Cubegeek

Boxtag Idea #057

These days I am doing double duty, reaching out to individuals through Clubhouse and Lunchclub to extend my reach surrounding the subjects of the Logos Project as well as my daily duties for Full 360. I have been pleased with the reception, from polite to enthusiastic, I have received for various aspects of Logos. One person has gotten deep into the current (raggedy) state of prototyping for XRepublic and several have considered the implications for Boxtag. But I have to give full marks to Sumeet R. for recognizing something about Boxtag that I never considered. 

I'll get more into Boxtag as time goes by for those who don't know it beyond the idea of 'multidimensional karma for comments' over time. As much as I'd like to spend my early retirement building the entire thing myself, various economic dislocations and personal miscalculations have made early retirement a diminishing possibility. So I'm being as open as someone non-famous can be. Thus the revival of Cubegeek and the upcoming establishment of the Logos Group however small it may be. Never underestimate the power of one man and twelve disciples. 

At any rate, Sumeet related a story about the difficulties with meta-moderation at StackOverflow, with some note about how a subject may be answered and the frozen, or some response might be considered out of bounds. Whether or not Boxtag was originally implemented at StackOverflow, it can be implemented in retrospect which allows meta-moderation over and along with the original one dimensional karma system. Boxtag itself will offer incentives for postfacto meta-moderation in a way 'similar' to that of Wikipedia so that subjects that are considered 'dead' may come to life once again. This will be especially useful in solving the oracle problem. It can be crowdsourced if meta-moderation is done right. We think Boxtag will be meta-moderation done right. 

Thanks Sumeet. You're brilliant. 

Day 17

I discovered Urbit today. I have always been here. I have just discovered the other people who think like me. I'm not trying to be afraid that this is very much what I've been all about for quite some time, but I think perhaps I can have some cred as these entities get to know me. This is day 17, arbitrarily, of my new engergy and dedication to building this world I have envisioned. I am so pleased to find that Urbit suits my purposes rather exactly as I had hoped someone would. So I'm there. I'll let you know what planet I'm on as soon as I understand this universe a little bit better.

Waiting for Dot Gov

Somebody asked me: Could blockchain technology be used to implement Social Security or Universal Basic Income?

I sez:

Yes, it’s possible. It’s coming from a side angle though. Basically Congress is going to have to admit at some point that the credit card companies keep better track of individuals. And then the credit card companies will have to admit that the new crypto devs have a more secure way of keeping individuals in control of their own identity. And then somebody at Apple is going to make it easy to integrate anonymous identity with iCloud and ApplePay.

Basically, the interest around blockchain and cryptocurrency is going to drive the development of secure identity management and peer to peer payment tech.

If you look at something like Keybase you can get a feel for how a single ID can federate other well known IDs.

I forget the name of this other company, but they have the ability to take your one credit card and make it authorized for all your online purchases except you use a different ‘credit card number’ for each transaction. So your single, real credit card ID is never used online. It’s just used to authorize, from your desktop (or thumbprint as Apple has proven), an on-the-spot value card. This technology is similar to Amazon KMS and HashiCorp’s Vault. IE it’s already done and well understood.

This combination of technologies already exist. The question is basically who is going to mainstream it best. I bet Apple will. Now let’s say they do that next year or late this year. How many Congressmen do you have to buy in order for them to

1. Get it
2. Regulate it
3. Authorize it’s use for Government things.
4. Get bureaucrats across the US to understand it.

Yeah almost never. Which means somebody needs to hack the other two credit bureaus to prove what we already know. Current identification schemes that dominate US commerce are insecure and outdated. Then of course you’ll have to deal with millions of paranoids about the possibility of a National ID, seeing as it’s ‘racist’ to have people show a driver’s license when they vote.

Bottom line. Stop hoping for the masses. Do the math, figure it out, and do it with people who already get it now. And yes I did triple my money in Bitcoin (and in Amazon stock before that (and in Google before that (and in Netscape before that (and in Inktomi before that)))) and no I’m not hurt by the price collapse today.

