Wine and Dime #0028
I’ve long had disdain for baby boomers as a population, but this article does a great job of capturing my whine: “Baby boomers have been a disaster for America, and Trump is their biggest mistake yet”. Baby boomers (at least in Australia) spent their youth lapping up full employment, free healthcare, and free education all the while treating the world like a toilet. Now they’re spending their dotage deconstructing the very institutions that gave them such a comfortable life.
This is truly amazing: “Google AI invents its own cryptographic algorithm; no one knows how it works”. I know I don’t have a flying car yet, but that opening paragraph definitely reads like something from the future.
And speaking of flying cars … well, almost. Watch this demo of someone commanding a Tesla Model S using an Amazon Echo. Wow.
This is the last Whine and Dime for 2016, and also the last one for now. I’ll continue to post on Twitter and Tumblr from time to time, but full-time work takes up so much time that I just can’t do this at the quality and frequency that it needs. Have a great holiday break, and all the best for 2017.
The standard layout on the UK MacBook Pro laptop keyboard is one of the dumbest bits of design I've ever seen from Apple. The shift key is reduced in size by 1/2, the section key '§' - which I have never used - is given pride of place at the top-left of the keyboard, and the '~' key has been squashed in next to the anaemic left shift key so that it is impossible to tap.
Its good to see a regulator doing something useful. The ACCC has officially ruled that the country's 3 largest banks can't collectively negotiate with Apple about Apple Pay. Well played, ACCC.
- Australian Banks Denied Temporary Approval For Apple Negotiations
- The Apple Pay Battle In Australia Wages On, Gets Meaner By The Minute
- Apple Pay On The Web — It’s All About The ‘A’
- Verizon files a blockchain patent
- Some big banks are borrowing the blockchain to build their own bitcoin
- Google and Apple like Ripple's Interledger Protocol for interoperability - and because it's not Visa
- Big Banks Band Together to Launch 'Settlement Coin'
- Microsoft Launches Smart Contracts Security Working Group
- Maybe Blockchain Really Does Have Magical Powers
- Blockchain Will Become ‘Beating Heart’ of the Global Financial System
- Blockchain Is Banks' Secret Sauce
- Barclays Completes Blockchain Trade Finance Transaction
- The Blockchain: An Experiment in Governance Without Power
- Goldman Sachs wants to put foreign exchange trades on the blockchain
- Cryptocurrency In Space!
- Sydney Stock Exchange Taps Blockchain to Fight ASX Monopoly
- Several Global Banks Join Ripple’s Growing Network
- CBA’s need for speed
- Microsoft and Bank of America Merrill Lynch collaborate to transform trade finance transacting with Azure Blockchain as a Service
- Blockchain Adoption Moving Rapidly in Banking and Financial Markets: Some 65 Percent of Surveyed Banks Expect to be in Production in Three Years
- The Unreasonable Effectiveness of Recurrent Neural Networks
- How do Convolutional Neural Networks work?
- How Germans use cash, and how it's changing
- How Millennials Became Spooked by Credit Cards
- The Company Quietly Handling Your Online Purchases
- How to price anything
- Reserve Bank unveils new payments system: instant money transfers, and phone numbers instead of BSBs
- Australians call for banking efficiency and security
- RBA Unveils 'Instant' Payments System
- Financial industry faces extreme disruption in payments
- Mastercard jockeys for mobile payments domination with new API platform
- Android Security Flaw Exposes 1.4B Devices
- NIST declares the age of SMS 2FA over
- Why the silencing of KrebsOnSecurity opens a troubling chapter for the ‘Net
- Someone Is Learning How to Take Down the Internet
It's been a good week! I've been a part of the launch of Coup (see below), and now I'm going on holidays for a week in (hopefully) sunny Sicily. I certainly have nothing to whine about! However, the late news that this idiot has been elected to the Australian Senate is almost enough to cast a pall over the week.
I've had the great privilege of working with some really talented people in Berlin over the last 8 months or so on the Coup Electric Scooter Sharing Network in Berlin. The project is in soft-launch at the moment, with a view to kicking off later this month. It's not all that often that a project you work on gets a write-up in Wired Magazine. #chuffed
- Amazon Tiptoes Into Banking Business Through Student Loans
- Why It’s Not So Easy To Bring Down The Cost Of Banking
- Peter Thiel-backed banking startup Number26 rebrands as N26 and becomes an official bank
- If financial systems were hacked
- Blockchain Roundtable @FrogCapital
- Bitcoin futures and options exchange IBM Set to Launch One of the Largest Blockchain Implementations to Date
- Brexit To Lead To UK Recession?
- Lloyds cuts a further 3,000 jobs and doubles branch closure plan
- Tech billionaire backs London
- This Is the Next Big Thing in Fintech
- Fintech founder calls Aussie banks hyprocrites over Apple Pay complaints
- Google Cuts Its Giant Electricity Bill With DeepMind-Powered AI
- Approaching (Almost) Any Machine Learning Problem
- Machine Learning is Fun!
- Mastercard Buys Most of Britain’s VocaLink for $920 Million
- France Says ‘Bonjour’ To Apple Pay
- Will Press-On Nails Be The New Way To Pay?
- Money as Message - How WeChat got users to adopt payments as a way to grow its network
- Want to work for Australia's national payments platform?
- Australian Banks Looking To Collectively Boycott Apple Pay
- Apple Pay Now Accounts for Three-Fourths of U.S. Contactless Payments
- Mastercard Makes P2P Ubiquitous And Real Time
- More And More London Startups Eyeing Berlin
- How to Pitch Your Company
- A guide to Demo Day presentations
- How to Create an Exponential Mindset
- A top Silicon Valley investor predicts what the world will look like in 10 years, when roads are full of self-driving cars
- Twilio Real-time Sync NIST declares the age of SMS-based 2-factor authentication over
- Abe the finance bot
- The Eighth Dirty Word — “Just”
A slight change of format from now on. Industry News and Blog Posts are combined into News, and I have simplified some of the other section headings (eg 'Nerding out' to 'Development'). Also, the linked news items will be categorised under relevant hashtags. I might try to do some stats over time against the hashtags, time permitting.
