Category Archives: Internet Economy

The radical potential of Blockchain

Niki WilesBlockchain, the technology which underpins Bitcoin has the potential to disrupt many large and powerful industries believes Niki Wiles.

Speaking to London Futurists in a session in London today Wiles, Lead Data Scientist for the London-based digital media agency, 360i said Blockchain solved some of the biggest problems with today’s centralised services.

Big disadvantages with centralised services such as lack of transparency, resilience, security and cost, would all be resolved if Blockchain technology was used.

The big problem which has traditionally mitigated against decentralised systems was the risk of double payment, he said.

The pseudononymous programmer or programmers Satoshi Nakamoto solved this with the Blockchain protocol in which everyone on the network effectively has a copy of every transaction in sequence and there is no central repository.

“Paying with Bitcoin is like shouting in a crowded room,” said Wiles. “All transactions are seen by all.”

Despite the fact that Bitcoin has taken most of the limelight he belives the underlying technology can disrupt basically any centralised system.

DNS allocation, currently the responsibility of the central ICANN organisation is one such example. Moving DNS allocation to a distributed system would defend websites against censorship as well as make DNS much less vulnerable to attack.

In fact he sees censorship-resistant communication as of the killer apps for Blockchain. There are already services like Bitmessage which offer decentralised P2P encryption.

Decentralising cloud storage and computing could bring real benefits too – more security, less downtime, lower cost. Storj.io, for example, aims to be many times cheaper than Dropbox while Zennet is hoping to do the same for computing resources. Because there are no ‘sysadmins’ they should be much more secure, too.

Blockchain should prove effective in the sharing economy he believes – La’Zooz, for example is Blockchain ridesharing.

Social networks could also migrate. Twister is a decentralised social network similar to, you guessed it, Twitter.

There is even a project called Bitnation looking to see what aspects of the state could be delivered on the platform.

There are many other example – decentralised energy networks powered by solar, p2p drone deliveries, decentralised smart contracts, the list goes on.

IBM is even working on Blockchain for powering the Internet of Things.

There are problems however. Blockchain technology is very resource hungry. It takes a lot of computing resources to run the encryption algorithms at the core of the technology and because the whole database is distributed it is very bandwidth-hungry, too.

As a example Bitcoin can currently only process seven transactions every second – hardly a rival for Visa yet.

However, Wiles believes Moore’s Law is on the side of Blockchain. “Decentralised systems are likely to become cheaper and more cost-effective.”

And when they do the financial industry is ripe for change. Blockchain’s strength in transparency and the automatic enforcement of rules could be a real game-changer in a global financial system which is riven with issues. “Financial audits could be done automatically, for example,” says Wiles. “Counterparty risk could be eliminated by all banks sharing one ledger based on Blockchain.”

And because the technology is fundamentally very cheap with very low transaction costs the world’s unbanked could find a solution with just their phones.

It could even lead to the formation of Decentralised Autonomous Organisations – as Wikipedia describes them  “corporations run without any human involvement under the control of an incorruptible set of business rules.”

Things are moving fast is the Blockchain world and in many directions. The next two or three years should show which of these directions is the most promising.

Thoughts on The Watch

There are a couple of things that have occurred to me about Apple’s latest new product line. The first is that fashion and rapid technology upgrade cycles don’t really mix.

Thinking about the evolution of the iPhone (a product whose significance has been compared to the Apple Watch)

apple watcheach new iteration was thinner, more powerful, and larger than the one before. In the case of the watch, I very much doubt the screen will become larger – wrists aren’t going to get any larger any time soon (though I suppose we could get a widescreen version at some point!) but undoubtedly they will be thinner and more powerful. With technology doubling in power every 12 to 18 months it would be remarkable if they didn’t.

That will be OK for those who paid £300-£400 for their watches – Apple customers have shown themselves to be quite happy shelling out this kind of fee every couple of years for an upgrade. But what does this mean for those customers who paid £10,000 for a gold watch? Will they be happy with a watch which is thicker and less powerful that the current model? Especially when a few years down the line it probably won’t even run with the latest version of iOS.

