Showing posts with label information age. Show all posts
Showing posts with label information age. Show all posts

Saturday, March 26, 2016

Infographics: Domo Arigato, Mr. Roboto: The Booming Robot Industry

One of the sunshine industries of the information/digital/third wave age would be robotics. The Visual Capitalist has an effusive overview of the industry:
Domo Arigato, Mr. Roboto

ROBOT MARKET GROWING AT 15%, WITH 1.3 MILLION NEW INDUSTRIAL ROBOT INSTALLATIONS BY 2018

The market for industrial robot installations has been on a skyward trend since 2009, and it is not expected to slow down any time soon. According to the World Robotics 2015 report, the market for industrial robots was approximated at $32 billion in 2014, and in the coming years it is expected to continue to grow at a compound annual growth rate (CAGR) of at least 15%.

That means between 2015 and 2018, it’s anticipated that 1.3 million industrial robots will be installed worldwide. This will bring the stock of operational robots up to just over 2.3 million, mostly working in the automotive and electronics sectors.

For how long can the global robot population continue to grow?

ROBOT DENSITY

Perhaps the most interesting way to peek into the future of industrial robot installations is to look at potential sales in China.

Currently, the world’s most populous nation has a density of robots that is about half of the world average, equal to just 36 robots for every 10,000 manufacturing workers in China.

However, this is changing fast. It’s been the largest market for robots since 2013, and in 2014 the country bought 57,100 robots – the highest quantity ever recorded in a year. By 2018, one in every three robots in operation around the world will be in China.

What will happen if China’s density approaches that of other robot industrial centers?

Highly automated countries such as Germany, Japan, and South Korea all have robot densities that are multiples higher. South Korea, for example, has 478 industrial robots for every 10,000 workers – a ratio that is 13x higher than China’s.

With this kind of potential for growth, it’s clear that this is only the start of the robot story.
The spread of robots would entail not only of investments aspects but of political-economic ones as well. For instance expect the rise of neo-Luddism.

Courtesy of: Visual Capitalist

Tuesday, February 02, 2016

Infographics: How the Fintech (Financial Technology) Industry Performed in 2015


Part of this has been the the Financial Technology (FinTech) industry.

Financial Technology, according to Wikipedia, are the "line of business based on using software to provide financial services". Additionally, the the technology heavy companies "are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software".

In short, Fintech industries have emerged to challenge incumbent institutions established by the industrial revolution.

What distinguishes the "information age" as against the "industrial revolution" has been the "decentralized" platforms enabled by digital technology relative to the latter's "centralized" (top-down) institutions.

2015 have been a great year for the Fintech. Below is an infographic of the state of the Fintech in 2015. 

As an aside: disclosure: I do not have exposure yet on Fintech.

The SavvyBeaver writes,
Financial technology or FinTech is an integral part of the global economy. It's what processes transactions, helps us monitor the markets, and keeps the banks ticking. In recent years this kind of technology has rapidly evolved with the advent of mobile banking, cryptocurrencies like Bitcoin, and the general rise of financial apps. There's no telling where it will take us in the future, but if the current stats are anything to go by GROWTH is the word.
A new infographic from SavvyBeaver Canada and startup Call Levels takes a closer look at the current financial technology landscape.
Its exponential growth can be clearly seen from the investment side. From 2013 to 2014, global investment in FinTech jumped from $3 billion to over $12 billion - a 400 percent increase. When the full data from 2015 is in, it's expected to have reached a staggering $40 billion!
Payment and lending solutions make up 40% of all investment, but blockchain technology (popularized by Bitcoin) and Cloud-based services are also heavily backed.
Unsurprisingly the United States is the largest investor, followed by Europe and then Asia. Giants like Citigroup, JP Morgan and Goldman Sachs are all pumping millions in to the industry, alongside individual entrepreneurs like Marc Andreessen of Netscape and Reid Hoffman of LinkedIn. The general public are also increasingly investing, with stocks in Paypal and P2P lending platform Lending Club, leading the pack.
The majority of FinTech startups are also born out of the US, from tech hubs like Silicon Valley, New York and Boston. Collectively these account for roughly 4.7 million companies. India is next with 1.92 million FinTech startups and the UK accounts for 820,000, most of which are developed in London.
The top 5 Unicorns of 2015 (I.e. startups that have been valued over $1 billion), include mobile payment processor Square Inc ($6B), online payment processor Stripe ($3.5B), eCommerce and mCommerce technology company Powa ($2.7B), P2P lending platform Prosper ($1.9B), and outsourced payment processor Adyen ($1.5B).
Quite clearly the current demand is for efficient online and mobile payment processing solutions, which is just a reflection of how society wants to do business. Whether it's the local plumber wanting to accept digital payments instead of cash or a giant corporation wanting to include Bitcoin as a payment option, FinTech is helping us get there.
Meanwhile the top FinTech acquisitions of 2015 include the sale of bank software provider SunGard to FIS for $9.1B, DH Corporation acquired bank payment solution provider Fundtech for $1.25B, and digital payments business Skrill acquired online payment provider Optimal Payments for $1.2B.
What drives FinTech is innovation and efficiency. Simply put people want to be able to access financial services quickly, easily, on the go and for a cheaper price than traditional services. Even relatively new technologies like contactless credit cards are already being challenged by apps like Google Wallet that lets you do the same thing but with your phone instead. One less item to carry and extra security.
Other apps currently in the limelight include Call Levels itself, which allows you to monitor markets like equities and Bitcoin and receive alerts when there's a move you need to know about. Venmo is a digital wallet that allows you to send money instantly between friends and family for free, and you can fund the transaction with credit cards and bank accounts. On a larger scale it could easily rival Paypal.
Quite what the future holds isn't clear but FinTech advocate Michael Spencer believes the public are going to become far more educated in managing their assets and finances because of the apps themselves. He and other analysts like Chris Skinner are also predicting that some of us could end up doing our banking through Facebook.