On the other hand, there will be people who will slowly duplicate old tech with new tech, and maybe they’ll be able to sell this stuff. The old dis-spirited workers at the NSA and CIA are going to have to work somewhere.

 

The Bitcoin Power Equation

Q: How much power does the production of Bitcoin cost the planet?

A: In my HashFlare Scenario[1] I did some calculation to figure out how much it would cost to mine Bitcoin. I used the example of the fastest commercially available mining machine, the Antminer S9 which consumes 1600W. Right now there are about 12,000 full nodes in the Bitcoin network. So that multiplies out to about 19.2MW for the current usage of the mining network, not counting the cost of electricity of the networking hardware. So add a megawatt or so for that and you have about 20.2MW. This is a lot of energy but not much at all for any global system.

Your average household eats 10kW. And your average Texas wind turbine generates 6MW. So basically you could power the Bitcoin network of miners with four wind turbines.

To give some perspective, in 2014 Google’s data centers used 260MW.[2] One nuclear power plant produces 1GW. All of the data centers on the planet use 1.1 to 1.5% of all global electricity.

So to answer your question, if you took the current Bitcoin network and expanded it tenfold, it still wouldn’t use as much energy as Google used 3 years ago. If you expanded it 40 times, you could handle its energy use with one nuclear power plant. Or if you liked you could use solar. The US currently generates 47GW of solar power[3]. So basically 2% of US solar power could power a Bitcoin network 40 times as large as today’s.

Footnotes

[1] The HashFlare Scenario

[2] INFOGRAPHIC: How Much Energy Does Google Use?

[3] What's in a Megawatt? | SEIA

 

BlockCon Trip Report

So those of you who know me know that I know something about BI / DW and VLDB aka Big Data. I think I may continue to use VLDB to distinguish big structured data from high heaps of Hadoop which may or may not map to anything or reduce you to tears. So let's block and tackle shall we?

Brock Pierce
I'm fairly sure that I saw this dude a year ago at a conference in DTLA. Dude was in a completely different suit. Today he wore a cowboy hat and showed slides from his wedding at Burning Man. He's quite a showman, and his topic 'Disrupting the Disruptors' excited some non-zero fraction of the audience when he mentioned certain disruptions, which I forget. Seeing that he was an actor does not surprise me. He clearly knows how to play to different audiences. His overall message was very reasonable and underscored what people like me already know. Don't fuck with people's money. I think it's a message that needed to be said, underscoring what was true about what Jamie Dimon said in the previous fortnight or so. This is real money and real people will destroy the fraudulent, real people meaning governments in organized countries and organized criminals in others. 

Thinking about Pierce and the DTLA crowd, including the guy who runs Gem and pointed me to Netki boss Justin Newton, one is reminded that players will play in this space and when they have particular interests that they can articulate, things will happen. If I had any doubts about matters of inevitability, they were swept away. This is a herd of smart cattle. They may not know which particular direction or destination they will find, but when those hooves start thundering, watch out. What is clear from Pierce' perspective is that donkeys will get whipped. There's more regulation that applies here than most people are aware of. It's not a whole new type of human endeavor, it's just a whole new set of technologies that haven't put together a full ecosystem yet. It will be the web of value, but we already know what to do with money. 

ICOs are a volatile term, and people are already coming up with alternative acronyms. But the writing about underwriting is on the wall. Entrepreneurs can enable a new class of investors in boilerplate fashion so long as they are clear and have no intent to deceive. This will ultimately have salient effects on financial transparency in startups and the accountability of OTC traded public companies. Huge, but ultimately very reasonable. I get it. 

The other half of the speech was something interesting that I'm noting from both he and Richard Heart. After you make your first doshpoint, the emphasis is on other things. This is reinforcing my set of ideas around 'the smart money'. Easy for Burning Man types, after all, they're not playing to the masses. Well, not at first. Quoth Pierce, a 'billionaire' is not the person with a billion dollars but someone who helps a billion people. 

