Enterprise Bitcoin and the Brain as a CryptoCurrency Network

If Dell, New Egg, and TigerDirect now accept Bitcoin, and Paypal's CEO contemplates the same, eBay and Amazon might also accept Bitcoin in the not too distant future, and this would start to really push cryptocurrency into the mainstream. Faster still if Google Wallet were to join. Bitcoin seems to be 'going enterprise' (= key step to mainstream) as fast as the Internet-of-things (Enterprise IOT: Microsoft, Ernst & Young, etc. offering connected POS (point of sale) networks and all 'devices' as an IOT service to businesses). However, even though Bitcoin in its entirety is a radically new concept, from a vendor standpoint, accepting Bitcoin is not a big deal - it is analogous to accepting any other kind of payment mechanism. Anyone (individual or enterprise) receiving, or wanting to pay out in Bitcoin can easily convert national currencies via Coinbase, bitpay, or other sites, or now the purported (as of July 2014) 33 worldwide Robocoin Bitcoin ATMs. Conceptually, Bitcoin is a payment mechanism for vendors, but for money businesses like banks, it is much more critical to develop explicit Bitcoin strategies and policies.

However, there is still much risk in Bitcoin and cryptocurrencies. Bitcoin as a currency is still new and volatile, and it is not clear if it is a faddish or persistent transformation, although the concept may have considerable resiliency even if specific cryptocurrencies do not (i.e.; Baconcoin). Also, there is only about $8 billion USD in Bitcoin now, and it would need to be on the order of $50-100 billion USD to receive more serious financial consideration. The currency does have a number of important features that could propel acceptance including architecture (psuedo-anonymous and trustless), openness, low-cost (eliminates currency exchange costs), and fungible worldwide availability. As Kevin Kelly points out, Bitcoin is not just a payment mechanism, it is a revolutionary way to enable collaboration at an unprecedented scale. Bitcoin is the reinvention of the institution of capital. Further, in the automation economy, Bitcoin is automated and open accounting; a transparent ledger. The concept of Bitcoin and its architecture and operation is a new model which is not unlike the brain, where (at minimum) many functions are handled automatically, and there is a certain modular aspect to function. Bitcoin might be a universal mathematical model of nature that human intelligence is just now discovering.

Prediction Markets Round-Up

Prediction Markets are a tool for collecting group opinion using market principles. The price is usually based on a conversion of an opinion of the percent likely an event is to happen (i.e., the probability), for example there is a 40% change that Candidate X will win the election. The premise is that there is a lot of hidden information that can be sharable but there are not mechanisms to share it because information-holders either cannot or do not wish to share it (for example that a current work team project may not finish on time). Some research has found that prediction markets may beat polls or experts in terms of forecast accuracy [1].

Figure 1. Prediction Market Example

To aggregate hidden organizational opinion and expertise, Prediction Markets are in use at 100-200 large US organizations as of June 2014: Paypal, HP, BestBuy, Electronic Arts, Boeing, Amazon, Harvard, GM, Hallmark, P&G, Ford, Microsoft, Chevron, Lockheed Martin, CNN, Adobe, American Express, and Bosch. There are several enterprise Prediction Market vendors for enterprise idea management: Consensus Point, Inkling, Spigit/Crowdcast, Bright Idea, and Qmarkets. The main applications of Enterprise Prediction Markets are revenue forecasting, demand planning, and capital budgeting; innovation life cycle management (rate, filter, and prioritize ideas), and project management and risk management.

There are Enterprise Prediction Markets and also Consumer Prediction Markets for event prediction such as politics: election results; economics: box office receipts, product sales; and health: pandemic prediction. Some of the leading markets are Iowa Electronic Markets (and Iowa Electronic Health Markets), the Hollywood Stock Exchange (film box office, TV shows, celebrities), simExchange (gaming: video game consoles, video game launches), CROWDPARK (general), and LongBets (futurist). A new market, SciCast, has recently launched for detailed science and technology predictions.

Markets are typically real-money, reputation-based, or anonymous. In the wake of Intrade’s regulation-forced closure, Bitcoin Prediction Markets are enjoying a surge of trading activity; markets like Predictious, Fairlay, and Bitcoin Bull Bear.

More Information: Prediction Markets @ Singularity University

[1] Trepte, K. et al. Forecasting consumer products using prediction markets. MIT. 2009.

Our beautiful future

As worldwide over-dependence on oil and the costly Iraq war has hastened the way for new energy regimes, the U.S. financial bailout will be hastening the use of economic models other than Darwinian capitalism as it has been known where the most able seize maximum resources for themselves. Nascent social movements for opting out of the traditional economic system will become stronger. Science fiction is rife with dystopian models of robotic controlled governments (Daniel Suarez’ Daemon is a recent example) but in many ways machine-like entities absent the agency problem could be a dramatic improvement over fallible people-administered governments. Technology is more often humanifying than dehumanifying.

