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Blockchain Reflections for 2017: Do We Know What We Don’t Know?

Source: http://startupmanagement.org/2016/12/14/blockchain-reflections-for-2017-do-we-know-what-we-dont-know/ CoinDesk’s editor Pete Rizzo asked me to be a Guest Editor with him for their  year-end series of thought leadership articles, that will run over the next 3 weeks. I was honored to be asked, and happy to help. I kicked off the series on its first day (yesterday) with my own take, entitled Blockchain in 2017: Do We Know What We Don’t Know. Here’s what I wrote. Self-awareness is bliss, in life and in business. Part therapy, part philosophy, it is a psychological state of mind that carries with it several benefits. For one, the more you know about yourself, the better you are at adapting to changes. The blockchain is no different. Left to its own devices, the blockchain space has plenty of reality distortions. To kick-off this year-end series, I’m going to try and provide a balanced reality check about where we are in the blockchain’s evolution, as I ask a simple, yet inquisitive question: As we enter 2017, do we know what we don’t know about the blockchain? No predictions. Just reflections. To answer the above question, I will highlight a few areas while categorizing topics along two dimensions: the strategic and the tactical. Strategic unknowns Where are we in the cycle? Pick your flavor of cycle theories- Gartner’s hype cycle, Carlota Perez’s theory of economic development, or Geoffrey Moore’s crossing the chasm. There is no disputing we are in the formative years of any one of these cycles, but where exactly? When will blockchain adoption take off in terms of users, applications variety, steadiness and predictability of growth patterns? From my vantage point, we haven’t crossed the chasm, nor are we in the wide installation phase of the technology, and we aren’t even past the peak of inflated expectations. To be more accurate, where we are exactly will be visible only in the rear-view mirror, when we’ll be able to look back. In the meantime, we’ll need to keep plowing, knocking every obstacle, and picking ourselves up at every seemingly failing moment. Will we need a real crash in order to adjust our expectations? If the Internet is a precursor of blockchain history, the year 2000 crash was a momentous event because it flushed out what was hyped, reset expectations, and allowed cool heads to prevail during a new and renewed phase that ensued. That new phase was dubbed Web 2.0 and appeared around 2003, ushering an ever-lasting phase of Web prosperity and growth thereafter. In retrospect, that was about seven years into the Web’s 1993 real appearance. With the blockchain, some have already started using the label Crypto 2.0, but that might be a premature moniker for where we are in the blockchain’s life. I firmly believe we are still exploiting a Blockchain 1.0 era of sorts, despite the nuances of its own evolution. Perhaps only a real crash would shake things up enough and substantiate a real entry into the new phase of Blockchain 2.0. What are the blockchain’s boundaries? Do we know where the blockchain will apply and where it won’t? What will work and what will never work? We really don’t know, but we need to keep pushing the envelope and going off the edges in order to realize where the limits are. I am seeing many cases where the blockchain is being thought of, but it looks like a solution waiting for a problem that is not there. For example, the healthcare field as a whole has been touted as a perfect sector for the blockchain, but we have not seen real progress or practical blockchain implementations. Specifically, I often hear that the blockchain is going to solve the synchronization issues in the patient medical record, yet there is little realization that solving the medical record puzzle has other non-blockchain related issues that must be addressed first. Will the blockchain have an impact on the firm? Distributed Autonomous Organizations (DAO’s) put into question our traditional thinking about managing organizations, but we still don’t know if these early implementations could propagate into any traditional organization, or if they would remain in the domain of blockchain-based businesses. Will the concept of decentralized organizations that are tied to blockchain technology influence how a firm is organized? And to what degree? We haven’t yet totally figured out blockchain governance, yet we want these early examples to model how the firm needs to be run. Automating governance and automating operations are not the same thing, but in both cases, we need more experience in modeling and running parallel systems before declaring that we know how the firm’s organization will change. What will be the blockchain’s contribution to the GDP? We have no idea. For comparison, in developed countries, the Internet economy contributes anywhere from 5 to 12% of a nation’s GDP, and that was