The Industries of the Future

by Alec J. Ross

Fees vary based on the type of business a merchant runs,

And credit card companies do not make it easy to understand; MasterCard’s policy on interchange fees numbers over 100 pages.

You see it not just with commerce, but you also see it with things like Foursquare, Twitter, where in the best cases, it’s an online movement that ends up in a face-to-face sort of interaction.

So in terms of what drives the economy and where the true power lies, I think it is these networks of local sellers and local buyers.

multinationals and the corporations into these local entities, and we see it certainly in our numbers.” This is a dynamic we’ll explore further in this c...

“Square shows the power of distribution and distributed technologies,” says Jack. “Anyone can pick up a device they already own and suddenly become a powerful commerce engine in that particular area, which then will have influence on the larger entities: the neighborhood, the city, the state, and then the nation.”

He views Square as a product that can help these struggling areas incubate new businesses. “The part I think Square plays is making commerce easy,” Jack says. “Not payments but commerce, so that anyone can make a start and then easily run and then easily grow.” It’s a commerce company for the little guy.

While visiting Hebron, I encountered a joint Hamas-Fatah procession. Hundreds of men paraded down the city’s main thoroughfare arm in arm, waving Fatah’s flag alongside the pennant of Hamas. The warming of the historically hostile relations between Hamas and Fatah signaled a worrying renewal of militarization in Palestinian politics.

The common gripe I heard from Palestinian entrepreneurs was twofold: the lack of payment systems and the lack of access to 3G (the standard at the time for delivering wireless Internet connectivity). Each year, 2,000 Palestinians graduate from local universities in technical subjects, but only about 30 percent of them find work in their fields. As one young woman studying at Palestine Polytechnic University put it, “We must have a better economy to have better lives, and we must have 3G to have a better economy,” her reasoning being that if there is no Internet connectivity, then the basic conditions necessary to do engineering work are not there.

Radicalization, unemployment, and engineering skills are a nasty combination. Many suicide bombers and bomb makers that Hamas has produced have come with this background.

The best way for the West Bank to not end up like Gaza is through economic int...

eBay and PayPal

Coded markets will now reach into the world’s most isolated communities, and they will link emerging markets to the global economy even more closely.

Driven by competition over natural resources, ethnic divisions, and the vanities of warlords, conflict in eastern Congo has claimed at least 5.4 million lives.

The current crisis has led to an almost complete breakdown of the Congolese state, which has devastated the Congolese economy. As security collapsed, most foreign investors fled—all except beer, telecoms, and mining.

without access to capital or even a currency stable enough to hold value, commerce has foundered. The black market dominates the economy, and the Congo remains one of the world’s poorest states.

Here, the advent of mobile payments has allowed the mobile phone to become a payment system that provides vast new opportunities for the “little guy.”

The man to whom many of them look for inspiration is Mo Ibrahim, a 69-year-old Sudanese entrepreneur who effectively brought the mobile phone to the continent. Mo founded Celtel in 1998, realizing that a continent of 1 billion people and almost no phones could be a highly promising market for telecom. When he started his company, the Democratic Republic of Congo had about 3,000 phones in a country of 55 million people. Today it has more than 20 million phones. Mobile telecoms spread in part because sub-Saharan Africa was a lightly regulated market. Anybody willing to invest would get the licenses, rights of way, and a market ready to buy.

International finance flows have a particular importance in the developing world because so much money is transferred home as remittances from workers who live abroad. Remittances are one of the primary sources of income across Africa. Approximately $40 billion is sent to communities in Africa from families abroad, and in some countries, like Lesotho, remittances comprise as much as a third of GDP.

Indeed, Mo had put his money where his mouth was: in 2005, he sold Celtel to a Kuwaiti company and set up the Mo Ibrahim Foundation with the proceeds. Through the foundation, he is making a significant investment in governance, focusing exclusively on rooting out corruption. Despite his background as an entrepreneur in technology and a telecom executive, Mo thinks that whether Africa takes off economically will have less to do with telecom and innovation than with whether basic governance improves.

When we researched this, we learned that the core problem was that the soldiers were not getting paid. Barrel-sized rolls of banknotes were flown from the capital city of Kinshasa to Goma, 978 miles away. After the banknotes arrived, the generals would take most of the money. Then the colonels would have their shot at it, and they might leave a little bit for lower-ranking officers. Regular soldiers would regularly go months without seeing any pay.

Or, if you’re an investor, do you trust that business in Africa will be safe and secure? In order to be effective, the code-ification of money, payments, and markets has also had to figure out how to code trust.