Experts & Grownups
I had the good fortune to be sitting between an angel investor herder, Jeff and a legal diligence dude, Matt. The former I only spoke a small bit to, whereas I had a bunch of questions for the latter. We briefly talked about China as I poked him about how much the SEC is likely to say. He informed me that their may be questions in the minds of some startup entrepreneurs about whether they can pivot from security to utility or vice versa, but the law is clear. There are, apparently, relatively pro-forma channels for doing this sort of business, and in fact one company has done so as an exchange back in the day. These packages of diligence, provided by his firm which has a technical auditor as well as an economist can look at all of these things. As I thought before, he added some confidence to the idea that coins are commodities and can work like commodities markets. 

Other Kibbles & Bits
First of all the overall sense that I got from this conference is that there is a good amount of money and brains in the crowd. There is a level of energy that is frenetic. People are committed to be present in the space. There is a wide variety of done-ness to the projects on display and what is one conference today will surely be 3 or 4 separate conferences in the future. Blockchain is simply too big to put under one roof, and the roof they had this time was already too small.  This crowd skewed towards entrepreneurs and devs, very much unlike the one last year DTLA which skewed towards financial folks and VCs. I suspect there is a lot of hashing (!) out to be done before this becomes what I would consider a coherent industry. But believe me, the gongs of inevitability are vibrating the air. 

NEO
I talked to my friend Mark J who introduced me to one of his technical associates. His idea is to generate a coin economy around subcontractors to his product. It's a super cool idea and I hope it works out. But I must say that I need some clarity around the difference between a value coin and a utility coin. I asked his tech guy, whom I'll call 'Pedro', where he was on the idea of Solidity. I tell you it was such a relief when I heard him blurt that it sucks. I'm glad I'm not the only one with reservations about writing what ought to be considered ironclad contracts in a language that looks like a crippled half-sister of Javascript. They're building what they're going to build. So I asked him what he thought about EOS, and he skipped right to the money. He said that if he had to do it all over again, he would choose the Chinese system called NEO, which he characterized as a 2nd and a half generation blockchain ecosystem. If he didn't say the word 'bulletproof' his expression implied it strongly. I popped over to the NEO website and promptly lost my ability to recognize the problems it claims to solve. Only proving I have a lot more homework to do. 

Bitcoin's Antifragility
The best thing I wanted to hear was that there are some practitioners and champions in this brave new world who understand that it is actually brave to be new, and newer is not always better. So I was pleased to hear the term 'anti-fragility' in the presentation of Jimmy Song. His presentation was coherent and structured and I have added him to my feeds. I will continue to keep an ear out. 

Identity
Identity and security are one of my ongoing concerns, and one of the deeper reasons I am paying attention to blockchain. The blockchain will bring to the masses what I'm calling a more 'perfected security'.  Since the beginning days of e-commerce a bit of fudging has been going on primarily owing to the original design of the Apache webserver. Too much of the WWW is built on stuff that was overburdened for the applications they would eventually support. Now there are more than enough serious developers to make thing work with purpose-built languages and frameworks. Go exists because of what the web has become.  The internet of value will clean up some of the messy identity and security problems we now face, not only for the web itself, but across enterprises as well. It was clear during the panel discussion here that there is a broad set of customers in the identity market and a lot of market penetration is going to happen with brand-y products that may or may not be a comprehensive solution. I'm rather skeptical right now. I want there to be a standard that is at least as good as KYC (if that's a standard). It didn't appear that the panelists were interested in that so much. So I'll keep my bets with Apple and the more boring financial community for the moment. 

Pay Close Attention
The two best presenters for my attention span were BlockCypher and This Guy.

BlockCypher
Basically they are the AWS of blockchain tech. They lease infrastructure and they have an API that ties the whole thing together. No matter which cryptocurrency does what, this company is the surest bet. They have the proper commercial attitude and they've lined up the most real world partners of anybody I can recall at the conference. They're doing work. 