accomplished 23 years after the Web’s advent. Yes, cryptocurrency-based companies are emerging, but what will be the compound effect on real wealth creation across countries, industries and economies? We know that the total value of cryptocurrencies hovers roughly at the $15bn mark as of the end of 2016, but that is the only quantifiably measurable metric relating to wealth creation. Will the crypto-tech economy follow a similar path as the Web economy in being its own force of economic strength? I certainly hope so, but we are in the early innings of this evolution. Will blockchain-based identities have a future? How many blockchain identities will we have is an interesting question. One answer is that we’ll likely have as many blockchain identities as we currently can hold real ID cards in our physical wallets, combined with the number of online identities we possess. This is because a blockchain identity crosses the physical to online world due to the potential melding of the trust factor between these two semi-artificial boundaries. Blockchain-based identity holds a promise, which is to allow us to consume a number of services in a trusted manner, without the need to assert our physical presence, like remote voting for example. What will be the killer app for blockchain-based identity: voting, trading, social applications, e-commerce, consumer services, or others? Are we going to end-up with a variety of identities or will a handful emerge? Will bonding our reputation be a romantic linkage, or will it have a real value? Can we really codify law? There are big expectation for blockchain-based smart contracts. Will they be able to dispense money, change conditions, and enact decisions? Maybe it’s easier to codify existing law and we should start there, instead of creating new laws while we also attempt to codify them before they are proven. Can smart contracts govern company operations, decisions, stakeholders, and future directions? We must be careful in not rushing smart contracts implementations where we don’t fully understand the implications of their potential failures. In the case of the much publicized DAO rise and fall, too much autonomy was entrusted into fledgeling smart contracts, and the process took a turn that was humanly unstoppable (except via a hardfork). Autonomy seems to be a stubborn goal of DAO’s, as zealous engineers want to give power to their smart contracts, just because money, business rules, responsibilities and decision-making can now be programmed all together in a big mashup. Will we see the equivalent of a smart contrast in-chief that governs other smart contracts? Is Turing completeness a benefit or weakness of smart contracts? Will blockchain networks be more secure than existing banking networks? In light of the continued blockchain-related security hacks (eg: The DAO and Bitfinex, to name just two recently visible ones), a fundamental question is front and center: will we eventually take blockchain security for granted, just as we take bank grade security for granted? Or is it too early in the maturity cycle of blockchains to expect total security resiliency? There is no reason why we shouldn’t expect blockchains to be as trusted as what is commonly referred as “bank grade security”, although we are not there yet, today. However, we should be reminded that real banks have had a rich history of robberies starting with the 1800’s during the Wild West era in the US, and there are continued successful bank robberies, thefts and hacking exploit, up this day. Eventually, the frequency of blockchain security vulnerabilities should be an artifact of the past, because security is an essential condition if blockchains want to become big. How will blockchains interact with each other and with the physical world? That is a loaded question that we are barely starting to tackle and with expected breakthroughs in 2017. Will there be standard way to access off-chain data? Will decentralized oracles become provably honest retrieval sources by centralized services? Will various blockchains inter-operate with each other at the asset exchange level or via other types of linkages? Will the Internet of Things take off when we connect it to blockchains? Will there be other flavors of blockchains in addition to the popular public and private one? How will the blockchain record and update physical status? Or should we optimize for on-blockchain activity? Will moving assets across blockchains be like the nightmare of integrating multiple databases or will it be a lot easier? Will big companies play outside their operations? The innovator’s dilemma is an omnipresent hurdle for large companies. The Internet was no exception to it, as we saw few large players reinvent themselves with the Web era. Instead, a number of industry sectors were hit broadside by the Internet: newspapers, retailers, bookstores, travel agents, stock brokers, lenders, payment processors, post offices, and others saw their business