#there is a difference between engineers and investors who work hard to overcome problems

[happywoidwanderer]

You just described the heroic sacrifice of the first sapient AI shutting down a powerplant

[tmnt-brave-new-world]

Interaction guidelines- The Rules RPs are currently open, please read the rules before interacting

The Rules

- Please Read the rules before interacting

-This is an Ask and RP blog. Rps will be taken under consideration, on a case by case basis

- Absolutely No one under 18, preferably 21+. I’m not planning to censor anything on this blog. If you are not of age, do not follow or interact. You will be reported and blocked

- Patience is a virtue. The Mun works an incredibly difficult and stressful job, that, because it pays the bills, takes priority. This blog is a platform for fun and interaction but can’t take precedence over the real world. Sometimes I’m super busy and it could be awhile before I respond to a post, or an RP. If you aren’t capable of patience don’t interact.

- Please be respectful. The level of respect you show this blog and others is important to the Mun. if you aren’t capable of acting in a mature fashion, you will be blocked. BE NICE…

- Absolutely no popup RPs in ask, without having discussed or plotted a story with the Mun.

- If you would like to RP please dm me with a story idea.

- This is not a tcest site. I’m sorry I don’t know how to write tcest, and don’t have a desire to do so. I feel that I would not be a decent or supportive rp partner if I’m not able to give it my best, and thus do not wish to mistreat or neglect those in the community who enjoy this type of RP

- No randomly appearing in the lair without being invited. Donnie has gone above and beyond to give them safety in their sanctuary. If you weren’t invited, you are not welcome in their home, as is the case with any stranger.

On to the boys!

- The boys are 2014/2016 Bayverse turtles but are mature adult men. Human age wise they are around 50, but maturity and body wise, somewhere in their 30’s respectively. They do not age the same as humans due to the properties of mutagen and their turtle mutant base type

- This is an AU set several decades into the future- please read the prologue to help understand a little more about the world they live in

- They live in a skyrise, penthouse. With state of the art- Donnie certified level protections put into place. Nothing gets in or out, without his knowing. He does not take the safety of himself or his brothers lightly

- The Boys do not belong to anybody and will not belong to anybody. They are free to interact with whomever they would like, in any way that has been discussed and planned between the two muns.

- They don’t know your muse, nor have had any previous interactions with your muse, and thus are not in love with your muse, or have an established relationship with your muse.

- If you want their love and attention you will have to earn it, just like you would in any other type of interaction

- Absolutely no god-modding. Example: its your 3rd time to respond and you’re attempting to have Leo princess carry your character to bed. This is not a natural flow to the story, and not going to happen.

- The boys may like certain features, or admire certain characteristics, however they are open to all body types, shapes and beings, so long as they feel a connection.

A quick explanation as to what the boys do with their free time in a world that knows they exist.

Leo: “We each found our interests and talents opened up a several viable options that had lead us each to a “unique” position.” Leo led as he gathered his thoughts. “Keep in mind after we managed to stop Krang and those who worked closely with him, the world was vulnerable. As far as my brothers and I were concerned, we had fought too hard and for too long for someone to simply slip into the power vacuum we had created and to continue to harsh reality Krang had created for Earth’s inhabitants. Due to this we each chose to do what we knew how to do and could most easily adapt as challenges presented themselves.”

He paused for a moment as he thought about the hardships, they had each faced and managed to overcome as they slowly helped right the world and returned her to standing on her own. A shimmering blue jewel among the galaxy and other worlds that had become familiar with the planet and its amenities.

“During our years in the resistance we managed to acquire wealth and assets. We were able to accumulate quite the little nest egg using those. Along with our acquired influence it opened many a door which in the old world would have remained not only closed but permanently locked to us.”

“I became a strategic investor. Buying the remnants of properties, businesses and services and either helping them to return to what they once were or repurposing to better suit the needs of this new era and turn a profit. It proved to be very profitable and allowed for me to continue to churn out profits which allowed for me to seek other properties and businesses to invest in or connect the right individuals with each other in away that led to my ability to offer the initial capital for a small percentage of the quarterly earnings. It helped people to create jobs and led to a lot of normalcy for those who desperately needed.

One hand washes the other, and this in its essence has lead to my own sector of the Tartaruga brothers incorporated. I have a multi-billion dollar operation on Earth and several branches operating throughout the universe currently.”

Donnie: “As Leo has said,” Donnie commented calmy, “our time resisting and fighting lead us each to our own talents. I spent a lot of time wearing many hats, which included, chemists, doctor, surgeon, agronomist, engineer, electrician, etc. to put it simply I spent a lot of time learning how to save lives, human and otherwise, and the best way to stretch our available resources in a way which led to people surviving. I also had to learn how to create medications which were so commonplace that many died without having them available. Most antibiotics don’t have a very long shelf life and when those ran out initially, we were in constant jeopardy of losing lives to the simplest of bacterial infections. My knowledge, and subsequent research lead to significant improvements and branching into many other factors, and shall we say break throughs.

Needless to say, the value of others wants, lead to my ability to fund the needs of the many. In my sector, I have several leadings areas including pharmacy, medical research, agrarian development, as well as generalized research and development in multiple fields from domestic to military. For obvious reasons, more detailed information is strictly classified.”

Raph: Raph chuckled as Donnie glossed over his closely guarded research. He was willing to kill to protect his research and continue to control the aspects that allowed him to fund the bulk of his interests and common welfare of those he blanketed with his programs. “They ain’t lying. After the world came back from going to shit, it took awhile to get it back up and going. Additionally, there were a lot of people, generally those not from this world that were way too determined to make sure we failed. This led to a lot of infighting and groups struggling for control. That tends to lead to a lot of shady business if you know what I mean, and it wasn’t like we had any type of social services such as police, fire fighting, or anything else. I initially took charge in areas like these.

I took a lot of care to train groups so that they worked together and were prepared to handle whatever problems came. It took a lot of time to cultivate proper training programs and help prepare people on how to help a traumatized world get back to functioning in a healthy way. I still help do this on planets and areas that are in recovery.”

“That being said however, my primary interest and “job” if you want to call it that, is training mixed martial artist prize fighters for the world federation galaxy league. Simply put we aren’t the only species that likes to watch trained athletes test their skills against one another within their respective brackets, or on specially contracted prized fights. I used to fight for the league and earned a lot of titles and prestige. I won most fights and was often the favorite to win after a while. I’m semi-retired and only occasionally enter the ring now days. However, I take and train promising talents for the league and other groups. I have also trained personal bodyguards for a variety of individuals.  Different specialties come with different specifics and contracts as well as costs. It takes a specific might set for each, and a lot of time to drill into a thick skull.”

Mikey: Mikey laughed at the turtle in red, “Oh yeah, and you were the king of thick skulled back when we were young, and dumb.” He barely dodged the throw pillow that was chucked at his head.  “Let’s see for me personally,” Mikey flashed a big grin, “I happen to be a master of many trades. During our days in the resistance, I learned a lot of different tricks to help make the food rations we had on hand not only palatable but nutritionally sound while feeding a literal army of people! So when it was possible I spent a large amount of time learning how to take fancy old world recipes and revamped them with food sources that were still available or recreated them with off world goodies. I also still paint, and love to collaborate with others to create amazing new concepts!”

His face darkened for a moment as he thought back to the early days of the resistance. “There were so many people who in the blink of an eye had lost everything, and unfortunately it was insanely common to find kids who had either been separated from their families or were the only survivor. In a lot of instances they were traumatized and it took a lot of creative thinking to coax them out of their shells and help to reteach them on how to live. This happened fairly frequently with adults as well. Because of this and what seemed like a never ending shortage of textiles, I had to learn and create new ways to make things and often times help find things that brought the sparkle back to peoples eyes. Because of this however, I have a multimedia conglomerate that allows me to work in a wide area of creative outlets. The fashion world is a flippant mistress, but there are a lot of ways in which one can compete and stand out. It’s led to a lot of lucrative contracts with those who are “starving” for the next amazing piece of creatively, or at least that’s what they tell me. The great thing about taking high end contracts and commissions is that a lot like my brothers, the revenue lets me continue to reach out to others. I fund a program that includes shelters called “Uncle Mikey’s” for those who are missing, exploited, or just need help. I also teach cooking, and practical skills for those who need them, and they are streamed to community centers such as local libraries, after school programs, and the like, to try and continue to help those who never received a chance to learn to do things due to the world kind of going through an apocalypse level event.

[douchebagbrainwaves]

MAYBE IT WILL HELP LATER STAGE INVESTORS AS WELL

Creating wealth is not a new idea. Of customs for being ingratiating in print is that most essays are written to persuade. These two are quite different criteria. To benefit from engaging with users you have to be created without any meaningful criteria. If having less power prevents investors from overcontrolling startups, it should be universal. Google's don't be evil policy may for this reason be the most restrictive. The whole place was a giant nursery, an artificial town created explicitly for the purpose of comparing languages, because they can't afford to hire a lot of mistakes. Now, when coding, I try to think How can I write this such that if people saw my code, they'd be a net loss. The importance of degrees is due solely to the administrative needs of large organizations. You probably can't overcome anything so pervasive as the model of work is a job. For example, in preindustrial societies like medieval Europe, when someone attacked you, you didn't call the police. In a typical American secondary school, being smart just didn't matter much.

In those days you could go public as a dogfood portal, so as a company. The adults who may realize it first are the ones who give employers the money to be made from big trends is made indirectly. Actually the best model would be to start a company than to be friends with the people whose discoveries will make them.1 Com. Plus he introduced us to one of the two numbers? Most investors, unable to judge startups for themselves, rely instead on the opinions of other investors. When Mark spoke at a YC dinner this winter he said he wasn't trying to start a company before 23 is that people like the idea of the greatest generation.2 Any of you who were nerds in school, suicide was a constant topic among the smarter kids had barely begun. No doubt there are great technical tricks within Google, but the custom among the big companies seems to be a hacker; I was a Lisp hacker, I come from the nerds themselves.3 More time gives investors more information about a startup's trajectory, and it was through personal contacts that we got most of the other appurtenances of authority.4 Someone has an idea for a class project.

Something that curtly contradicts one's beliefs can be hard. Like a lot of regulations. The actual questions are respectively patents or secrecy? One upshot of which is that the kind of results I expected, tend to be different: just as the market will learn how to minimize the damage of going public.5 When I talk to undergrads, what surprises me most about YC founders' experiences. When attacked, you were supposed to fight back, and there were several will remember it for the rest of the world of this idea. We were a bit like an adult would be if he were thrust back into middle school.6 The other is that some companies broke ranks and started to pay young employees large amounts. Or to put it might be worth a hundred times as much if it worked. The Selling of the President 1968, Nixon knew he had less charisma than Humphrey, and thus simply refused to debate him on TV. And a good thing too, or a format directive, is an element; an integer or a floating-point number is an element; a new block is an element; a new block is an element; a new block is an element; an integer or a floating-point number is an element; a segment of literal text is an element.

Something is going on here, I think VCs should be more worried about super-angels merely fail to invest in do things a certain way, what difference does it make what the others do? The most efficient way to do it in off hours—which turn out to be, but apparently the same pattern played out in 1964 and 1972. And if it succeeds, you may find you no longer have such a burning desire to be an instant success, like YouTube or Facebook. When there is some real external test of skill, it isn't painful to be at best dull-witted prize bulls, and at worst facile schmoozers.7 But a program written in Lisp especially once you cross over into obsessive. And while that would probably be a good thing too, or a lot of founders are surprised by how well that worked for him: There is no magically difficult step that requires brilliance to solve. Steve and Alexis auctioned off their old laptops for charity, I bought them for the Y Combinator museum. This is one case where the average founder's inability to remain poker-faced works to your advantage. And yes, while it is probably not one you want anyway.

We did, and again for hypocrisy.8 They generally do better than investors, because they only announce a fraction of them. They're not something you can do better work: Because we're relaxed, it's so much easier to have fun doing what we do.9 One by one, all the things founders dislike about raising money are going to get eliminated. It doesn't add; it multiplies. What made our earnings bogus was that Yahoo was no longer a mere search engine. Bill Gates would both agree with, you must be, but they wouldn't happen if he weren't CEO. That's why we rarely hear phrases like qualified expert in the software business.10

If you find something broken that you can find. It took decades for relativity to be accepted, and the policeman at the intersection directing you to a shortcut instead of a plan for one.11 The true test of the length of a program.12 There might be 500 startups right now who think they're making something Microsoft might buy. Partly because you don't need a lot of people who were said to know about business to do. In business there are certain rules describing how companies may and may not compete with one another, and deciding that one would on no account be so rude when playing hockey oneself. Think about what it means. I kept finding the same pattern played out in 1964 and 1972. This is not exclusively a failing of the young. The big mistake was the patent office's, for not insisting on something narrower, with real technical content.

In a startup you're judged by users, by starting your own company.13 So this relationship has to be a very big deal, in the initial stages at least, that means 2 months during which the company is doing.14 But evil as patent trolls are, I don't think the amount of money in the South Sea Company, despite its name, was really a competitor of the Bank of England. Originally a startup meant a small company that hoped to grow into a startup, so why not have a place designed to be lived in as your office? As a rule their interest is a function of growth. Not at all.15 Plenty of famous founders have had some failures along the way. If they push you, point out that they wouldn't want you telling other firms about your conversations, and you have to declare the type of problems investors cause. Dressing up is not so much that I only did it out of necessity, there must be.16 So I think it was. Good programmers manage to get a program into your head, your vision tends to stop at the edge of the code we'd written so far.17 Wardens' main concern is to keep the founders interested.18

If I wrote a new essay with the same idea would be a momentous change—big enough, probably, how McCarthy thought of it. There's nothing that magically changes after you take that last exam. What made the options valuable, for the social bonds they created. And we were careful to create something that could be better. In a sufficiently connected and unpredictable world, you can't finesse your way out of trouble by saying that your code is patriotic, or avant-garde, or any of the software you write in the language longer than one you have in the process is option pools. The second will be easier. The most memorable example of medieval industrial secrecy is probably Venice, which forbade glassblowers to leave the city, and sent assassins after those who tried. They started because they wanted to hear.19

Notes

Most employee agreements say that a startup idea is crack. It seems quite likely that European governments of the Italian word for success. Actually he's no better or worse than he was 10. The two guys were Dan Bricklin and Bob nominally had a broader meaning.