- Image source: 'Do electric scooters dream of robot sheep?' (a photo I took in the garage while we were setting up for the launch of Coup this week)
- Deloitte unveils plan to build blockchain-based digital bank
- Blockchain puts a Bitcoin bank in every pocket
- Dutch Central Bank Prepares its Boldest Blockchain Experiment Yet
- Lightning Network (HN Comments)
- IBM Unveils New Cloud Blockchain Security Service
- Blockchain-based banking backend Vault OS from ex-Googler emerges from stealth mode
- Android Pay launches in Australia, but ANZ is the only big four bank signed up
- Cardless Withdrawals With Touch ID Coming to Over 70,000 ATMs Nationwide
- Will Press-On Nails Be The New Way To Pay?
- Why It’s Not So Easy To Bring Down The Cost Of Banking
#pokemon (I couldn't resist)
- Sore Legs Become Pandemic As Pokémon Go Players Accidentally Get Exercise
- Pokemon Go Is Driving Insane Amounts of Sales at Small Local Businesses. Here's How It Work
- Maybe Uber isn't God's Gift to Mankind
- How Uber, Airbnb, and Etsy Attracted Their First 1,000 Customers
- A top Silicon Valley investor predicts what the world will look like in 10 years, when roads are full of self-driving cars
- Kill the password
- The Conjoined Triangles of Senior-Level Development
- Using Simulated Annealing to Solve Logic Puzzles
- Image source: What would happen if Britain left the EU? - The Guardian
The UK EU referendum vote can't come quickly enough. I am sick of unelected idiots like Nigel Farage occupying my TV screen. And I'm sick and tired of the leave campaign cherry picking data to suit their arguments. Like talking about government outgoings to the EU without considering private sector income to businesses. And I'm even more exasperated with the media giving them airtime without holding their confected arguments to account. Curiously, as an Australian living in London, I get to vote. So there.
I really like simple and elegant solutions to tricky problems. The Bullet Journal system uses a traditional pen in conjunction with a notebook and a simple icon system to help with recording notes. No matter how advanced our phones and tablets become, it strikes me that the simplicity of a pen and paper will always be hard to beat. So, if you use a pen and notebook on a regular basis, Bullet Journal is well worth checking out.
Satan’s Credit Card: What The Mark Of The Beast Taught Me About The Future Of Money. Silicon Valley has sold us on a cashless, cardless, walletless, supposedly frictionless future. Is it possible to live entirely cash free?
Here is a list of use cases for Ethereum. Mostly stuff you will have seen before, but "stablecoins", where you can make use of blockchain technology without the risks associated with cryptocurrencies seems like a good idea. Wills (as in 'last will and testament') also seems like something curious to explore, if a little bleak.
Given the changes brought on with private browsing and ad blockers, and the thorough trashing of the social contract of using the web by programatic advertising technologies, can advertising continue to sustain the Internet? David Brin (renowned scientist, futurist and author) takes a two-part look to see if micropayments can be the 'secret sauce' that saves modern journalism. Here's part 2.
'Motion AI' is a service that allows you to create chatbots with ease. After being bullish about this as an interface paradigm, I wonder if we might be overdoing it slightly. Not everything needs a conversational interface. It will be interesting to see how this pans out as a UX trend over the summer.
This is simply amazing: Starbucks has more customer money on cards than many banks have in deposits.
Here is the future of Apple Pay. It shouldn't be too much of a surprise that Apple is playing a long game with Apple Pay.
Why Central Banks Will Issue Digital Currency. This does seem inevitable, but it's not obvious quite what form it will take.
- People are falling in love with a simple productivity system that just uses pen and paper - I love the simplicity of this, and it's still really hard to beat the form factor of a good pen and a good quality notebook
- Boosting sales with machine learning - machine learning and AI is everywhere at the moment
- Image source: Bullet Journal
Wow. I've seen some service incompetence in the past, but last night's LAX-LHR flight with United will go down as one of the worst. I travel a lot, and so I am fully prepared for delays and the general inconveniences that happen with airports. Between the ineffective security theatre of the TSA, the jet lag, and the MTBF of aeroplane parts, things are going to go wrong from time to time. These are incredibly complex machines, surrounded by complex systems, and littered with tired and grumpy people. And that's just the staff.
But this was different. First of all, departure was delayed by 2 hours because of a warning light while the plane was prepped. Given that it arrived just after midday for a 5:30pm flight, why it took until just after 5:30 to discover this is the first mystery. After a two hour wait in the lounge, we board the plane and we're ready to go. Except the plane doesn't move. A message from the Captain informs us that another warning light means further checks are required. Another two hours goes by with a full plane sitting at the aerobridge. Unlike Monday's LHR-LAX flight which sat at departure for nearly an hour without even an announcement from the crew, the Captain at least made the odd PA to let everyone know that things were not progressing.
About 1.5 hours into the second delay (3.5 hours in total now) we get a message that the crew had gone overtime and would have to be replaced. This takes about an hour to complete so we're now upwards of 5 hours behind schedule. Finally, the new crew arrives, the doors close and the plane begins to move. We taxi for approximately 3 minutes before stopping. The plane returns to the aerobridge. There there is an announcement from one of the cabin crew that the Captain had now gone overtime.
It is impossible to conceive that United "management" did not know this at the point when they realised the cabin crew were going to go overtime TWO HOURS EARLIER. The Captain makes a quick exit and the cabin manager announces that we have to get off the plane (or "deplane" as they like to neologise in the USA).
It's now just before midnight and I'm still in LA along with a 777 plane-load of very unhappy travellers. I've missed my son's birthday party and have to mill around in the departure lounge with no idea what's going on and zero communications from United. Two people on the "customer service" desk attempt to process everyone. They fail. I give up and call corporate travel. They get me a hotel for the night.
