inexpensive and convenient. Technical capabilities, convenience, and low cost come about by leveraging the CSP’s infrastructure, services, monetization platform, and established relationship with the customer base.

As a stodgy incumbent, a CSP is resistant to revamping how they do business. Their belief in their products is entrenched. They believe their own role in the market is entrenched. Incumbency and entrenchment are impediments to transforming their business. So long as CSPs cling to the belief that they must defend their declining revenue-per-bit dumb pipe business against OTT services, CSPs will not be motivated to engage in transformation. They need to understand that their advantage is not in dumb pipes. Their advantage is in owning strong customer relationships that can be monetized on behalf of third party services that are unbounded in potential revenue opportunities. Digital services want to receive payments from subscribers, and CSPs can broker this through their own reputable, ethical, and trust-worthy billing and payments platform.

CSPs must move away from primarily selling dumb pipes. They should re-orient the business to enable an ecosystem that uses the CSP’s infrastructure and platform to sell digital services from all vendors to the installed base of loyal customers. This will open up unbounded opportunities for passive income as all the risk to develop innovative new products based on OTT services is borne by third party digital service providers, while the CSP reaps the rewards of their use of the CSP’s ecosystem.

innovation

Bus factor

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Observation: management is obsessed with assessing all kinds of risk and their mitigations. This includes technical risk, financial risk, schedule risk, market risk, security risk, and others. This typically does not include bus factor.

One of the biggest risks is the concentration of knowledge and expertise in too few individuals. This is known as bus factor. How many teams measure and report on bus factor, and actively mitigate the risk of bus factor falling to 1?

economics, innovation, software

Digital Economy of Social Cohesion

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This Web2 era of the Internet has culminated in the concentration of economic power in a few of the largest corporations, a phenomenon that is termed Big Tech. Facebook (Meta), Amazon, Apple, Netflix, Google (Alphabet) are known as FAANG, the dominant Big Tech players. Centralization of control and concentration of power go hand in hand. This control is being used for social engineering, which is divisive, and it is destroying social cohesion.

Web2 is described by Britannica as:

the post-dotcom bubble World Wide Web with its emphasis on social networking, content generated by users, and cloud computing from that which came before.

https://www.britannica.com/topic/Web-20

Digital Economy

The digital economy that has emerged from Web2 is based on either extracting fees from users, as Netflix does with subscriptions and Amazon does with Prime, extracting profits from selling goods as Amazon and Apple do, or selling ads as Facebook and Google do. In each case, the business model relies on positioning the Big Tech company as the dominant supplier in the supply chain.

If you produce movies, you have to go through Netflix to reach your audience. Producers of goods have to go through Amazon to sell to your customers. If you produce iPhone apps, you have to go through Apple’s App Store to offer apps to users. If you want to advertise, you have to go through Facebook and Google to reach your audience. In every case, Big Tech is an intermediary that gets rich as the middleman.

Crypto Payments

One feature of Web3 is the incorporation of digital currencies (crypto). This would disintermediate payments by potentially eliminating banks, credit card companies, and payment processors. The payer and the payee would transfer funds directly with a transaction on a blockchain, which itself has no controlling entity and is therefore decentralized (assuming we are talking about Bitcoin, not some shitcoin). Financial transactions paid in crypto require no middlemen. Digital transactions have concentrated power into Big Tech because integration with the fiat financial system is expensive and subject to onerous regulation.

Integrating a crypto payment protocol natively into the Web is a game changer. Not only would it begin to decouple commerce from the fiat financial system, it should also begin to alter the relationship that users have with service providers and each other. Fiat payment processors impose an asymmetric relationship between participants: merchant and consumer. Crypto eliminates that asymmetry by enabling anyone to send funds to anyone with an address who can receive them.

Monetizing with ads destroys Social Cohesion

Google and Facebook have thrived on advertising dollars because of the asymmetrical relationship imposed by the fiat payment system. The Social Dilemma is a Netflix documentary that explains how the ad revenue model provides social media companies perverse incentives to design systems that encourage harmful behavior among the user base. Engagement becomes divisive. Information bubbles form. Users become addicted to dopamine hits. All to lure more eye balls and clicks so that advertisers can be charged for more impressions and conversions. Users hate seeing ads, but it is the price they pay to receive free services, as their engagement is monetized. The users become the product that is sold to advertisers.