This could lead to some very dissatisfied customers – unless Apple comes up with a way to overcome this. One way might be to offer a technology upgrade service. Send in your £10,000 watch and Apple will retrofit the latest innards, upgrading your family heirloom to the latest, greatest tech. There are all sorts of implications and challenges with this approach – logistical and manufacturing complexity, weakening the bond between this year’s shape and desirability and so on.

And I don’t think a trade-in will work – people current buy expensive watches to keep, not to exchange in two years.

The second observation is not so much that the launch of the watch is the first time online has been pushed ahead of the physical experience – though that is obviously true. It is that mobile was where Apple was most prepared and efficient. At 8.05am we were still waiting for the Apple online store to come back online (it was promising to be open for buisness at 8.01am). The iPhone app, though, was functioning smoothly and to plan. The combination of a physical Apple Store as a showcase for the physical product, and the Apple app as the way to purchase seems to be the ideal future for Apple. After I had bought via the app I was invited to take a survey of the experience by Apple which asked a large number of detailed questions about the online experience. It seems they are determined to get it very right.

Phases of Photography

I had an interesting day on Monday wandering round the Photography Show in the NEC in Birmingham. The thing that struck me was the scale of the change sweeping through.

Firstly, there were only two places where analogue photography was in evidence: on a standing selling “rare and unusual” film stock, and on the disabled photographers’ society stand where some of the second hand equipment harked from that era. Other than that everything was digital.

The core audience of the show seemed to be 40-60 year-old men with DSLRs with large, expensive lenses hanging from their necks. And the big flashy stands – Canon, Nikon etc – as well as the several equipment retailers were clearly catering to that audience.

But the next wave of change in photography was also evident in the stands selling drones and those showing off software solutions which automate much of the difficult stuff of photography.

So far, it seems to me, the digitisation of photography has mostly replicated what was available in analogue photography. In the next phase, though, it is what happens after the picture is taken that will make the difference. Already smartphones have powerful editing software which can radically change what was actually taken. And startups like Lytro are taking this trend one stage further. Their camera actually shoots at multiple focal lengths simultaneously. So the photo you shoot is only one of several possible perspectives. This means it’s what happens afterwards which is important. And when you view the picture you can choose what to see. This intrinsic interactivity makes the photograph truly digital.

One thing is for sure – photography is changing again and the role of the photographer with it.

The breaking of Glass?

Techcrunch is predicting the demise of Google Glass as a consumer product, citing departing developers and a perceived lack of support from the top of Google. Techcrunch’s Mike Butcher predicts b2b will be where the product makes headway:

Industrial applications – building and manufacturing, security, training – could be the future for Glass. Indeed, Taco Bell and KFC are considering Glass as a potential training method for employees. And five developers that have joined the programme are all in the enterprise space.

I agree. The case for having a heads-up display is dangerous or difficult work situations (think nuclear plants for operating theatres) seems pretty self-evident. And it does seem that the general aura of weirdness which has settled around Glass is just too much to allow for a successful general consumer launch.

But all that is not to say that Glass isn’t pointing the way to the future. The end game in computing is ubiquity – being able to get help, find information, communicate effortlessly and at will. The watch, currently the flavour-of-the-month wearable, won’t fill that role. Eventually it will be a direct brain interface that does, I’m pretty sure. The next best thing is to use the heads-up display, however that is done. Google Glass, or some other variant, will be back.

Short and long-term innovation

It’s the mobile innovation season again. Apple launched the iPhone 6 and 6 Plus, the latest operating system iOS 8, announced the much-anticipated Apple Watch and last week launched new iPads. Google unveiled plans for the new Nexus 6 phablet and the Nexus 9 tablet and a new Android operating system, Lollipop.