I understand that things can go wrong with aeroplanes, and I'd much rather have them go wrong on the ground than in the air. But the combined and coordinated levels of incompetence needed to stuff up a departure to this level is truly staggering.
Bottom line: I won't fly United again.
And in other news, the greatest minds of our generation have come up with a new chat program that allows you to whisper or SHOUT by changing the size of the font. What a time to be alive. #sarcmark
Seeing the really big guys in financial services make broadside statements against 'disruptive startups', you have to wonder what they're worried about.
Are ATMs on the way out? Analysis from Australia indicates that ATM use is declining as shoppers shift to cashless payments.
And finally, straight from the #nosurprisesthere department, we now say bye-bye To MCX CurrentC. It was always too complex, but more importantly, MCX was simply not solving an actual user friction.
- @MedievalReacts - for a bit of light relief
- From the "This Gives me Sweaty Palms Just Thinking About It" Department: The cave divers who went back for their friends - this is truly frightening
- Real World Microservices: When Services Stop Playing Well and Start Getting Real - things are a lot different a scale
- The Independent Discovery of TCP/IP, By Ants - isn't nature fascinating?!
- Distributed systems theory for the distributed systems engineer - a great staring point for all things related to distributed systems theory
- A couple of articles exploring the idea that the brain is not a computer. The rationale here is ultimately unsatisfying as it is a) drifting uncomfortably close to dualism, and b) is simply replacing one syllogism with another. Make up your own mind:
If you have been playing along at home, you would have noticed that things have been very quiet with the blog over the last month or so. That's because I've been doing a ludicrous amount of international travel from the UK into Europe. I'm back in London this week and it will be the first time since the 18th of January that I have spent more than 3 nights in a row in London. For practical reasons that should be obvious, I'm going to have to cut down on the frequency of the blog to monthly (ish), rather than weekly. I'm pretty sure no one will notice.
After having missed the 2015/2016 Summer in Australia, Spring in Europe is really lovely. And sometimes there's even some sun around.
Debate has kicked off again that Craig Steven Wright is Satoshi Nakamoto. According to Hacker News, Reddit, and the Economist itself, there's almost no way that this is true. But it sure is an odd story, and it looks set to continue.
The financial industry is having its Napster moment, says Bloomberg.
Check out Appii. They're doing something novel: binding resume and qualification details into the blockchain. It's certainly an interesting idea.
Digital money hasn't (yet) killed cash. Here are some reasons why.
- Five Big Questions on Bitcoin and Blockchain - some very insightful questions to ponder
- Is a basic income is smarter than a minimum wage? - more and more on the topic of basic income
- @FinMktg - financial services, top-5 'most followed fintech persons on Twitter'
- 15 Fundamental Laws of Software Development - a great set of interview questions here, "Tell me what you think about Parkinson's Law of Triviality".
- Image source: Corning CC Academic Calendar
It happened again: one of the bag check "clerks" at Heathrow airport pulled out my cabin luggage bag (which has gone thru the check at least 16 times in the last two months) and questioned the plastic bag containing my toiletries. Just to be clear: he checked the plastic bag, not the contents of the plastic bag. Apparently, even though I had the correct number of items, and each of the items was less than 100ml in volume, this person thought it necessary to check the actual plastic bag that they were in "because it was not an official plastic bag." The lunacy of this is just mind blowing. Whatever it was we were allegedly fighting against, this kind of behaviour tells me we have already lost.
Mondo had a great outcome with it's latest crowdfunding effort. They raised £1m in 96 seconds, making it the fastest crowdfunding raise in history at more than £10,000/second. Impressive.
- Bitcoin's Capacity Issues No 'Nightmare', But Higher Fees May Be New Reality
- #blockchain? It's complicated
- A Typical Day in a Blockchain-Enabled World Circa 2030
- Researchers Propose RSCoin, a Permissioned Blockchain Currency Controlled by Central Banks
- Mobile phone payments way of the future
- The broken world of mobile payments and how to fix it
- Square launches in Australia
- Amazon Echo users can now ask Alexa to pay their credit card
- Why Your Bank Wants to Track Your Phone
- Malware hijacks big four Australian banks' apps, steals two-factor SMS codes
- Taking On Legacy Banking Systems Via The Cloud
- How we build code at Netflix - software engineering on a grand scale
- Global Continuous Delivery with Spinnaker - unique challenges of delivering software at massive scale
- The Future of Chat Isn’t AI - more on conversational commerce
- First Click: A month with Apple Watch as my wallet - a look at how Apple Pay works in the UK
- @leonk1 - technology and digital business strategy (thanks for the 'RSCoin' article)
- Image source: California imposes first state-wide plastic bag ban
The process of getting into a departure lounge at an international airport has descended further into farce. I've been doing a lot of travel lately between London, Paris, and Berlin, and so I have a small plastic zip-lock bag that I keep in my backpack that can be easily removed to go through security. On one occasion, one of the trumped-up purple-jacket officials at Heathrow (on the outside of the customs check!) attempted to tell me that the plastic bag was not going to be allowed because it was not one issued by Heathrow Airport. On another occasion, a small container (<100ml) that had been through multiple airports around the world multiple times, including the one in question, was summarily removed, no reason given. This whole process is totally crazy, and it's little more than security theatre.
In contrast to the "air-travel-as-shopping-mall" experience salted with ludicrous security theatre provided by most airports, Berlin's Tegel Airport is a revelation. Notwithstanding the usual bag check crap, the physical distance between the check-in gate and the aerobridge is no more than about 20 meters. The airport has a check-in, bag-check, and customs desk for each gate at the airport, a design that is unique as far as I know. This 'distributed' design means that you never have to wait longer than about 5 minutes to get through the whole process, and there is not a single shop anywhere along the way.
What's the relevance to payments? Well although the airport is a pleasure to use from a passenger perspective, it's (apparently) not great for shopping. Sadly, because the new Berlin has outgrown its original capacity, it is due to be replaced. Probably with a shopping mall that allows planes to land.