Monetizing without ads brings Social Cohesion

How does eliminating fiat asymmetry fix this? Users on social media are content creators. Their opinions are an organic source of reviews, endorsements, and complaints. Every day the most compelling content goes viral because the audience is won over and engages enthusiastically.

What if a decentralized social media platform, instead of directing advertising dollars to Big Tech, rewarded users for content creation and promotion?

Users could be paid to post quality content with their compensation being proportional to the positive engagement they receive from others. This could be achieved through tips from the audience and from promotion fees charged for boosting content. The key is rewarding users for positive contributions. This institutes an incentive structure that increases personal fulfillment and social cohesion. This is what we want to enable with Web3.

economics, innovation

Risk-Reward of Entrepreneurship

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Entrepreneurship is characterized by willingness to take on higher-than-normal risk in pursuit of outsized reward. To achieve outsized rewards, one must be willing to accept higher risks, because risk and reward are proportional. Success comes from skilled assessment of what risks are worth taking for the rewards that can be earned with respect to capital accumulation (growing the business), production capacity, revenues, profits, market share, innovation (bringing superior products and services to the market), and customer satisfaction (making a positive difference to society).

Start-ups pursuing highly uncertain goals on the frontier of human innovation are at the extreme end of the risk-reward spectrum. Near-certain failure is assumed by outsiders. Most people believe the pursuit to be impossible. Only the entrepreneur has the vision and courage that are uniquely exceptional to overcome the status quo. The culture of a start-up is defiant, contrarian, and non-conformist.

A start-up’s market is initially non-existent because demand follows supply. Supply is zero until the product is produced and its value can be demonstrated to consumers. People could not have imagined the product until the invention brought it into reality. Invention creates a market, where none existed before. Before the automobile was invented, the market for transportation could only imagine a stronger, faster horse. Once an automobile could be supplied, consumers demanded it.

Contrast a start-up with an established corporation. An established corporation has mature processes, regimented procedures, and formalized governance. Standards, guidelines, and best practices are enforced through reviews and approvals for compliance. The intent is to reduce and mitigate risks: financial risk, schedule risk, technical risk, security risk, and market risk. Knowing what has proven to work, it is imperative to institutionalize delivering quality reliably and consistently to engender trust with customers and shareholders. The culture of an incumbent is compliant, conformist, and standard-bearing.

Entrepreneurship often involves recognizing that what has worked for the incumbents can be revolutionized. Processes can be more efficient. Labor can be automated. Products can be better designed or entirely obsoleted by the next generation of technology. Business models including the relationship with customers can be changed (i.e., a perpetual license can be replaced by a subscription). The goal is to win sales from customers by having a competitive advantage. Entrepreneurs seek to disrupt the market for existing incumbents.

Incumbents are intent on protecting their market position. Risk is ever-present that a competitor may win out. New up-starts entering the market are disruptive to the market. There is the risk that an established business can be made obsolete. Obsolescence is almost inevitable, as we are continually advancing to improve quality of life. Danger exists for incumbents who stubbornly cling to their established ways, eschewing novel innovations that are causing the industry to evolve. Incumbents may even resort to erecting barriers to entry through lobbying and regulatory capture. But the relentless march of progress never stops.

There is an uncomfortable tension between maturity (protecting what is proven to work) and novelty (inventing better ways of working). Culturally, it is very difficult for an incumbent to build disruptive technology that threatens its own business, even though it knows this kind of disruption is necessary to make a better future. This clash in cultures is usually overcome by entrepreneurs building start-ups, which are unencumbered by the status quo. The freedom to explore disruptive innovations allows a start-up to break all the old rules and ignore every self-imposed constraint that would hold back an incumbent from going against its established know-how. An incumbent’s financial strength allows it to forego risky experimentation, which is prone to failure, and watch the landscape for successful start-ups that can be acquired before they grow to become a competitive threat. In so doing, an incumbent gets the best of both worlds. It can protect its market position while also benefiting from risky bets taken by entrepreneurs that prove successful.