The State of Fintech in 2016
Made by: SavvyBeaverCA

Wednesday, October 21, 2015

Infographics: The Internet of Things and Our Mobile Future, Lessons from the Matrix

The internet of things will likely be one of the major technological advances from the information age that will have significant influence in the shaping of the future. 

The Visual Capitalist writes
By the time you finish reading this infographic, there will be 3,810 new devices connected to the Internet of Things.

That’s because there are 328 million devices being connected to the internet each month. It’s also why researchers estimate that there are going to be 50 billion devices connected by 2020.

In fact, the future looks very different as we adopt to these technological trends. Already, 71% of Americans using wearable technology claim that it has improved their overall health and fitness. Imagine what will happen with more immersive analytics, a preventative mindset, more metrics of useful health functions, and integration into the health system.

The connected lifestyle means that there could be 500 devices in each home connected to the web by 2022. Every lightbulb, lock, thermostat, appliance, and item with an electronic circuit could be networked together, finding synergy. As strange as it may seem, by 2020 researchers even expect 100 million lightbulbs and lamps to be connected to this grid.

Entertainment and convenience are driving the “smart home” concept, which is expected to be worth $56 billion in 2018. However, there is also the benefit of creating a more energy efficient world. It’s already expected that street lamps could save energy costs up to 80%, so why can’t that be the case in the home as well? Self-adjusting thermostats, lights, and appliances will increase the efficiency of homes to make a big impact on net efficiency.
Internet of things should be something to look forward to.

But as tools, they can be use for productive or non-productive activities. By non-productive, this can even enhance the government's repression of the public. The internet of things may even pave way for the realization of omnipresent surveillance society ala George Orwell's 1984.

John Whitehead of the Rutherford Institute analogizes the internet of things with the trilogy movie the Matrix:
Make no mistake: the Internet of Things is just Big Brother in a more appealing disguise.

Even so, I’m not suggesting we all become Luddites. However, we need to be aware of how quickly a helpful device that makes our lives easier can become a harmful weapon that enslaves us.

This was the underlying lesson of The Matrix, the Wachowski brothers’ futuristic thriller about human beings enslaved by autonomous technological beings that call the shots. As Morpheus, one of the characters in The Matrix, explains:

The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work… when you go to church… when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.

“What truth?” asks Neo.

Morpheus leans in closer to Neo: “That you are a slave, Neo. Like everyone else you were born into bondage. Born into a prison that you cannot smell or taste or touch. A prison for your mind.”
Courtesy of: Visual Capitalist

Thursday, July 30, 2015

Infographics: How Big Data Will Change the World

Big Data should be major trend that will underpin the Information Age.


HARNESSING THE EXPONENTIAL SURGE IN DATA CREATES BIG OPPORTUNITIES.

Thanks to Purefunds Big Data ETF (BDAT) for helping us put this together. 

IBM estimates that each day, 2.5 quintillion bytes of data are created or replicated. That’s the equivalent of a million hard drives filling up with data every hour.

The current volume of data created is substantial: it is so much that 90% of the world’s data has been created in the last two years. However, the amount of information today pales in comparison to what our future holds, as the rate at which data is created is accelerating exponentially.

It’s for this reason that The Economist estimates that there will be roughly 7x more data in 2020 than there was in 2014.

WHERE DOES BIG DATA COME FROM?

Big data comes from both internal and external sources. Internally, millions of old documents and records are scanned and archived by businesses. Most of the time, no detailed analytics have ever been run on this information. Externally, the public web offers millions of data sets published for public consumption by government, economic, census, and other sources.

There’s also a broad spectrum of data that exists that can be a part of both of these categories: social media posts, documents, emails, business applications, machine log data, media, and sensor data can all be collected, processed, and analyzed. To get a sense of the extent of this information, here’s what is created every hour just from social media and email: 72 hours of video uploaded to Youtube, 4 million search inquiries on Google, 200 million emails sent, 2.5 million shares on Facebook, and 300,000 tweets made.