But what does this innovation actually amount to? Our phones are now bigger and even thinner – so much so that they bend if we accidentally sit on them.

Apple-Watch-logo-main1Apple is very focussed on getting all their technology to work “seamlessly” together. After Yosemite we should be able to start a Keynote presentation on our iPhone, pick up on our iPad, finish off on our Mac and then show it on our Apple TV, controlled by our Apple Watch. It’s clear that Apple’s future growth is going to come from getting us to buy more things and updating those we already have on a regular cycle.

Google, to some extent, is on the same merry-go-round. It too has watch software, a desktop (Chrome), phones, tablets and a TV streaming device, the Chromecast.

But Google also has Glass – a product still not ready for prime-time which has come in for increasing criticism after the initial burst of enthusiasm wore off. This Guardian review sums up the ambivalence well. What Glass does point to is a different interpretation of the way things will develop in the future.

The thing that makes Glass work is the voice interface and that is an area Google has been investing a lot of time and effort in – and with striking results.

Research by Stone Temple Consulting set out to compare results from Google Now, Siri and Cortana from Microsoft. And Google came our firmly on top – the chart here summarises those results.

mdr

Stone Temple summarise their findings like this:

So there you have it. As of October 4, Google Now has a clear lead in terms of the sheer volume of queries addressed, and more complete accuracy with its queries than either Siri or Cortana. All three parties will keep investing in this type of technology, but the cold hard facts are that Google is progressing the fastest on all fronts.

Google has been taking the whole artificial intelligence space more seriously than any other technology company. They have bought some serious talent like Demis Hassabis, the founder and chief executive of Deep Mind, the artificial intelligence business bought by Google for £400m at the start of the year.

On a visit to Microsoft way back in the 1990s I heard the head of Microsoft Research say that consumers already knew what they wanted – it was the Star Trek computer. This means a universal interface which is largely neutral about the actual device it is using at a particular moment in time.

Apple’s business model I think largely rules it out as a contender. It is too invested in creating physical devices and it is telling that it already let the Siri team depart when their work is clearly not done. (They have founded their own business called Viv aimed at delivering their version of the Star Trek computer.)

But with its heavy focus on understanding and organising knowledge, and its commitment to the development of powerful AI, my money is on Google to finally deliver the vision. And whether we access that through Glass, or through an Android-powered watch, or for that matter on the iOS platform, I’m not sure they particularly care.

The power of the platform

What is the key to allowing large companies to move fast? Build great platforms. I first heard this insight being persausively argued in Mark Zuckerberg’s interview with John Battelle and Tim O’Reilly at Web 2.0 in 2010 – an age ago in internet time. 

In this clip he tells how he urges his people to “be fast and be bold”. He then talks about what it means to be agile. While small start-ups can do it easily, the larger you get the harder it is to move fast. But, he says, people can move quickly on top of a robust platform built on “solid abstractions”. 


I also remember being impressed with the speed that Yahoo! teams were able to build strong features on the back of solid APIs to things like single sign-on, maps and Flickr photos. Because the APIs are easily internally available, teams are able to function on the innovation rather than the plumbing.

Amazon is perhaps the supreme example of a company build on the power of the platform. Jeff Bezos has built a platform which can quickly turn its hand to selling just about anything. There was an accidental post by a Google engineer Steve Yegge which famously demonstrated the pain it took getting there, but there is no doubt that the platform approach is one of the main underpinnings of Amazon’s huge success. That same post argued that Google was, incidentally, some way away from the ideal which illustrates eloquently just how hard it is to get it right. 


Bringing internet access to the world

There was rather a poor article in the Observer today by John Naughton about Google and Facebook’s recent buying sprees. It wasn’t that there was anything particularly wrong with the analysis – it is just that it was lame, uncontentious and old hat.

The main conclusion was that Google and Facebook’s recent purchases of drone companies was driven by a desire to bring the internet to the 5 billion people without proper access and in the process to advance their own businesses and increase their profits. Neither company has made a secret of their ambition to widen access to the internet and it would be extraordinary indeed if they didn’t want to make a profit from the activity.