Some sense from a national patent office? A new guideline from the Indian Patent Office's says that if the contribution of the invention lies only in computer programme, the examiner should deny the patent claim.
Could Amazon be making a play to run infrastructure for banks? Assuming the massive regulatory and compliance issues can be overcome, this is a potentially huge win for Amazon, and an even bigger win for the banks. If they can just get over the issues with running software on someone else's computer. The big losers would undoubtedly be the multinational outsourcers.
BPay's initial convenience service (ICS) offering on top of the New Payments Platform (NPP) will allow peer-to-peer (P2P) payments that may finally bring an end to cheques in Australia. Interestingly, Fastacash plans to have a competitive service up and running by the end of this year, which is a full year before NPP is ready (assuming it can be delivered on time). Fastacash already has a similar system running in Singapore, India, and Britain.
This is a pretty impressive number: “China Apple Pay Launch: 3 Million Cards In 2 Days”. Apple is playing a very long game with Apple Pay.
Check out some of the keynotes from the recent Mobile World Congress. VR/AR plays a huge part.
The large investment banks (and in particular JPMorgan) are doing a lot of work on bitcoin and blockchain technology. Investment bank activity is often a leading indicator of significant change: Jamie Dimon on Finance: ‘Who Owns the Future?’ Worth a read.
- The first successful Zero-Knowledge Contingent Payment - we are just starting to unlock use cases for blockchain tech
- Inbox is the Trojan Horse for consumer AI - there is so much going on behind the scenes here that it boggles the mind
- @rderow - Growth Director at BCGDV
- Stateless sessions with JWT - this is a neat pattern that simplifies web session management, and it's particularly useful in API scenarios
- An overview of Kubernetes - a good place to start to work out the basic concepts
- Image source: The airport they couldn't shut down: Berlin Tegel
It's really quite hard to get a weekly blog post out when you have a proper job. Particularly one that requires you to spend half a normal working week in airports, airplanes, or fast trains. From now on, Whine and Dime is likely to live up to his byline of being a "(semi)regular" newsletter.
It's no surprise that the Germans have a great reputation for engineering. The attention to detail of the Rails programmers on my current project is World class.
Basic income: the idea that we should pay all people an unconditional wage, instead of most other forms of categorized social security. Has it's time come? When Y-Combinator starts asking questions about the idea, it's probably a sign that it is something worth paying attention to. Of course, not everyone agrees.
Chase in the US is going to roll out cardless ATMs. It will work via a smartphone app in which the user effectively remotely controls the ATM. Another step along the way to getting rid of plastic.
More ATM news, this time in the form of support for Apple Pay, with both Wells and Bank of America apparently integrating their ATMs. It's not entirely clear how the integration will work, but going cardless as per the Chase example above would seem to make sense. One advantage of such an approach is that it might make it harder for card skimmers. Obviously, a good thing.
Conversational User Experience. This just keeps coming up. Watch out for a change in the way we interact with machines based on text. It's a short walk from here to conversing with systems using speach and natural language. And here come the #fintech conversational commerce start-ups: “Meet Cleo”. See also @meet_cleo.
This man wants to upend the world of high-frequency trading. Best of luck.
The Open Bank Project is an interesting attempt to provide a unified interface to banking systems.
- @meet_cleo - conversational commerce comes to financial services
- UK Open Banking APIs - explore bank APIs
- The Princeton Bitcoin textbook is now freely available - a systematic approach to understanding how Bitcoin works
If you have ever built a web or native app that prevents paste functionality for password fields: pick a new career. Because seriously, if you think that preventing paste into a password field somehow improves the security of your app or site, you really haven't got a clue what's going on.
The Europeans really know how to do trains. The Eurostar is just fantastic. London-Paris (and vice versa) by train has to be one of the best international capital city routes in the world. And speaking of Paris, I'm spending a bit of time there each week at the moment, so I'm making some #ParisObservations about the quirky and interesting differences that make it such a great city.
What is the Australian Payments Plan? Watch the video and read the material to find out where the Australian Payments Council think payments will go in Australia over the next 10 years. Seems to have a lot in common with the UK's World Class Payments.
Are you thinking about applications other than banking for blockchain technologies? Try this: Banking Is Only The Start: 12 Big Industries Where Blockchain Could Be Used. Note: not all of the twelve ideas discussed present a strong case, but a couple of them are quite interesting.
Elsewhere: this is a cracking idea for a non-financial use of blockchain tech: The GIF That Fell to Earth.
I keep hearing more and more about IBM's Bluemix. One of the advantages it has over public or hybrid elastic infrastructure (the term 'cloud' should be banned!) like AWS, SoftLayer, Heroku among others, is that there is an on-site version. Bluemix Local has all of the same features as the hybrid and multi-tenant versions, but it can run behind an organisation's firewall. This makes it attractive for banks and financial institutions that are generally prevented by regulators from using public or multi-tenant infrastructure. Expect to hear a lot more about this in the near future.
Look out for a new term: "conversational commerce". This article explaining why: "2016 will be the year of conversational commerce" lays out the concept and the reasons why it will be a thing this year. I agree. Definitely something to watch.
And finally, it looks like millions of e-commerce sites are at risk from a new Magento bug. E-commerce is hard.
- The resolution of the Bitcoin experiment - an interesting perspective from a developer intimately familiar with the bitcoin network.
- Bitcoin is Dead, Long Live Bitcoin - is Bitcoin on the way up, or way down?
- A Bitcoin Believer’s Crisis of Faith - some interesting questions about where Bitcoin is headed
- @elPedroMajor - has a lot of good things to say about how to build an agile digital organisation
- Tyrant - an alternative to Devise for Rails (based on Trailblazer)
- Trello clone with Phoenix and React (part 1) - Phoenix and Elixir keep making the news
- London Stock Exchange - Guide to the new trading system - a detailed technical look at the way the LSE operates
- Image source: Making the Change: Finding a New Career in Technology
Dodgy private equity deals (such as the Dick Smith shenanigans mentioned below) turn my stomach. Combine that with the ATO's recent 'Corporate tax transparency list' and a picture emerges of a sustained corporate rip off of the tax system. There's no doubt that the majority of this tax activity is legal, which is of course part of the problem. It's also intentionally inscrutable and questionably ethical. Why are we not asking serious questions about companies earning billions of dollars of revenue paying dividends to shareholders, but not paying a single cent in tax? And then there's the subsidies. To what end? Cui bono?