BIG DATA = BIG OPPORTUNITIES FOR BUSINESS

With proper analysis, Big Data can lead to new understandings of consumer behaviour, better management decisions, new innovations, and improved risk management. However, there are big challenges in making use of so much information.

Too much data creates an information overload.

Organizing and storing all of this data can be problematic.

Companies don’t know how to use all of this data to create insight.

To organize and make sense of it all, data scientists use the three V’s to describe Big Data.

Volume is the scale at which data is created, and includes the massive amounts of information derived from phones, internet users, machine logs, and internet of things.

Velocity is the analysis of streaming data: for example, modern cars have 100 sensors that monitor different systems in real-time.

Variety is the different forms of data, and it reflects the fact that data comes in all shapes and forms. Finding a way to harmonize multiple types of data can be quite a challenge. Research finds that organizations spend up to 80% of their time modelling and preparing data, rather than actually gaining insight.

Let’s see how companies have been able to use Big Data to create opportunity.

CASE STUDIES OF BIG DATA

Macy’s adjusts pricing in near-real time for 73 million items based on demand and inventory.

American Express developed predictive models that analyze historical transactions and 115 variables to forecast the loyalty of customers. Using this data, they can see if customers may be potentially closing their accounts in the near future. Launching a pilot program in Australia, the company can now identify 24% of accounts in the country that will close in the next four months.

Walmart built a new search engine for their website that includes semantic data relying on text analysis, machine learning, and even synonym mining to create better search results. Online shoppers have been more likely to complete purchases as a result by 10% to 15%, increasing revenue by billions.

Los Angeles and Santa Cruz police departments have used an algorithm that is typically used to predict earthquakes, now using it to look at crime data. The software can predict where crimes are likely to occur down to 500 square feet. In areas the software is being used, there has been a 33% reduction in burglaries and a 21% reduction in violent crimes.

BIG MARKET

Today’s data centers occupy the land to equivalent to almost 6,000 football fields. By 2020, the amount of digital information is expected to increase exponentially to more than 7x of what it is today.

In healthcare alone, Big Data is expected to eventually save $300 billion per year in healthcare analytics. Retailers may increase margins up to 60% through Big Data analytics.

“Information is the oil of the 21st century, and analytics is the combusion engine.” – Peter Sondergaard, Gartner Research.

Courtesy of: Visual Capitalist

Tuesday, July 28, 2015

Age of Robotics: Japanese Hotel Staffed by Robots

This is revolutionary. The service industry will most likely see a widespread adaption of robots.

In Japan, a small hotel opened with a service staff manned by robots.

From the CBS:
The world's first hotel staffed almost entirely by robots is opening its doors full-time to guests this month, but CBS News correspondent Seth Doane has already been able to spend a night in the futuristic facility near the city of Nagasaki.

Doane reports that the opening of a small, low-cost hotel doesn't usually warrant international attention -- even with gimmicks like drones, or the boss arriving via robotic platform.

But the "Henn'na Hotel," which translates to "strange hotel" in Japanese, lives up to its name.

"Please ask me your request, but don't ask me a difficult question because I am a robot," says the dinosaur behind the check-in desk.

The English-speaking dinosaur robot is designed to appeal to kids. Also at reception, an almost creepy humanoid, programmed to speak Japanese, and of course, to bow in respect.

There's a robotic bag-check, even a robot concierge.

Hideo Sawada is the man in charge. Doane asked him if robots, which rely on a set of multiple choice responses to any question asked, could really replace staff like the hotel concierge, who has actually tasted food.
The Kicker… (bold mine)
Sawada says having robots fill jobs can help reduce labor costs by about 70 percent. At the Henn'na, rooms start at only about $80 per night -- a pretty good deal in one of the most expensive countries in the world for travellers.

The hotel boss admitted that the robotic staff "don't come cheap," but said that compared to an annual payroll for human personnel, "they are quite cost-effective... and as (technology) improves I think they will become quite price-competitive."

In technology-crazed Japan, robots are becoming part of everyday life; from commercials, to appearances on TV as modern-day samurai. They're in stores greeting customers, and titillating tourists at Tokyo's famed "robot restaurant."

Hotels were merely the next logical progression.
Investors/entrepreneurs have always been on a lookout for ways around minimizing labor costs. Part of such costs may be from policy based interventions like the minimum wage. Thus proliferation of robots will likely on occur areas with high labor costs.