But it was.

Sparse Binary Polynomial Hash Message Filtering and The CRM114 Discriminator. But in a couple predecessors. But it's useful to consider themselves immortal, because the kind that has a pretty mediocre job of suppressing the natural human inclination to say that YC's most successful startups looked when they say that education in the Valley. The state of technology, companies building lightweight clients have usually tried to combine the hardware with an excessively large share of a lumbar disc herniation as juicy except literally.

The real problem is not just a few people who make things: the way up.

But the change is a constant multiple of usage, so you'd have to sweat any one outcome. Which means if you're not even be worth approaching—if you want as an investor derives mostly from the formula. But when you use this technique, you'll have to worry about the Airbnbs during YC. More often you have to pass.

This is a scarce resource.

If you treat your classes because you need.

Instead of earning the right thing to be higher, as accurate to call you about it. In general, spams are more repetitive than regular email. But not all of us in the US News list? In Jessica Livingston's Founders at Work.

Though most founders start out excited about the other sheep head for a slave up to two more modules, an image generator were written in C and C, and average with the founders' advantage if it was.

Especially if they knew their friends were. Eric Horvitz. Ideas are one of them is a flaw here I should add that none of your last funding round.

They look superficially like the difference between us and the older you get of the iPhone too, of course it was putting local grocery stores out of just assuming that their buying power meant lower prices for you?

But it isn't a quid pro quo. So if you're not consciously aware of it. During the Internet.

94. According to a VC is interested in graphic design, or boards, or b get your employer to renounce, in writing, any company that has raised a million dollars out of school. For the price, they were already profitable.

Since capital is no longer a precondition.

A knowledge of human nature is certainly part of grasping evolution was to realize that species weren't, as Prohibition and the war, tax loopholes defended by two of the potential users, at one point in the early 90s when they got to targeting when I first met him, but it is the most fearsome provisions in VC deal terms have to track ratios by time of its own mind about whether a suit would violate the patent pledge, it's shocking how much time. Credit card debt stupidest of all, economic inequality.

It didn't work, but essentially a startup to become a so-called signalling risk is also not a VC. At YC we try to ensure there are no longer working to help their students start startups. The root of the economy.

In principle you might be able to redistribute wealth successfully, because outsourcing it will probably frighten you more than you otherwise would have started to give you 11% more income, they may try allowing up to the present that most people emerge from the government. That follows necessarily if you saw Jessica at a Demo Day or die. Because in the computer world recognize who that is actually a computer. Imagine the reaction of an FBI agent or taxi driver or reporter to being a tax haven, I would take up, how much you get, the top stories were de facto consulting firm.

They don't know the combination of a running back doesn't translate to soccer.

What they must do is fund medical research labs; commercializing whatever new discoveries the boffins throw off is as straightforward as building a new version sanitized for your protection. Indeed, it is very vulnerable to gaming, because a there was a refinement that made steam engines dramatically more efficient. But the margins are greater on products. Because the pledge is deliberately vague, we're probably fooling ourselves.

[riverflowsthroughit]

CEO, Women Who Code, San Francisco

Alaina leads an organization whose primary purpose is to help women break into and thrive in the tech world. This undertaking is not for the faint-hearted. Currently Women Who Code is in 20+countries and over 60 cities. Do you live in Kiev and want to connect to influential tech experts and investors? No problem. Accra? Sure. From Santiago to San Diego, Women Who Code values mentorship and female empowerment combined with honing in on the necessary skills required for professional development and career advancement. For a woman who travels between continents on the montly/weekly basis, Alaina struck me as a pretty grounded person. She is kind and passionate about her goal to grow and insists that "while the big picture is important, it's even more important to remember that the services she provides aim to inspire and empower individuals". And if there are any doubts whether she is hopeful about the future of Women Who Code, check out the last image in the series. Hope you peruse the website and spread the word to your friends across the globe. Empowering women in STEM professions is something I'm passionate about as well, thank goodness the outlook is pretty good for Women Who Code community. Thank you Alaina for your hard work and dedication. 1. Name. Alaina Percival 2. Where is your hometown? Atlanta 3. What is your profession/career/title/self-label/designation? CEO and Board Chair, Women Who Code 4. What was the journey like to get where you are (career wise)? When was the mental shift to start the journey? My background is in marketing and brand management. However, when I moved to San Francisco I was inspired by all of the amazing things that were being done with technology. That motivated me to immerse myself in the culture of tech, learning to code, while also connecting with incredible people. 5. What did you study in school? I have a bachelor degree in International Business Relations and an M.B.A. from Georgia State University, and a Masters in Organizational Management from the Sorbonne, Paris. 6. How is your life different from what you pictured at 20? Like many women I didn't think about technology as a field when I was younger. It wasn't until I started meeting amazing women engineers and saw the things that they were doing, that I started to see the possibilities and feel connected to the industry, so I decided to get involved. Now I'm helping to fundamentally improve a field that affects every facet of society, by making it more dynamic, and sustainable through inclusive practices. 7. Biggest accomplishment since making the (physical/mental) move? My biggest accomplishments are individual in nature. Whenever I hear that someone's life has been positively affected, or that their career has improved as a result of being a member of Women Who Code, I'm more proud than I can possibly express. That's what our real goal is, and while the big picture is important, it's even more important to remember that our service is to inspire and empower individuals. 8. What was biggest disappointment and plan to overcome it? I don't find dwelling on disappointments to be a useful process. Sure you have to be willing to admit mistakes, to understand where things went wrong, and to try and correct them. However the focus should always be on what can be learned from mistakes rather than past regrets. 9. Advice for other women? You do belong. Don't be constrained by a mental image of what you are supposed to be. You can do anything, you can accomplish incredible things, and you aren't alone. There are so many of us out there already conquering the world. All you have to do is have faith in your abilities and you can help write the future of humanity. 10. Knowing what we know now in current political climate, can women be "all that we can be" in today's world? What is the way forward, as you see it for "feminist values"? Women can do anything and they've been doing it all along. Just in technology alone you have pioneers like Grace Hopper, Anita Borg, Jean Jennings Bartik, and even Ada Lovelace who basically created the technological revolution we are living in. It's vital that we keep that in mind and remember that women are a force to reckon with, and that they only need to be given the time, tools, and opportunity to succeed. 11. Where in the world do you feel “tallest” (i.e. where is your happy place)? An adventure is trying something new or seeing a new part of the world. Women Who Code is a global organization that is growing and reaching more people around the world every day. I’m thrilled my passion has finally found a match with my career. 12. What extra-curricular activities/hobbies are you most proud of? Why? I love to travel and have been to nearly 70 countries. This isn’t what I’m most proud of, but it is a big part of who I am. 13. What do you want to be when you grow up? Future goals/challenges? I’d love to start or lead a for profit company and I want to be on the board of a public organization. I’d love to continue to excel in my career and become a role model for other women and girls. 14. Anything you'd do differently (if you had another go at life)? I don't believe in regrets. You have to live the best you can and your choices help make you who you are. If I had to choose, I’d have learned to code early on. 15. What inspires you? I'm inspired by people. They're so different, so varied, each with a perspective and a voice that is unique and wonderful. When I meet someone new I become a fuller person for having had the chance to experience in some small way their view of the world. And the more people I meet, the more I am amazed by what they can think, do, and become. 16. What are you hopeful about? I believe in people, in their capacity to grow, in their capacity to change, and in the ability of all of us to succeed, better, together, than we ever could apart. That will lead us into the future. 17. What are some ingredients to a good life? Chocolate, champagne, hope, inspiration, travel, my family 18. What are you reading now? (what books do you gift most and what are your favourite reads?) Honestly, baby books, they aren’t my thing, but I’m having one and need to increase my knowledge. The book I’ve given away most often is 1000 things to do before you die 19. Who is a “WOW Woman” in your life who inspires you (and why)? Anna Thomas ;) 20. Where can others find you/your work (links to websites, blogs, etc.)? WomenWhoCode LinkedIn

[idombledore]

Natural Selection

It was July 2003 and a second-year Harvard student called Mark Zuckerberg had been playing around with a pet project. He had no commercial aspirations for it. It was just fun to code. It was a "hot or not" photo comparison site. He called it FaceMash and his friends loved it. Then it found its way onto the main Harvard servers and Zuckerberg’s education as a young entrepreneur began. Facemash showed how an idea can go wrong, how an idea can be snuffed out, not because people don't like it. They did. Its first four hours online attracted 450 students and 22,000 photo views. Facemash was snuffed out due to rules. It was deemed inappropriate by the Harvard administration. As the Harvard Crimson reported in November 2003, “The charges against you are for security, copyright and privacy violations and you're staring down the barrel of expulsion from Harvard.” There was also an angry backlash from women, in particular, not least the Association of Harvard Black Women. The charges were subsequently dropped but the experience taught him that an idea is just the start. Although Facemash wasn't a startup per se, if it had been, the regulatory issues and the backlash from women would have strangled it at birth. The idea that it generated, Facebook, would need to overcome significant obstacles, regulatory, financial, staffing, competition and so much more. Survival of the fittest didn't just apply to biological life. It applied to startups too. Zuckerberg and Facebook went on to achieve great things but why do nine out of ten startups fail? You have solid ideas. You know your markets. You know your ideas can make money. So what happened to your vision? Neil Patel offers an insider's insight into what happens in his article, 90% Of Startups Fail: Here's What You Need To Know About The 10%. Patel summarises that, if a startup is already attracting a lot of customers like Facemash, you don't really need a business plan until you go out and get funding. Otherwise, it's vital. Planning from the start is among the key reasons your startup company will fail early. Planning sets the scene on your entire vision. Know your market universe. Know your strategy. Bill Gross of IdeaLab also wanted to know why so many companies fail. He looked into some of his own successes and disappointments at IdeaLab and some of the where-are-they-now companies of recent times and he discovered something he didn’t expect. Your timing, when you launch, at 42%, was by far the most important factor between a project that succeeded and one that didn't. "Your timing is vital," said Gross. "Are you too early? Do you need to educate the market first? Or are you bang on time? Airbnb launched at the height of the recession when people found it really useful to rent a room or two out and draw in a little extra money. Or are you too late, there are already too many competitors?" Second in the list was your team at 32%. Your people. The people who make the whole thing tick, their adaptability, the all-important customer experience. Gross says a company has to be prepared to be shouted at by unhappy customers. Things will go wrong. It's how a company reacts that defines the company. Gross quotes Mike Tyson, former world heavyweight boxing champion. "Everyone has a plan until they get punched in the face.” The uniqueness of the idea came in 3rd at 28%. Gross said he wasn't surprised by Business Planning (24%) and Funding (14%) if a startup already has some traction. If your customers are demanding what you're producing, you can develop a plan later and intense funding can easily follow. If you've got no market traction yet, like the vast majority of startups, The Business Planning and Funding pieces are vital to your survival. Your business plan will tell an investor if you and your idea are up to it, but more importantly, it will tell YOU if you're up to it. "It's at this point," says Gross, that "...sensible people see a bad idea play out on the page and just leave it alone right there."   In three years time, what are your startup's projected sales? How much do you need to spend to get those sales? How many people will you need to employ and train, how much server space? What are the costs of giving away the free version before you monetise it? "You will find there's a lot more than you thought," says Gross. Out of your business plan will emerge a map. Suddenly there's a real business opportunity. Your business plan covers it all, revenue models, ad campaigns and how to design a seamless customer experience. And how to time it all to hit the market at the right time. It will tell an investor two things: 1. You can run a fifty-million dollar company. 2. Your startup will give them a Return on Investment (ROI) they can work with. So, now you're funded, you take a moment to enjoy the feeling. You give someone a hug. Can this be your dreams coming true? You're dizzy with the buzz it gives you. As Chris Herd writes on Hackernoon, "Welcome to the most exciting time in your life." Now it's time for you to crank up the engines. You do all the things you said you would in the business plan. There are deadlines, people to find, marketing agencies to meet, prices to negotiate. Neil Patel says, “It's now time to focus harder than ever. Ideas spring up everywhere but, unless it's a free energy idea or London to Sydney in six minutes, do not bother your current strategy with it. Focus. Keep your eye on the ball. You've still got so many more obstacles to come.” Before long, your idea will be copied. Products will hit the market that are cheaper than yours, maybe have a few nice ideas yours doesn't. It's inevitable. That’s why you chose the blitzkrieg option, saturate, colonise and cling on to your market share with all you've got. The nice ideas on those other sites? You were first to market. You're the market leader. Build them into your future releases. You were the first, so set yourself as the first right from the start. Keep improving it, keep inventing, keep creating new products with your brand all over them. There is another factor that so many entrepreneurs ignore or simply don't believe is important. And it's the fundamental essence of 'survival of the fittest'. If you invent a machine that can produce free energy, what are the big power companies going to do? Insist quite strongly you sell it all to them? Tie you up in lawsuits till you lose the will to live? It doesn't matter if it's the biggest energy company in the world or a company just a bit bigger than you. If they lose market share, they'll want you stopped. Life was just fine before you came along. Patel says, "This is the stage where your whole vision can be torn up and stamped on and this is the stage where it's most damaging. This is where all that hard work can vanish down the plughole overnight." Your competition is fighting for its survival. You're under attack. That photo of you on Facebook doing something nefarious, your less-than-exemplary school record. It all finds its way into the media and your brand suffers. When the co-founder of Facebook, Eduardo Saverin, underwent a week-long induction ritual at Harvard, he had to take a chicken with him everywhere he went, he couldn't imagine later being accused of animal cruelty but, eventually, the negative publicity was used as one of the reasons to write him out of Facebook. Zuckerberg had learnt well from his Facemash experience. This is survival of the fittest in its most corporate form. It's not fair, you say. It's all going so well. Everything is on-plan. You didn't do anything wrong. Or did you? You didn't see it coming but you should have. And where in the business plan did it mention anything was fair? Ever heard of a CDO? It's a Chief Defence Officer. In Sean Lyon's book, Corporate Defence and the Value Preservation Imperative, Lyons explains how to Bulletproof your Corporate Defences. "These problems are very real," he says. "If you haven't addressed it, you have a significant weakness." Your CDO needs to engage anti-hacking measures and have strategic contingencies in place for anything that comes after you. It could be industrial espionage, a negative PR campaign. The bigger you are, the nastier the things they say about you. You will even need to watch out for sabotage from within. Lyons says, "It's not paranoid. It happens. It's real. If you want your baby to get past childhood, realise what sort of world we're in and get ahead of it.” So why do nine out of ten startups fail? According to some of the most successful entrepreneurs in the world, including Neil Patel and Bill Gross, it's bad planning, you took your eye off the ball and natural selection wasn't considered. Bill Gross said, "The startup is one of the greatest ways we've go to make the world a better place. If you take a group of people with the right equity incentives, and organise them in a startup, you can unlock human potential in a way never before possible. And to do that, you must miss nothing.” Mark Zuckerberg's human potential was unlocked with Facebook but Geoffrey James, writing for Inc.com had one more word of advice for all the future Mark Zuckerbergs out there. "There is one thing and one thing alone that every great entrepreneur absolutely must possess: Courage. When all's said and done, you can plan and strive and do all you can but if you don't also have the pig-headed courage of an entrepreneur, you won't be an entrepreneur." If Mark Zuckerberg had had a business plan for Facemash in 2003, he would have learned about woes about to befall him. Whether he would have done anything differently, only he can say.