When an incumbent acquires a start-up to absorb successful innovations the clash in cultures becomes apparent. There is a desire to incorporate the smaller start-up into the larger incumbent’s organizations, and subject them to mature policies, processes, and procedures. Often, what is discarded are what made it possible for the start-up to be entrepreneurially successful: the freedom to be agile, rule-breaking, disruptive, and anti-establishment. The incumbent usually incorporates innovative technology but resists incorporating innovative culture and spirit, especially entrepreneurial risk-taking.

innovation, software

Web3 versus Web5 – the future Web

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In December, Jack Dorsey (founder of Twitter) disparaged Web3, claiming that the technology is owned by venture capitalists like a16z, cofounded by Marc Andreessen. Jack is critical of the current crop of Web3 protocols and implementations being deficient in decentralization. Others like Moxie Marlinespike have also been critical of Web3. I have offered my own thoughts on this topic in Decentralization: Be Unstoppable and Ungovernable.

Jack is backing an alternative to the Web3 vision called Web5 (Web2 + Web3) through an organization named TBD with open source projects for decentralized identity and decentralized web nodes for personal data storage that work with distributed web apps. On the surface, as I have not had an opportunity to look deeper into this Web5 initiative, the overview seems closely aligned with what I independently have imagined. I feel the potential kinship to what this project is doing.

The Web5 project appears to be directionally attractive with regard to how the problem space is framed. However, we need to examine the solution approach to see if the protocols and architecture being proposed are also attractive. The Web3 approach is decidedly not attractive for the reasons that Jack has highlighted. I credit him for being a vocal dissenter, when honest dissent is warranted.

I will dig deeper into Web5 and offer some insights from my own perspective. If this turns out to be closely aligned to my own passions, I may volunteer to contribute.

innovation, software

Reputation – scoring digital identities

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Is it possible to build tech to track reputation for a digital identity across services without having it gamed or turned into a social credit system of institutionalized cancel culture?

The topic of reputation came to mind was promoted by this tweet. Saifedean Ammous (The Bitcoin Standard) had this idea for how Twitter could be improved. It is about reputation. To determine whether someone should be distrusted, a person can look to their own social network to see how often the counterparty is distrusted. Apply the Web of Trust pattern toward distrust. The same system for tracking certification (a form of trust) can be leveraged to track distrust also. This would be a very valuable service for reputation tracking and analysis.

Web of Trust

Reputation may not be an absolute measure. Saifedean’s observation suggests to me that it should work more like Web of Trust, except in the case of blocking it would be a measure of distrust. Each block is an attestation of distrust of the blocked user. The users who Saifedean follows form his web of trust. To some lesser degree the connections to others through his follow list deserve some trust as a transitive relationship. Those blocked by these trusted users can each be assigned a distrust score based on the attestations from Saifedean’s web of trust.

From your perspective, the reputation of someone else would be based on your own web of trust. It is subjective, relative to your social network and the attestations of each member. Attestations of trust contribute to a score for how much a person deserves to be trusted. Attestations of distrust contribute to a score for how much a person deserves to be distrusted.

Calculating reputation scores based on attestations on social networks raises questions and concerns. Scoring can be gamed and abused. Bot nets can be deployed to skew scores by contributing many bogus attestations. This can be used to smear a hated enemy or to fraudulently raise someone’s public stature. We see such gaming in search engine optimization, in likes and dislikes of content on social networks, and in product rating and review sites. Personal and professional reputation is a high stakes affair.

Reputation is not Social Credit Score

Everyone is aware of China’s social credit system. It enables the government to track every citizen’s activities. Individuals are scored according to the government’s preferred behaviors. The government uses the scoring to punish citizens by denying low scoring individuals from participating in society (i.e., economic transactions, travel, etc.). If we introduce reputation scoring, such abuse cannot be permitted.

A reputation system exists to facilitate individuals to freely associate with others or to deny such associations. This system must forbid the government or other powerful entities from being able to coerce others into and out of associating with individuals these powerful entities target for punishment, which would be tyrannical.

Is it possible for such a reputation system to be deployed prolifically without enabling tyrannical regimes or angry mobs from exploiting it in violation of individual rights? Lives are destroyed in this way, as they are cast out of society. Ideally, the system’s protocols would make it impossible for such power to be abused. Reputation is tied to a person’s digital identity. If a person is shackled to a single identity, they are vulnerable to that identity being smeared and targeted for cancellation by adversaries.