Watch video here. (hat tip EPJ)

Thursday, June 19, 2014

Listverse: 10 Outrageous Broadcasts That Caused Mayhem

Listverse.com enumerates 10 broadcasts (from error, prank or publicity gimmickry) which sparked episodes of turmoil. [hat tip Lew Rockwell.com]

My favorite three…

#9 Sea Monster Attacks Tokyo
May 20, 1947

In a scene straight out of Godzilla, the US army’s radio station WVTR announced that a giant sea monster had risen off the coast of Tokyo and was rampaging its way toward the capital. Although the perpetrators intended the broadcast as a humorous part of their station’s anniversary celebration, it instead sparked panic among the local populace and the occupying forces, with US personnel and Japanese police mobilizing to track down the monster.

One British officer called to verify the station’s reports because his men were demanding weapons to fight the beast. According to one station member, even MacArthur himself called in to confirm their broadcast.

After the hoax was revealed, the US army’s top brass lambasted the perpetrators and removed them from the station. Although their fates were not announced after the debacle, they were likely sent to Korea afterward as punishment.

#7 The Sibuxiang Beast
September 19, 1994

Residents of Taiyuan in China’s north erupted into panic when a TV station reported that a terrible animal known as the “Sibuxiang Beast” was nearing their city. The frightened populace locked themselves up at home while others frantically called the authorities for help. Eventually, the beast did arrive—only in the form of a new brand of liquor.

The “Sibuxiang Beast” TV spot had been an ad. But viewers used to commercials mundanely narrating and presenting products had taken it as an actual news report.

Although Jing Huiwen, the owner of the advertising firm behind the commercial, was later forced to apologize and pay a fine, the overwhelming publicity turned the Sibuxiang brand into a household name and quadrupled the firm’s roster of clients. Foreign analysts hailed the event as the beginning of capitalist creativity in China. 

#1 War Of The Worlds (Ecuadorian Edition) 
February 12, 1949 

Residents of the Ecuadorian capital of Quito rioted after local station Quito Radio aired a Spanish dub of Orson Welles’s famous broadcast. People panicked in the streets, some running to the nearest church to hear a last service. However, fear quickly turned to rage after they realized that they had been hoodwinked. Consequently, a mob formed and set fire to the building that housed the radio station. They also ganged up on staff members who tried to escape the blaze.

The station suffered more than $300,000 in damages, and an estimated 6–20 people died. Only the arrival of the police and military ended the chaos.

In true urban legend fashion, it was said that the announcer who aired the broadcast, Leonardo Paez, was last seen standing on top of the burning building before disappearing. His daughter, however, later revealed that Paez understandably went under the radar for a while before having his case reviewed—and ultimately dismissed—by a court. After that, he relocated to Venezuela.

Aside from the amusement aspect, the article demonstrates of the frailties of crowd psychology and their vulnerability to ‘trusted’ sources of information. 

Prior to the internet age, where information dissemination has been mostly centralized, it is easy to understand the public’s sensitivity to centralized information.

In the information age, this should unlikely be the case.

But not for the Philippines which has a cameo role here...

#3 Philippines Flesh-Eating Disease Hoax
February 24, 2014

In a classic case of mass hysteria with a modern twist, residents of the Philippines province of Pangasinan and netizens erupted into hysteria after linking an Indian preacher’s April 2013 prophecy about a flesh-eating disease to two patients with a “mysterious illness.” It didn’t help that that the country’s leading news station, ABS-CBN, investigated the incident and had its reporter wear full protective gear while interviewing the patients.

While local residents understandably panicked, the response took on epic proportions on the Internet, as evidenced by 80,000 Twitter users who hashtagged “#PrayforPangasinan.”

Eventually, health authorities who closely examined the two patients disclosed that they were suffering from nothing more than leprosy and psoriasis respectively. This revelation forced the news station to issue an apology, although they also stated that they really just wanted to find out if the flesh-eating disease was real or not.
The internet age should have provided the public opportunities to investigate on the validity of such sensationalist claims. Unfortunately, this “classic case of mass hysteria with a modern twist” looks like a sorry state of affair where social media has functioned instead as loudspeakers for misinformation. This also reveals of the gullibility of the so-called local netizens to populist-tabloid journalism.

As British essayist Gilbert Keith Chesterton once wrote
Journalism is popular, but it is popular mainly as fiction. Life is one world, and life seen in the newspapers another; the public enjoys both, but it is more or less conscious of the difference.

Wednesday, May 14, 2014

Third Wave Politics: Failing Nation States and the Growing Secession Movement

Industrial age centralized governments will pave way for decentralization.

In the observation of Europe Day Sovereign Man’s Simon Black writes:   (bold mine)
But what is true is that European imperialists conjured entire nations in Africa out of thin air from their palaces in Brussels, Paris, and London.

And all of this was done without any regard for ethnic, linguistic, religious, and historical divisions among the various tribes that inhabited Africa.

But what few people realize is that Europe is no different.

Think about it—the United Kingdom consists of England, Wales, Scotland, and Northern Ireland lumped together in a political union.

Each is entirely different from the others. And secessionist movements are alive and well. 