According to eBay founder Pierre Omidyar, people on eBay “learned how to trust a complete stranger. eBay’s business is based on enabling someone to do business with another person, and to do that, they first have to develop some measure of trust, either in the other person or the system.” The development of trust online is a product of algorithms.

The next leap forward in the code-ification of trust and markets is in the so-called sharing economy. I think of the sharing economy as a way of making a market out of anything and a microentrepreneur out of anybody. The sharing economy uses a combination of technology platforms packaged as apps on mobile phones, behavioral science, and mobile phone location data to create peer-to-peer marketplaces. These marketplaces take underused assets (e.g., an empty apartment, empty seats in a car, or skill as a math tutor) and connect them with people looking for a specific service.

In autumn 2007, Brian and his buddy Joe were unemployed in San Francisco and trying to figure out how to pay the rent. All the hotel rooms in the city were booked up for a conference, so they decided to use their three unused air mattresses and breakfast cooking skills to create a low-end bed and breakfast. They marketed it as “Airbed and Breakfast.” It helped them pay the rent and launched the idea for Airbnb: a marketplace to connect underused lodging space with people struggling to find affordable accommodations.

Airbnb is worth more than twice as much as Hyatt, and Brian has gone from being unable to afford the rent to being a billionaire.

Founded in 2009 by Travis Kalanick and Garrett Camp and also based in San Francisco, Uber provides travel and logistics in more than 250 cities in 58 countries as of June 2015.

Uber’s first tagline was “Everyone’s Private Driver,” but as the company has expanded, it has changed its motto to “Where Lifestyle Meets Logistics.”

The power of coded markets was explained to me by Charlie Songhurst, one of the most creative thinkers at the intersection of technology, society, and the global economy. Charlie bet on Google early, after realizing the winner-take-all dynamic of online search as a young analyst at McKinsey. He then went on to work for Microsoft as head of corporate strategy, and now, at age 35, he oversees a series of his own funds. When it comes to his own lifestyle, Charlie doesn’t own a car, hold a permanent residence, or employ a staff. He owns a few suitcases with personal possessions and travels the world living as part of the shared economy, relying on Uber and Airbnb.

Charlie is pointing out the potential for powerful global consequences:

Every classified ad in Italy used to go into a town newspaper. Now it goes to Google.

Pinterest will basically replace magazine sales.

Now Uber dominates tr...

Uber and Airbnb have inspired a host of imitators, and the sharing economy is growing far beyond lodging and transport. Companies have been established to sell (not share) latent goods and services ranging from home-cooked meals and day care for pets to tutoring in math.

Trust has become code-ified, and the role of the state as a regulator has been diminished.

The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.

Bitcoin is more easily thought of as a public ledger system than as a physical currency.

Nakamoto conquered, and that every previous cryptocurrency had failed to manage, was the question of how to update that decentralized ledger: How could you make sure that the millions of copies of the master ledger, which are located far and wide throughout the Bitcoin network,

I see that the withdrawal have already been processed. Kindly refer to the below link and process withdrawal can not traced or stopped.

‘Hey, there’s this thing called a cryptocurrency, which is a virtual currency, and it was stolen from an account by anonymous hackers’?” He knew that the local cops

Bitcoin and found 302,000 cases, but most happened after Mt. Gox’s February 10 press release. These were, in all likelihood, copycats capitalizing on the initial hack. Between January 2013 and the February press release, hackers had only tried to steal 1,811 bitcoins.

The attitude among the most respected investors in Silicon Valley is that the collapse of these early Bitcoin ecosystem companies is actually a good thing. They tell me that these companies had to be taken down for Bitcoin to make it over the long term.

Charlie Songhurst believes that “the problem with the Internet from 1995 to 2010 was that it enabled information dissemination and communication but lacked any ability to transfer value between individuals.

as a currency exchange and a remittance network. It has been compared to a hawala, a traditional Arabic exchange system used to transfer money for people who do not have access to banks, largely as a remittance system. In contrast to bitcoins,

Ripple Labs maintains the global ledger, and its servers automatically monitor the transactions to ensure against fraud.

The world has left the Cold War behind only to enter into a Code War.

On Wednesday, August 15, 2012, a shadowy group linked to the Iranian government attacked Saudi Aramco, the world’s largest energy company. Their weapon of choice: a computer virus.

Shamoon was designed to wipe out the memory of Saudi Aramco’s computer system.

Saudi Aramco is the most valuable company in the world by a long shot, with estimates beginning at $2 trillion, more than triple the market cap for Apple and seven times that of ExxonMobil as of this writing.

Malware. Virus. Worm. Trojan horse. Distributed denial-of-service. Cyberattack. The terms for the weaponization of code are by now well known, but we are just beginning to understand their full implications.