As usual, the focus is on technological advances to remedy the current global energy, resource consumption and economic challenges. Given both history and the present status of initiatives, technology is likely to deliver. New eras may be ushered in even more quickly when demand is higher and complacency lower. A surveillance and sousveillance society is clearly emerging, simultaneously from top-down government and corporate programs and bottom-up individual broadcast of GPS location and other lifestreaming. The trend to freeing human time for productive and rewarding initiatives is continuing. What will be the first chicken in every pot, the robotic cleaner or self-cleaning nanosurfaces? How soon can all jobs be outsourced to AI? How soon will there be options on the nucleotide chassis?

Economic fallacies II

Fallacy #3: The singularity is a great investment opportunity
A technological revolution like that brought about by the PC or the Internet is a great investment opportunity. Current possibilities for this kind of compound growth in technology-driven financial returns include alternative energy, genomics, personalized medicine, anti-aging therapies, 3d data manipulation tools and narrowly-applied artificial intelligence.

A technological singularity is not necessarily a great investment opportunity. A technological singularity implies change so radical and diffuse that prior models for understanding and exploiting or profiting from the world will no longer work. There is a substantial risk that financial markets as they are known today could disappear. Growth, alpha and superior financial returns may be irrelevant in a post-traditional financial markets era. Planning for the possibility of a technological singularity suggests a much broader definition of what the assets of the future may be and allocating to these areas, a substantial shift away from the traditional asset preservation and financial returns that outpace inflation in the long-run mindset of today.


Fallacy #4: Economic systems become irrelevant in a post-scarcity economy
This is the notion that economies and markets go away in a post-scarcity economy for material goods. At present, an increasing number of goods and services are becoming available for free or offered via modern business models such as the freemium. In the future, substantially all material needs may be easily met at low cost or for free in a molecular-nanotech society, but scarcity as an economic dynamic is likely to persist and economics systems in general are also likely to continue.

Scarcity would be perceived in whatever material resources were not yet plentifully available and in any finite resources such as time, ideas, attention, emotion, reputation, quality, etc. Economic system dynamics could change substantially, for example, property tax would not make sense in a world where nanotech could rapidly build or absorb structures. Unless economics and markets as the most effective means of resource distribution are superceded, they are likely to endure.


Fallacy #5: Social capital markets need not deliver competitive returns
The conventional notion is that it is acceptable for social capital market investments to deliver lower returns than traditional financial instruments. Social capital market investment products include SRI equity funds, corporate governance initiatives, social capital venturing (private equity), fair trade coffee and organic products. On average, consumers are willing to spend 5% more for attribute products (products with affinity attributes such as fair trade, local, organic, etc.) and investors have been willing to sacrifice 5% or more in financial return for socially responsible investments.

However, after some implementation time lag, social capital could have equal or higher returns. Sustainable socially responsible businesses should be more profitable not less. Both direct tangible economic benefits can accrue as well as the indirect benefits of marketing and market-knowledge that the business is more principled and sustainable. Corporate governance and other green or social initiatives should benefit the bottom line, not penalize it. The notion that return and social good are mutually exclusive is a fallacy.

The article with all nine fallacies is available here

Fallacies when thinking about the economics of future technology

Future technologies seem so impactful and fabulous that it is easy to jump to incorrect conclusions about what things would be like with their advent.


Fallacy #1: Molecular assemblers will have a worldwide overnight rollout
The conventional assumption is that once humans are able to make one molecular assembler, it will be able to self-replicate, and therefore within twenty-four hours everyone worldwide will have one. It is far more likely that a molecular assembler would follow the usual s-curve adoption pattern of any other newtech; early versions are expensive and clunky with minimal functionality, continued improvement iterations make the newtech more relevant and usable.

The first molecular assemblers may be like a next generation 3d printer, printing the T-shirt a friend sent as an email attachment. Only early adopters will have the utility (read: money and interest) to purchase the first molecular assemblers. Also, the first molecular assemblers will not be able to self-replicate as the intricate molecular manufacturing processes will need to be conducted at special facilities.

Finally, the full newtech ecosystem needs to be considered, while carbon and other basic elements could be obtained easily from dirt piles delivered to suburban driveways, industrial utility solutions are need for the 50% of the urbanized world. Cartridge supply for specialty elements (think Gillette) will be required. Matter decompiling will need to be a feature of the molecular assembler or there will need to be some other means of recycling. More here, here and here.