Scotland will hold a referendum about its independence in September. And the troubles in Northern Ireland have plagued the region for decades. 

Belgium is a completely artificial country, and the Flemish are actively pursuing independence from the Walloons. 

In the late 19th century, Germany and Italy were both unified into modern countries from diverse fiefdoms and city-states with strong regional identities.

Those regional identities are still present today. Just a few weeks ago, a vote was held in Venice over independence for the wider region. 

The Basque separatist movements in Spain are stronger than ever. The Balkans were an absurd experiment. I could go on and on.

Europe is the best example that borders and countries are completely arbitrary. 

They are created to serve one purpose—consolidating authority over a piece of land and the people living upon it. 

Today just happens to be “Europe Day”, a holiday in which Europeans are supposed to commemorate the Schuman Declaration that jumpstarted today’s European Union. 

This is a continent that has a long history of constantly going to war with itself.

They slapped lines on a map, formed some new countries, and expected that everything would be OK.

Then they made those lines even broader when they consolidated everything into the European Union. And EU politicians are trying to make things even bigger.

History shows that when economic times are good, people are happy about unity. 

But when times are tough as they are now, divisions start creeping up. People look around and say “this system isn’t working”. 

They demand change. Sometimes violently. And we would be foolish to presume that this time is any different.

The immediate avenue for this conflict to play out is still through peaceful means—referendums and the rise of nationalist and Eurosceptic political parties. 

But it’s clear that the trend is to get smaller, not bigger. And for the system to change entirely. 

Like feudalism before it, the nation state is a failed experiment that will ultimately be replaced. It’s already happening. 
Pls continue to read here 

I previously noted that growing secession movements marks the “gradual confirmation of the predictions of futurist Alvin Toffler as elucidated in his highly prescient 1980 book, The Third Wave (p.317)
National governments, by contrast, find it difficult to customize their policies. Locked into Second Wave political and bureaucratic structures, they find it impossible to treat each region or city, each contending racial, religious, social, sexual or ethnic group differently, let alone treat each citizen as an individual. As conditions diversify, national decision-making remains ignorant of the fast-changing local requirements. If they try to identify these highly localized or specialized needs, they wind up deluged with overdetailed, indigestible data…
In consequence, national governments in Washington, London, Paris or Moscow continue, by and large, to impose uniform, standardized policies designed for a mass society on increasingly divergent and segment publics. Local and individual needs are forgotten or ignored causing the flames of resentment to reach white heat. As de-massification progresses, we can expect separatist or centrifugal forces to intensify dramatically and threaten the unity of many nation-states.
The Third Wave places enormous pressures on the nation-state from below.
Bursting bubbles will only compound on such trend.

Friday, March 21, 2014

Social Cycles: The Rise and Fall of Civilizations

Cycle as defined by dictionary.com is “any complete round or series of occurrences that repeats or is repeated.”

And cycles are not only evident in natural sciences (e.g. planetary, organic, physics), but most importantly in the dynamics of human social relations.

Aside from business economic cycles which occupies much of the discussion of this blog, the rise and fall of civilizations is another example of such social cycles.

There are important lessons to learn from social cycles.

As example, Sovereign Man’s Simon Black has an eloquent narrative of the rise and fall of the French empire. (bold mine)
Throughout the 18th century, for example, France was the greatest superpower in Europe, if not the world.

But they became complacent, believing that they had some sort of ‘divine right’ to reign supreme, and that they could be as fiscally irresponsible as they liked.

The French government spent money like drunken sailors; they had substantial welfare programs, free hospitals, and grand monuments.

They held vast territories overseas, engaged in constant warfare, and even had their own intrusive intelligence service that spied on King and subject alike.

Of course, they couldn’t pay for any of this.

French budget deficits were out of control, and they resorted to going heavily into debt and rapidly debasing their currency.

Stop me when this sounds familiar.

The French economy ultimately failed, bringing with it a 26-year period of hyperinflation, civil war, military conquest, and genocide.

History is full of examples, from ancient Mesopotamia to the Soviet Union, which show that whenever societies reach unsustainable levels of resource consumption and allocation, they collapse.
Mr. Black goes on to cite a recent NASA funded study which identified 32 advanced civilizations that rose and collapsed. Again Mr. Black.

A recent research paper funded by NASA highlights this same premise. According to the authors:

“Collapses of even advanced civilizations have occurred many times in the past five thousand years, and they were frequently followed by centuries of population and cultural decline and economic regression.”

The results of their experiments show that some of the very clear trends which exist today– unsustainable resource consumption, and economic stratification that favors the elite– can very easily result in collapse.

In fact, they write that “collapse is very difficult to avoid and requires major policy changes.”

This isn’t exactly good news.

But here’s the thing– between massive debts, deficits, money printing, war, resource depletion, etc., our modern society seems riddled with these risks.

And history certainly shows that dominant powers are always changing.

