Kate Baucherel's Blog, page 5

Happy Birthday Bitcoin. Here’s to all the family!

Bitcoin celebrated its eleventh birthday on January 3rd, 2020, the anniversary of the creation of its Genesis Block. The first working peer-to-peer system of electronic cash was born into turbulent times. In that original block lies a hidden message which reads: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. It is generally accepted that the final push to bring cryptocurrency into being was the global financial crisis which broke the bonds of trust in centralised banking systems. There has been plenty of interest in Bitcoin’s early years (including intense speculation on its immediate parentage), and its younger siblings are always clamouring for attention, but like every modern superhero, it also has a riveting Origins story just waiting to be told.

Galactic cocktails

Authors have for decades dropped their characters into alien lands, both on earth and around endless fictional universes, assuming blithely that they have the means and method to settle their bar tab wherever they may be. What is the strange currency that keeps our wandering heroes in cocktails? Over the many years that galactic travellers have been hanging around in disreputable bars, researchers and cryptographers have been working toward a vision of digital cash. There have been plenty of false starts. Today, many of us use PayPal as an easy payment option – I made a micropayment just now to the creator of the cute birthday image at the head of this post – but few realise that PayPal, like many other less rounded concepts which fell by the wayside, started out as an attempt to create a system of electronic cash. It found its niche as a payment system using established, centralised currencies and has been successful there: according to its annual report, its 267 million active users made almost 10 billion transactions in 2018.

Trustless Systems

The concept and workings of digital cash were first suggested almost 40 years ago by David Chaum in his 1982 thesis, “Computer Systems Established, Maintained and Trusted by Mutually Suspicious Groups”. He proposed a secure vault to hold the hashed root of a bundle of transactions, something we would now recognise as a block in a chain. (This hash is the Merkle Treet Root, named for Ralph Merkle after his 1979 thesis on cryptography in public key systems.) Sharp-eyed readers will also notice that the idea of trust between mutually suspicious groups is one of the wider use cases for blockchain technology. Chaum went on to develop the concept of blind signatures, and in 1989 founded DigiCash. This introduced Cyberbucks, probably the first electronic money system, but was short-lived.

Cypherpunks vs the NSA

More significant players in our Origins story emerged in the 1990s: the Cypherpunks. This community grew from a mailing list around the Crypto Anarchist Manifesto which was published by Timothy C. May in 1988. At that time in the United States, encryption was the preserve of government. It was so important to securing communications in wartime that it was classified as a munition, and even nascent tech companies were unable to use anything beyond 40-bit encryption to secure their user licences. The Cypherpunk movement stood up to National Security Agency and succeeded in bringing strong encryption into the public domain. This was a watershed moment for cryptography, privacy, and the development of cryptocurrency.

It takes a village

The Cypherpunks probably counted the creator/s of Bitcoin among their number. Although the person or persons behind ‘Satoshi Nakamoto’ are unknown, this group included some extraordinary people who contributed to the puzzle. Among these was Nick Szabo, whose 2005 concept ‘BitGold’ introduced timestamping for transactions, and Wei Dai, who suggested broadcasting transactions to multiple nodes of a network in a 1998 paper about ‘B-money’. While we may never know the true identity of Satoshi, and arguably we should not, the Cypherpunks were a major part of the village which raised our Bitcoin child. On the fringes, we can also thank the developers of peer-to-peer networks of varying notoriety such as Napster and The Pirate Bay, the protocols developed by BitTorrent, and the SecondLife community whose Linden Dollar showed that virtual (if centralised) currency was viable.

Our little Bitcoin was almost thirty years in the making, and hasn’t it grown? You can read more about the origins of Bitcoin in my new book for Business Expert Press: Blockchain Hurricane: origins, applications and future of blockchain and cryptocurrency.