Hyperledger Project
I've tended to forget about this project primarily because I've been answering newbie questions about cryptocurrencies instead of actually building something and answering questions I need to know. Altoros looks like a very sharp operation and so I'm not surprised that they are rather deep into working with those companies that are ready to take a serious look. Oleg's presentation was the first coherent thing I've heard about the differences between private and public blockchains that wasn't dripping with hype about the superiority of Bitcoin. It cannot be that there are only 500 people in the world smart enough to implement, especially given open source, the guts of a world class blockchain. So the breadth of companies seriously looking at this project augur well for the future. I'm really looking to see if I can get a copy of Oleg's presentation.

That's all for now. I should go again next year, and I'm hoping and expecting that if and when Amazon makes an announcement, there will be much wailing and gnashing of teeth. 

Obligatory Seriousness on Goldman Sachs Interest in Bitcoin

So this happened.

Goldman Sachs Group Inc. is weighing a new trading operation dedicated to bitcoin and other digital currencies, the first blue-chip Wall Street firm preparing to deal directly in this burgeoning yet controversial market, according to people familiar with the matter.

I have yet to meet a neutral objective analyst of the Bitcoin market. So I’m really not expecting to get a very good answer as to what happens next. I do expect, however, that Bitcoin in particular will react differently as a market leader and that other coins are traded in a basket without reference to their actual strengths and weaknesses. At some point that will change. I’m singly focused on Bitcoin because the most people know the most about it, and I consider it the safest investment of them all.

Anyway, I know a lot of people have been jawboning against Bitcoin, especially a good friend of mine who works for Morgan. They had a jolly good laugh a couple weeks ago when they were convinced that China and Jamie Dimon were going to destroy Bitcoin. The price has rebounded. (and yes I bought on the dip). So now they are going to think twice and wonder what Goldman is doing. I like the idea that Goldman’s interest seems to be coming from its own captive audience of customers, but I cannot imagine that GS will build an exchange to compete with the likes of Kraken, Bitfinex and Coinbase.

One smart thing would be for GS to simply acquire Coinbase (although I wish they wouldn’t), or one of the notable exchanges. It’s a decent idea for them to make their own exchange. They could amass a fair amount of goodwill by funding or certifying banking transactions with one of the major exchanges. But also one of the historical problems in establishing these large public cryptocurrency exchanges is that no banks would do business with them. I’m certain that GS has enough contacts and influence in the industry to quickly martial some tech folks behind market making, and simply on reputation alone could convince people to ‘bank’ on their exchange. In the end, all the bitterness about MtGox was about who was sloppy and who was a crook. So if GS doesn’t have a reputation as being sloppy and crooked, there’s another piece of the market who would trust a GS branded Bitcoin exchange. Interestingly enough, I bet GS knows 1000 whales who would actually pay for access to such a branded exchange, which is somewhat reasonable to expect.

About six months ago, I thought that private blockchains would be an avenue towards improving the lot of clearinghouse tech. Today I’m not so sure. I’d be willing to bet that there’s a lot of efficiency to be gained in the settlement process without blockchain. I’m sure GS among others have figured exactly how much by now, so we should see walking at long last after all the talking. I expected that investment houses would simply chuck out their staffs and replace them with blockchain settlements. But they could save a lot of money by tailoring a service around Bitcoin itself rather than trying to build their own blockchain. The trick is that they’re going to have to buy enough themselves to manage that business as their internal paper. That will make the price go up, as they acquire, and allow their customers to acquire. It’s a big part of the liquidity that Bitcoin needs. If all GS has done is setup their own systems to work with Bitcoin for settlements and for their own investment customers convenience, it would be a very smart move, and all they really needed to do. If I were a macher at Goldman, that’s what I would do.

 

A Blockchain Update: Bitcoin Rules

I have recently discovered yet another superstar Bitcoin maximalist. His name is Richard Heart. He reminds me of another brilliant guy I know and have worked with for many years. As a result of watching him speak for several hours on his YouTube channel, I have come to several conclusions and consequently taken several actions. 

