Bitcoin and Transparency in Politics

So it’s General Election day. Maybe it’s me but it all feels a bit anti-climactic here in Scotland, coming as it does hard on the heels of the Referendum. Regardless of which side you were on in that process, it feels different when you’re voting ‘just’ for the next five years (as opposed to the indefinite future) of your country.

But while we’re on the subject of politics, I wanted to just flag one thing up quickly which has intrigued me about the political process this time around that’s new. And (surprise!) it relates to Bitcoin.

Some of you might know Gulnar Hasnain as one half of the team (together with Pamir) behind the awesome CoinSummit conferences. Interestingly, during this General Election campaign, Green Party candidate Gulnar became the first UK politician to start accepting Bitcoin donations. It’s a great example of how the transparency of the blockchain can be used for good in an area that’s not always known for, shall we say, impeccable behaviour.

For example, you can see every donation that was made as part of the campaign, recorded permanently and publicly here. Every. Single. Donation.

Of course, it’s not exactly taxing for anyone to follow funds donated in this way moving forwards. And for any others to audit donations in order to provide any necessary checks and balances within the electoral system. Develop the potential a little further, scale it up and then unleash that (free) technology on a country that went through the parliamentary expenses scandal in 2009.

So, if you still don’t think that Bitcoin helps with real-world issues, it’s worth having a think about this. I predict that if we do end up with a government by the morning that can govern for a few years (far from a certainty at this stage) then by the time we go through the next major political event, this kind of transparency should be something that’s expected – and demanded – by the electorate.

Now where’s the popcorn? Looks like it’s a long night ahead.

The Cyber Academy Launches In Edinburgh

In a post almost exactly two years ago, I talked about a concern of mine that I’m pretty certain I share with many who work in the ‘technology’ sphere in general. To summarise, if one of the primary goals of education is to provide kids with the skills that they need to secure employment in later life, how can the teachers of today possibly keep up with the pace of progress?

As Noam Chomsky said in an interview I read this week,  “If you are teaching today what you were teaching five years ago, either the field is dead or you are“. And if the majority of kids in school today will end up working in jobs that don’t currently exist, it’s clear that finding ways to bridge that widening gap will become increasingly critical.

The thought hit me again today as  I went along to the launch of The Cyber Academy at Napier University this afternoon. The new venture, which pulls in a wide range of collaborators from across academia, government and business, is focused on developing an environment which will produce many of the people that are so badly needed as security threats continue to rise daily in our increasingly-networked society.

There were a number of interesting talks but the one that stood out for me was by John Howie who gave a great summary of just how far we’ve come and the challenges that lie ahead in a world where everyone – with a little knowhow – can use the mobile in their pocket to access any other connected device in the world. A situation which of course is only going to become more complicated if the much-trailed Internet of Things suddenly explodes (hence the blockchain solution that IBM have been investigating).

John also drew a key distinction between information security – defending data contained within your own database or system – and cyber security – a term which has no accepted definition but which he convincingly argued relates to the interconnectedness of such databases. For example, if malware attacks your system, how do other databases then react and collaborate to ensure that overall that weakness become systemic across a networked world.

It’s a great programme and credit must go to Bill Buchanan who has clearly championed and worked hard to build the idea and ultimately deliver an Academy that has the potential to gain significant importance over the next few years. From a personal perspective, I’m also intrigued to see how it evolves within our post-Snowden society. And, of course, if there’s going to be a raft of highly-skilled new cryptographers coming knocking about in the area, who knows, I *may* just happen to redirect a few towards the Scottish Bitcoin Meetups…

Bitcoin: Bigger Than Google?

One Bitcoin company that continues to cause a stir in the industry is the mysterious 21 Inc. Not only has the business remained in stealth mode since it started back in 2013, it’s captured the interest of some serious heavy-hitters (founders of PayPal, Dropbox, eBay and Expedia are involved), it’s taken investment from chipmaker Qualcomm (a massive player in the global mobile phone business). And then, to top it all off, it’s raised a total of a staggering $116 million already pre-launch.

To put it another way, the only thing that we do know is that some seasoned veterans known for delivering unusually big successes are taking a punt on the chance that this particular business might turn into something very special indeed. I’ve had two fairly high profile people on differen sides of the Atlantic tell me conflicting rumours about the nature of the company’s business so I suspect we’ll just need to wait and see.