Originally published via LinkedIn Pulse, January 2020 https://www.linkedin.com/pulse/happy-birthday-bitcoin-heres-all-family-kate-baucherel/

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Diversity across a decade

With eleven days left of a turbulent ten years, I’m following the fashion of reflection but looking ahead to the promise of the impending Twenties. In January 2010 I was comfortable in a senior financial position with a FTSE 100 subsidiary. Today, I’m in the process of writing my fifth book (fiction) and awaiting publication of my fourth (non-fiction), loving my emerging profile as a speaker, managing the ups and downs of a freelance consultant’s life, and enjoying my work with Teesside University Business School. It’s been a decade of change personally, too. My toddlers are now at secondary school, and all of their grandparents have passed away. We lost a whole generation of our immediate family in the space of five years. The pressure that such personal change exerts on working life is extraordinary, and it has been a factor in my choice of, or more accurately need for, a freelance career. Combining the care responsibilities of the sandwiched generation with regular work and founder roles is an almost impossible tightrope, and has a large part to play both in the lack of diversity we have seen in business to date, and the new awareness of a need for change.

There is far more attention now than ten years ago on a need for diversity and the lack of female and other minority role models in business, but not enough recognition of the juggling act that goes on behind the scenes. It is telling that in that January a decade ago when the company I worked for was taken over, my colleagues and I looked at the board of men in the London office of the new parent and the board of women in the local northern subsidiary, and checked our redundancy clauses. Sure enough, within a very short time our roles were indeed redundant, and we were unsurprised. The journey that followed, from digital marketing agency Divario through co-founding and growing software development startup Ambix, and on to my current roles was a learning experience not only in terms of skills, building a layer of technical knowledge and communication skills onto my professional background, but in dealing with attitudes to diverse needs and flexibility. In the early years, presenteeism and strength won the day. As time went on, attitudes changed. The work of organisations like 50:50 Future, Northumbria University’s Executive Programme for Women Leaders, the Institute of Directors’ flagship Women on Board group in the region, and the publication this year of Caroline Criado Perez’ extraordinary book Invisible Women, have brought gender diversity discussions and action to the fore. This can only be positive.

My hope as we enter 2020 is that the coming decade will expose and find solutions for the roots of such inequality in all its forms. In the process we can improve the diversity of our businesses, educational institutions and government, and of the innovative products and services which are changing our lives.

Originally published via LinkedIn Pulse, December 2019 https://www.linkedin.com/pulse/diversity-across-decade-kate-baucherel/

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Whither the future of money?

As cryptocurrencies gain both ground and notoriety, questions are increasingly asked about the future of money. I confronted this in my 2017 novel Bitcoin Hurricane, imagining a near future where digital and fiat currencies trade side by side in the money markets, and banks still have a role to play in our lives. Austin’s SXSW festival this year featured for the first time a Blockchain and Cryptocurrency track. Speakers and attendees from keynotes to high quality fringe events were vocal on the topic, and their views on the future of crypto and the cash in our pockets were hotly debated. Here is a flavour of the views from all points on the spectrum.

Twin Pillars of Trust and Stability

The first people to have their say, in a high profile featured session, were Cameron and Tyler Winklevoss. (They are very tall.) The Winklevoss twins sit firmly in the camp of custodianship. As seasoned crypto investors they have watched the development of the space and the high profile disasters, from Mt Gox to the recent Quadriga collapse. In most cases, the weak link has been human: the trust placed in the guardians of crypto assets has been misplaced. Their question to the audience: Who guards the guardians? Who watches the Watchmen?

In the absence of caped heroes, regulatory oversight is currently our only hope, according to the Gemini exchange founders. They assert that the healthiest markets are the best regulated, and that regardless of the currency involved, the future of money requires trust. They established their exchange in the aftermath of the Mt Gox collapse and acquired their banking licence before launching. Interestingly, they cited the early legal wrangles between Microsoft and Netscape which held those 90s giants back from dominance on the internet, allowing Google to overtake. The Winklevoss twins are in this for the long haul, ready to take the opportunity that being a trusted custodian should convey.