radically altered by the Internet. With blockchain implementations, large companies could keep busy for the next 10 years, reengineering their operations to benefit from cost savings and process improvements due to blockchain-based solutions, but will they go further outside of their comfort zones? Will they implement what’s under their nose and in their current operations? If central banks who have been tinkering with the blockchain adopt cryptocurrency, will it be as an experiment or as something they truly believe is in their future? Tactical Unknowns When will we see widespread consumer adoption? Where are the consumer applications that don’t require users to have any technical knowledge of the blockchain? Early cryptocurrency wallets are very natively close to the blockchain and not user-friendly enough, at least not for mass consumption. Maybe there’s a Web equivalent to the blockchain that we are still waiting for. It was the World Wide Web that provided this user-friendly layer where users didn’t have to worry about connecting computers together in order to benefit from the information availability. Will we be able to shift the conversations from the technical realm into the business one? What will be the regulators’ role and impact? For the most part, regulators have not been too heavy-handed yet. But they are bound to place their marks on the blockchain, eventually. What is not known is whether they will innovate, update, experiment, support or tamper with blockchain innovation. The right regulatory updates could provide a great boost to blockchain implementations. There are new theories for blockchain regulations that place regulators as a node on the network, just like any other peer, allowing it visibility and transparency into a slice of transactions which they can observe and react to. However, we have yet to see official regulators taking these types of positions, and we still need to see more regulatory sandbox experiments bear their fruit. Does proof of work have a long-term future? Will proof of work (POW) scale indefinitely or will a new consensus method such as proof of stake or delegated proof of stake replace it? Do we know all we need to know about the economics and safety of this popular consensus method? A corollary to that first question follows: will miners continue to play a key role or will their place become threatened? Furthermore, will it be possible to create a public blockchain that isn’t dominated by a few mining interests? Let us be reminded of what Tim Berners-Lee said when they decided to make the Web technologies totally open: “You can’t propose that something be a universal space and at the same time keep control of it.” Finally, will it be possible to have a secure blockchain without a valuable token as the incentive to secure it, without calling that a permissioned private blockchain? Are ICOs a boon or will they bust? Currently, new Initial Cryptocurrency Offerings (ICOs) are launching with a frenzy not unlike the Internet rush to IPO’s during 1999, when half-baked companies or ideas hurried to get listed, only to later face the ugly brutalities of public markets. Choosing the ICO route via a public crowdfunding campaign is almost like being a public company from day one. It’s not easy being in the public eye, and companies that can’t deliver high standards of transparency shouldn’t take that path. Amidst the uncertainties in evaluating ICOs, we really don’t know if this trend will become a normative way to raise funds when a cryptocurrency is involved. Furthermore, we are still trying to validate the various roles that a cryptocurrency (or token) plays in it: is it a proxy for network effects, an intrinsic utility, a reward, or a speculative instrument? What standards will emerge? In 2016, waiting for blockchain standards has been like waiting for Godot, but that was not such a bad thing. Imposing standards too early may be hurtful to the blockchain industry, because we need to see the technology blossom a little further. The topic of blockchain standards is complicated, and it extends beyond just seeing it as an interoperability challenge. We will probably need a set of technical, business and legal types of standards, but we really don’t know which ones they are yet, or which existing ones need to be updated instead of being completely re-thought of. Technology innovation will always outpace regulatory and standards bodies who want to freeze-frame it in order to put their stamp on it. But if you try to frame a moving picture too early, the resulting optic will be distorted and you will want to replace it soon after. What will be the impact of quantum computing on the blockchain? In theory, quantum computing could lower the security resiliency of blockchains because it threatens to break the strength of encryption. Will quantum computing be a force to reckon with, or will blockchain encryption also benefit from it and strengthen itself accordingly, rendering