Double Down on Bitcoin
I have moved all of my cryptocurrency investments, or about 90+% of them into Bitcoin. I have learned that there are about 300-500k private off-exchange wallets which severely changes my estimation of the widespread adoption of Bitcoin. I was shocked. I'm an earlier adopter than I thought. And although I'm on the mountain, I'm a long way from base camp on this journey. I expect that as an investing phenomenon, Bitcoin is a great deal further forward in quality and adoption than any other coin or blockchain tech. I have renewed confidence in the engineers working at Bitcoin Core, specifically Greg Maxwell. 

Somehow I had gotten it into my head that Bitcoin development was mostly done and work was only being done to solve particularly difficult fundamental problems but that those problems were better addressed in Ethereum and newer coins. Now I am convinced that the single purpose and mission of Bitcoin is focusing their developers on actually more serious capabilities that are not very well addressed in the other crytpos. Now I am convinced that Bitcoin will improve, and that it is more resistant to external manipulation than any other cryptocurrency. It retains the most serious brains.

Adam Back is a hero. I haven't heard such glowing praise of a hardcore developer since the early Silicon Valley days and that honeypot exploit that I think was called the 'Takedown'. I'd have to go find my book by Cliff Stoll where he mentions it. Speaking of Cliff Stoll, does anybody remember Guy Kawasaki? 

The Oracle Problem
I haven't heard this phrase before this weekend, although it made perfect sense to me when I started thinking about 'smart contracts'. That problem is simply  how do you trust that software contracts written in stone are responsive to things that are reported to it? In other words if I rely on human reporting to a system, what's the point of the system? There are some areas of human affairs that are best left in decisions made in human minds. That will never change. Smart contracts will always have that weakness. Who tells the State Farm insurance smart contract that your motorcycle has indeed been totalled? Who tells the flood insurance smart contract that Irma did actually flood your living room? I think right now that a ledger is a better application than a contract. 

EOS and Transactions
So Ethereum uses the EVM to process a certain amount of transactions using a certain amount of gas. But it's not scaled globally to process a zillion. It doesn't matter how big a zillion is, but sooner or later the zillion will come. If you are not designed to handle the zillion in your original design, then you have a built in Y2K bug. EOS was engineered for the zillion. In other words it's architected to scale to handle billions of people around the world doing hundreds of transactions a day. Like credit card numbers, it understands its domain so that it will never run out. EOS is brand new.

Solidity vs ...
What if the conditional logic processing of Solidity is inferior to Java or Python? I don't know. I'm not sure why smart contracts ought to be processed in Solidity. It may be optimized in a certain way, but that is something less than perfectly clear to me. Is it a proper functional programming language? Is it buggy? These are not questions I'm hearing answers to yet. We shall see.

Customers Before DApps.
This follows the Rule of Doc. Don't tell people what you're going to do, do something and then tell them what you did. Don't tell people you're going to solve their problems with your magic dust before you know what their problems are. Solve their problems first and then prove your magic dust does the same job only better, cheaper or faster. Believe me, I came from Xerox. You don't have to tell me this twice. I will prototype. Repeat after me. I will prototype my solutions in response to what paying customers demand. I'm not a booth babe. 

The End of ETH coining.
This might happen. I've heard an explanation of why it is expected to happen. IIRC it's 'Proof of Stake' vs 'Proof of Work'. If that happens, ETH shouldn't become a store of value. There's something wonky about the idea that if you want and need Ethereum transactions to take place, that the price of gas should not be counted as a coin. What protects the whole economy of transactions if the cost of transactions inflates? I don't want it to. That's at cross purposes to the impetus of turning paper contracts into code contracts. I don't want AI lawyers to cost more than human lawyers. If and when I come to understand Proof of Stake and its downsides, I'll get a better idea about this, but right now it makes me lean away from the rule-based logic of distributed databases of limited transactional capacity and back towards the rule based logic of centralized database that I understand very well. A more efficient transaction engine is always better. The price of gas is a wildcard for capacity planning. 