Avoiding centralised decentralisation

There are robust challenges to this strategy, stemming from the simple fact that cryptocurrency is intended to be decentralised. By relying on exchanges to store their coins, users are treating them as de facto banks and are blind to the risk this could pose. Why is this? It is the curse of familiarity. We have become accustomed to the role of retail banks in our everyday lives. The concept of an  exchange feels comfortable, reliable, almost bowler-hatted (in a steampunk kind of way). Exchanges are making an effort in turn to be friendly to use, easy to access. This is great for introducing new users to the space, but it’s the equivalent of just dipping your toe in the water and thinking you’ve been scuba diving.  It is reliance on a central authority to do the right thing with your purportedly decentralised coins. We have been taught all our lives that the bank is the safest place for our money, but it is no coincidence that Satoshi’s whitepaper appeared very soon after the 2008 banking crash, offering a viable alternative to misplaced trust.

Moving to your own personal wallet – the technical equivalent of the sock under the mattress – is definitely a culture shift and, quite frankly, slightly disturbing the first time round. Who hasn’t tested a transfer of funds with a fraction of a coin first, just in case, and checked and re-checked every character in the wallet address? The challenge for mass adoption is that this is an unforgiving space where coins lost down the back of the virtual sofa cannot be retrieved.

Encouraging safe adoption

I took part in a spirited panel at the JustHODLIt event during SXSW where we debated the Future of Money, addressing every point on the continuum between custody and personal responsibility. Decentralisation is the watchword for serious actors in the crypto space, who have the same scathing view of exchanges and their risks, but propose a different course. VaultWallet , represented on the panel by Corey Segall, helps app developers to bring users on board with a simple mobile wallet interface. Adryenn Ashley’s Loly incentivises adoption by offering users a reason to jump down the crypto rabbithole, seeking safe and secure dating experiences.

The work of these commercial ventures is mirrored by the mission of Joseph Lubin’s Consensys, as they grow the Ethereum ecosystem and make adoption easier through smooth user experience with the MetaMask wallet. Overall, mainstream cryptocurrency use, at volume, is essential for stability and growth. Regulated custodians will have a part to play in building user numbers, but they are only one path to adoption.

Cryptocurrency approaches the mainstream

Making crypto use simple and safe benefits everyone. There is a consensus that those who are currently unbanked will be the most significant beneficiaries of this move. In our comfortable, regulated, wealthy society, we forget that access to bank services is a privilege. This is not just a phenomenon in less developed areas of the world: in the United States, 5% of households are unbanked, according to the Federal Reserve’s 2017 Report on the Economic Well-Being of U.S. Households. In the United Kingdom, the reported figure is 1.6 million adults, of whom many are refugees. There are also businesses who struggle to access banking services. The emerging US cannabis industry which is gradually overturning prohibition, state by state, still relies on cash, and increasingly is turning to cryptocurrency to reduce theft and increase accountability through the clear audit trail of a public blockchain. While gaming is likely to be a key driver to personal adoption of cryptocurrency according to most observers including Lubin, the cannabis sector could lead business takeup. A challenge for any industry is the friction at the edges of the ecosystem. It is all very well transacting in cryptocurrency for retail, wholesale and related sales and purchases, but what happens when you want to pay your rent, or buy food from the local store? This usually requires a shift back to fiat currency, with the twin risks of price volatility and exchange integrity. In the past few weeks, however, the State of California’s Assembly Bill 953 opens the door to accepting crypto in payment of cannabis taxes, and trailblazing legislators led by Caitlin Long in the State of Wyoming have passed a bill to recognise cryptocurrencies as money. These are significant moves that will reduces friction at the edge of the burgeoning crypto ecosystem.

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Nifty Moves: Blockchain news from SXSW

Is it hype, or is there something in it? The innovation spawned by cryptocurrency and its underlying distributed ledger technology is matched only by the scepticism that surrounds wild claims of future potential, and by the scams which arose in the Wild West of the 2017 bull run and ICO fundraising. The sector is beginning to settle, it seems. A gradual release of enterprise systems utilising the technology, for example IBM’s Food Trust, has conferred some much-needed legitimacy. This year’s South by Southwest (SXSW) featured for the first time an extended blockchain and cryptocurrency track. Although many of the panels took place in the final three days of the festival, outside the bulk of interactive programming, events throughout the week shed light on the latest developments. It’s impossible to cover every aspect of these in a single blog. In this first of several, I want to highlight nifty moves around non-fungible tokens and digital cats.