the net impact as a neutral one? What will the new intermediaries look like? We define the blockchain as being a peer-to-peer network for value flow without central intermediaries, but the reality is that new intermediaries are emerging. Much of the blockchain activity is focused on financial services, as many startups see banks as the disappearing intermediaries, but outside of financial services, what other industry sector will show good use cases for the blockchain? Government, energy, healthcare are good contenders, but real implementations are few and far in-between. Will linking physical assets to blockchains get accomplished without introducing trusted third parties? Will consortia succeed or be a stepping stone? There are at least 25 various consortia across various sectors and industries, all of them vying to provide collective benefits to their members. Consortia are hard. Pulling diverse companies to work together is not easy. You need disciplined processes, persistence, patience, a tolerance for some politics and lots of maturity. At best, they level the playing field among participants and help to move forward collectively. Therefore, consortium work doesn’t offer a competitive advantage, which is why most participants will need other blockchain initiatives in parallel. Will group initiatives deliver on their promises or will they end up being a bridge into other types of activities? Will cryptocurrency redefine the attention economy? We are increasingly spending our time in online activities that we don’t get paid for, but will we continue to give our time away for free? Social media for example is a benevolent time consuming activity that has no direct financial paybacks. What if we injected cryptocurrency into these activities as a new unit of value? Will it be a good enough incentive that brings benefits and quality improvements? Is cryptocurrency the missing fuel that could re-energize the attention economy? What will the shape of private blockchains be? What does a world of competing blockchains look like? Or will they all work together harmoniously? If there were more than one Internet, it would have undoubtedly not blossomed the way it did. Certainly, the path to multiple blockchains and distributed ledgers is currently being paved, but we still don’t fully understand how the needed network effects would be affected by a multiplicity of blockchain networks. Is the only form of private blockchain the consortium one, or will there be other forms perhaps similar to the private website where one firm runs its own blockchain application to serve its private customers? Keep looking further ahead The intent of this reality check was not to be negative, but to be grounded. It’s always good to know about the headwinds you face, even when experiencing the feelings of hope and excitement. Optimists would like you to believe. Skeptics want you to forget. Realists (like me) encourage you to think hard and be aware. The proverbial jury is still out for many of the issues that I have enumerated. To bring these thoughts into the practical, I encourage you to take on a personal assignment for whatever blockchain activities you are involved in: make your own list of unknowns, and think of a path to remove uncertainties and turn them into known issues. Then, talk to people outside of your blockchain spaces. Ask them what they think of your projects and ideas. Like kids, they’ll say the darndest things, but they will tell the truth and ground you back to reality. After more than two decades in operation, we can say today that the Web has been largely tamed, as there are few unknowns to it (except perhaps for the vague mysteries of hacking). In contrast, the blockchain terrain is boiling with uncertainties, although not insurmountable ones, and will remain so for a few more years, until a given maturity is reached. Uncovering the known unknowns was only the easy part. The harder part will be to discover the unknown unknowns, but to get there, we will need to wait yet another year! (Thanks to Fred Wilson, Daniel James, Yondon Fu, Soumitra Mandhata, Susanne Tarkowski Tempelhof, Matt Moynihan, Brian Hoffman and several followers for providing input or feedback that I took into consideration.)  

What a mobile website is SUPPOSED to do

(function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = "//connect.facebook.net/en_US/sdk.js#xfbml=1&version=v2.5&appId=122125307879498"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk')); The Oatmeal Share this   Latest Things Random Comics Browse more comics >> Home Comics Blog Quizzes About Contact All artwork and content on this site is Copyright © 2016 Matthew Inman. Please don't steal. var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); try { var pageTracker = _gat._getTracker("UA-9487849-1"); pageTracker._trackPageview(); } catch(err) {} Source: http://theoatmeal.com/comics/mobile_website

The characters of Westworld beautifully reimagined as horses