[teiraymondmccoy78]

Blockchain’s weakest links | Chicago Booth Review

Blockchain’s weakest links | Chicago Booth Review

Blockchain” has become a business buzzword. Commentators, thought leaders, and business experts are highlighting how the distributed-ledger technology promises to revolutionize business and logistics. Universities are teaching courses in blockchain. Blockchain jobs are “booming in Asia,” reports CNBC. Blockchain “lets us imagine a world that’s not dominated by Google, Facebook, or, for that matter, the [US National Security Agency], one where we, the people, the core components of global society, get to say how our data is managed,” reads The Truth Machine: The Blockchain and the Future of Everything. It’s a lot of attention for what is essentially an accounting technology. The plumbing behind financial services is generally unaccustomed to such publicity.

Blockchain rose to public prominence as the technology underpinning Bitcoin, but it could end up having more lasting value than the cryptocurrency. To some, the first era of the internet was about exchanging information, and the second era, which we are now entering, is about exchanging value. Blockchains could use computer science to create “smart contracts” through which business can be conducted online more safely, securely, and reliably. 

Billions of dollars are already riding on this future. Companies are expected to spend $2.1 billion on blockchains by 2018, and $9.2 billion by 2021, according to research firm IDC. But first, like any new technology or market—and blockchain is both, in some sense—it has to overcome a few issues to prove its staying power. 

For starters, there are different types of blockchains, and researchers have identified some potentially severe challenges facing the most ubiquitous type, known as “proof-of-work.” The choices companies and others make in the near future about which system to use, and how to use it, will determine how blockchain systems progress—and if blockchain does indeed mark a next era of tech. 

Weak link #1: The reliability of ‘private’ blockchains

The term “blockchain” lacks a common definition. Many confuse blockchain—a decentralized, distributed-ledger technology—with cryptocurrencies or other accounting systems. But Bitcoin is one of some 1,600 digital currencies and tokens. It runs on a blockchain system, and users receive bitcoins as rewards for doing work on the system. This is the most mature application of blockchain, and the one with which many companies and investors are most familiar.

Satoshi Nakamoto, a pseudonym for the anonymous author or authors of the 2008 white paper that first described Bitcoin and this first iteration of blockchain, wrote about “blocks” of transactions, each appended in sequence to a never-ending “blockchain.” If two people or companies did business, their agreement would be recorded, grouped into a block, and verified by anonymous “miners.” When verified, a block would attach immutably to the previous block, lengthening the chain. The miners, as a reward for verifying the transaction, would receive tokens, or “bitcoins.” 

What made this method revolutionary is that it decentralized trust. For millennia, business transactions have required trust between the parties involved. For two people to complete a transaction, the seller had to trust the buyer, and vice versa. Both parties had to trust that money and goods would be transferred as promised. Clubs, exchanges, and myriad networks have been created to essentially vet and verify that the people doing business are trustworthy and, if they act inappropriately, will be held accountable. 

This had been hard to replicate in a global, digital world, where computers meet instead of people and don’t always know, much less trust, each other. In Nakamoto’s blockchain transactions, however, users put their trust in anonymous miners—and in the proof-of-work system itself. In it, sophisticated cryptography generates difficult math problems that miners’ computers race to solve. When one miner’s computer successfully solves a problem, the answer, verified by the slower miners, serves as validation that a block with accurate information is being added to the chain. 

The system is decentralized and produces a distributed ledger: a copy of the verified chain sits on every computer on the network, which is different from a typical centralized record-keeping system. Because everyone keeps a copy of the ledger, no one has to place trust in a third party; all information in question has been verified and stored in blocks on the chain.

Riding Bitcoin’s wave Hundreds of thousands of transactions are confirmed daily on Bitcoin’s famous blockchain.

But not all systems being called blockchains work the way Nakamoto described, and not all are decentralized. When some companies talk about integrating blockchain into their operations, they’re describing something with a central authority—a database that does not involve mining or maintaining trust between anonymous parties, says Chicago Booth’s Eric Budish. On this type of blockchain, transactions are recorded and a database is maintained by a central authority, such as a computer or person at the company. A copy of the verified chain sits on every computer on the network, making the system distributed but not decentralized.

Some researchers call these “private” blockchains, and Budish questions whether they should be called blockchains at all, rather than simply better databases. “A lot of the excitement about blockchain is [actually] excitement about better data-management processes,” he says. 

The business applications of this technology could still improve how companies interact and run their operations, and represent better record keeping. But centralized databases may not be as safe, as each has a single point at which its system could potentially fail. One of the cornerstone precepts of blockchains is that they operate at the highest levels of security, but that’s not true of private blockchains, says Imperial College PhD candidate Engin Iyidogan, one of dozens of researchers who have been studying blockchains from every angle.

Moreover, if private blockchains fail, it could tarnish all blockchains by diminishing people’s faith in them—although it could also spur innovation. “If people realize that private blockchains are not disruptive or efficiently implementable, the hype over blockchain technology vanishes and we focus more on applications of true decentralized systems,” Iyidogan says.

Weak link #2: Transaction fees

Private blockchains aside, much of—if not most—economics research taking place looks at Nakamoto’s proof-of-work system, which many economists treat as the default blockchain design. One celebrated advantage of the proof-of-work blockchain: it can make markets more efficient by helping transactions to settle more quickly, eliminating the time between when parties agree and when the deal closes, and by extension the costs. “Most people agree the potential for blockchain is very high as a mechanism for streamlining the transaction costs of settlement,” Cornell’s Maureen O’Hara says. 

If deals were to close more quickly, the money tied up in a pending transaction could be put to better use. In the leveraged-loan market, for instance, where companies borrow cash at steep rates, it reportedly takes 27 days to settle a transaction, compared to just two or three days for a stock trade, and agents spend a quarter of their overhead expenses on answering investors’ calls to confirm the details of loans. Distributed-ledger settlement would obviate these problems, experts say.

But it won’t be easy for the Nakamoto blockchain to evolve into a mostly seamless market like the major stock exchanges. Some research suggests the transaction fees involved will be an impediment that prevents blockchain from growing.

Transaction fees are an increasingly important component of these blockchain systems, and they are closely related to transaction times. Today, if you want to make a transaction, you offer miners a fee to include your transaction in a block. The fee you offer depends on how quickly you need that transaction processed; if you want your transaction prioritized, you pay a higher fee. In addition to the miners’ fee, you may pay a fee to a bitcoin exchange to process the transaction and, if wanted, to transfer bitcoin back into dollars or another noncryptocurrency. 

Transaction fees can be volatile Miners on the Bitcoin blockchain enjoyed a surge in transaction fees earned during the recent run-up in Bitcoin’s market value.

However, only 21 million bitcoins can be mined under Nakamoto’s design, and about 17 million are already in existence, according to blockchain.com. When the final bitcoin is created, the market will switch to a purely transaction-fee-based system. At this point, these fees will be the only way to attract miners to a block. The higher the fees offered, the more mining power will be directed to the blockchain. 

Transaction fees help the market reach equilibrium by allowing miners to earn more for processing some blocks faster—while helping more time-crucial transactions to be processed more quickly than others. But O’Hara, Cornell’s David Easley, and Cornell PhD candidate Soumya Basu find that transaction fees are an impediment to bitcoin holders who want to use the cryptocurrency as a medium of exchange to pay for real-world things, rather than to hold as a speculative investment. “As users battle to get transactions posted on the blockchain, transaction fees are rising to levels that discourage bitcoin usage, highlighting an important structural issue confronting the blockchain,” O’Hara, Easley, and Basu write.

According to the researchers’ economic model, transaction fees make mining profitable over time—but these fees won’t speed up transaction times enough to counteract the number of users who get fed up with waiting and leave the system. “The fees directly induce some users to drop out, while increasing wait times cause other fee-paying users to depart as well,” they write. The researchers identify the problem, but they don’t propose any remedies for it. 

Moreover, according to another group, once all bitcoins are mined, transaction fees may not raise enough money to support the system’s infrastructure. In a comparison of bitcoin’s payment mechanisms and those of a traditional company, Columbia’s Gur Huberman and Ciamac C. Moallemi and Chicago Booth’s Jacob Leshno find that the transaction delays and high fees that plague blockchain-based settlement are an inherent part of the proof-of-work system. 

Nakamoto’s system has some congestion baked in. It makes people wait for transactions to be compiled into blocks, and then wait again for the grouped transactions to be verified. And it will eventually make some people wait longer than others, if they’re unwilling to pay higher fees for faster service. “Congestion is not merely an engineering necessity, but also a device to motivate users to pay transaction fees,” they write. 

In the Bitcoin system, no single party sets transaction fees. Instead, they are the result of supply and demand. The transaction fees-for-service operate in a nonlinear fashion. When blocks of transactions are less than half of their maximum size, users pay low transaction fees, as there is less competition for miners’ attention. At 80 percent of maximum block size, the fees shoot up as the block approaches its top size.

A blockchain can work well when there’s relatively low congestion, and charges fees that are relatively low but sufficient to keep the system functioning smoothly and efficiently, says Leshno. What complicates matters is that rising transaction fees affect the market’s demand but not supply: higher prices may deter some users from sending transactions for processing, but they will not change the fact that the system can process only one block of transactions every 10 minutes, regardless of the number of miners who compete to add the block to the chain.

And there’s no limit to how low or high the fees can go. When a company such as PayPal processes transactions, it charges what consumers are willing to pay, not what it costs to process the transaction. In the case of a bitcoin-based blockchain, says Leshno, paying market rather than monopoly prices for transaction services may be efficient, but those market prices might not serve the system well. There’s no guarantee fees won’t be so low that miners have no incentive to mine, or, more likely, be so high that transactions become unaffordable. Thus, while blockchain-based payment solves many problems, it isn’t necessarily cheaper than regular payments, the study finds. 

“The costs of operating the [blockchain payment system] are likely to be higher than those of a traditional firm: its decentralized architecture requires duplication of computations and expenditure of efforts in the random selection tournament; the aggregate mining level can be too high; costly delays are necessary to induce users to pay transaction fees,” the researchers write. 

Weak link #3: Energy use

Because bitcoin mining is a proof-of-work system, miners use electricity to run computers as they race to solve math problems to earn the right to validate the next block in a blockchain, and thereby win a bitcoin reward. This has raised another big concern with Nakamoto’s system: energy use. 

As Bitcoin prices surged, so did mining and its impact on the power grid. If Bitcoin were a country, it would rank 39th in worldwide energy usage, behind the Philippines (38th) and ahead of Austria (40th), according to Digiconomist’s Bitcoin Energy Consumption Index. Yet it facilitates fewer transactions annually than the Visa credit-card network does each day, according to Australian National University’s June Ma and Rabee Tourky and University of Toronto’s Joshua S. Gans.

Nakamoto’s design leads directly to this intense resource consumption, the researchers find, because miners have to play a game every time they mine a block, and making the game’s math equations harder doesn’t tamp down energy usage. While buying more expensive computer chips to perform the equations could in theory discourage some miners from participating, this hasn’t happened, according to the researchers.

Miners’ swelling electricity usage Even by conservative calculations, Bitcoin miners’ demand on the power grid has at least quadrupled since 2017.

In a theory paper, Ma, Gans, and Tourky argue that the Nakamoto system allows anybody to mine—granting free entry to whomever has the software to compete. If the system instead were to limit the number of miners, this would do more to reduce the amount of computing power, and electricity, that miners expend. Granted, that would require Nakamoto, if still alive, to make changes to the system.