However at the weekend, 21’s Chairman and Andreessen Horowitz partner Balaji Srinivasen (@balajis) managed to pique our collective interests still further when he gave a talk in which he stated that Bitcoin can be seen as bigger than Google, in terms of network footprint.

“All of Google today would represent less than 1% of mining. The sheer degree of what is happening in mining hasn’t been appreciated in the press.”

If we view the Bitcoin network as the worlds largest supercomputer, then it’s likely that this is bigger than Google in terms of computing power and power consumption.

As onename.io co-founder Muneeb Ali points out in a follow-up post on Medium, it’s not so much that we’re yet at the stage where it would be beyond Google’s ability to catch up (if they chose to do so). It’s simply the fact that for them to do so would involve massive capital expenditure. They simply don’t have the necessary hardware (ASICs in this case) to suddenly move in that direction quickly. Take on board the fact that they are one of the most cash-rich companies in the world and you get, I believe, a sense of the sheer scale of the project that we’re all so fascinated by.

Sometimes Progress Needs A Little Shove

During a number of recent conversations about technology and the rate of progress (general thrust: technologists underestimate – and the general public overestimate – how long adoption will take), I’ve been thinking about tipping points. In most cases, these appear obvious only in retrospect after a little time has passed to firmly place events in some kind of perspective.

However some events clearly have more impact than others. I read a great article today about Kathrine Switzer who ran the Boston Marathon in 1967. So far, so unremarkable you might think. Nothing unusual there –  unless you realise that women were banned from running marathons 50 years ago.

It gets better though. Not only did Switzer run in and complete the race (in a very creditable 4 hours 20), one of the organisers was so affronted when he spied the interloper, he took it upon himself to physically launch himself at her in an attempt to shove her off the road, before a male running companion removed him.

The drama was caught by a photographer whose three pictures were shared far and wide in the press, starting that same evening. As the article says, “her run, and the photos, changed the lives of all female runners”.

Only 6 years later, Switzer’s would-be assailant, Jock Semple, opened up the Boston Marathon to women (Switzer came third) and the 1984 Olympics saw the introduction of the woman’s Marathon for the first time. And today, almost half of all entrants in marathons around the world are female.

I guess sometimes rules have to be broken in order to allow widescale progress to take place. Rules that, by definition, have after all been designed for the purpose of protecting the status quo. And ironically it’s often the very people who are most opposed to progress that inadvertently lay the foundations for it to take place.

Dot Everyone and Digital Inclusion

Last night Martha Lane-Fox gave a hugely inspirational talk for the 2015 Richard Dimbleby Lecture. You can read the transcript here (and watch it here for the next month in the UK).

In short, it’s a call to arms. As is usually the case when digital issues are publicised in front of a mainstream audience, it has inevitably provoked discussion both for and against some of the themes raised during the course of 40 minutes.

But I recommend that you watch and/or read it. I fully endorse a number of the points that she makes and if you do too, I suggest that you consider signing the petition to call on the incoming UK government to take the points raised seriously.

In short, there were three main themes: increasing general understanding and usage of the internet at all levels of society; increasing the involvement of women in technology; and addressing the burgeoning ethical and moral issues that such advances generate.

After quoting Aaron Schwartz (“It’s not ok not to understand the internet anymore”), she hit the nail on the head by pointing out the all-too-real problem that we have today. Many of those with responsibility for regulation are often woefully under-educated about the technologies that they seek to legislate. To me, this is no more clearly illustrated than within the continued debate around the value of encryption.

Whilst there may be challenges, the reality of living within an increasingly digital world is that we have the opportunity to develop new business processes within the public sector that kill off inefficient and ultimately dangerous methods that exist by default. As she points out, technology provides us with an opportunity to “save money from the cold world of paper and administration and invest more in the warm hands of doctors, nurses and teachers”.

As for the call for more women in tech? Nothing new there, perhaps. But it’s old news quite simply because it’s true. The skills gap that we are currently accelerating towards is being either wilfully or negligently ignored by those who have the power to institute widespread change from above. Seeing this  reflected within the Bitcoin community has prompted me to progress a few initiatives on this front which you’ll (hopefully) hear more about during this year but I do think we have to accept ownership for solving this problem lies with each of us as individuals.

Martha Lane Fox’s idol is Dame Stephanie Shirley, a recent visitor to Edinburgh. If you need further context, watch her talk from the Informatics Ventures event here (I’ll blog more fully about her story at some point soon).