If you didn't read this rebuttal to Paul Graham's Economic Inequality essay last week, then read it now: Paul Graham is Still Asking to be Eaten. Then go and follow @girlziplocked on Twitter. Like all deep, complex arguments, it's difficult to agree with everything she says, but that post sure does make you think.
This article has to be read to be believed: Dick Smith is the Greatest Private Equity Heist of All Time. It's all legal, of course, but with bullshit financial engineering like this going on, we have the ATO chasing Mum and Dad businesses for small thousands of dollars of GST. What a scam.
This guy apparently has 1,497 credit cards. What's stopping him getting another 3 to make it 1,500?
Continuing the trend of payments startups targeting business-to-business payments, Singapore-based startup Xfers has landed $2.5M funding to simplify transfers for online sellers. Xfers spin on payments is to facilitate 'pay-anyone' style payments from online banking accounts.
Slock.it is another blockchain startup that allows you to 'rent, sell or share anything, without middlemen'. Watching their vids and reading their material I find myself torn between on one hand thinking this is profound, and on the other just being somewhat confused about the primary use case. Remember, 2016 is the year of blockchain.
Bitcoin and cryptocurrencies more generally can seem impenetrable for non-mathematicians. So, if you're interested in how the Bitcoin protocol actually works, then this post is for you. Great detail, well written.
Interested in the strategic implications of blockchain technology? This might help.
Continuing the theme of exposition: we use credit cards every day, but do we really appreciate the full costs, or even how they work? How Credit Cards Tax America provides an insight into the complexity behind the seemingly simple act of swiping a credit card.
Stripe will now accept ACH payments. Payments cost 0.80% capped at $5.00. Not sure if this will increase or decrease the longevity of ACH payments in the US.
- The end of the taxi era - no one should mourn the death of slow, ageing, monopolies with atrocious service. But we should also be careful what we wish for. Do we really want to turn the entire economy into a piece-work machine?
- Bristlemouth - a value investing blog
- @girlziplocked - taking on the received wisdom of the VC class with some really interesting, robust polemics
- A Beginner's Guide To Scaling To 11 Million+ Users On Amazon's AWS - it's always interesting to get some tips from people that have scaled big systems
- Image source: Learn About Business Law & Regulations
Welcome to 2016. And welcome to ridiculous mobile phone pricing. Virgin Mobile refuses to give me an additional pay-monthly SIM, even though the amount I have paid topping up the prepaid SIM over the last three months is approximately 3 to 4 times the pay-monthly tariff. Their line that it is because of my 'credit rating' is clearly nonsense, as they won't let me pay in advance, and easily debunked because they will allow for my wife to get her own pay-monthly SIM on a separate account, but not for me to have two on the one account. It's obviously designed as a cynical way to extract higher rates. What a nasty little scam. Any mobile carriers out there want a new customer? Drop me a line.
What about this English weather, eh? The warmest December on record was also one of the wettest.
Paul Graham started the new year with a pair of posts on Y Combinator that address the issue of economic inequality: 'Economic Inequality' and 'The Refragmentation' are both well worth a read. There have also been a number of rebuttals that are equally worth reading, some with more venom than others. For example: Paul Graham is Still Asking to be Eaten. The bottom line here: people are talking constructively about inequality, and that is a good start.
There was a bunch of cryptocurrency activity over the break, including:
- 10 New Bank of America Cryptocurrency Patents Published and also, Bank of America is trying to load up on patents for the technology behind bitcoin
- How Apple’s Trojan horse will eat the credit card industry
- National Security Implications of Virtual Currency
- Why bitcoin matters
London is still buzzing with fintech activity. For example, "in last five years, out of $9.8 billion of investments in FinTech across the European region, 55% are invested in UK FinTech."
Insurance is a terrible investment, but one that the majority of people are forced into for cash-flow reasons. You only have to look at what large corporations do with insurance: they mostly underwrite themselves. So, is 'microinsurance' the answer to the insurance industry? Notwithstanding that "the insurance industry" is not a question, the changes afoot in banking and finance could mean that insurance is ripe for disruption, too.
In a move that foreshadows a move towards financial services by one of techs Big 4, Amazon is to start offering loans to customers with pay monthly option.
- Basic infrastructure patterns - its very useful to think of solutions in terms of patterns that can be categorised, synthesised and reapplied in different contexts
- 16 mobile theses - another must read from Ben Evans
- Bitcoin's mining difficult has increased by 41.9% over the last 30 days - most likely because of BitFury's new 40 megawatt data centre
- The Global Landscape of Blockchain Companies in Financial Services - includes one of those 'landscape' infographics
- Outdated payment protocols expose customers and merchants - proprietary security protocols are never a good idea
- Reputation Tokens - another snapshot infographic
- FinTec 2016 – quo vadis? – Part I: The digital challenge - introduces the idea of 'relevant banking'
- @hollyransom - speaker and strategist
- Getting started with Distributed Ruby (DRb) - #TIL that Ruby stdlib contains a remote method invocation (RMI) system.
- 5 AWS mistakes you should avoid - good tips on setting up an AWS environment
- aws-shell - interactive productivity booster for the AWS CLI
This is the last Whine and Dime for 2015.
All the best for the holidays, assuming you manage to grab some. Chat next year, or catch up on the Twitters in the meantime.
The FT has a big roundup of what's happening with "the future of banking".
Here's another spin on the progress of Apple Pay and mobile payments, and why we still don’t use them. This is another in a long line of articles that seems to want to tar Apple Pay specifically with the fact that most merchants in Europe and the USA don't (yet) support contactless payments. Apart form that, there are some good points in here about payments reliability and ease of signup. But this is a long game. Setting up the mechanics of the process and isolating it, to some extent, from the traditional card schemes will set Apple Pay up for what's next.