Fallacy #2: Don’t develop newtech if it’s not cheap enough for universal access
This is the view that we should not develop any beneficial newtech unless it can be immediately accessible worldwide at a low price. “Folks, lets not make the Eniac since not everyone can have one.” However noble this view may be, it again ignores the historical precedent of technology development, rollout and penetration. A fundamental property of technology is that it may be expensive at the outset but then price drops, functionality improvements and re-purposing to new markets occur over time. For example, those currently paying $100,000 a year for life extension treatments are hopefully helping to rationalize, standardize and develop a broader market for these services.

Work can still be done on open-source and universal accessibility models, and diligence applied to clearing public goods to non-IP protected regimes (e.g.; the human genome), but with the understanding that traditional technology development models (cost drops over time) will continue to drive progress.

In fact, there can be benefits in not adopting newtech immediately; costs are higher, unintended consequences are unknown, early adopters can work out the kinks (e.g; the first generation iPhone cost $600, the second generation iPhone 3G with expanded functionality emerged a year later at $199) and older technology generations like landline telephony can be skipped. World-is-flat cycle time speed-ups and new business models (e.g.; OneWorldHealth as a non-profit pharmaceutical company directed at developing world disease) illustrate market efficiency in applying traditional technology development in today’s world.

The article with all nine fallacies is available here

Humanity transcends material wealth

Another chapter in the broad theme of "an idea whose time has come" is the interesting element of social coercion in behavior influencing. It is now not politically correct or even socially acceptable to smoke, drink heavily, eat fatty foods or to have poor posture in most professional and social settings. It is becoming less acceptable to just have a job and hobbies, rather than a direction and mission.

There is of course, regional seepage to this cultural phenomenon; the ideas generally begin, intentionally or not, in California and other clean living, high actualization environments and pervade other urban areas and even extend slow fingers out from cities. Witness anti-tobacco lawsuits superseded by anti-fast food and anti-trans fat lawsuits. The interesting aspect is that behaviors we have known for years to be unhealthy sat untransformed until the eye of social disapproval turned to them. While social disapproval can be seen as an invitation for anti-conformist counterbalance when it pertains to ideas, maybe it is all right when it pertains to statistically supported facts that enhance human life, especially those that hit low on the Maslow hierarchy.

It is increasingly unacceptable to show material trappings or any other sign of success. Indeed, pecuniary interests matter less and less, both directly and as a proxy for success. The brain - ideas, creativity, innovation and skill flexibility and acquisition - is the new currency of success, and it is measured intangibly. The impact is an increasingly interconnected actualizing civilization cleanly focused on true progress, ensconced in the true freedom of ideas.

New Business Models I

This is New Business Models I because there are so many new ones springing up and surpassing the old world business models with many more to come. Perhaps the most notable new business model du jour is Open Source, even espoused by IBM CEO Polisano in a recent suggestion list to the US government on the imperative of increasing American competitiveness.

The new business model addressed here is the customer creating not only the content but also the applications. Customers have long been creating content in Internet business models like eBay, hotmail, craigslist, and now in blogging sites, flickr and other photo sites, and online gaming worlds like Sims Online and Second Life. The next wave is the customers, really a new class of entrepreneurs or other innovators, creating the applications as well, using web services APIs provided by Amazon and increasing numbers of others.

There are many amazing things about this including:

1) the exponentiation - exponentially more content is and will be created than the company/initiator could possibly create. From the vast sea of content will arise attendant phenomenon such as the coalescing of new special interest groups / shared interest communities, and patterns, linkage and ultimately new means of value creation from the content / information,

2) the necessary accompanying innovation of new tools (especially automated) to manage, search and create content,

3) the rise new skills to exploit this medium, the application and tool creators, to create derivatives of derivative of derivative applications, the need for people to be proficient in these new skill areas or at least decide whether they would like to or not, and services like the early easy website development sites allowing one not to know html,

4) the way humans are getting to be more meta with computers, adding layers of intelligence in how machines talk amongst themselves to make human live more productive and easier. This is great in lots of ways but also represents humans getting another step farther removed from the operating, and really, control, of computers,

5) the additional democratizing of the trend - allowing more people the freedom to dream and create the applications that are fun interesting and worthwhile to them, not having to wait until their needs are a large and valuable enough corporate marketing opportunity. This StarBucks of software development facilitates the proliferation of individuality, self-expression, and fulfills self-actualization levels in Maslow's hierarchy,

6) and the stronger form of democratizing of the trend, economically, individual application development and launch as a flexible income generator nicely complementing a traditional job and other life activities that can grow, turn into multiple businesses and deliver economic freedom. This is an important emotional empowerment, to not work for someone else but to be an autonomous unit coming together for collective collaboration, training, feedback and other activities but remaining fundamentally self-directed not answering to another or another's machinations within a slow-to-evolve corporate hierarchy.