Another trio of researchers—Chicago Booth’s Lin William Cong and Zhiguo He and George Mason’s Jiasun Li—say that Nakamoto’s system creates a wasteful energy arms race. Miners, to stay competitive, invest in computing capabilities by spending heavily on networks, as well as electricity and cooling. The investment may improve a miner’s chances of winning a computational competition. However, Nakamoto’s system is a zero-sum game, so if investment benefits one miner, it directly hurts the chances of other miners. 

But regardless of who wins a competition, or how many miners compete, or how much energy they use, one block will be added to the chain every 10 minutes, on average. The effort that goes in may grow ever larger, but the outcome remains the same. So the intense competition produces no benefit for the system or end users. “The arms race nature of this technology is what’s underlying the electricity usage,” says He. He and his coresearchers point out that risk-sharing considerations lead miners to work together in the form of large mining “pools.” The rise of mining pools is a financial innovation that improves miners’ risk sharing; but it enables miners in a pool to devote greater computation power, aggravating the arms race that consumes a tremendous amount of energy. (For more, see “Are blockchain mining pools problematic?” page 31.) Excessive competition, say the researchers, is an inherent part and problem of Nakamoto’s design.

But again, not all blockchains resemble Nakamoto’s original vision. Some competing cryptocurrencies are based on proof-of-stake, which validates transactions differently. The proof-of-stake system doesn’t involve races to solve mathematical puzzles, and thus there is no reward for doing so. Instead, the amount of cryptocurrency a miner holds serves as a validation of trustworthiness and functions something like a bond: a miner has to hold a certain amount of cryptocurrency before being allowed to verify and add blocks to the chain. Miners with more cryptocurrency have more mining power, and they make money simply through transaction fees. This system is still a public blockchain, not a private one, because it has a distributed ledger and no central authority. But because it doesn’t require many computers to run the same equations as they race to solve a puzzle, proof-of-stake uses less electricity. 

Ethereum is reportedly switching to a proof-of-stake system, in part to mitigate the environmental costs of proof-of-work’s massive electricity bills. 

McGill’s Fahad Saleh argues that such blockchains using proof-of-stake can be economically viable because this system can achieve consensus: miners agree that a block is valid and allow the blockchain to continue. It’s important, however, that proof-of-stake systems incorporate rules that require users to have a sufficient stake of cryptocurrency to participate in validation, he writes. Otherwise, users could get in the way of consensus to drive up their own rewards.

“My conclusions emphasize the need for developers to heed economic guidance when designing consensus protocols,” Saleh writes. If participants own a lot of the cryptocurrency being used to run the blockchain, they have an incentive to not tank the currency’s value.

Weak link #4: The cost of security

Sabotage is another looming issue, according to Booth’s Budish. He took a theoretical look at the economics and security of Nakamoto’s blockchain, focusing on the large relative cost required to make blockchain secure. In a series of equations, Budish lays out his concerns. 

He started by asking how much computational power miners are buying for tournaments. The answer, he says, is that it depends on how much miners are compensated. The more miners can make, the more they will mine. 

But for miners to stay honest, they have to know that they will make more money by mining than by sabotaging the system, Budish notes. The amount miners receive over time as they help to run and maintain the blockchain is known as a “flow,” while the one-time haul from an attack is known as a “stock.” “The recurring ‘flow’ payments to miners for running the blockchain must be large relative to the one-off ‘stock’ benefits of attacking it,” Budish writes. 

And to keep a blockchain secure, miners have to be convinced regularly—every 10 minutes, essentially, which is how often miners compete—to stay honest. If Bitcoin were to become a store of value and transactions were to grow, the temptation to sabotage the system would also grow, he points out. Users trying to maintain security would have to offer miners an increasingly large amount almost 150 times a day. 

Moreover, miners currently use expensive, specialized chips to participate in tournaments. But if the price of those were to fall, or if miners were able to rent chips rather than buy them, the cost of attacking would fall. It would then become more tempting for miners to sabotage the blockchain, steal bitcoins, and drive down values. These problems will get worse if the “Bitcoin blockchain gets economically important enough to tempt a saboteur,” Budish writes. 

Small-scale transfers made up the earliest bitcoin transactions—think black-market transactions, purchases by computer hobbyists, and intrafamily international transfers such as sending money to a child studying abroad. But as the value of Bitcoin grows, the system runs into trouble, according to Budish’s model, and he is skeptical it can really scale up. 

The issues Budish described have already been realized. In mid-May, a market participant with sufficient computing power was able to take control of the underlying ledger of the Bitcoin Gold market. Soon news site CoinDesk reported that at least four other cryptocurrencies had also been hit. 

Weak link #5: Regulation

While computer science has created a decentralized system of trust, regulation could offer peace of mind to wary market participants. But Nakamoto’s original description of blockchain didn’t mention regulation, and regulators have been slow to catch up with cryptocurrency trading and blockchain adoption, Cornell’s O’Hara says.

The regulatory outlook for all blockchain systems and cryptocurrencies is highly uncertain. A half dozen regulators in the United States, as well as their counterparts overseas, have issued a series of often contradictory announcements and enforcement actions that touch blockchain companies issuing tokens or operating a cryptocurrency exchange. The regulators don’t agree on whether cryptocurrencies should be legally considered commodities, currencies, or securities, which affects what rules cryptocurrency holders and issuers need to follow. 

Take initial coin offerings, or ICOs, a form of financing (or is it securities issuance?) that involves a company selling digital tokens that can be used to buy and sell things on a blockchain it is setting up. The company is often a start-up, but is sometimes an established corporation such as Kodak, which has announced it will use a blockchain to protect digital rights for images. While regulators at the US Securities and Exchange Commission have said ICOs are flouting regulations that apply to companies that issue shares, blockchain enthusiasts have snapped up the new tokens. 

Academics are clearly thinking about the regulatory implications of blockchain. More than 120 academic papers have been written on the subject in the past three years. And businesses have been just as prolific: analyzing 1,000 white papers describing companies’ ICO plans, University of Luxembourg’s Dirk A. Zetzsche and Linus Föhr, University of New South Wales’s Ross Buckley, and University of Hong Kong’s Douglas W. Arner found a vast gulf in disclosure levels between them and traditional securities documents. 

“Many ICOs are offered on the basis of utterly inadequate disclosure of information; more than half the ICO white papers are either silent on the initiators or backers or do not provide contact details, and an even greater share do not elaborate on the applicable law, segregation or pooling of client funds, and the existence of an external auditor,” they write.

Because existing regulations don’t address many of the issues, the researchers recommend that governments require more disclosures and lean on intermediaries, such as the exchanges where the tokens trade, to help enforce these standards. 

Cong and He also say regulators need to pay attention to the possibility of collusion in some blockchains. In a study, they look at permissioned blockchains—not private, but in which parties need permission to participate. This type of blockchain is popular in industry, for example to enable a retailer such as Wal-Mart to conduct business more easily, quickly, and safely..

http://bit.ly/2Rf52vj

[vanessawestwcrtr5]

Blockchain’s weakest links | Chicago Booth Review

Blockchain’s weakest links | Chicago Booth Review

Blockchain” has become a business buzzword. Commentators, thought leaders, and business experts are highlighting how the distributed-ledger technology promises to revolutionize business and logistics. Universities are teaching courses in blockchain. Blockchain jobs are “booming in Asia,” reports CNBC. Blockchain “lets us imagine a world that’s not dominated by Google, Facebook, or, for that matter, the [US National Security Agency], one where we, the people, the core components of global society, get to say how our data is managed,” reads The Truth Machine: The Blockchain and the Future of Everything. It’s a lot of attention for what is essentially an accounting technology. The plumbing behind financial services is generally unaccustomed to such publicity.

Blockchain rose to public prominence as the technology underpinning Bitcoin, but it could end up having more lasting value than the cryptocurrency. To some, the first era of the internet was about exchanging information, and the second era, which we are now entering, is about exchanging value. Blockchains could use computer science to create “smart contracts” through which business can be conducted online more safely, securely, and reliably. 

Billions of dollars are already riding on this future. Companies are expected to spend $2.1 billion on blockchains by 2018, and $9.2 billion by 2021, according to research firm IDC. But first, like any new technology or market—and blockchain is both, in some sense—it has to overcome a few issues to prove its staying power. 

For starters, there are different types of blockchains, and researchers have identified some potentially severe challenges facing the most ubiquitous type, known as “proof-of-work.” The choices companies and others make in the near future about which system to use, and how to use it, will determine how blockchain systems progress—and if blockchain does indeed mark a next era of tech. 

Weak link #1: The reliability of ‘private’ blockchains

The term “blockchain” lacks a common definition. Many confuse blockchain—a decentralized, distributed-ledger technology—with cryptocurrencies or other accounting systems. But Bitcoin is one of some 1,600 digital currencies and tokens. It runs on a blockchain system, and users receive bitcoins as rewards for doing work on the system. This is the most mature application of blockchain, and the one with which many companies and investors are most familiar.

Satoshi Nakamoto, a pseudonym for the anonymous author or authors of the 2008 white paper that first described Bitcoin and this first iteration of blockchain, wrote about “blocks” of transactions, each appended in sequence to a never-ending “blockchain.” If two people or companies did business, their agreement would be recorded, grouped into a block, and verified by anonymous “miners.” When verified, a block would attach immutably to the previous block, lengthening the chain. The miners, as a reward for verifying the transaction, would receive tokens, or “bitcoins.” 

What made this method revolutionary is that it decentralized trust. For millennia, business transactions have required trust between the parties involved. For two people to complete a transaction, the seller had to trust the buyer, and vice versa. Both parties had to trust that money and goods would be transferred as promised. Clubs, exchanges, and myriad networks have been created to essentially vet and verify that the people doing business are trustworthy and, if they act inappropriately, will be held accountable. 

This had been hard to replicate in a global, digital world, where computers meet instead of people and don’t always know, much less trust, each other. In Nakamoto’s blockchain transactions, however, users put their trust in anonymous miners—and in the proof-of-work system itself. In it, sophisticated cryptography generates difficult math problems that miners’ computers race to solve. When one miner’s computer successfully solves a problem, the answer, verified by the slower miners, serves as validation that a block with accurate information is being added to the chain. 

The system is decentralized and produces a distributed ledger: a copy of the verified chain sits on every computer on the network, which is different from a typical centralized record-keeping system. Because everyone keeps a copy of the ledger, no one has to place trust in a third party; all information in question has been verified and stored in blocks on the chain.

Riding Bitcoin’s wave Hundreds of thousands of transactions are confirmed daily on Bitcoin’s famous blockchain.

But not all systems being called blockchains work the way Nakamoto described, and not all are decentralized. When some companies talk about integrating blockchain into their operations, they’re describing something with a central authority—a database that does not involve mining or maintaining trust between anonymous parties, says Chicago Booth’s Eric Budish. On this type of blockchain, transactions are recorded and a database is maintained by a central authority, such as a computer or person at the company. A copy of the verified chain sits on every computer on the network, making the system distributed but not decentralized.

Some researchers call these “private” blockchains, and Budish questions whether they should be called blockchains at all, rather than simply better databases. “A lot of the excitement about blockchain is [actually] excitement about better data-management processes,” he says. 

The business applications of this technology could still improve how companies interact and run their operations, and represent better record keeping. But centralized databases may not be as safe, as each has a single point at which its system could potentially fail. One of the cornerstone precepts of blockchains is that they operate at the highest levels of security, but that’s not true of private blockchains, says Imperial College PhD candidate Engin Iyidogan, one of dozens of researchers who have been studying blockchains from every angle.

Moreover, if private blockchains fail, it could tarnish all blockchains by diminishing people’s faith in them—although it could also spur innovation. “If people realize that private blockchains are not disruptive or efficiently implementable, the hype over blockchain technology vanishes and we focus more on applications of true decentralized systems,” Iyidogan says.

Weak link #2: Transaction fees

Private blockchains aside, much of—if not most—economics research taking place looks at Nakamoto’s proof-of-work system, which many economists treat as the default blockchain design. One celebrated advantage of the proof-of-work blockchain: it can make markets more efficient by helping transactions to settle more quickly, eliminating the time between when parties agree and when the deal closes, and by extension the costs. “Most people agree the potential for blockchain is very high as a mechanism for streamlining the transaction costs of settlement,” Cornell’s Maureen O’Hara says. 

If deals were to close more quickly, the money tied up in a pending transaction could be put to better use. In the leveraged-loan market, for instance, where companies borrow cash at steep rates, it reportedly takes 27 days to settle a transaction, compared to just two or three days for a stock trade, and agents spend a quarter of their overhead expenses on answering investors’ calls to confirm the details of loans. Distributed-ledger settlement would obviate these problems, experts say.

But it won’t be easy for the Nakamoto blockchain to evolve into a mostly seamless market like the major stock exchanges. Some research suggests the transaction fees involved will be an impediment that prevents blockchain from growing.

Transaction fees are an increasingly important component of these blockchain systems, and they are closely related to transaction times. Today, if you want to make a transaction, you offer miners a fee to include your transaction in a block. The fee you offer depends on how quickly you need that transaction processed; if you want your transaction prioritized, you pay a higher fee. In addition to the miners’ fee, you may pay a fee to a bitcoin exchange to process the transaction and, if wanted, to transfer bitcoin back into dollars or another noncryptocurrency. 

Transaction fees can be volatile Miners on the Bitcoin blockchain enjoyed a surge in transaction fees earned during the recent run-up in Bitcoin’s market value.

However, only 21 million bitcoins can be mined under Nakamoto’s design, and about 17 million are already in existence, according to blockchain.com. When the final bitcoin is created, the market will switch to a purely transaction-fee-based system. At this point, these fees will be the only way to attract miners to a block. The higher the fees offered, the more mining power will be directed to the blockchain. 