If it's not the legacy of legacy systems worrying UK and US bankers, it's cybercrime. Bloomberg reports that while fintech creates excitement, the top concern among bankers is their readiness to handle a substantial electronic attack. Exposing a firm's readiness to defend against attacks is difficult to do in principle, but also difficult to do in practice, without giving away critical information that attackers might use.
What if the "Uber of Banking" was ... Uber? Many taxi drivers singing up to be Uber drivers were previously unbanked. This was such a problem for Uber that it is now allowing drivers to sign up for a debit card as part of the on-boarding process. There are some great quotes in that article, such as "If you’re a bank, 2016 is the year you start redesigning every single product in your wheelhouse", and "Will your children ever own a car? I don’t know, do you own a horse?" Well worth a read.
From the which-horse-are-you-on-department in Australia comes the news that the Big banks opt for Android over Apple Pay. Because Australia was a long way ahead of other markets with respect to the use of Chip+PIN and contactless, the promise that ApplePay brings in terms of cardholder and card security are simply not there relative to what was already available. They are also very powerful as a group, and don't want to just end up being a "coin pipe" for apps, in the way that (most) telcos ended up being "bit pipes" for smartphones. Grab some popcorn.
In a surprising turn of events, it seems Glenn Stevens and the RBA are warming to blockchain tech. He likes the potential for cost savings, as all good Reserve Bank Governors should. It'd be interesting to know what he thinks about 'anti-bitcoin', a centralised, digital currency.
You've heard of 'neobanks', now get ready for 'challenger' banks. After the UK's Financial Conduct Authority and Prudential Regulatory Authority signalled their willingness to review startup bank applications, as many as 20 startups have approached the regulators with applications in the past two years.
- The Death of Bank Products has been greatly under-exaggerated - predicting the decline of branch banking
- Software has diseconomies of scale - not economies of scale - so, so true! And this is a great quote: "Large companies trying to be Agile remind me of middle aged men buying sports cars."
- Capital is no longer scarce - estimates that "... that global investable capital exceeds by 2x the capital required to operate the economy." Wow.
- Why customers will decide the fate of our banks - "Financial services are becoming demand driven, with the balance of power in the hands of the customer."
- What Satoshi Did - a very succinct and well stated background into the creation of Bitcoin
- @albertwenger - Partner at Union Square Ventures and author of the Continuations blog
- @GCGodfrey - CEO of Moo.la
The patent system is a joke. I had the misfortune this week to review some alleged prior art for a patent. One of the review patents was this: 'Peer-to-peer security authentication protocol'.
As anyone who has ever had anything to do with patents will attest, patent language can be impenetrable, but my (admittedly legally ignorant) reading of this patent seems to indicate that it is trying to lock down the idea of salted password hashing.
How could a patent issued in 2007 get coverage of salted password hashing, a concept that predates this patent by at least 36 years?
As a holder a number of patents in the US and Australia, I have an interest in the workings of the patent system. However, this article entirely changed my views on it, and intellectual property more broadly.
Well worth a read.
Here’s some very bearish commentary on Apple Pay and Apple Watch: The Incredible Shrinking Apple. I am on the fence about Apple Watch (even tho’ I wear one every day), but I am sure that Apple's payments play is part of a very long game. Apple does not need to make money from payments and Apple Pay is just another “ecosystem feature” that makes iOS devices attractive. However, what will be interesting is how long banks keep playing with Apple if short-term uptake falls short. Banks are much less patient.
In contrast, here's some very bullish commentary on the blockchain from Goldman Sachs: 'The Blockchain can change... well everything'. And some more from R3 CEV: 'Global bank blockchain should be operating within a year'.
Here's a neat infographic via @obussmann that tries to frame "the disruption of blockchain on the financial services industry".
Is the creator of Bitcoin an unknown Australian genius? The Sydney Morning Herald seems to think so, after Craig Steven Wright had his North Sydney home raided by Federal Police. Apparently, the Herald is reporting that Craig has a few tax issues. Well, I guess you might have a few tax problems if you were sitting on potentially hundreds of millions of dollars worth of cryptocurrency. Lawn mowers, Hills Hoists, utes, and now Bitcoin. Who knew!? The Hacker News thread on Wright's outing has some fascinating extra info. The Guardian also has a few more details. This is a curious story. David Fincher is sharpening his pencil as we speak. But not everyone is convinced, of course. A respected Sydney security expert thinks not. Or in his words, "not a chance".
Australia's Commonwealth Bank has been working with blockchain tech for two years and is saying that blockchain may transform trade finance and share trading.
Continuing the theme of trying to understand the real threat facing traditional banks (legacy systems, anyone?), former Barlcay's CEO Antony Jenkins thinks that traditional banks are heading for an Uber moment. However, Currency Cloud CEO Mike Laven thinks it is worth drawing a distinction between market-share and mind-share. He goes on to make the point that 'mind-share does change consumer demand'.
It seems like Apple is having some difficulty persuading the large banks to sign up for Apple Pay in Australia. Reuters reports that 'In Australia, banks disrupt Apple with mobile payments power'. The banks are all-powerful down there, so this will be fascinating to watch. Is it a win for the Big4, or the start of another 'Docomo won't sell iPhones' story?
The NYT is reporting that Walmart is jumping into the (crowded) mobile payments business with a service called Walmart Pay. Walmart is certainly big enough to move the needle on this one, but QR codes? Really!?
- "Little today is real-time or near-free ... but this will change and here's why" - international money transfer facilitated by big banks is so outdated
- @obussmann - fintech and blockchain
Same-day delivery with Amazon Prime is really one of the wonders of modern e-commerce. But what's crazy is that a single order, made up of multiple items, can still end up being delivered by multiple couriers on the same day. I'm sure the Amazon brainiacs are onto this, but it shows just how complex logistics must be underneath that it makes sense to split an order up into three separate deliveries, all of which occur on the same day, rather than aggregate them into a single delivery.