 Source: http://theoatmeal.com/blog/westworld_horses

Israel — Some Thoughts

Source: http://themusingsofthebigredcar.com/israel-some-thoughts/ Israel is the topic for discussion today, dear readers. Israel. Big Red Car here on an 84F Texas winter day. Brrrrr! On Earth as it is in Texas, y’all! So, Israel has been in the news of late and it has me a little irritated. Let me share a few thoughts with you.   Israel v Palestinians? Who are they, Big Red Car? First, the Palestinians and the Israelis are not equals. Israel is the only democracy in the Middle East while the Palestinians (Arabs) are a stateless people who have had as a common bond the propagation of hate against the Jewish state and a desire to annihilate them or to drive them into the sea. This is not Duke v the Tarheels in the NCAA Final Four. This is a blood lust which has spawned several wars. The current Palestinian Authority is the successor to the PLO (Palestine Liberation Organization) of Yasser Arafat. The PLO was the sponsor of Black September which was the terrorist group which murdered eleven Israeli Olympic athletes at the 1972 Olympics in Munich, Germany. Yasser Arafat (an Egyptian named Mohammed Yassser Abdel Rahman Raour Arafat al-Qudwa, Chairman of the PLO 1969-2003) approved the murders. Israel and Wars Israel has been involved in a number of wars to ensure its survival and existence. Take a second to consider how you might feel if, say, Staten Island had attacked Manhattan? Israel was almost killed in the cradle. They had to fight for their existence for the entirety of their existence. It is hard to be Israel.  1. Israeli War of Independence — 1947 – 1949 — Israel fought against Egypt, Jordan, Lebanon, and Syria to literally be created. The war ended with the 1949 Armistice Agreements and boundaries known as the Green Line. This war was an Arab attempt to destroy Israel after its declaration of independence at the end of the British Mandate of Palestine.  2. Reprisals — 1950s to 1960s — Israel fought against determined fedayeen infiltrations from Syria, Egypt, and Jordan in reprisal for unprovoked attacks against Israeli civilians.  3. Suez Crisis — 1956 — When the French and Britain withdrew an offer to Egypt to fund the construction of the Answan Dam, Egypt threatened to nationalize the Suez Canal thereby controlling commercial movement in that part of the world. France, Britain, and Israel attacked Egypt with Israel capturing the Sinai Desert which France and Britain subsequently forced it to return to Egyptian control.  4. The Six Day War or the 1967 War — 1967 — Israel fought against Egypt, Jordan, Syria and troops from Iraq, Saudi Arabia, Kuwait, and Algeria. The Israelis won and captured the West Bank and East Jerusalem (both from Jordan), the Golan Heights (Syria), and Gaza (Egypt). This war lead to the Purple Line which included these captured lands as part of Israeli territory. It is important to note that the ease of mounting future attacks from Egypt, Syria, and Jordan was significantly diminished because Israel now had what it called “defensible” borders. The reference to the “West Bank” is the west bank of the Jordan River which allowed the Israelis to defend their homeland behind a natural barrier — every soldier’s dream to force the enemy to cross such a significant natural barrier under fire.  5. The War of Attrition — 1967 – 1970 — Israel fought Egypt, the USSR, Jordan, Syria, and the PLO in limited engagements over control of the Sinai which was captured by the Israelis during the 1967 War. Egypt initiated this conflict to retake its formerly owned Sinai. In the end, no boundaries were changed.  6. The Yom Kippur War — 1973 — Egypt and Syria attacked Israel with Russian advice,  equipment, and support. The Syrians almost turned the trick and overran Israel attacking through the Golan Heights. The fight became so desperate that Prime Minister Golda Meir authorized Defense Minister Moshe Dyan to position and arm Israel’s nuclear rockets with an eye toward a devastating attack on Damascus. In a very close fight, the Israelis, with American assistance in the form of tank replacements for combat losses and ammunition, prevailed. It was after the Yom Kippur War that Henry Kissinger was successful in prying the Egyptians out of the hands of the Russians, who had been advising and instigating Egypt and Syria in the unprovoked attack. Until the Russians cozied up to the Syrians, Russian influence in the Middle East was negligible. The Obama administration reversed this defeat. It is meaningful to note that Jordan — which would have had to cross the Jordan River under fire — sat this one out. It was the presence of the post-1967 War boundaries (which the recent UN resolution calls upon Israel to abandon) which allowed Israel to fight a winning defensive war. This was a very, very close call and Israel almost ceased to exist.  