China Isn't Fooling Anyone
Bitcoin is actually in an important way, to big to fail. But big is not the appropriate word. Call it "확고부동 한", which is Korean for 'entrenched', as in the coterie of nuclear engineers that you would literally have to hunt down and assassinate if you wanted to cripple the DPRK's nuclear ambitions. Except that there are way more Bitcoin devs than Nork nuke scientists, and the devs are already open sourced. So China may want to legislate against ICOs, but like everywhere else, they either are or are not going to put their regulations in writing. Regulations that are anti-freedom will be routed around. China is a large and important actor, but they are not in as much control of Bitcoin as they are of their own 'Internet'. This currency will not be manipulated.

Filecoin What?
I browsed the white paper. I had my doubts about why anyone would go for this. Yes there are people who serve storage in the form of Torrents. So I'll think of Filecoin as getting paid for serving torrents. But really how much am I going to get for my 3 TB of spare space across my installation? And what kind of software do I have to put on top of all that. Something like Backblaze I imagine. But the more I think about it, the more I tend to agree with Richard Heart. There's no way for me to compete with Backblaze themselves, or Amazon. So how long would I have to wait for my crappy fractions of Filecoin to appreciate? Doesn't look like a good revenue stream to me. It has inefficiency built in. Who is going to pay for the new regime's slow storage?

Which goes to my final point, that makes perfect sense as explained by the acerbic Heart. If it's not better, why try to sell it as new? He has gone the distance and lies on the other side of the Dosh Point. I appreciate the economic thinking of such individuals, and from what I've gathered of his principles he's on the right track. Dude has an ethical mean streak. He doesn't like liars or cheaters or scammers and he doesn't suffer fools. He's got a streak of Taleb in him, and since he speaks well of Tim Ferriss, he might actually be consciously aware of Taleb. But I've clearly heard his Chestertonian logic and he sounds Hayekian to me as well. Even speaking ill of Jamie Dimon he doesn't completely lose his shit. Bottom line is he appreciates difficult problems and is willing to put skin in the game while lambasting others who do the charlatan thing. Righteous. 

So where am I on ICOs? I'm going to have to learn how to play Shark Tank. It will help me to listen in that particular way. I'm too old to be impressed with technology. Show me the solution before and after tech. 

Back on the Chain Gang

It has been a while since I've updated the blog on what's been percolating in my noggin on the blockchain front. Here's a rundown.

First off, it turns out that my new friend Mark Jeffrey is putting together folks and had a really good turnout in Santa Monica. The oven is warm, and although what's baking for the most part is only half-baked, it does smell delicious. I met a few really sharp folks to bounce ideas off of and this has turned out to be a really good workout. I'd say there were about seven rows of seven seats across at MetaX meat space and a lot of good questions and energy was maintained by the half dozen speakers that entered the lightning round. I would say that I'm prepared to give a shout next time as I review the following paragraphs with my crew at Full 360. 

So what's new and big in my mind about the blockchain technologies has more to do with what kind of database a distributed database essentially is and why that would be advantageous over a centralized database. What we do every day is create multi-tier data-centric applications. So we have an idea of what it means to manage data across 'platforms' as it were, using specialized data stores on a purpose driven basis. But still it operates as one system in a secured private space belonging to one entity who is extracting value from its use and control. But why use a decentralized data store? That's the big question. When I answer it, I will naturally be drawn to build a hybrid. Why not control an analytic portal against public blockchains? That's my inclination.

Eric Chung is the founder of the Dapp Developer's Bootcamp. I intend to spend a day learning EVM and all that in the beginning of September just before the launch of Destiny. I will also be attending Big Data Day this summer and BlockCon in the fall. But what my first instinct told me about Solidity, the new Dapp language that I expect is edging out Geth (dunno really) is why we should trust entirely new languages to write smart contracts. Why not simply write extensions to better known languages to promote adoption? So I hope to answer that question by the fall. 

Beyond that here are a few idea areas.

Decentralized Organization
This is going to be huge and falls naturally in my management consulting wheelhouse. I'm going to work with Marc Danziger to flesh this out, as soon as he liberates some time away from the Drama in NYC he must deal with in his new gig. As that settles down, we'll be able to brainstorm a good deal of powerpoint and charge a fee. I'm looking forward to associate myself with this chitlin circuit, because I hella know how to present. Don't believe me, just watch.