Blockchain 101

For those new to the party, what is blockchain? Jargon is chucked around with abandon. It’s ‘transparent’, ‘disintermediated’, ‘consensus-driven’, ‘immutable’. What that really means is: everyone can see the entries on the ledger, everyone has a copy, everyone agrees the data is correct (thanks to a neat randomised approval of the transactions by the network participants), and no-one can change what’s recorded in it. It is not a silver bullet which will solve all the world’s problems. Rather, it is a magic spreadsheet in the sky with military-grade tamper-proofing (thanks to Ian Cornwell of Kraken IM, and Joseph Lubin of Consensys, for their contributions to this succinct description).

Cats on the blockchain

What kind of transactions can you record? Movement of cryptocurrency was the starting point, ensuring that transfers from one wallet to another on the ledger were incontrovertible and unique. The rules for a transaction are laid out in the ledger’s code and are known as smart contracts (although they are neither smart, nor actually contracts). Movement of non-monetary digital assets, represented as programmable tokens, is also naturally suited to this process.

Some of the more exciting developments in these are coming from the gaming sector. CryptoKitties allows users to buy, sell and breed cartoon cats. The artwork for a particular cat is licensed to the owner of the digital cat token – this is Dapper Labs’ clever Nifty License. My three kitties are pictured above. Their characteristics are defined by the smart-contract-generated genetic code, recorded on a unique, indivisible token known as an NFT – a ‘Non-Fungible Token’. All the cats are different, you can’t slice them up (that would be cruel), and you own them outright, unlike items in traditional games which stay firmly on the servers of the gaming company.

Interoperability

Ownership is one thing – a nice-to-have feature which can take buying and selling activity outside the game platform – but what else can you do with the tokens? Creators Dapper Labs have taken a step into the unknown through their recent partnership with a very different game, Gods Unchained. Each Cryptokitty token generated a limited-edition card pack in Gods Unchained, and fancy Gods Unchained cats appeared in Cryptokitties. You can read more about this in Fuel Games’ article here. The interoperability of tokens in a collaborative ecosystem may seem like a niche application right now, but it is important because it is something that could not be done before this technology emerged. We don’t know where blockchain will take us, in the same way that in the days of dialup modems we could not conceive of social media, but I’m willing to bet that these little cats will be leading the way.

Follow me on Twitter and LinkedIn for more news from SXSW 2019

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The Innovation Game

Science fiction, fantasy, computer games, and chess. My children are all over these, playing hard and imagining new worlds. As we start to face adult responsibilities, it’s sometimes hard to hold on to the absolute joy of play, but discussions around the development of artificial intelligence at this year’s South by South West (SXSW) festival reminded me how important it is not to grow up.

Playing machines at their own game

Presenting on Ethics and Responsibility in Artificial Intelligence, Garry Kasparov fondly recalled winning the world Chess championship in 1985 when “machines were weak and my hair was strong”. A decade on, in 1996, he lost the first of three matches against IBM’s Deep Blue, winning the other two: he found this even competition more interesting than “the brain’s last stand” in 1997 when the machine finally gained the upper hand. This success did not imply that Deep Blue thought like a human, or even that it memorised all the 1046 possible moves. It simply had to make fewer mistakes. This is a key aspect of the machine learning and artificial intelligence which complements our human performance. Machines do not grandstand. A win is a win. For decision making to be both precise and creative, humans and machines need to work together. A great analogy can be found in the world of motor racing. A Formula One car in the hands of a commuter may terrify the driver and will not set any lap records. An F1 star ‘in a reasonably priced car’ may be faster than the average celebrity but would not win the championship. Put the high performing machine with the high performing human, and you have a winning formula.