Transaction fees help the market reach equilibrium by allowing miners to earn more for processing some blocks faster—while helping more time-crucial transactions to be processed more quickly than others. But O’Hara, Cornell’s David Easley, and Cornell PhD candidate Soumya Basu find that transaction fees are an impediment to bitcoin holders who want to use the cryptocurrency as a medium of exchange to pay for real-world things, rather than to hold as a speculative investment. “As users battle to get transactions posted on the blockchain, transaction fees are rising to levels that discourage bitcoin usage, highlighting an important structural issue confronting the blockchain,” O’Hara, Easley, and Basu write.

According to the researchers’ economic model, transaction fees make mining profitable over time—but these fees won’t speed up transaction times enough to counteract the number of users who get fed up with waiting and leave the system. “The fees directly induce some users to drop out, while increasing wait times cause other fee-paying users to depart as well,” they write. The researchers identify the problem, but they don’t propose any remedies for it. 

Moreover, according to another group, once all bitcoins are mined, transaction fees may not raise enough money to support the system’s infrastructure. In a comparison of bitcoin’s payment mechanisms and those of a traditional company, Columbia’s Gur Huberman and Ciamac C. Moallemi and Chicago Booth’s Jacob Leshno find that the transaction delays and high fees that plague blockchain-based settlement are an inherent part of the proof-of-work system. 

Nakamoto’s system has some congestion baked in. It makes people wait for transactions to be compiled into blocks, and then wait again for the grouped transactions to be verified. And it will eventually make some people wait longer than others, if they’re unwilling to pay higher fees for faster service. “Congestion is not merely an engineering necessity, but also a device to motivate users to pay transaction fees,” they write. 

In the Bitcoin system, no single party sets transaction fees. Instead, they are the result of supply and demand. The transaction fees-for-service operate in a nonlinear fashion. When blocks of transactions are less than half of their maximum size, users pay low transaction fees, as there is less competition for miners’ attention. At 80 percent of maximum block size, the fees shoot up as the block approaches its top size.

A blockchain can work well when there’s relatively low congestion, and charges fees that are relatively low but sufficient to keep the system functioning smoothly and efficiently, says Leshno. What complicates matters is that rising transaction fees affect the market’s demand but not supply: higher prices may deter some users from sending transactions for processing, but they will not change the fact that the system can process only one block of transactions every 10 minutes, regardless of the number of miners who compete to add the block to the chain.

And there’s no limit to how low or high the fees can go. When a company such as PayPal processes transactions, it charges what consumers are willing to pay, not what it costs to process the transaction. In the case of a bitcoin-based blockchain, says Leshno, paying market rather than monopoly prices for transaction services may be efficient, but those market prices might not serve the system well. There’s no guarantee fees won’t be so low that miners have no incentive to mine, or, more likely, be so high that transactions become unaffordable. Thus, while blockchain-based payment solves many problems, it isn’t necessarily cheaper than regular payments, the study finds. 

“The costs of operating the [blockchain payment system] are likely to be higher than those of a traditional firm: its decentralized architecture requires duplication of computations and expenditure of efforts in the random selection tournament; the aggregate mining level can be too high; costly delays are necessary to induce users to pay transaction fees,” the researchers write. 

Weak link #3: Energy use

Because bitcoin mining is a proof-of-work system, miners use electricity to run computers as they race to solve math problems to earn the right to validate the next block in a blockchain, and thereby win a bitcoin reward. This has raised another big concern with Nakamoto’s system: energy use. 

As Bitcoin prices surged, so did mining and its impact on the power grid. If Bitcoin were a country, it would rank 39th in worldwide energy usage, behind the Philippines (38th) and ahead of Austria (40th), according to Digiconomist’s Bitcoin Energy Consumption Index. Yet it facilitates fewer transactions annually than the Visa credit-card network does each day, according to Australian National University’s June Ma and Rabee Tourky and University of Toronto’s Joshua S. Gans.

Nakamoto’s design leads directly to this intense resource consumption, the researchers find, because miners have to play a game every time they mine a block, and making the game’s math equations harder doesn’t tamp down energy usage. While buying more expensive computer chips to perform the equations could in theory discourage some miners from participating, this hasn’t happened, according to the researchers.

Miners’ swelling electricity usage Even by conservative calculations, Bitcoin miners’ demand on the power grid has at least quadrupled since 2017.

In a theory paper, Ma, Gans, and Tourky argue that the Nakamoto system allows anybody to mine—granting free entry to whomever has the software to compete. If the system instead were to limit the number of miners, this would do more to reduce the amount of computing power, and electricity, that miners expend. Granted, that would require Nakamoto, if still alive, to make changes to the system.

Another trio of researchers—Chicago Booth’s Lin William Cong and Zhiguo He and George Mason’s Jiasun Li—say that Nakamoto’s system creates a wasteful energy arms race. Miners, to stay competitive, invest in computing capabilities by spending heavily on networks, as well as electricity and cooling. The investment may improve a miner’s chances of winning a computational competition. However, Nakamoto’s system is a zero-sum game, so if investment benefits one miner, it directly hurts the chances of other miners. 

But regardless of who wins a competition, or how many miners compete, or how much energy they use, one block will be added to the chain every 10 minutes, on average. The effort that goes in may grow ever larger, but the outcome remains the same. So the intense competition produces no benefit for the system or end users. “The arms race nature of this technology is what’s underlying the electricity usage,” says He. He and his coresearchers point out that risk-sharing considerations lead miners to work together in the form of large mining “pools.” The rise of mining pools is a financial innovation that improves miners’ risk sharing; but it enables miners in a pool to devote greater computation power, aggravating the arms race that consumes a tremendous amount of energy. (For more, see “Are blockchain mining pools problematic?” page 31.) Excessive competition, say the researchers, is an inherent part and problem of Nakamoto’s design.

But again, not all blockchains resemble Nakamoto’s original vision. Some competing cryptocurrencies are based on proof-of-stake, which validates transactions differently. The proof-of-stake system doesn’t involve races to solve mathematical puzzles, and thus there is no reward for doing so. Instead, the amount of cryptocurrency a miner holds serves as a validation of trustworthiness and functions something like a bond: a miner has to hold a certain amount of cryptocurrency before being allowed to verify and add blocks to the chain. Miners with more cryptocurrency have more mining power, and they make money simply through transaction fees. This system is still a public blockchain, not a private one, because it has a distributed ledger and no central authority. But because it doesn’t require many computers to run the same equations as they race to solve a puzzle, proof-of-stake uses less electricity. 

Ethereum is reportedly switching to a proof-of-stake system, in part to mitigate the environmental costs of proof-of-work’s massive electricity bills. 

McGill’s Fahad Saleh argues that such blockchains using proof-of-stake can be economically viable because this system can achieve consensus: miners agree that a block is valid and allow the blockchain to continue. It’s important, however, that proof-of-stake systems incorporate rules that require users to have a sufficient stake of cryptocurrency to participate in validation, he writes. Otherwise, users could get in the way of consensus to drive up their own rewards.

“My conclusions emphasize the need for developers to heed economic guidance when designing consensus protocols,” Saleh writes. If participants own a lot of the cryptocurrency being used to run the blockchain, they have an incentive to not tank the currency’s value.

Weak link #4: The cost of security

Sabotage is another looming issue, according to Booth’s Budish. He took a theoretical look at the economics and security of Nakamoto’s blockchain, focusing on the large relative cost required to make blockchain secure. In a series of equations, Budish lays out his concerns. 

He started by asking how much computational power miners are buying for tournaments. The answer, he says, is that it depends on how much miners are compensated. The more miners can make, the more they will mine. 

But for miners to stay honest, they have to know that they will make more money by mining than by sabotaging the system, Budish notes. The amount miners receive over time as they help to run and maintain the blockchain is known as a “flow,” while the one-time haul from an attack is known as a “stock.” “The recurring ‘flow’ payments to miners for running the blockchain must be large relative to the one-off ‘stock’ benefits of attacking it,” Budish writes. 

And to keep a blockchain secure, miners have to be convinced regularly—every 10 minutes, essentially, which is how often miners compete—to stay honest. If Bitcoin were to become a store of value and transactions were to grow, the temptation to sabotage the system would also grow, he points out. Users trying to maintain security would have to offer miners an increasingly large amount almost 150 times a day. 

Moreover, miners currently use expensive, specialized chips to participate in tournaments. But if the price of those were to fall, or if miners were able to rent chips rather than buy them, the cost of attacking would fall. It would then become more tempting for miners to sabotage the blockchain, steal bitcoins, and drive down values. These problems will get worse if the “Bitcoin blockchain gets economically important enough to tempt a saboteur,” Budish writes. 

Small-scale transfers made up the earliest bitcoin transactions—think black-market transactions, purchases by computer hobbyists, and intrafamily international transfers such as sending money to a child studying abroad. But as the value of Bitcoin grows, the system runs into trouble, according to Budish’s model, and he is skeptical it can really scale up. 

The issues Budish described have already been realized. In mid-May, a market participant with sufficient computing power was able to take control of the underlying ledger of the Bitcoin Gold market. Soon news site CoinDesk reported that at least four other cryptocurrencies had also been hit. 

Weak link #5: Regulation

While computer science has created a decentralized system of trust, regulation could offer peace of mind to wary market participants. But Nakamoto’s original description of blockchain didn’t mention regulation, and regulators have been slow to catch up with cryptocurrency trading and blockchain adoption, Cornell’s O’Hara says.

The regulatory outlook for all blockchain systems and cryptocurrencies is highly uncertain. A half dozen regulators in the United States, as well as their counterparts overseas, have issued a series of often contradictory announcements and enforcement actions that touch blockchain companies issuing tokens or operating a cryptocurrency exchange. The regulators don’t agree on whether cryptocurrencies should be legally considered commodities, currencies, or securities, which affects what rules cryptocurrency holders and issuers need to follow. 

Take initial coin offerings, or ICOs, a form of financing (or is it securities issuance?) that involves a company selling digital tokens that can be used to buy and sell things on a blockchain it is setting up. The company is often a start-up, but is sometimes an established corporation such as Kodak, which has announced it will use a blockchain to protect digital rights for images. While regulators at the US Securities and Exchange Commission have said ICOs are flouting regulations that apply to companies that issue shares, blockchain enthusiasts have snapped up the new tokens. 

Academics are clearly thinking about the regulatory implications of blockchain. More than 120 academic papers have been written on the subject in the past three years. And businesses have been just as prolific: analyzing 1,000 white papers describing companies’ ICO plans, University of Luxembourg’s Dirk A. Zetzsche and Linus Föhr, University of New South Wales’s Ross Buckley, and University of Hong Kong’s Douglas W. Arner found a vast gulf in disclosure levels between them and traditional securities documents. 

“Many ICOs are offered on the basis of utterly inadequate disclosure of information; more than half the ICO white papers are either silent on the initiators or backers or do not provide contact details, and an even greater share do not elaborate on the applicable law, segregation or pooling of client funds, and the existence of an external auditor,” they write.

Because existing regulations don’t address many of the issues, the researchers recommend that governments require more disclosures and lean on intermediaries, such as the exchanges where the tokens trade, to help enforce these standards. 

Cong and He also say regulators need to pay attention to the possibility of collusion in some blockchains. In a study, they look at permissioned blockchains—not private, but in which parties need permission to participate. This type of blockchain is popular in industry, for example to enable a retailer such as Wal-Mart to conduct business more easily, quickly, and safely..

http://bit.ly/2Rf52vj

[courtneyvbrooks87]

Blockchain’s weakest links | Chicago Booth Review

Blockchain’s weakest links | Chicago Booth Review

Blockchain” has become a business buzzword. Commentators, thought leaders, and business experts are highlighting how the distributed-ledger technology promises to revolutionize business and logistics. Universities are teaching courses in blockchain. Blockchain jobs are “booming in Asia,” reports CNBC. Blockchain “lets us imagine a world that���s not dominated by Google, Facebook, or, for that matter, the [US National Security Agency], one where we, the people, the core components of global society, get to say how our data is managed,” reads The Truth Machine: The Blockchain and the Future of Everything. It’s a lot of attention for what is essentially an accounting technology. The plumbing behind financial services is generally unaccustomed to such publicity.

Blockchain rose to public prominence as the technology underpinning Bitcoin, but it could end up having more lasting value than the cryptocurrency. To some, the first era of the internet was about exchanging information, and the second era, which we are now entering, is about exchanging value. Blockchains could use computer science to create “smart contracts” through which business can be conducted online more safely, securely, and reliably. 

Billions of dollars are already riding on this future. Companies are expected to spend $2.1 billion on blockchains by 2018, and $9.2 billion by 2021, according to research firm IDC. But first, like any new technology or market—and blockchain is both, in some sense—it has to overcome a few issues to prove its staying power. 

For starters, there are different types of blockchains, and researchers have identified some potentially severe challenges facing the most ubiquitous type, known as “proof-of-work.” The choices companies and others make in the near future about which system to use, and how to use it, will determine how blockchain systems progress—and if blockchain does indeed mark a next era of tech. 

Weak link #1: The reliability of ‘private’ blockchains

The term “blockchain” lacks a common definition. Many confuse blockchain—a decentralized, distributed-ledger technology—with cryptocurrencies or other accounting systems. But Bitcoin is one of some 1,600 digital currencies and tokens. It runs on a blockchain system, and users receive bitcoins as rewards for doing work on the system. This is the most mature application of blockchain, and the one with which many companies and investors are most familiar.

Satoshi Nakamoto, a pseudonym for the anonymous author or authors of the 2008 white paper that first described Bitcoin and this first iteration of blockchain, wrote about “blocks” of transactions, each appended in sequence to a never-ending “blockchain.” If two people or companies did business, their agreement would be recorded, grouped into a block, and verified by anonymous “miners.” When verified, a block would attach immutably to the previous block, lengthening the chain. The miners, as a reward for verifying the transaction, would receive tokens, or “bitcoins.” 