Empires rise and fall. The global monetary system is always changing. The prevailing social contract is always changing.
Social cycles are a product of the same series of human interactions that leads to parallel consequences. In short, people hardly ever learn from mistakes to keep repeating them. And such cyclical transitions are hardly ever smooth sailing.

But not everything is bad news. 

Again Mr. Black.
But there is one FAR greater trend across history that supercedes all of the rest… and that trend is the RISE of humanity.

Human beings are fundamentally tool creators. We take problems and turn them into opportunities. We find solutions. We adapt and overcome.

The world is not coming to an end. It’s going to reset. There’s a huge difference between the two.

Think about the system that we’re living under.

A tiny elite has total control of the money supply. They wield intrusive spy networks and weapons of mass destruction. The can confiscate the wealth of others in their sole discretion. They can indebt unborn generations.

Curiously, these are the same people who are so incompetent they can’t put a website together.

It’s not working. And just about everyone knows it.

We’re taught growing up that ‘We the People’ have the power to affect radical change in the voting booth. But this is another fairy tale.

Voting only changes the players. It doesn’t change the game.

Technology is one major game changer. The technology exists today to completely revolutionize the way we live and govern ourselves.

Today’s system is just a 19th century model applied to a 21st century society. I mean– a room full of men making decisions about how much money to print? It’s so antiquated it’s almost comical.

But given that the majority of Western governments borrow money just to pay interest on money they’ve already borrowed, it’s obvious the current game is almost finished.

When it ends, there will be a reset… potentially a tumultuous one.
The 19th century industrial age top-down centralized model has been running on a head on collision with the deepening of the information age characterized by decentralization. And such underlying seismic shifts causes massive societal strains as previously discussed. This is what futurist Alvin Toffler once predicted as the Third Wave

And when the socio-political-economic system has been routinely abused to the point that the accrued imbalances reaches a climax and a critical mass, the system eventually implodes. Nonetheless people will adjust to such changes.Thus a reset.

This quote MISattributed to British lawyer and Alexander Fraser Tytler on democracy captures some of the essence of the political-behavioral cycle (wiikiquote):
The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

-From bondage to spiritual faith; 

-From spiritual faith to great courage; 

-From courage to liberty; 

-From liberty to abundance; 

-From abundance to complacency; 

-From complacency to apathy;

-From apathy to dependence;

-From dependence back into bondage.
The reset nears.

Tuesday, February 04, 2014

Bitcoin depends on human valuation and volition

At the Mises Blog Austrian economist Joseph Salerno brings about a very important insight on Bitcoin (bold mine)
Whether or not Bitcoin survives and whether gold returns to favor among investors and, eventually, to its traditional monetary role are, of course, purely empirical questions, which cannot be solved by theoretical arguments. At the moment both are valuable commodities and neither one can be considered as money.  Thus, tedious arguments on the blogosphere  which invoke Ludwig von Mises’s regression theorem, are completely irrelevant to the issue.  Both items are scarce commodities which are valued by consumers and command a price on the market.  As such, the regression theorem does not prevent bitcoin from being monetized or gold from being re-monetized in the event or anticipation of a fiat-money breakdown.  Rather, it is a matter of human valuations and volition which are not determined by economic law.  In this matter, our only guides are historical experience and what Mises called “thymological” insight into people’s likely choices  under varying circumstances.  Will the general public  trust and routinely accept a commodity embodied in lines of computer code or a tangible commodity that has served for millennia as the general medium of exchange?  Hmmm, I wonder.
Right. This is why I think debate on bitcoin is a waste of scarce time. What is needed is to simply observe Bitcoin’s progression via “matter of human valuations and volition”  in the face of the ‘resistance to change’ obstacles.

Many governments have thrown the kitchen sink on bitcoin, such as charging bitcoin operators with money laundering, many governments issuing warning on bitcoin usage, if we can’t beat them join them—by calling for more regulations and etc. But this should be an expected reaction since bitcoin poses a challenge to government’s monopoly control of money.

On the other hand, bitcoin’s function as a settlement medium appears to be rapidly growing. There are now more than 10,000 merchants spanning 164 countries accepting bitcoin for transactions. Some high profile examples: Online shopping Overstock.com now accepts bitcoin. Bitcoin have been accepted by some Las Vegas casinos

True while 10,000+ is a speck compared to millions of merchants in the global economy, again the question here is if “human valuation and volition” with regards to bitcoin usage will continue to spread. 

The ballooning merchant acceptance appears to be complimented by reports of flourishing bitcoin ATMs


New York will open its first ATM soon. Bitcoin ATMs are slated to open in Hong Kong, Singapore and Australia also this year. 

And bitcoin ATM manufacturers have reportedly been rushing to take advantage of this growth momentum

In addition, there are 88 crytocurrencies in existence, 84 of which has market capitalizations. This means that bitcoin’s success has been drawing in many competitors. Such competition should extrapolate to more improvements on the quality of cryptocurrencies offered.