Accelerated innovation

Since Deep Blue, technology has moved rapidly. We now have Deep Mind’s AlphaGo Zero, learning a far more complex game from scratch. According to Accenture’s UK AI lead Fernando Lucini, its ability to be curious has enabled it to deploy successful strategies which would simply not occur to a human player. How has artificial intelligence advanced so much in two decades? Thanks are due to the gaming community, said IBM Watson IoT’s Chief Agitator John Cohn. As computer games grew in complexity, hardware ran to catch up. Anyone who has gone back to the original Lara Croft games will see the difference between graphics processors in the Deep Blue era and the way things look now. I recently retired my original Playstation and its pixelated Crash Bandicoot in favour of the latest remastered, crystal clear graphics. The advance in GPUs for better game experiences has delivered the processing power needed for the new generation of artificial intelligence. Gaming has driven innovation, and to continue advancing, we must continue to play.

Playfulness in interaction

The Genuine People Personalities conferred by Douglas Adams on Marvin and the Heart of Gold spaceship doors were a hilarious warning to the builders of today’s AI. As Slack’s Anna Pickard reminded us, there is a difference between a ‘fun’ personality, and the persona we take away from any encounter. Whenever we interact with an AI (and believe me, you do this more than you think), the register and content of communication are important. Experiments with AI which mirrors emotion have not been a roaring success. Mirroring stress, for example, built a spiral of worry instead of alleviating the condition. Playfulness is a much easier way to connect, with appropriate adjustments for culture. Personalisation and trust come from friendly interaction, although this does not mean the machine is a friend. Is Alexa your friend? Do you want it to be? Ultimately, the goal is for AI to speak to you in the right way, at the right time, and for you to be comfortable enough that it empowers you to take the right actions.

Fiction and hope

For lifelong scifi fans, the fictional inspiration behind some of today’s everyday tools is not lost on us. It is more than two decades since I owned my first Star Trek communicator (Motorola flip phone) and it’s a sure bet that advances in the use of lasers are being driven by scientists and engineers who really, really want a light saber. There is a dialogue between writers and developers driving inspiration and innovation in both directions. Author Ytasha Womack led a lively discussion with representatives from Boeing, the Aerospace Institute, and the Smithsonian. Fiction allows for metaphors and thought experiments, and for the presentation of dystopian visions which reflect the lessons of the past or scenarios to avoid in the future. Blade Runner’s battle for replicant rights is a fictional representation of the ongoing battle for human rights. However, in the same film we can see that extrapolation of the future starts with what we already know. At the time, computers filled large rooms, and communication happened in telephone booths, and you can see these in the film. What lies in our future reality? One thing of which we can be certain is that fiction helps creative engineers to push the envelope, investing time and effort in making imagination a reality. It is the responsibility of writers to stoke the fire with stories, in what is a golden age for popular culture.

Stay curious!

The overarching lesson on innovation is that both humans and machines have to let their curiosity lead them to new things. Be curious about your world. Be curious about your future. Be curious about the potential for machines to complement your skills and deliver better results thanks to a true meeting of (human and silicon) minds. We don’t have to grow up, after all.

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Expert Insight: Blockchain Technology

This briefing on the history of blockchain and distributed ledger technology was commissioned by Business Expert Press as part of their now discontinued Expert Insights series. You can view and download the full article here: BEP Expert Insight Blockchain Nov 2017

Abstract:

Blockchain is a distributed ledger technology, which has its roots in the development of the Bitcoin cryptocurrency in 2009. The emergence of Ethereum, permissioned blockchains, distributed applications, and smart contracts has sparked rapid development. Blockchains are appropriate for any transaction or process that features a string of clear transactions and would benefit from distributed responsibility and disintermediated operation rather than centralized control. However, there are challenges and regulatory concerns to be addressed.