It strikes me that there is an opportunity for Uber et al to really disrupt household deliveries. With a massive fleet of vehicles already out on the road it seems like a very short walk from on-demand taxis to on-demand courier deliveries.
The UK does e-commerce really, really well. The suburb where I live has a constant stream of white vans making deliveries throughout the day, well into the evening, and also on weekends. Population density does amazing things to economics.
One more digital bank has joined the ranks of challengers in the UK. These folks seem to be very well capitalised, mobile-first, and plan to offer current accounts and mortgages. Back in Australia, Tyro wants to beat the big banks at small lending. This is another front on which the big banks will need to defend against startups: business banking. @NicoleWill100 had a neat tweet here: "The fintech who does front end innovation is just sustaining the major banks." Great perspective.
In South Korea, a pair of online-only banks gets preliminary regulatory approval.
What would the technology of a disruptive bank look like? It's a great question. Here's a (admittedly, very high level) shot at answering that by Jack Gavigan. Microsoft also has a view. And apparently, @pmarca is dying to fund a disruptive bank.
Disrupting retail banks is one thing, but what about business banking? Is Small Business Banking Next in Line for Disruption? This startup founded by a few ex-Simple folks thinks so. Also, check out their API docs. Really, really well done.
Another jurisdiction is heading towards real-time, immediate payments with the EPC publishing a proposal for the design of an instant credit transfer scheme.
Whilst Australia has traditionally been quick to embrace new payments technologies, the country seems to be lagging on person-to-person payments, according to Visa.
Also in Australia and also with Visa, there is an opportunity for push payments over the Visa network. They are (presumably) putting this up an alternative to NPP.
Why does Apple want to get into the unprofitable world of payments between friends when there really isn't any money to be made? In fact, there's lots of money to be lost. However, Apple's motivation for moving into P2P is more likely to be about shoring up Apple Pay, and providing yet another reason to buy into the Apple ecosystem.
"Uber for ..." is ridiculously overused. So, how about "Uber for ATMs"? Crazy? What could possibly go wrong? If the idea of using regular people for ATMs sounds a little bit too unlikely, then perhaps with a few tweaks, this could work. Who knows. Developing countries have been the source of some fascinating innovations in payments in recent years.
- How to exchange secrets - some entry level ideas for upping security, plus a bit of PGP
- Google got it wrong. The open-office trend is destroying the workplace - hot-desking is a personal bugbear of mine. "Open plan offices" are based on (questionable) accounting principles rather than good ergonomics or workplace design. They cater almost exclusively to 'manager schedules' not 'maker schedules', which actively works against those whose job it is to get stuff done, and worse, they are simply not supported by workplace design data.
- @NicoleWill100 - saying some clever things on the kinds of disruption that startups needs to be involved in
- @JackGavigan - London based entrepreneur with a fintech spin
- @tellerapi - the API for your bank account
- @stevegraham - "proud father of @tellerapi"
- What if we didn’t need an app server anymore? - is it possible to design the back-end of an application so that it does not need a monolithic application server?
- API banking with SEED - a really well designed API for business banking
- CockroachDB - a scalable, geo-replicated, transactional datastore
- Features that make CockroachDB unstoppable - distributed databases are a Really Hard Problem™
- A Simple feature toggle for a Rails app - feature flagging made easy
- Introducing the timechain - time-locked crypto is also a Really Hard Problem™
"The blockchain doesn't matter."
"The blockchain is the future of finance."
There has to be something going on with blockchain technology when you start to get massively polarised views on what it is, and what it isn't. CapGemini think that it is a fundamental shift for financial services institutions. Simon Taylor, Vice President for Entrepreneurial Partnerships at Barclays, presenting at the first public meeting of Whitechapel Think Tank, thinks that blockchain tech will have a big impact on reconciliation, premissioning, and privacy. And a whole bunch of other banks have similar perspectives. Even the Bank for International Settlements has a view. Almost everyone thinks there's something deep going on.
Well, almost everyone. Constellation Research's Steve Wilson is more bearish, particularly with respect to the use of blockchain tech for identity. Skepticism is warranted when a proposition is little more than "add blockchain to X" (particularly when "X" is "identity"). However, there are some blockchain startups solving real problems. And add to this the focus on blockchain tech from Tier-1 global banks. There is an awful lot of activity in this space at the moment.
In contrast, Duena Blomstrom thinks that blockchain doesn't matter. Whilst her comments on the primacy of cultural transformation are fundamental to banks dealing with their manifest issues, she also goes on to say that "technology in itself does not matter". This is at the very least arguable, given that technology is one of the defining traits of humanity. "Culture" and "communications" are both "technologies" invented by humans, albeit emergent phenomenon. Given that, the advice to pay particular attention to the cultural and emotional impact of technology is well made.
McKinsey also has some insights onto disruption in payments: "How the payments industry is being disrupted". An interesting insight here is that "transaction-related revenues" (directly linked to transactions) will grow more quickly than "liquidity revenues" (derived from outstanding transaction account balances), at least in part reflecting how the move to mobile will increase the total number of payments transactions executed. The report also calls out 'non-bank digital entrants' as a source of disruption, modernisation of domestic payments infrastructure (eg NPP in Australia), inefficiencies in cross-border payments as an opportunity for new players, and how the digitisation of retail banking will spread beyond payments into transaction banking. Great detail, and well worth a read.
Why is Visa Europe testing remittances on the Bitcoin blockchain? Visa's Jon Downing said it was the need to identify a "human use case" with potential global value that led the project to focus on the remittance industry. This strategy appears to be a common theme as larger institutions test the water with blockchain technology. This is also a good point: "... bitcoin offers a creative solution to the 'last-mile' problem, in which it is argued the majority of remittance costs come in the form of physical kiosks that deliver hard currency."
Continuing Samsung's storied tradition of emulating the work of others, they are now taking a leaf out of Wells Fargo's payments marketing playbook, giving shoppers a $50 Best Buy gift card if they activate Samsung Pay on their phones. It's an idea worth emulating because of the power of defaults.