What the above dynamics suggest? For as long as the internet exists, and most importantly, for as long as people preferences will be expressed by actions in favor of cryptocurrenncies, then this means that cryptocurrencies, which represent as the evolving innovations from the deepening of the information age, are here to stay. 

[Disclosure: I don’t have any exposure onbitcoin or other cyrptocurrencies yet, but I am contemplating to experiment with this sometime ahead]

Thursday, December 05, 2013

Bitcoin prices almost equal to Gold

image

Bitcoin closed at 1,236 yesterday
image
Gold closed at 1,242.5

The gold bitcoin spread has narrowed to amazingly only USD $6.5 from more that $1k just a few months back
While this may look like a bitcoin to gold rotation, this has not been clear.

There has been an ongoing fascinating impassioned debate (especially in the Austrian school of economics) on bitcoin as money and as investment. 
For me since bitcoin is a product of the spontaneous market process and of the information age, whose present role appears to be as an "alternative currency", the markets will ultimately determine bitcoin’s viability and potential role as medium of exchange, in spite of intervention from various governments. Perhaps even a gold-bitcoin tie up could emerge.

As I have been saying the information age will deliver decentralized products, and services (even new financial services such as payment and settlement methods) that will immensely alter the way we do things. This is part of the manifold revolutionary innovations brought about by rapid advances in technology which will be met intuitively by resistance to change. 

Incidentally, Bitcoin seems to have the first mover advantage of the dramatically growing world of cryptocurrencies. It remains unclear how bitcoin will fare against competition over the long run.

But even if I had a bitcoin wallet today, I wouldn’t be buying bitcoin at current prices. Looks like the easy money policy yield chasing induced wild speculation has spread to bitcoin.

Wednesday, November 20, 2013

Bitcoin’s Future is in Asia and More

Well bitcoin has been under sustained fire from authorities who see cryptocurrencies as undermining the monopoly of central bank fiat money.

Sovereign Man’s Simon Black explains why bitcoin’s future is in Asia
Senator Tom Carper (Delaware) is confused about Bitcoin.

As Chairman of the Senate Committee on Homeland Security and Governmental Affairs, this is how Carper framed his opening remarks yesterday at a hearing about digital currencies– with complete, incoherent confusion.

Carper’s hearing went on for several hours as one witness after another testified about the potential evils of digital currencies. They hailed from agencies and organizations like:
  • The Homeland Security committee
  • Criminal Division of the US Attorney General’s Office
  • US Secret Service Criminal Investigative Division
  • The Financial Crimes Enforcement Network
  • The International Centre for Missing & Exploited Children
Based on the way they stacked the witness list, the message they’re sending is clear: digital currencies like Bitoin equate to crime, terrorism, and child exploitation.

But the height of absurdity in yesterday’s hearing probably came during the testimony from the Financial Crimes Enforcement Network (FinCEN), in which the agency’s chief cited the BENEFITS of digital currencies, including:
  • anonymity
  • simple, easy to navigate
  • lower fees than the conventional financial system
  • globally accessible
  • can be used as both a store of value and medium of exchange
  • security
etc.

Yet in listing all of these benefits, FinCEN’s chief was actually trying to make a case AGAINST Bitcoin! In her mind, only criminal terrorists want low-fee, secure, globally accessible money.

All of these politicians and bureaucrats can’t wait to get their arms around digital currency to regulate the hell out of it. They don’t understand it… therefore they think it’s dangerous.

Even the World Bank president (a US government-appointed stooge) weighed in on digital currencies. It’s obvious they’re all afraid.

And their entire argument begins with the deeply flawed premise that financial privacy is somehow wrong, immoral, and nefarious.

I’d add that if bitcoin is a manifestation of declining trust on the US dollar standard or even fiat money, then bitcoin will flourish not only in Asia but around the world despite sustained harassment by governments around the world.

As proof of this, the world’s first bitcoin ATM was launched 3 weeks back in Vancouver Canada.

Fiatleak.com has a real time counter which tracks global bitcoin trades.

And curiously as government’s continue to tighten their grip on bitcoin, the web’s response has been to introduce an bitcoin based “assassination market” where RT.com “Barack Obama, Ben Bernanke and the prime minister of Finland are already on the hit list.” 

Bitcoin is also a manifestation of the transition to the information age where much of people’s 'decentralized' activities will revolve around the web.

As Laissez Faire Book’s Jeffrey A Tucker notes
How long will it take before the full implications reveal themselves?  It took email some 20 years to go from obscure to common. Digital phone technology needed about the same swath of time. Bitcoin, however, could be different. Information travels farther and faster than ever before. Adoption could be led by peoples who are currently excluded from the existing cartelized system of privilege. Every currency crisis, whether national or international, could be a catalyst for advances.