Keywords: Bitcoin, Blockchain, Cryptocurrency, Disintermediation, Decentralization, Distributed Ledger Technology (DLT), Ethereum, public blockchain, permissioned blockchain, Smart contracts

Introduction

Blockchain technology has been hailed as the most important development since the internet itself. Originally underpinning cryptocurrencies, starting with Bitcoin, the concept of Distributed Ledger Technology (DLT) is well established in the world of finance (fintech). However, blockchain has the potential to transform business practices and to address societal challenges, revolutionizing services in government and the private sector (UK Government Chief Scientific Adviser, 2016). This article examines the different types of distributed ledgers and their existing and potential applications in, among other things, digital identity, government, Internet of Things, accounting and finance, supply chains, and data security.

Development of Blockchain Technology and Bitcoin

Blockchain was originally introduced as the technology that underpins Bitcoin, the first working cryptocurrency. The idea of cryptocurrency has been in fictional and academic circulation for decades. In fiction, it is an appealing concept in the operation of futuristic societies. How else would any character described by authors from Douglas Adams to Isaac Asimov pay for rented ground cars or cocktails on arrival at the spaceport of a new planet? In research, the concept and workings of digital cash were suggested by a leading cryptographer in the early 1980s, with multiple articles exploring the mathematical underpinning of virtual currency (Chaum, Fiat, & Naor, 1988). Two fundamental problems were clearly defined at the outset. First, double spending: there is a need to prevent someone spending the same digital money more than once. Second, a cryptocurrency must be created, supported, and secured without recourse to physical reserves or central banks. A decade after Chaum et al., a computer engineer (Wei Dai, 1998) suggested solutions for the transfer and the creation of digital money, and also a process for the effecting of contracts, all of which have now been realized.

In 2009, an article was published under the pseudonym Satoshi Nakamoto proposing a “peer-to-peer version of electronic cash” (Nakamoto, 2009). Nakamoto’s proof of concept solved the challenge of double spending, and incentivized a huge network of users to create cash and maintain the system in perpetuity through the mining process. A working cryptocurrency, Bitcoin, was born.

Continue reading: BEP Expert Insight Blockchain Nov 2017

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Who can be trusted with our personal data? | Center for Digital Ethics & Policy

There are shivers in Silicon Valley as the data protection winter approaches. Hard on the heels of the implementation of Europe’s General Data Protection Regulations (GDPR) in May 2018, the California Consumer Privacy Act 2018 (CCPA) passed through the state legislature in August. The long and difficult labor which preceded the birth of the CCPA is well documented by Nicholas Confessore in his New York Times article[i], and raises a serious ethical question: Who should take responsibility for data privacy in this connected age?

Source: Who can be trusted with our personal data? | Center for Digital Ethics & Policy

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Bitcoin? That will do nicely, sir….

Oh, how we have waited in vain to hear those words. Since the heady days of the first real-world bitcoin transaction, the legendary pizza purchase of 2010, we have been poised with our wallets in hand, waiting for coffee purveyors to catch on…..

Read the full article on Converge : Making real-world payments with Bitcoin. Coming soon?

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Let the Blockchain take the strain | Digital Leaders

How will smart contracts streamline business processes?

Digital Leaders North East and Invotra attracted a broad range of businesses to their Blockchain event earlier this year. The audience ranged from those who are already actively exploring blockchain solutions in their business to the majority who are still feeling their way on the potential of the technology.

Source: Let the Blockchain take the strain | Digital Leaders

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Gold! Gold! Gold from the Blockchain River! | Center for Digital Ethics & Policy

In 2017, $5.6 billion was raised for blockchain-based development projects through a new funding mechanism dubbed an ICO or Initial Coin Offering. By comparison, $240 million was raised by the same method in 2016, while it’s estimated $1 billion has already been invested in the first two months of 2018 (close to $6 billion as at end April). There is a rush for digital gold and with it comes a hefty dose of snake oil. Ethics takes a back seat in the dash for cash as the authorities scramble to keep pace.

Source: Gold! Gold! Gold from the Blockchain River! | Center for Digital Ethics & Policy

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