As much as we like to think that startups can and will disrupt the banking industry, it's sobering to look at just how difficult bureaucracy and entrenched thinking can make that task. Just having technology, or even money, is not enough, you also have the crack through the molasses of regulation and incumbency. Even seasoned entrepreneurs like Brewster Kahle have had so much trouble that he has decided to call it quits on the Internet Archive Credit Union. There are certainly some lessons here for upstart banks. Perhaps, rather than fight head on, it makes more sense to join up with the established players? Or more likely, there is a role for both: one to foster ideas, and the other to supply the kind of capital needed to operate a bank.
And in a move that has the potential to confound the rollout of Australia's NPP, PayPal shoppers will soon be able to make real-time, point-of-sale payments via the Eftpos network. PayPal will be integrating with Eftpos's new payments hub to make this happen.
- Why Yammer Believes the Traditional Engineering Organizational Structure is Dead - it's fascinating how the same kinds of ideas tend to pop up in different places at the same time.
- Banks too slow to modernize core systems - this is potentially a much bigger threat to traditional banking than disruptive startups
- @sytaylor - Vice President for Entrepreneurial Partnerships at Barclays
- @duenablomstrom - blogger, VC, consultant, creating "emotionally connected customers"
- Data processing architectures – Lambda and Kappa - processing large amounts of data in real time is increasingly important for payments, Lambda and Kappa architectures are two different ways to think about the architecture of these kinds go system
- Architecting Rails Apps as Microservices - a short tutorial on architecting microservices with Rails, which is often associated with 'monolithic' architecture apps
I've often felt uneasy about high-frequency trading. Contrary to claims from those participating in HFT that it increases liquidity, intuition suggests that having someone jump in and out really, really quickly between trades would end up reducing total market liquidity. But who am I to question these mechanisms? I am little more than a naive observer, unschooled in the dark arts at the confluence of physics and finance.
That's why reading an article like this is so compelling:
After taking that in, is it not worth asking a few questions about market fairness when the physical distance of a trading platform from its exchange has a material impact (due to the speed of light) on who gets to buy what, at what price? Especially given that access to said real estate is preferentially dished out by the same exchanges to the highest bidders?
Whoa. My life is complete: Smiths Frazzles. Think: bacon flavored bacon. In a crisp. Or "chip", for the Australians in the audience.
Should the anonymous creator of Bitcoin get the 2016 Nobel Prize for Economics? Bhagwan Chowdry from the Huffington Post thinks so, saying "I (shall happily) accept the 2016 Nobel Prize in Economics on behalf of Satoshi Nakamoto". Maybe Satoshi isn't just one person, but if he is, then the SEK10,000,000 Nobel Prize pales into insignificance compared to the (alleged) one million bitcoins that he is sitting on.
Nasdaq is looking to Estonia for its new blockchain services.
Australia's largest telco Telstra is having a say on mobile identity. There's also an infographic to summarise the report. The report provides details on how security and identity issues are gaining increasing attention, particularly in the Gen-X / Gen-Y crowd. However, there's not much to say on whether or not security concerns are actually changing people's behaviour or preferred financial institution. Banks have done such a great job convincing people that any security problems experienced online will be handled by the banks that most consumers think security is somebody else's problem.
According to Royal Bank of Canada head Dave McKay legacy systems are a bigger threat to banks than startups. This is almost certainly true, but those legacy systems still manage to fund massive profits. So there is little incentive to change, until the profit engines start to come off the boil.
Also Canada related, check out the difference in worldview between the Canadian and Australian banks when it comes to blockchain tech on the latest A16Z podcast: Blockchain vs./and Bitcoin. One is thinking economics, the other about politics. I'll let you decide which is which.
Starbucks is having quite a bit of success with its mobile payments functionality. How? By driving functionality entirely from how it improves the user experience in buying coffee in a Starbucks store. Obvious when presented like that. It's a real shame more product development isn't driven from the glass.
"Approximately 70 percent of consumers across all generations (85 percent of millennials) believe banks that are current with the latest technology are more trustworthy than banks that lag; however, nearly 4 out of 5 Americans say when it matters most, they value people more." An interesting result given the amount of time and money that most banks spend on tech.
Will Apple’s new money transfer idea leave Visa and MasterCard in the dust?. What a great question. Given how much banks (generally) make from their credit card businesses, there will be massive internal resistance to anything threatening. However, there are also those within banks and regulators who are very wary of the card schemes' power, particularly in Europe, given the US-centricity of the three biggest players. Grab some popcorn. This will be a hoot to watch.
Apple Pay finally gets a run in Australia, thanks to Amex. It will be very interesting to see how this plays out in Australia given the much higher penetration of NFC/contactless terminals in retail.
It is astounding that the US has rolled out chip cards, but not PINs. No wonder merchants are up in arms about spending a fortune replacing terminals that cut down only on the fraud shouldered by banks, not merchants.
The phrase "cashless society a few taps away" has been uttered so many times, but we are yet to see it. And we won't, until the form factor and user experience of "handing over cash in person" can be replicated electronically. In any case, while the advantages for electronic remote person-to-person transactions are clear (with or without a business model), do we even want to get rid of cash for local person-to-person transactions?
Superannuation is another area where Australia's New Payments Platform may have an impact.
- How to destroy bitcoins? - the digital equivalent of lighting a cigar with a $100 note
- Mobile, ecosystems and the death of PCs - great data and analysis from Ben Evans
- What is Open Bank Project - tech overview of Open Bank Project
- One Time Secret - allows for sending of single-use / "burn after use" URLs, useful for email links to documents
- Single Artificial Neuron Taught to Recognize Hundreds of Patterns - there's an awful lot of really fascinating stuff going on with the simulation of neurons, is humanity on the verge of cracking something big with artificial consciousness?
- Life in Life - Conway's Game of Life running Conway's Game of Life. Whoa! #turtlesallthewaydown