There was a missed opportunity here as I think there is an interesting story to tell about these acquisitions.

I will concentrate in this post on the drone acquisitions – I will write a further post about the other acquisitions later.

Google’s move into the provision of internet services (as opposed to merely services which run upon it) may actually be quite a bit more calculated than it at first appears to John Naughton.

Aral Balkan, the designer, programmer and entrepreneur,  gave at talk at the RSA on April 10th called “Free is a Lie” where he argued that Google’s business model is “the business model of corporate surveillance”. (The talk will appear here in due course – there is usually a small delay before they are posted. The talk has now been posted here.)

He argued quite persuasively that “free is a concealed barter” and that the “monopoly of the free business model is leading to digital feudalism”. The argument is that Google needs to know everything about you in order to squeeze all the economic value out of your data. This is why they developed Android (which you log into with your Gmail address) and why they have developed services like Google Now, and why Chrome’s features are so much richer if you log in. The provision of internet services is even better as you log into the web with your Gmail address so that everything you do (on whatever browser) is now tracked and usable.

Facebook has the same business model. It tries everything it can to make us default to public so that, again, the economic value can be extracted. The problem is, says Aral “if we make the default public then anything private has the association of guilt about it”.

“The cost of free is our human rights – which is too much to pay.” Whether you agree with this interpretation or not, it is a much more interesting story.

To Glass or not to Glass

It seems as if Google Glass has travelled quite a long way along its hype cycle even though it has yet to be launched as a finished product. The product was shown initially at the I/O conference in June 2012 and the first beta products (knows as the Explorer Edition) were made available to a select group of evangelists who paid $1,500 for the privilege in April 2013. Since then they have made all sorts outings on various conference stages around the world, been photographed in the New York subway and even been photographed in the shower (see photo of Robert Scoble).There have been endless reviews from the “explorers” such as this or this.

On the whole the tenor has been – revolutionary product, will take some getting used to but generally positive. Lately, though the tone has changed. Gizmodo calls out Google for getting defensive but not answering the real issues. And Mashable weighed in with its prediction that Android smart watches (specifically the Moto 360) will render Glass obsolete:Why the Moto 360 Smartwatch will Kill Google Glass.

I think this new-found pessimism is wrong on a number of counts. It is easier to see how a smart watch would be used – we already have watches and if it gives us a bit of what our phones give us we can get our heads round that.

But that is to miss the basic point. We are all now inseparable from the web. We use the internet as external memory and our smart phones are our current access point. But they are far from perfect – staring at your phone screen distracts from the task in hand and acts as a barrier to the real world. Smart watches will be better, but only just.

The real end-game is seamless access to the web directly overlaid on the world. Google Glass is the closest thing we have to that right now.

Sure, Glass is flawed (poor battery life, limited applications etc etc) and certainly it will take us a while to work out the correct etiquette around it.

But the Glass paradigm is a powerful one which is qualitatively different to all that has gone before it. And Moore’s law should take care of the shortcomings.

This summary from Wired is a pretty good round up of both the good and the bad. The conclusion is, I think, right on the money:

You can make fun of Glass, and the assholes (like me) who wear it. But here’s what I know: The future is on its way, and it is going to be on your face. We need to think about it and be ready for it in a way we weren’t with smartphones. Because while you (and I) may make fun of glassholes today, come tomorrow we’re all going to be right there with them, or at least very close by. Wearables are where we’re going. Let’s be ready.

Is Yahoo’s move the first of many?

This morning’s story in the Guardian about Yahoo’s decision to move its European headquarters to Ireland is I think very significant.

According to the Guardian, Home Secretary Theresa May summoned the company to a meeting to express the concerns of Scotland Yard that Yahoo will no longer be bound to co-operate with British anti-terrorism investigations once it completes is move to Ireland.