There must be some recourse. If a person can change identities and recertify their verified credentials for their replacement identity, this could effectively renounce any references to the old identity. Attestations of distrust of the old identity would have no effect on the new identity. However, attestations of trust for the new identity would need to be earned and reestablished. This makes changing identity a costly migration, only worthwhile if shedding a highly disreputable identity to start fresh.

It is also important for the identity protocols to be decentralized. The system should be open to many providers with no coordination, shared storage, policy enforcement. There must not be an single source of truth for human identity tied to digital identities, otherwise a person can be cancelled by tyranny or abuse of power.

We want to enable Alice to assess Bob based on Bob’s positive and negative attestations among the people connected between them. That allows Alice and Bob to associate or not based on informed consent. We do NOT want voluntary associations to be interfered with by tyrannical powers. Tyrants wish to exert control over collectives to target individuals regardless of consent. Freedom of association must be protected.

innovation, software

Revisiting personal assistant

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In 2017, I wrote:

I find myself being more diligent taking notes and then distilling knowledge from my notes into articles for others. I used to be able to complete tasks serially, more or less. Occasionally, I noticed that follow-on tasks were hard to accomplish, because I couldn’t remember what I was thinking originally. So I tended to capture essential (summary and instructional) information into README, comments in code, and docs. I never really took detailed notes to log my step-by-step activities until recently. I started doing this logging, because I find myself multi-tasking and distracted so much by so many concurrent activities, I can hardly focus on getting anything done. The context-switching was so frustrating, and I didn’t have enough stack space in my head to keep anything straight. So now I’m employing some rudimentary techniques to apply computer-assistance by just taking notes. That is why my mind wanders to the topic of personal assistants in the workplace as being the next frontier. Personal Assistants

The Loretta superbowl ad by Google was a very compelling story about the benefits of memory assistance if the human-computer interface is frictionless enough to integrate into normal experience.

Google’s commercial was extremely compelling, except that Google is failing to see how to apply its foresight into its products (Android, Keep) to enable quickly clipping ANY content while using ANY app to save as notes, and then applying machine intelligence and analytics to provide reminders and personal assistance based on computed insights.

The reason I was trying to recall the notes-related insight was actually because I’ve been finding myself buried in unrelated tasks and things to do coming from so many directions every day, it’s hard to keep track of what and when. The obvious solution is to use some kind of task reminder application. The problem with those is that I have to take time out of what I’m doing to go into such an app and create a task, which is distracting and time consuming in itself. What I really want is while I’m in any other application, whether I am reading email, reading Slack messages, attending a Zoom meeting, working a JIRA issue, responding to PagerDuty, writing on Confluence, reviewing code in GitLab, or literally anything, I want a one-click mechanism to “remember this”, so that an app will keep a note, maybe translate it into a task on my to-do list, remind me later if necessary, help me prioritize, and help me remember things. It is the one-click action in the context of the application that I’m already working in that is the key feature to interface to all these other personal assistance capabilities.

Android does support highlighting content and using Share to Keep Notes. However, this does prompt for additional information, and it creates a new Keep document. This is close, but not sufficient. From a user experience perspective, it is fine to highlight and share, but the aim should be to “remember this” without prompting for anything more so that focus is not taken away from the original context.

The app for keeping notes should be light weight. Notes should be more like items on a list, timestamped, and available for subsequent labelling, re-organization, searching, and use (integration with related apps like for task management). It needs to be a clipboard with unlimited history, so that snippets of information can be remembered on the fly for later review, classification, and movement to other applications. Life is a stream of notable events, many of which we want to queue for later recall in a different context, as we are preoccupied with what we are busy with in the moment.

The idea of a personal assistant is that without the user needing to click at each moment to clip something at each interesting moment, an agent can shadow the user’s activity and automatically track what is attracting the user’s attention. It can keep a history of bookmarks and actions across applications based on the user’s activity. Later, this record will help to answer questions about what the user had done earlier and what information was encountered. An assistant would ensure that everything is committed to memory continually without interrupting the user’s normal flow of work. When the user does highlight and share, it indicates something of particular interest that becomes a priority.

Having a recorded history of work can then be analyzed to document procedures, teach others the same workflow, and automate procedures for repeatability. Repetitive tasks are a machine’s specialty. Reducing tedium is what mechanization is meant for.