I’ve gone on long enough. If you’ve read this, you’ve certainly got enough time to read the transcript. Perhaps even to watch the talk. And you should. You can argue with some of the finer points that she makes but Martha Lane Fox hits delivers an important talk here and one worth listening to.

Bitcoin continues to rise in the UK

I had a feeling that today was going to be an big day in the UK Bitcoin scene – and so it proved.

The news came quick and fast this afternoon. To be honest, I’ve not yet had a chance to dive into the various documents in great depth. But it’s worth summarising a few key developments here in case you missed it.

The Budget lands…with funding for digital currency research

As rumoured, the Chancellor came out in the Budget today with some positive news for the nascent digital currency scene (see point 19). He announced that £10 million of funding would be made available for the launch of a new research initiative into the future potential of digital currency technology.

Response to the Call For Information on Digital Currencies

Also you’ll remember that the HM Treasury issued a Call for Information on Digital Currencies back in November. Now they’ve finally issued the Response to the Call for Information on Digital Currencies – in essence, a framework for the regulation of digital currencies. As the last Scottish Bitcoin Meetup guest Jerry Brito at CoinCenter handily summarises, the main points relate to proposals to:-

  • Apply anti-money laundering regulation to digital currency exchanges to prevent criminal use.
  • Ensure that law enforcement bodies have the necessary training, resources, and legislation to address criminal activity conducted with Bitcoin.
  • Work with the British Standards Institute and the digital currency industry to develop a set of best practices for consumer protection that does not impose an extreme regulatory burden players in the space.
  • Launch a research initiative with leading institutions within the UK to study digital currencies and increase funding for digital currency research to £10 million.

Report on Future of UK FinTech to 2025

Finally, there’s a 68-page report published today that sets out the findings of the Chief Scientific Advisor on FinTech, Sir Mark Walport, into the future of FinTech in the UK up to 2025. This contains statements such as:-

“Digital currencies such as bitcoin have the potential to replace traditional currency and, by extension, the need for central banking and regulatory systems.”

I’m still holding to my prediction that 2015 will be a huge year for Bitcoin. It’s always felt to me that this would be the year that both legislators and the City/Wall Street made great strides into the area. The report last week by Goldman Sachs stating that “Bitcoin could shape the future of finance” is just one example. That’s not to say that there don’t remain significant hurdles ahead in a number of areas. But I do feel that we’ll be in a far different place come the end of this year than we ever have been before.

 

Whose Security Is Best?

I woke up this morning to an email from Amazon confirming that I’d just bought Bruce Schneier’s new book, ‘Data and Goliath‘ whilst I was sleeping. Ah, the wonders of forgetting you’d pre-ordered a book way before its release date…

Anyway, there’s obviously little I can say about the book as I’ve still to read it. But I can however recommend another great essay from Schneier which he posted recently on his blog: ‘Everyone wants you to have security, but not from them‘.

As I wrote yesterday, there’s a general confusion about encryption. As Schneier points out in his essay, it’s too simplistic to say that the big tech companies don’t want your data to be secure in some way in order to have their wicked way with your information. Instead, it’s far more accurate to say that companies such as Facebook and Google are constantly striving to become the single place where you deposit all of your valuable data – so that they can then protect it alone.

But of course, move ahead with that ‘single point of failure’ model and we run the very real risk of significant breaches occurring at some point or another in the future, as Lenovo discovered to their (and their customers’) cost last week. Or from secretive actors breaking into such systems and inevitably compromising the system for all participants regardless of what their motives might be, such as the Gemalto break-in whereby the encryption keys for billions of mobile phones were stolen.

It’s a binary choice that we have. Security or surveillance. Privacy or convenience. And until MaidSafe launches, the likely outcome under the current architecture of the internet doesn’t look too appealing.

The Encryption Battle Heats Up

It’s not surprising that there’s so much confusion in the minds of the general public when it comes to encryption. There are so many conflicting narratives around, each of which is wrapped up in varying degrees of political spin.

Take for example, Michael Chertoff who basically helped to create the Patriot Act in the US which paved the way for mass surveillance in the aftermath of the 911 attacks. After moving on from a career which included a four-year stint as Secretary of Homeland Security.

However, it seems that Chertoff has changed his mind. He now believes that everyone should have the right to strong encryption without the backdoors that are currently being sought by many government agencies around the world.