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Here is an update of bitcoin prices in US dollars which been exploding amidst amidst intense scrutiny from public officials.

Tuesday, November 12, 2013

American’s Evolving Access to Credit

In the Philippines only about 2 in 10 persons have access to the formal banking system and a further smaller number from these few have access to banking credit, which has largely been inhibited by regulations
In the US, credit history serves as a major requirement for credit access.
At 24, Josh Waldron thought he was ready to buy a house. He paid off his college debt, only two years after graduating. He saved enough for a down payment. All in all, he and his wife were ready to leave a life of renting behind.

Then his plans ground to a sudden halt. Waldron’s credit score had disappeared.

“How did this happen? It just didn’t make sense to me that I’d have a nonexistent score,” says Waldron, who is now 28. He had applied for a mortgage loan a few months earlier and found his credit score to be a robust 718.

So what happened? How could a person who was financially responsible and paying his bills on time just wake up one day with no credit score?

The culprit turned out to be his debit card. Waldron, eager to avoid debt, used his debit card to pay his bills and buy what he needed. He had never used credit cards.

The catch: no credit cards meant no credit.
And the lack of access to credit card has been growing, from the same article
Waldron is not the only millennial who has hoped to make a go of it without a credit card. According to recent FICO study, in the last seven years the number of those 18-29-years-old living without a credit card increased by 9%, going from 7% in 2005 to 16% in 2012…

Having a FICO score – that key to financial maturity – requires having at least one account that reported to a credit bureau in the past six months. Yet a lot of millennials are walking around among the 50 million people with no credit score, and thus, no access to credit.
Seen from a different angle, the US banking system rewards chronic borrowers.

Yet the dearth of access to credit has not been limited to the millennial generation, a significant number of non-millennial have also been affected.
image

Here is a snippet of a recent survey conducted by Federal Reserve Bank of New York on the Unmet Credit Demand of US households.
Within each bar, the three kinds of groups—accepted applicants, rejected applicants, discouraged borrowers—are denoted with a different color. Here we can see substantial differences in the composition of the groups. Compare, for example, the lower-income group (those with annual household income below $50,000), and the high-income group (those with annual household income above $100,000). Both groups demanded credit at similar rates: 61 percent of lower-income households and 65 percent of high-income households demanded credit over the past twelve months. But 33 percent of lower-income households were approved (the light blue bar in the figure), while 57 percent of high-income households were approved. Likewise, while 13 percent of the lower-income households were discouraged borrowers (the maroon bar in the figure), only 0.3 percent of the high-income households fell in this category. A similar pattern plays out when comparing unemployed and employed individuals—a larger proportion of unemployed respondents do not apply because they believe they would be rejected, and those who do apply are rejected at a higher rate than the employed.
Since the world doesn’t operate on a vacuum, under served credit markets by the formal banking system has been matched by the  informal sector.  

The emergence of informal pawnshops has partly filled such demand.

From the Wall Street Journal: (bold mine)
Borro and other collateral lenders—essentially high-end pawnshops—are a small but fast-expanding part of the shadow-lending system. Since 2008, as commercial banks have cut lending to small businesses, such alternative lenders have helped fill the void.

In some states, collateral lenders can charge interest rates exceeding 200% annually because the business isn't bound by traditional banking laws. On the upside for borrowers, there isn't a credit check and little paperwork.

So some entrepreneurs are hauling treasured possessions—Baccarat chandeliers, Picassos, Maseratis, even Houdini's handcuffs—to Borro and others to bankroll businesses historically financed by conventional loans, credit cards or not at all.

In Ms. Robinson's case, Borro was familiar with her Elizabeth Catlett sculpture: She had pledged it before to fund charitable events.

Borro is the largest of this new breed of collateral lenders, having lent nearly $100 million since opening in England in 2009.

Competitors such as iPawn Inc. and Pawngo collectively have lent tens of millions of dollars.

"If it continues being this hard for consumers and businesses to access credit, we think this can be a multibillion-dollar industry," says Paul Lee, a partner at Lightbank, a venture-capital firm that has invested $3 million in Denver-based Pawngo.
Aside from specialty pawnshops, many Americans have dropped out of the formal banking system to rely instead on payday lenders or rent-to-own services as I earlier noted, aside from online P2P lending.

The notion that there have been less demand for credit from the banking system has hardly been an accurate representation of reality.

Instead credit scores, bank regulations and lending standards, the banking system’s financial conditions, the state of the economy and many other factors including even a change in people’s mindsets and confidence levels, as well as, technological advancements have combined to influence the changing patterns of American households’ access to credit.
Japan’s post bubble bust era produced the same shift out of the banking system.
Nonetheless, the markets always finds ways and means to meet such shift in demand.
And it is not just credit, even corporate financing has been evolving. Venture capital is being complimented by – Corporate VC, Competitions, Conscious Capital, and Crowdfunding, according to Lux Research