The story says Yahoo has been “horrified by some of the surveillance programmes revealed by Snowden and is understood to be relieved that it will be beyond the immediate reach of UK surveillance laws.”

Thus a giant company has chosen to move to a state with more favourable privacy/security regulations and practices – it will surely not be the last. I would not be surprised if we see European countries advertising themselves on the quality of their regulatory safeguards. And neither would I be surprised if the current Government insouciance at criticism of GCHQ oversight begins to crack when hard economic consequences are felt.

The internet has grown so fast and technology so powerful so quickly that the legal and regulatory framework in the West is way behind. This move by an internet giant (and potentially others to come) may be what it takes to start a grown up debate about the kinds of trade-offs and safeguards a modern society needs. So far it looks like indiscriminate tapping of the Yahoo messenger chats of millions of innocent citizens has occurred at the potential expense of a future lack of co-operation in the case of a genuine investigation into real suspects. Talk about own-goal.

A new employer-employee compact

The old “job for life” certainties have gone but the laissez-faire approach which has replaced them is neither good for companies, nor good for employees argue Reid Hoffman, Ben Casnocha and Chris Yeh in the Harvard Business Review.

For most of the 20th century, the compact between employers and employees in the developed world was all about stability…..careers progressed along an escalator of sorts, offering predictable advancement to employees who followed the rules. Corporations, for their part, enjoyed employee loyalty and low turnover.

The arrival of globalisation and the information destroyed all that, they argue. Adaptability and entrepreneurship became the key to achieving and sustaining success.

These changes demolished the traditional employer-employee compact and its accompanying career escalator in the U.S. private sector; they are in varying degrees of disarray elsewhere.

The result is a break-down of trust between companies and their employees with a “winner-take-all economy that may strike top management as fair but generates widespread disillusionment among the rest of the workforce.”

The answer, they argue, is to build a new kind of compact between employer and employee based on three things:

Hiring employees for explicit “tours of duty”
“A tour of duty serves as a personalised retention plan that gives a valued employee concrete compelling reasons to finish her tour and that establishes a clear time frame for discussing the future of the relationship. ” These typically would be between two and four years and the end of the “tour” needn’t necessarily lead to the employee leaving the company (though that could be the outcome) but it would mean signing up to a further two or four year “tour”.

“Work with employees to establish terms of their tours of duty, developing firm but time-limited mutual commitments with focussed goals and clear expectations. Ask ‘in this alliance how will both parties benefit and progress?'”

Encouraging employees to build networks and expertise outside the organisation
To maximize diversity and thus innovation you need networks both inside and outside your company. Therefore, employers should encourage employees to build and maintain professional networks that involve the outside world. Essentially, you want to tell your workers, ‘We will provide you with time to build your network and will pay for you to attend events where you can extend it. In exchange, we ask that you leverage that network to help the company.’ “

Establishing active alumni networks to maintain career-long relationships
“The first thing you should do when a valuable employee tells you he is leaving is try to change his mind. The second is congratulate him on the new job and welcome him to your company’s alumni network.”The authors argue that having an extensive and active alumni network is extremely powerful.

“One obvious benefit of alumni networks is the opportunity to rehire former employees….They can share competitive information, effective business practices, emerging industry trends, and more. They understand how your organization works and are generally inclined to help you if they can.”

They recognise that this may sound counter-intuitive to many firms. “You might fear that running an alumni network is an admission of failure—a sign that your company can’t retain its best people. But your alumni are likely to form a network anyway; the only real question is whether your company will have a voice in it.”

They sum up:

The key to the new employer-employee compact we envision is that although it’s not based on loyalty, it’s not purely transactional, either. It’s an alliance between an organization and an individual that’s aimed at helping both succeed.

In the war for talent, such a pact can be the secret weapon that helps you fill your ranks with the creative, adaptive superstars everyone wants. These are the entrepreneurial employees who drive business success—and business success makes you even more attractive to entrepreneurial employees.