“I’m sympathetic to law enforcement, but nevertheless I’ve come to the conclusion that requiring network managers or ISPs to retain a key that would allow them to decrypt data moving back and forth on a particular device is not something the government should require,” he said. “If you require companies to manage a network to retain a key to decrypt, I guarantee you another provider will allow someone else in the world to have that key. What happens is, honest people will have a key to encrypted data that’s held by a third party. As we’ve seen in the past, that can lead to problems.” 

That’s quite some turnaround.

And quite different to the position of the Director of the NSA, Mike Rogers and recent statements in the UK from David Cameron. After all, even President Obama has stated in a recent interview, “I’m a strong believer in strong encryption” (seemingly contradicting an earlier statement that encryption should be unlocked by the authorities in certain circumstances).

Changes are coming: mobile phone companies are encrypting by default, there’s pressure to move all websites from http to https under the Let’s Encrypt movement and public awareness is rising. And yet there’s still a big issue here. There’s a very strong argument to say that the level of technological knowledge in order to adequately protect yourself in today’s society is one which is disproportionately damaging to those from poorer socio-economic backgrounds.

No doubt individuals and groups will continue to come forwards to protect those who inevitably are forced to rely on others to provide user-friendly solutions in this area. But working out how much protection those volunteers require in order to carry out their jobs – and who can be relied upon to provide them with this necessary support – is where we truly start to learn what sort of society we live in.

The Listening Television

I finally took the plunge and bought a new TV today. Using a mass of Nectar points accumulated from food shopping over the past decade or so, I managed to get a good deal on a new low-end model. To be honest, I rarely watch the TV. Any viewing that I do have time for inevitably tends to be on the laptop these days. But the difference between the two models, old and new, is pretty significant. If nothing else, I have no idea how to get the old TV down the stairs – it’s that heavy.

But the whole experience of buying a new piece of tech – as exciting as that invariably is for anyone with geek-tendencies – was tempered by the story in the back of my mind about the recent Samsung Smart TV. These once-simple appliances have become completely different propositions these days, as Michael Price in Salon pointed out late last year (‘I’m terrified of my new TV: Why I’m scared to turn this thing on – and you’d be too‘).

We’re suddenly in a world where so-called Smart TV’s record our activities and choices, retaining the power to send such information on to marketers and other third parties to do as they wish. The decision to be made by many consumers is in many ways an unfair one: disable many of your all-singing all-dancing new TV’s features or accept one further encroachment into your privacy.

As you might remember, the worrying issue with the Samsung Smart TV was the fact that it had voice recognition. Or, more accurately, because of the voice recognition features that it employs, the Privacy Policy for the TV shows that in fact anything you say in the vicinity of the television may in fact be recorded and transmitted to a third party for analysis. When that’s a marketing company, it’s little more than irritating perhaps. But there’s no guarantee that the data exchange stops there.

One of the biggest issues is the fact that Samsung is sending the customer’s voice searches and data in an unencrypted format. Think of the potential for hackers and snoopers to literally listen in.

Yeah, it was a lot simpler the first time I bought my TV. Even if it weighs about the same as my fridge and is almost as attractive…..

Skyscanner Becomes A $1 Billion Business

It’s Friday so it’s as good a time as any to have some good news.

Scotland now has its first $1 billion internet business in the form of Skyscanner. I remember being at a startup drinks event in Edinburgh around five or so years ago and hearing Gareth talking about his vision to achieve exactly this goal. And now it’s reality. It’s been incredible (and hugely inspiring) to see the growth of the business in the intervening years and a real testament to both the leadership and the vision within the business.

OK, this comes with the obvious caveat in that I worked with Skyscanner for a while so I may be slightly biased. But the reality is that what Gareth – and so many more – of them have achieved collectively is absolutely phenomenal. I would be dishing out the same praise whether I knew the team or not. But having seen the inside of the business only reinforces my belief that there is something very special going on within the business away from public perception of ‘simply’ being a travel aggregation site (I’m not the only one to have seen this by any means). I look forward to watching them continuing to grow.

I’ve written before about why Scotland’s such a great place to build a technology company. Edinburgh in particular leads the way, with a rich ecosystem of startups, Codebase (the UK’s largest tech incubator), the next edition of Silicon Milkroundabout landing next weekend, the Startedin group….the list goes on.

Skyscanner might be the first $1 billion internet business, it’s true. But now it’s time to build a few more.