The Dark Side
Another good friend of mine knows very well what happens to bad actors who get busted. So I will like to help out when he too gets less busy. Whatever sidechains can do for train of custody looks to be a brilliant application for the court system and registry of bad actors. 

Common Adaptation
There are fewer than 20 ATMs in Los Angeles from which one can buy and sell bitcoin. I'm not sure about other cybercurrencies but if this technology is going to take off, then somebody is going to have to dare the 13 year old boy to eat the first oyster. Talking about eating the first oyster sounds like an act of desperation if you're not thinking specifically of 13 year old boys. We will have to find the daring youth in this. Where are they. What do they want? Also, how does anyone valuate labor markets? There could be a laborcoin. 

Loyalty Exchanges
eBay was a no-brainer. But how do you ebay all of the various coupons and pseudo-currencies of the world? There used to be something I think called 'Belly' in the Hawaiian restaurant I used to go to. I gathered a bunch of Belly points and now they have disappeared. There's got to be a better way to establish a market for marketing loyalty. It just happens that Full 360 knows a lot about loyalty systems. I think we can do something here.

If this gains adoption, one idea is that a charity portal would be useful for metered giving to non-profits. Of all the things that need transparency and proper care and feeding of contributors, that whole ecosystem of charitable organizations could most definitely benefit. At some point if the right legislation is passed, providers of blockchain transparency will have a sinecure similar to those companies who provide core banking software.

Triple Entry Ledger Accounting
This is, to my lights, going to be the future auditor's best friend. So good in fact, that it is reasonable to expect a great deal of resistance as well as off-books trickery. In any case there will be IOT gas costs for which bot-farmers will not tolerate cheating. So there are certain accounting for latency in transaction that will be very useful to understand, a redefinition of suspense accounting, if you will. Fast suspense. Along with this comes high speed inter-transaction accounting. I wish I could remember where that paper was that I read. Damn me for not putting it in Evernote.

Reference Data
When I was at the New York Banking Summit a couple years ago, the hot topic was the new regulatory requirements for risk accounting. Banks that are not hedge funds, if my guess is correct owing to my time on Wall Street, make some ballsy moves without fully accounting for what might be the blowback. Big partners roll that way. At any rate, these new regulations forced them to consider Spark over their sluggish HDFS. They clearly were not doing daily reviews of their portfolios but running on the guts of the masters of their universes. Clever perhaps but not wise - the equivalent of running corporate books off Excel which is a lot more common than anyone would think. At any rate, the smartest guys there said public, reference data would be a goldmine if somebody could figure how to do it. You guessed it. The answer is blockchain. 

Tax Coins
You and I both want transparency in government spending. The enemies of sloth are ever present. But we just might chase them down.

McLabor Coins
So the idea here is that you firstly can make coins behave like shares in an ETF. The  intellectual property then is the masterminding of the algorithm that prices those puppies against this or that option on this or that indicator. Same as it ever was, except allow the public to trade themselves, and then take the gas money as your reward. In the case of McLabor, somebody needs to index that which is human labor vs bot labor by industry by manual function. A global index of manual labor would be a wonderful thing. It will modernize the third world and make the infrastructure advantage of certain western countries more obvious than it already is. But I like the idea of working from home in some other real estate market with a climate similar to Los Angeles. Perhaps off the Agean. 

That's a head full of ideas. You heard it here first. 

Blockchain Insurance

It turns out that Vinay Gupta is smarter than I thought he was, which is pretty goddamned smart. He points out something that excites me in a way I haven't been in a while. So let me tell you a little story.

Once upon a time in Atlanta when Essbase was young, I had a sit down with some actuaries at a company of extraordinary repute. They wanted me to get some of their data into Essbase so they could refine their model. It turned out that they needed 11 dimensions. We could not provide. Oh snap. I always wanted to work with actuaries and there went my chance. My old college roommate did actuarial work, and I can recall being fascinated by the story (was it Gladwell who told it?) of the invention of insurance from the minds and records of some priests in Edinburgh. 