What made this method revolutionary is that it decentralized trust. For millennia, business transactions have required trust between the parties involved. For two people to complete a transaction, the seller had to trust the buyer, and vice versa. Both parties had to trust that money and goods would be transferred as promised. Clubs, exchanges, and myriad networks have been created to essentially vet and verify that the people doing business are trustworthy and, if they act inappropriately, will be held accountable. 

This had been hard to replicate in a global, digital world, where computers meet instead of people and don’t always know, much less trust, each other. In Nakamoto’s blockchain transactions, however, users put their trust in anonymous miners—and in the proof-of-work system itself. In it, sophisticated cryptography generates difficult math problems that miners’ computers race to solve. When one miner’s computer successfully solves a problem, the answer, verified by the slower miners, serves as validation that a block with accurate information is being added to the chain. 

The system is decentralized and produces a distributed ledger: a copy of the verified chain sits on every computer on the network, which is different from a typical centralized record-keeping system. Because everyone keeps a copy of the ledger, no one has to place trust in a third party; all information in question has been verified and stored in blocks on the chain.

Riding Bitcoin’s wave Hundreds of thousands of transactions are confirmed daily on Bitcoin’s famous blockchain.

But not all systems being called blockchains work the way Nakamoto described, and not all are decentralized. When some companies talk about integrating blockchain into their operations, they’re describing something with a central authority—a database that does not involve mining or maintaining trust between anonymous parties, says Chicago Booth’s Eric Budish. On this type of blockchain, transactions are recorded and a database is maintained by a central authority, such as a computer or person at the company. A copy of the verified chain sits on every computer on the network, making the system distributed but not decentralized.

Some researchers call these “private” blockchains, and Budish questions whether they should be called blockchains at all, rather than simply better databases. “A lot of the excitement about blockchain is [actually] excitement about better data-management processes,” he says. 

The business applications of this technology could still improve how companies interact and run their operations, and represent better record keeping. But centralized databases may not be as safe, as each has a single point at which its system could potentially fail. One of the cornerstone precepts of blockchains is that they operate at the highest levels of security, but that’s not true of private blockchains, says Imperial College PhD candidate Engin Iyidogan, one of dozens of researchers who have been studying blockchains from every angle.

Moreover, if private blockchains fail, it could tarnish all blockchains by diminishing people’s faith in them—although it could also spur innovation. “If people realize that private blockchains are not disruptive or efficiently implementable, the hype over blockchain technology vanishes and we focus more on applications of true decentralized systems,” Iyidogan says.

Weak link #2: Transaction fees

Private blockchains aside, much of—if not most—economics research taking place looks at Nakamoto’s proof-of-work system, which many economists treat as the default blockchain design. One celebrated advantage of the proof-of-work blockchain: it can make markets more efficient by helping transactions to settle more quickly, eliminating the time between when parties agree and when the deal closes, and by extension the costs. “Most people agree the potential for blockchain is very high as a mechanism for streamlining the transaction costs of settlement,” Cornell’s Maureen O’Hara says. 

If deals were to close more quickly, the money tied up in a pending transaction could be put to better use. In the leveraged-loan market, for instance, where companies borrow cash at steep rates, it reportedly takes 27 days to settle a transaction, compared to just two or three days for a stock trade, and agents spend a quarter of their overhead expenses on answering investors’ calls to confirm the details of loans. Distributed-ledger settlement would obviate these problems, experts say.

But it won’t be easy for the Nakamoto blockchain to evolve into a mostly seamless market like the major stock exchanges. Some research suggests the transaction fees involved will be an impediment that prevents blockchain from growing.

Transaction fees are an increasingly important component of these blockchain systems, and they are closely related to transaction times. Today, if you want to make a transaction, you offer miners a fee to include your transaction in a block. The fee you offer depends on how quickly you need that transaction processed; if you want your transaction prioritized, you pay a higher fee. In addition to the miners’ fee, you may pay a fee to a bitcoin exchange to process the transaction and, if wanted, to transfer bitcoin back into dollars or another noncryptocurrency. 

Transaction fees can be volatile Miners on the Bitcoin blockchain enjoyed a surge in transaction fees earned during the recent run-up in Bitcoin’s market value.

However, only 21 million bitcoins can be mined under Nakamoto’s design, and about 17 million are already in existence, according to blockchain.com. When the final bitcoin is created, the market will switch to a purely transaction-fee-based system. At this point, these fees will be the only way to attract miners to a block. The higher the fees offered, the more mining power will be directed to the blockchain. 

Transaction fees help the market reach equilibrium by allowing miners to earn more for processing some blocks faster—while helping more time-crucial transactions to be processed more quickly than others. But O’Hara, Cornell’s David Easley, and Cornell PhD candidate Soumya Basu find that transaction fees are an impediment to bitcoin holders who want to use the cryptocurrency as a medium of exchange to pay for real-world things, rather than to hold as a speculative investment. “As users battle to get transactions posted on the blockchain, transaction fees are rising to levels that discourage bitcoin usage, highlighting an important structural issue confronting the blockchain,” O’Hara, Easley, and Basu write.

According to the researchers’ economic model, transaction fees make mining profitable over time—but these fees won’t speed up transaction times enough to counteract the number of users who get fed up with waiting and leave the system. “The fees directly induce some users to drop out, while increasing wait times cause other fee-paying users to depart as well,” they write. The researchers identify the problem, but they don’t propose any remedies for it. 

Moreover, according to another group, once all bitcoins are mined, transaction fees may not raise enough money to support the system’s infrastructure. In a comparison of bitcoin’s payment mechanisms and those of a traditional company, Columbia’s Gur Huberman and Ciamac C. Moallemi and Chicago Booth’s Jacob Leshno find that the transaction delays and high fees that plague blockchain-based settlement are an inherent part of the proof-of-work system. 

Nakamoto’s system has some congestion baked in. It makes people wait for transactions to be compiled into blocks, and then wait again for the grouped transactions to be verified. And it will eventually make some people wait longer than others, if they’re unwilling to pay higher fees for faster service. “Congestion is not merely an engineering necessity, but also a device to motivate users to pay transaction fees,” they write. 

In the Bitcoin system, no single party sets transaction fees. Instead, they are the result of supply and demand. The transaction fees-for-service operate in a nonlinear fashion. When blocks of transactions are less than half of their maximum size, users pay low transaction fees, as there is less competition for miners’ attention. At 80 percent of maximum block size, the fees shoot up as the block approaches its top size.

A blockchain can work well when there’s relatively low congestion, and charges fees that are relatively low but sufficient to keep the system functioning smoothly and efficiently, says Leshno. What complicates matters is that rising transaction fees affect the market’s demand but not supply: higher prices may deter some users from sending transactions for processing, but they will not change the fact that the system can process only one block of transactions every 10 minutes, regardless of the number of miners who compete to add the block to the chain.

And there’s no limit to how low or high the fees can go. When a company such as PayPal processes transactions, it charges what consumers are willing to pay, not what it costs to process the transaction. In the case of a bitcoin-based blockchain, says Leshno, paying market rather than monopoly prices for transaction services may be efficient, but those market prices might not serve the system well. There’s no guarantee fees won’t be so low that miners have no incentive to mine, or, more likely, be so high that transactions become unaffordable. Thus, while blockchain-based payment solves many problems, it isn’t necessarily cheaper than regular payments, the study finds. 

“The costs of operating the [blockchain payment system] are likely to be higher than those of a traditional firm: its decentralized architecture requires duplication of computations and expenditure of efforts in the random selection tournament; the aggregate mining level can be too high; costly delays are necessary to induce users to pay transaction fees,” the researchers write. 

Weak link #3: Energy use

Because bitcoin mining is a proof-of-work system, miners use electricity to run computers as they race to solve math problems to earn the right to validate the next block in a blockchain, and thereby win a bitcoin reward. This has raised another big concern with Nakamoto’s system: energy use. 

As Bitcoin prices surged, so did mining and its impact on the power grid. If Bitcoin were a country, it would rank 39th in worldwide energy usage, behind the Philippines (38th) and ahead of Austria (40th), according to Digiconomist’s Bitcoin Energy Consumption Index. Yet it facilitates fewer transactions annually than the Visa credit-card network does each day, according to Australian National University’s June Ma and Rabee Tourky and University of Toronto’s Joshua S. Gans.

Nakamoto’s design leads directly to this intense resource consumption, the researchers find, because miners have to play a game every time they mine a block, and making the game’s math equations harder doesn’t tamp down energy usage. While buying more expensive computer chips to perform the equations could in theory discourage some miners from participating, this hasn’t happened, according to the researchers.

Miners’ swelling electricity usage Even by conservative calculations, Bitcoin miners’ demand on the power grid has at least quadrupled since 2017.

In a theory paper, Ma, Gans, and Tourky argue that the Nakamoto system allows anybody to mine—granting free entry to whomever has the software to compete. If the system instead were to limit the number of miners, this would do more to reduce the amount of computing power, and electricity, that miners expend. Granted, that would require Nakamoto, if still alive, to make changes to the system.

Another trio of researchers—Chicago Booth’s Lin William Cong and Zhiguo He and George Mason’s Jiasun Li—say that Nakamoto’s system creates a wasteful energy arms race. Miners, to stay competitive, invest in computing capabilities by spending heavily on networks, as well as electricity and cooling. The investment may improve a miner’s chances of winning a computational competition. However, Nakamoto’s system is a zero-sum game, so if investment benefits one miner, it directly hurts the chances of other miners. 

But regardless of who wins a competition, or how many miners compete, or how much energy they use, one block will be added to the chain every 10 minutes, on average. The effort that goes in may grow ever larger, but the outcome remains the same. So the intense competition produces no benefit for the system or end users. “The arms race nature of this technology is what’s underlying the electricity usage,” says He. He and his coresearchers point out that risk-sharing considerations lead miners to work together in the form of large mining “pools.” The rise of mining pools is a financial innovation that improves miners’ risk sharing; but it enables miners in a pool to devote greater computation power, aggravating the arms race that consumes a tremendous amount of energy. (For more, see “Are blockchain mining pools problematic?” page 31.) Excessive competition, say the researchers, is an inherent part and problem of Nakamoto’s design.

But again, not all blockchains resemble Nakamoto’s original vision. Some competing cryptocurrencies are based on proof-of-stake, which validates transactions differently. The proof-of-stake system doesn’t involve races to solve mathematical puzzles, and thus there is no reward for doing so. Instead, the amount of cryptocurrency a miner holds serves as a validation of trustworthiness and functions something like a bond: a miner has to hold a certain amount of cryptocurrency before being allowed to verify and add blocks to the chain. Miners with more cryptocurrency have more mining power, and they make money simply through transaction fees. This system is still a public blockchain, not a private one, because it has a distributed ledger and no central authority. But because it doesn’t require many computers to run the same equations as they race to solve a puzzle, proof-of-stake uses less electricity. 

Ethereum is reportedly switching to a proof-of-stake system, in part to mitigate the environmental costs of proof-of-work’s massive electricity bills. 

McGill’s Fahad Saleh argues that such blockchains using proof-of-stake can be economically viable because this system can achieve consensus: miners agree that a block is valid and allow the blockchain to continue. It’s important, however, that proof-of-stake systems incorporate rules that require users to have a sufficient stake of cryptocurrency to participate in validation, he writes. Otherwise, users could get in the way of consensus to drive up their own rewards.

“My conclusions emphasize the need for developers to heed economic guidance when designing consensus protocols,” Saleh writes. If participants own a lot of the cryptocurrency being used to run the blockchain, they have an incentive to not tank the currency’s value.

Weak link #4: The cost of security

Sabotage is another looming issue, according to Booth’s Budish. He took a theoretical look at the economics and security of Nakamoto’s blockchain, focusing on the large relative cost required to make blockchain secure. In a series of equations, Budish lays out his concerns. 

He started by asking how much computational power miners are buying for tournaments. The answer, he says, is that it depends on how much miners are compensated. The more miners can make, the more they will mine. 

But for miners to stay honest, they have to know that they will make more money by mining than by sabotaging the system, Budish notes. The amount miners receive over time as they help to run and maintain the blockchain is known as a “flow,” while the one-time haul from an attack is known as a “stock.” “The recurring ‘flow’ payments to miners for running the blockchain must be large relative to the one-off ‘stock’ benefits of attacking it,” Budish writes. 

And to keep a blockchain secure, miners have to be convinced regularly—every 10 minutes, essentially, which is how often miners compete—to stay honest. If Bitcoin were to become a store of value and transactions were to grow, the temptation to sabotage the system would also grow, he points out. Users trying to maintain security would have to offer miners an increasingly large amount almost 150 times a day. 

Moreover, miners currently use expensive, specialized chips to participate in tournaments. But if the price of those were to fall, or if miners were able to rent chips rather than buy them, the cost of attacking would fall. It would then become more tempting for miners to sabotage the blockchain, steal bitcoins, and drive down values. These problems will get worse if the “Bitcoin blockchain gets economically important enough to tempt a saboteur,” Budish writes. 

Small-scale transfers made up the earliest bitcoin transactions—think black-market transactions, purchases by computer hobbyists, and intrafamily international transfers such as sending money to a child studying abroad. But as the value of Bitcoin grows, the system runs into trouble, according to Budish’s model, and he is skeptical it can really scale up. 

The issues Budish described have already been realized. In mid-May, a market participant with sufficient computing power was able to take control of the underlying ledger of the Bitcoin Gold market. Soon news site CoinDesk reported that at least four other cryptocurrencies had also been hit. 

Weak link #5: Regulation

While computer science has created a decentralized system of trust, regulation could offer peace of mind to wary market participants. But Nakamoto’s original description of blockchain didn’t mention regulation, and regulators have been slow to catch up with cryptocurrency trading and blockchain adoption, Cornell’s O’Hara says.