7. South Lebanon, Palestinian Insurgency — 1971-1982 — The PLO (predecessor to the modern day Palestinian Authority) was forced to relocate from Jordan to South Lebanon and from there staged vicious attacks resulting in the Israeli invasion of Lebanon (Operation Litani) to destroy the PLO and to stop the ceaseless rocket attacks and raids. This continuing series of actions ultimately escalated into the 1982 Lebanon War. How would you feel if a rocket made its way into your 4th of July barbecue?  8. 1982 Lebanon War — 1982 — After the escalations of the Palestinian Insurgency, the Israelis invaded South Lebanon to drive out the PLO and in retaliation for the assassination attempt by the Abu Nidal Organization (headquartered in Lebanon) to kill Israeli’s Ambassador to the United Kingdom. This war resulted in driving the PLO out and the creation of a South Lebanon Security Zone.  9. South Lebanon Security Zone War — 1982 – 2000 — For the next twenty years, the Israelis (and some of the Lebanese Christian militias) fought against Muslim guerrillas including the Iranian backed Hezbollah. This was the first unmasking of the evil intentions of the Iranians against Israel.  10. First Intifada — 1987 – 1993 — A large scale uprising by the Palestinians in the Gaza Strip and the West Bank (including East Jerusalem) against the Israelis. This was a terrorist activity in which many Israeli citizens were killed.  11. Second Intifada — 2000 – 2005 — A second uprising against the Israelis in the Gaza Strip and the West Bank (including East Jerusalem).  12. 2006 Lebanon War — 2006 — Israel fought Hezbollah which greatly damaged the Iranian backed terrorists and which involved a naval blockade of Lebanon. The United Nations brokered a ceasefire.  13. Gaza War — 2008 – 2009 — This fighting was between Israel and Hamas and lasted for three weeks which was provoked by Hamas rocket attacks from the Gaza Strip which killed Israeli civilians. The rockets were provided by Iran. Israel responded with a military invasion and a devastating air campaign. After the three week conflict, Israel withdrew from Gaza. Iranian funding and military support was an important element in the fight with Hamas.  14. Operation Pillar of Defense — 2012 — Another Israeli offensive into the Gaza Strip provoked by a re-invigorated Hamas and more rocket attacks.  15. Operation Protective Edge — 2014 — A third Israeli military offensive into the Gaza Strip provoked by more Hamas rocket attacks on the heels of the collapse of American sponsored peace talks and the failed attempt by rival Palestinian factions to form a coalition government. Three Israeli teenagers and one Palestinian teenager were kidnapped and murdered. I have laid out this framework of war to assist you in understanding with whom Israel is being asked to negotiate a “two state” solution. This not a negotiation between Canada and the US over fishing rights. This is sixty years of bloodshed in which Israel has been the victim and the Palestinians or their Arab allies have been the aggressors. Israel Occupied Lands The United Nations considers the territory captured and currently being controlled by Israel as nothing more than “occupied lands” subject to return to their original owners. Huh? The original owners used these territories to attack Israel, to stage raids into Israel, to send rockets into Israel, to dig tunnels into Israel to be able to slaughter soldiers and civilians. Israel requires these territories — such as the natural barrier of the Jordan River — to be able to adequately defend itself against Palestinian and Arab aggression. In evaluating what should happen between Israel and the Palestinians consider the necessity for Israel to possess defensible borders. To do otherwise is to encourage the next attack on Israel and the next war in the Middle East. But, hey, what the Hell do I really know anyway? I’m just a Big Red Car but I don’t have to worry about those folks in San Antone lobbing any rockets in my direction.   Source: http://themusingsofthebigredcar.com/israel-some-thoughts/


I thought I’d pause normal service for a small celebration today. This is post number 4031 on ALearningaDay. I knew I was approaching 4000 posts a couple of months ago. But, I only pay attention to the numbers every once a while. So, it was nice to find look up and find that that milestone had passed by. I also thought I’d share an update I’d worked on over the past couple of weeks – I updated the logo. I would be surprised if you noticed the change. It is still a word cloud and it still has “A Learning a Day” running through the center in green text. However, the words have gone through a significant update. A close friend had helped create the first version with the kinds of words he thought this blog stood for few years back. I loved the idea and wanted to change the words. While I think (he and) I had an idea of the kind of words this blog stood for then, I think I have a far better idea now. So, I went back to Wordle.net and worked on it. I hope they resonate with you as much as they do with me.