I have another insurance story or three but that's for another time. I only mention this story to help you understand how exciting it is to know that some of the stuff I've always wanted to do I may do in the future. Death panels! Gupta makes the following observation in his talk about identity provision in the future world of 'perfected security'. 

Insurers are already people that know a ton about you. They know what you’re worth, they know anything special that you own, they know where you live, and they’ve often got these data sets for years and years and years. Most people probably haven’t thought about their insurer in years: they send you a bill, you pay the bill, and it goes on. There could be somebody in this room with a 15–20-year relationship with their insurer, and you’ve almost certainly thought about it less than you think about your bank. The insurers are probably in a position where a lot of people already trust them, they’re in a position where they’re relatively good at keeping secrets, they’re in a position where they don’t really talk very much to other institutions, which is quite nice, because it means they don’t have a bunch of unfair advantage to draw from insider knowledge. They’ve got a bunch of really good attributes for doing the kind of stuff that we want them to do.

Brilliant. I've been thinking about the problem of real world validation of blockchain information. I might have eventually stumbled onto this idea, but I'm glad I heard Vinay's presentation, because I've been thinking certain things about identity that almost made sense. For example, in my book 'Borky's Beach', I have this global entity called 'The Wizards' and they are a consortium of marketing boffins who have perfected their craft. Based upon my own personal experience with a certain credit card company in Arkansas, I know that companies with enough data can impute a great deal of information by eyeballing patterns. After all, they explained to me that they kept track of about 12 genders, all given various certainties based on imputations vs explicitly validated data. But I didn't think about the fact that insurance companies would also have fat data stacks that could more definitively resolve questions of identity. 

So now I'm thinking about various new kinds of insurance and the newer AIs and models that will keep their scrying digital eyes on our metadata for all kinds of things. While I'm on this slight tangent, I'd like to bring up the notion of 'continuous transaction states'. They are not continuous but rather they are formally discrete but with a great deal more granularity than what all sorts of transactions have heretofore been. Part of this is 'Triple Entry Accounting', but that's not the whole of it. So this paragraph also serves as a placeholder for that idea of tracking an interim set of states before a transaction is fully executed and verified by all parties. And that alludes to an answer I gave today:

Q. How can businesses accept Bitcoin if it takes hours or days to process a transaction?

A.  There is at least one search engine that is available that will poll the top mining pools for the existence of a transaction being worked on in the current block. Using historical data, a service can predict based on the number of miners working on the transaction, how likely that transaction is to be contained within the next mined block. When that likelihood reaches a certain threshold, but before it’s actually confirmed, this service can make a guarantee and the seller can approve the sale.

Basically it is a short-term insurance policy which could be paid for by the seller to the service provider, the downside risk is held by the service provider.

This is different from counterparty risk, it is basically a bet that the entire bitcoin system will inevitably accept the transaction. There may be some double-spend risk, but no more than that of the entire bitcoin system.

"I attest."  is the key word. Such an attestation will bridge the gap between the impossibility of perfect information and those digital systems which are subject to human error. 

First Ideas on Blockchain

So my first idea about blockchain is that you open up applications at the lowest level, or perhaps at agreed-upon aggregations, and spew it out for on-chain or off-chain management. My interest in blockchain is primarily about attaching proper off-chain big data as referenceable. So the first place I want to start is perhaps with something like public data and then mark that data to a standard, and then sit it in S3 or some likely public equivalent place, maybe like Sia. My aim is then execute (perhaps with Fugue), a simple infrastructure as code deployment of a pre-certified dataset into a standard Aurora, or massive KV store. The trick is to automate, with a simplified PITbull like architecture, a data warehouse of certified queryable data.

For the purposes of Reference Data, I don't think I need to reverse-engineer a FIPS compliant system, but that would be a decent start. After all, it's the integrity of the data that matters most. And if the dataset is signed, then you're in good shape. The question becomes for big data, how big a chunk should be certifiable.