The regulatory outlook for all blockchain systems and cryptocurrencies is highly uncertain. A half dozen regulators in the United States, as well as their counterparts overseas, have issued a series of often contradictory announcements and enforcement actions that touch blockchain companies issuing tokens or operating a cryptocurrency exchange. The regulators don’t agree on whether cryptocurrencies should be legally considered commodities, currencies, or securities, which affects what rules cryptocurrency holders and issuers need to follow. 

Take initial coin offerings, or ICOs, a form of financing (or is it securities issuance?) that involves a company selling digital tokens that can be used to buy and sell things on a blockchain it is setting up. The company is often a start-up, but is sometimes an established corporation such as Kodak, which has announced it will use a blockchain to protect digital rights for images. While regulators at the US Securities and Exchange Commission have said ICOs are flouting regulations that apply to companies that issue shares, blockchain enthusiasts have snapped up the new tokens. 

Academics are clearly thinking about the regulatory implications of blockchain. More than 120 academic papers have been written on the subject in the past three years. And businesses have been just as prolific: analyzing 1,000 white papers describing companies’ ICO plans, University of Luxembourg’s Dirk A. Zetzsche and Linus Föhr, University of New South Wales’s Ross Buckley, and University of Hong Kong’s Douglas W. Arner found a vast gulf in disclosure levels between them and traditional securities documents. 

“Many ICOs are offered on the basis of utterly inadequate disclosure of information; more than half the ICO white papers are either silent on the initiators or backers or do not provide contact details, and an even greater share do not elaborate on the applicable law, segregation or pooling of client funds, and the existence of an external auditor,” they write.

Because existing regulations don’t address many of the issues, the researchers recommend that governments require more disclosures and lean on intermediaries, such as the exchanges where the tokens trade, to help enforce these standards. 

Cong and He also say regulators need to pay attention to the possibility of collusion in some blockchains. In a study, they look at permissioned blockchains—not private, but in which parties need permission to participate. This type of blockchain is popular in industry, for example to enable a retailer such as Wal-Mart to conduct business more easily, quickly, and safely..

http://bit.ly/2Rf52vj

[linabrigette]

Crypto Is Far From Dead, as These Scaling Projects Show

Michael J. Casey is the chairman of BTC News Today’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.

The following article originally appeared in BTC News Today Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.

——-

After a gloomy look at the state of cryptoland two weeks ago, it’s time for more of a glass-half-full assessment of the outlook.

As we’ve been hearing, one advantage of a bear market, when price is less of a distraction and competition for engineering talent isn’t so tight, is that serious projects can buckle down and start to develop real products. The question, then, is whether there are any serious projects for developers to work on?

The answer, resoundingly, is yes.

The big challenge for blockchain development is scaling: how to resolve the tradeoff between decentralization and efficiency that bitcoin and ethereum ran into once every node in the network had to process and record an ever-growing string of transactions.

Overcoming this scaling challenge, so that many more transactions can be processed without raising security risks or overly trusting specific record-keeping entities, is vital because it will pave the way for other improvements, including lower costs, more application-layer software products, and improved user experience.

The good news is that there’s a great deal of work going on. And whereas previous new blockchain projects that touted massive transaction-processing power were limited to “permissioned” networks, the work being done now goes to the heart of a more exciting scaling goal: a dramatic increase in the capacity of open, permissionless platforms.

Layer one and layer two

Much of the focus has been on the work being done among bitcoin and ethereum developers to resolve this challenge.

In bitcoin’s case, scaling was the subject of an ugly dispute between those favoring a block-size increase — an on-chain “Layer One” solution backed by advocates of breakaway cryptocurrency bitcoin cash – and those, such as the Bitcoin Core developers, who preferred off-chain “Layer Two” solutions such as the Lightning Network payment channels model.

While the block size increase solution at bitcoin cash deteriorated into an ugly battle among proponents, Lightning has shown significantly more progress. According to data from 1ml.com, the Lightning mainnet now counts more than 4,400 nodes and more than 13,500 payment channels, with those two metrics having increased by 10.45% and 43.5%, respectively, over the course of the same month. Even as the bitcoin price collapsed, work just continued building the network.

The ethereum community’s approach to scaling has been more cohesive than bitcoin’s, but it has also embraced a more ambitious agenda. The scaling roadmap includes a shift to proof-of-stake consensus under the Casper project, as well as ethereum’s own layer one and layer two solutions.

For layer one, the focus is on sharding, which splits the blockchain into different, interlinked portions, so that the processing requirements for each node can be lessened. And the layer two work includes Lightning-like state channels such as the Raiden Network and the “child chain” model on which Plasma is based.

The complexity of these amendments, as well as the fact that some of these changes, especially on-chain protocol adjustments, require coordination among ethereum’s relatively large user and developer base, has meant that target dates for launch of the various stages have been pushed back repeatedly. However, a new plan aims to accelerate the introduction of the changes.

In any case, the wider blockchain community should be thankful to ethereum for the enormous amount of thought and planning that has gone into these ambitious solutions. The Github repo for ethereum sharding work, for example, now stands as a resource for all to work on this promising solution.

Standing on the shoulders of giants

It might seem a bit unfair that, as these more established blockchain communities have worked hard at these solutions, newcomers have been able to build on some of their ideas and launch new permissionless protocols from scratch that incorporate these and other scaling solutions.

There’s still a lot of catching up to do – both in terms of network size and developer engagement. As BTC News Today’s newly created Crypto Economics Explorer, or CEX, shows, bitcoin and ethereum are well ahead of all other blockchains on both those metrics.

Some of these projects have been somewhat below the radar, partly because they were excluded from the ICO mania. But that hasn’t stopped them from building and, in some cases, raising decent money – if more quietly than others.

Take Algorand. The proof-of-stake blockchain, built by Turing Award-winning MIT computer scientist Silvio Micali, uses a randomly selected committee system for validating blocks that saves on computing power and aspires to achieve a massive three million confirmed transactions per second serving 4 billion users – capacity that’s many, many orders of magnitude greater than both bitcoin and ethereum.

In October, the Algorand team raised $62 million from what it described as a “broad global investment group representing the venture capital, cryptocurrency and financial services communities.” This week it lined up a further $100 million commitment from venture firm Algo Capital to fund app developers working on top of the Algorand platform.

Then there’s Devvio, which is targeting mainstream corporate and enterprise users and is preparing a coming-out presentation for the Digital Money Forum at the Consumer Electronics Show in Las Vegas in January.

Founded in Albuquerque by robotics pioneer Tom Anderson, Devvio has filed a number of patents for a protocol that took a lot of the ideas generated elsewhere on sharding, stablecoins, identity and custody solutions. Devvio claims to have achieved a whopping 8 million transactions per second as a benchmark result in testing its platform. Note: these claims are yet to be subjected to extensive peer review and Devvio has not published results of planned security audits.

Another under-discussed permissionless blockchain is that of Nexus Earth, whose multi-layered consensus process, known as Tritium, is designed to increase throughput by giving nodes different tasks to undertake within that process rather than doing all of them.

Nexus says that a recent test by founder and chief architect Colin Cantrell achieved throughput of almost 200,000 data requests per second and transactions of more than 4,000 per second.

While Nexus’ transaction processing claims are much more modest than those of Algorand and Devvio, they are well above those of bitcoin and ethereum, which handle seven and 15 transactions a second, respectively, and four times that of Ripple at 1,500 per second.

Importantly, Nexus is also tackling a secondary problem of network scaling. Via the involvement of former Cisco senior engineer Dino Farinacci, it is integrating the Locator/ID Separation Protocol, or LISP, which allows for identity interoperability across devices. This could engage Nexus in solutions aimed at bringing blockchain-based security to decentralized Internet of Things networks.

Cashed-up ICO recipients

Other, higher-profile projects are also hard at work developing large-scale blockchain solutions.

EOS, led by block.one, attracted some bad press after its launch when elections of its 21 block producers caused tension in the community, but its record-breaking ICO, which raised $4 billion, has left it with a massive war chest with which to advance the protocol and fund application development. BTC News Today’s CEX shows a relatively large network and developer pool working on EOS.

Cardano, led by early ethereum founder Charles Hoskinson, is now developing a variety of scaling solutions that draw from ideas developed elsewhere. While it is underperforming in terms of the developer activity shown on the CEX, Cardano has managed to spur a significant academic interest in its platform, in part because of an aggressive research and development fund led by the holding company, IOHK.

Beyond these specific blockchain platforms, solutions aimed at cross-asset interoperability are also pushing ahead with development, posing an alternative vision for achieving scalability across different blockchains. These include Polkadot, led by another ethereum founder, Gavin Wood.

While the collapse in crypto prices was not good news for ICO-funded projects such as Cardano, Polkadot and EOS, research by BitMEX showed that many of them remain well-capitalized because they managed their treasuries proactively following the big fundraises of last year. So long as these projects don’t fall afoul of securities regulations, which might force them to return money to investors, these funds will continue to help pay for development, both of protocols and of applications working on top of them.

It’s a fool’s game to try to predict which of these solutions will succeed and which will fail. But it seems that one or more of them are poised to deliver some real advances in scaling and usability.

Far from seeing the death of crypto, we may be entering its most exciting phase.

Construct 2017 image via BTC News Today archives.

source: https://ift.tt/2CkfXLV

The post Crypto Is Far From Dead, as These Scaling Projects Show appeared first on BTC News Today.

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[click2watch]

Crypto Is Far From Dead, as These Scaling Projects Show

Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.

——-

After a gloomy look at the state of cryptoland two weeks ago, it’s time for more of a glass-half-full assessment of the outlook.

As we’ve been hearing, one advantage of a bear market, when price is less of a distraction and competition for engineering talent isn’t so tight, is that serious projects can buckle down and start to develop real products. The question, then, is whether there are any serious projects for developers to work on?

The answer, resoundingly, is yes.

The big challenge for blockchain development is scaling: how to resolve the tradeoff between decentralization and efficiency that bitcoin and ethereum ran into once every node in the network had to process and record an ever-growing string of transactions.

Overcoming this scaling challenge, so that many more transactions can be processed without raising security risks or overly trusting specific record-keeping entities, is vital because it will pave the way for other improvements, including lower costs, more application-layer software products, and improved user experience.

The good news is that there’s a great deal of work going on. And whereas previous new blockchain projects that touted massive transaction-processing power were limited to “permissioned” networks, the work being done now goes to the heart of a more exciting scaling goal: a dramatic increase in the capacity of open, permissionless platforms.

Layer one and layer two

Much of the focus has been on the work being done among bitcoin and ethereum developers to resolve this challenge.

In bitcoin’s case, scaling was the subject of an ugly dispute between those favoring a block-size increase — an on-chain “Layer One” solution backed by advocates of breakaway cryptocurrency bitcoin cash – and those, such as the Bitcoin Core developers, who preferred off-chain “Layer Two” solutions such as the Lightning Network payment channels model.

While the block size increase solution at bitcoin cash deteriorated into an ugly battle among proponents, Lightning has shown significantly more progress. According to data from 1ml.com, the Lightning mainnet now counts more than 4,400 nodes and more than 13,500 payment channels, with those two metrics having increased by 10.45% and 43.5%, respectively, over the course of the same month. Even as the bitcoin price collapsed, work just continued building the network.

The ethereum community’s approach to scaling has been more cohesive than bitcoin’s, but it has also embraced a more ambitious agenda. The scaling roadmap includes a shift to proof-of-stake consensus under the Casper project, as well as ethereum’s own layer one and layer two solutions.

For layer one, the focus is on sharding, which splits the blockchain into different, interlinked portions, so that the processing requirements for each node can be lessened. And the layer two work includes Lightning-like state channels such as the Raiden Network and the “child chain” model on which Plasma is based.

The complexity of these amendments, as well as the fact that some of these changes, especially on-chain protocol adjustments, require coordination among ethereum’s relatively large user and developer base, has meant that target dates for launch of the various stages have been pushed back repeatedly. However, a new plan aims to accelerate the introduction of the changes.

In any case, the wider blockchain community should be thankful to ethereum for the enormous amount of thought and planning that has gone into these ambitious solutions. The Github repo for ethereum sharding work, for example, now stands as a resource for all to work on this promising solution.

Standing on the shoulders of giants

It might seem a bit unfair that, as these more established blockchain communities have worked hard at these solutions, newcomers have been able to build on some of their ideas and launch new permissionless protocols from scratch that incorporate these and other scaling solutions.

There’s still a lot of catching up to do – both in terms of network size and developer engagement. As CoinDesk’s newly created Crypto Economics Explorer, or CEX, shows, bitcoin and ethereum are well ahead of all other blockchains on both those metrics.

Some of these projects have been somewhat below the radar, partly because they were excluded from the ICO mania. But that hasn’t stopped them from building and, in some cases, raising decent money – if more quietly than others.

Take Algorand. The proof-of-stake blockchain, built by Turing Award-winning MIT computer scientist Silvio Micali, uses a randomly selected committee system for validating blocks that saves on computing power and aspires to achieve a massive three million confirmed transactions per second serving 4 billion users – capacity that’s many, many orders of magnitude greater than both bitcoin and ethereum.

In October, the Algorand team raised $62 million from what it described as a “broad global investment group representing the venture capital, cryptocurrency and financial services communities.” This week it lined up a further $100 million commitment from venture firm Algo Capital to fund app developers working on top of the Algorand platform.

Then there’s Devvio, which is targeting mainstream corporate and enterprise users and is preparing a coming-out presentation for the Digital Money Forum at the Consumer Electronics Show in Las Vegas in January.

Founded in Albuquerque by robotics pioneer Tom Anderson, Devvio has filed a number of patents for a protocol that took a lot of the ideas generated elsewhere on sharding, stablecoins, identity and custody solutions. Devvio claims to have achieved a whopping 8 million transactions per second as a benchmark result in testing its platform. Note: these claims are yet to be subjected to extensive peer review and Devvio has not published results of planned security audits.

Another under-discussed permissionless blockchain is that of Nexus Earth, whose multi-layered consensus process, known as Tritium, is designed to increase throughput by giving nodes different tasks to undertake within that process rather than doing all of them.

Nexus says that a recent test by founder and chief architect Colin Cantrell achieved throughput of almost 200,000 data requests per second and transactions of more than 4,000 per second.

While Nexus’ transaction processing claims are much more modest than those of Algorand and Devvio, they are well above those of bitcoin and ethereum, which handle seven and 15 transactions a second, respectively, and four times that of Ripple at 1,500 per second.

Importantly, Nexus is also tackling a secondary problem of network scaling. Via the involvement of former Cisco senior engineer Dino Farinacci, it is integrating the Locator/ID Separation Protocol, or LISP, which allows for identity interoperability across devices. This could engage Nexus in solutions aimed at bringing blockchain-based security to decentralized Internet of Things networks.

Cashed-up ICO recipients

Other, higher-profile projects are also hard at work developing large-scale blockchain solutions.

EOS, led by block.one, attracted some bad press after its launch when elections of its 21 block producers caused tension in the community, but its record-breaking ICO, which raised $4 billion, has left it with a massive war chest with which to advance the protocol and fund application development. CoinDesk’s CEX shows a relatively large network and developer pool working on EOS.

Cardano, led by early ethereum founder Charles Hoskinson, is now developing a variety of scaling solutions that draw from ideas developed elsewhere. While it is underperforming in terms of the developer activity shown on the CEX, Cardano has managed to spur a significant academic interest in its platform, in part because of an aggressive research and development fund led by the holding company, IOHK.

Beyond these specific blockchain platforms, solutions aimed at cross-asset interoperability are also pushing ahead with development, posing an alternative vision for achieving scalability across different blockchains. These include Polkadot, led by another ethereum founder, Gavin Wood.

While the collapse in crypto prices was not good news for ICO-funded projects such as Cardano, Polkadot and EOS, research by BitMEX showed that many of them remain well-capitalized because they managed their treasuries proactively following the big fundraises of last year. So long as these projects don’t fall afoul of securities regulations, which might force them to return money to investors, these funds will continue to help pay for development, both of protocols and of applications working on top of them.

It’s a fool’s game to try to predict which of these solutions will succeed and which will fail. But it seems that one or more of them are poised to deliver some real advances in scaling and usability.

Far from seeing the death of crypto, we may be entering its most exciting phase.

Construct 2017 image via CoinDesk archives.

!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n; n.push=n;n.loaded=!0;n.version='2.0';n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0];s.parentNode.insertBefore(t,s)}(window, document,'script','//connect.facebook.net/en_US/fbevents.js'); fbq('init', '239547076708948'); fbq('track', "PageView"); This news post is collected from CoinDesk

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[ormlacom]

Decentraland shows the potential of blockchain and VR combined

Something every woman should know - WHY MEN LIE!

GUEST:

Blockchain-based virtual reality universe Decentraland is holding its first property auction today. The virtual world is a social space linked to crypto coin-based transactions. You can buy a patch of virtual land, build something on it, share that experience with friends and family, or even turn it into a profitable business.

Decentraland’s launch is emblematic of a kind of showdown happening in the VR world at the moment. As virtual reality headsets and mobile VR become more readily available and affordable, big tech companies such as Facebook and Microsoft are taking strides to claim what some see as an unfair share of an industry destined to be worth over $70 billion in a few years.

Proponents of decentralization say centralized VR platforms such as Facebook Spaces and Microsoft’s AltspaceVR will give their owners too much control over the content users consume.

Decentraland uses blockchain and smart contracts to make sure that users maintain exclusive control over their virtual worlds. Users on the platform will be able to create virtual neighborhoods and towns, populate them with unique virtual objects, and use them to meet with their online community for parties, social gatherings, corporate meetings, education, and other events, the company says.

“The ownership of items is cryptographically established on a smart contract, which prevents anyone from stealing or altering users’ property,” Ariel Meilich, Project Lead at Decentraland, explained. “Conversely, a centralized platform can very easily print more in-game currency, revoke item ownership, or even delete users.”

Above: Some possibilities for life in Decentraland

Decentraland held its initial coin offering (ICO) earlier this year, raising a total $25 million from 4,000 investors for its MANA tokens. The number of token holders — an indication of the number of people who will be buying virtual land in the platform’s first property auction today — has since doubled.

Users can create content for their virtual worlds with Decentraland’s online land editor. But they’ll have to wait until early 2018, when Decentraland releases the web client, before they can publish content on their land parcels and make them available to visitors.

Since Decentraland land parcels are limited in number, their value will increase if the platform gains traction. Virtual land owners can monetize their worlds by enabling advertisers to post ads or by renting it to others in exchange for cryptocurrencies. With blockchain and smart contracts handling all payments, there’s no need for a central authority to broker the deal between land owners and their customers. This ensures that users get fully rewarded for the profit their imaginary world generates.

“People will initially be uploading static content. The first use cases will be creative building and the trading of collectible items, as well as social experiences facilitated by voice and text chat,” said Meilich. “Over time we will implement scripting to allow for games and more dynamic applications.”

While blockchain will solve some of the problems that centralized social VR platforms pose, it has its own challenges to overcome. Blockchain currently faces a scale problem in storing high volumes of transactions. In recent weeks, high traffic on CryptoKitties clogged the Ethereum blockchain, which Decentraland also relies on. That’s why Decentraland only uses the Ethereum blockchain to store the ownership and exchange of VR land and content. The actual content uses the InterPlanetary File System (IPFS), a decentralized alternative to cloud storage.

Decentraland will also have trouble dealing with abuse. Companies such as Facebook and Google, which have total control over the content they host and have thousands of moderators on their payroll, are having a hard time identifying and removing abusive content.

“We cannot remove it,” Meilich said. “But people may choose their content filters and choose whether to see what curators deem to be offensive, pornographic, violent, etc.”

For the moment, there’s hope that a shared economy, where everyone shares in the costs, benefits, and reputation of the platform, will encourage the community to strive for the overall health of the content.

Decentraland is not the only company that is working on the intersection of VR and blockchain. CEEK VR, a company that manufactures VR hardware and runs a platform for hosting VR events, is using blockchain to enable artists to extend their reach and directly connect with thousands of fans across the world in VR performances.

With CEEK, singers and stage artists can host live VR versions of their concerts, enabling fans from across the world to enjoy the experience without physically attending the event. However, instead of using a centralized registration and payment platform, CEEK provides artists with tools to issue and sell their own crypto tokens, which fans can purchase to attend a VR concert.

While CEEK’s VR platform has found appeal among artists such U2, Katy Perry, and Lady Gaga, anyone with talent and skill can use it to create and monetize VR experiences. For instance, a martial arts expert can launch a VR class on CEEK and sell admission to it through CEEK tokens. Meanwhile, developers can create VR environments and offer them as venues in CEEK’s blockchain marketplace. CEEK uses smart contracts to automatically distribute token revenue among different stakeholders that contribute to an event.

VibeHub, another decentralized VR marketplace, enables users to buy and sell various VR content on the blockchain with its VIBE token. This can be live VR events such as concerts, 360-degree videos, teaching lessons, and social meetups among others.

Like Decentraland, these blockchain VR platforms are still in their early stages. Time will tell whether blockchain’s decentralized organization model will give them the traction they need to take the lead from Facebook and other tech giants.

Ben Dickson is a software engineer and the founder of TechTalks, a blog that explores the ways technology is solving and creating problems. He writes about technology, business and politics.

The PC Gaming channel is presented by Intel®'s Game Dev program.

Reverse Phone - People Search - Email Search - Public Records - Criminal Records. Best Data, Conversions, And Customer Suppor

[douchebagbrainwaves]

EVERY FOUNDER SHOULD KNOW ABOUT PROBLEMS

My test was to think of intelligence as inborn is that people trying to measure it have concentrated on the aspects of economic inequality where the cause of poverty is the same as the root cause of variation in income is a sign that something is broken? At Yahoo, user-facing software was controlled by product managers and designers the final step, by translating it into code. I'm not saying that if you let Henry Ford get rich, he'll hire you as a waiter at his next party. Somehow the idea of making really large amounts of money. When people come to you with a problem and you have to sound intellectual. All the hackers I know, managed to be mistaken. An organization that wins by exercising power starts to lose deals. That was not, probably, how McCarthy thought of it as a personal insult when someone from the other team from scoring is considered to have played a perfect game.1 Right now, VCs often knowingly invest too much money at the series A stage. And if you weren't rich, you took the omnibus or walked.

Microsoft.2 Great hackers also generally insist on using open source software. In that case, stay on a main branch becomes more than a way to please other people. It's so cheap to start, this conflict goes away, because founders can start them younger, when it's rational to take more risk, and can start more startups total in their careers. When you reach the point where 90% of a group's output is created by 1% of its members, you lose big if something whether Viking raids, or central planning drags their productivity down to the average Frankish nobleman in 800, and report back to us. Art History 101.3 Hacker News and our application system.4 That way we can avoid applying rules and standards to intelligence that are really meant for wisdom. Whereas the independence of the townsmen allowed them to keep whatever wealth they created.5 These initial versions can be so pervasive that it takes a great effort to overcome it. Then you could see in the house, the herds, and the number one thing they have in common. The difference is that wise means one has a high average outcome.

Editorialists ask. Bottom-up programming suggests another way to convince investors to let you do it? If circumstances had been different, the people running Yahoo might have realized sooner how important search was.6 But that won't eliminate great variations in wealth would mean eliminating startups.7 When I heard this, I thought he was a complete idiot.8 You can see wealth—in buildings and streets, in the original sense, is something you write to try to figure something out. The more of your application you can push down into a language for writing that type of application, the more we'll see multiple companies doing the same thing ourselves.9 Which is precisely why we hear ever more about it.10 Society as a whole ends up poorer. But startups aren't like that. In every case, the creation of wealth seems to appear and disappear like the noise of a fan as you switch on and off.11

Central France in 1100, off still feudal. Or consider watches. You have to be nice to, you have two options: work at home, hackers can arrange things themselves so they can get the most done. And they think of it as normal to have a remedial character. The idea is basically that you sort search results not in order of how much money Yahoo would make from each link. It consists of some things that are good and some that are historical trends with immense momentum and others that are random accidents.12 The place to look for what I learned from Paul Buchheit: it's better to make a deep point here about the true nature of wisdom, just to make sure they're ok guys. I don't think there's any limit to the number of failures and yet leave you net ahead.13 Thanks to Trevor Blackwell, Jessica Livingston, and Jackie McDonough for reading drafts of this.

One of the things pinned up on our bulletin board was an ad from IBM.14 Brandeis was a product of this period. But Apple created wealth, in the sense that the authors didn't know when they started exactly what they were trying to get people to start calling them portals instead of search engines. This isn't true in all fields. And this is the route to well-deserved obscurity. So it's not just fastidiousness that makes good hackers avoid nasty little problems is that you make what you measure.15 That's why Yahoo as a company has sunk into technical mediocrity and recovered.

And of course if Microsoft is your model, you shouldn't be looking for, most of the time, perhaps most of the time, and runtime. You'd seem a barbarian if you behaved that way today. Starting in the tenth and eleventh centuries, petty nobles and former serfs banded together in towns that gradually became powerful enough to appropriate it.16 If Lenin walked around the offices of a company like Yahoo or Intel or Cisco, he'd think communism had won.17 Why?18 It's hard to predict what will; often something that seems interesting at first will bore you after a month. Understanding your users is part of what makes them good hackers: when something's broken, they need to get a work visa in the US, without an undergraduate degree—but tests like this will matter less and less.19

Though useful to present-day languages, if they'd had them. When you look at the history of stone tools, technology was already accelerating in the Mesolithic. We think of the core language semantics.20 The design paradox means they're choosing more or less a subset of potential users, or satisfying a subset of the needs of a subset of the needs of a subset of potential users, or satisfying a subset of hash tables where the keys are vectors of integers. Whereas if you're doing the kind of productivity that's measured in lines of code. But between the two. He knows what happened in every deal in the Valley. Extraordinary devotion went into it, and most decent hackers are capable of that. As big a deal as the Industrial Revolution was well advanced.

Notes

Joshua Schachter tells me it was true that being part of wisdom. This is actually a computer. See, we can teach startups a lot like meaning.

We're only comparing YC startups, just that if colleges want to believe this much. If they're on the order of 10,000 sestertii for his freedom Dessau, Inscriptiones 7812. But you couldn't do the equivalent thing for founders, HR acquisitions are viewed by acquirers as more akin to hiring bonuses.

The point where things start to rise again. The most striking example I know of no Jews moving there, and that's much harder. I'm convinced there were about the origins of the things attributed to them.

If you ask parents why kids shouldn't swear, the police treat people more equitably. Please do not take the form of bad idea. In Boston the best day job, or at least should make what they do.

You have to do this right you'd have to deliver these sentences as if you'd invested at a pre-money valuation of the first phase of the most part and you can probably write a book about how things are different. The only people who get rich by creating wealth—university students, heirs, professors, politicians, and there are few who can say I need to fix once it's big, messy canvases that philistines see and say that's not art because it looks like stuff they've seen in the beginning. None at all. No, and there are no false negatives.

It tipped from being this boulder we had, we'd have understood why: If they were friendlier to developers than Apple is now very slow, but when people in return for something that conforms with their company made money from it, but they can't teach students how to value valuable things.

Everyone else was talking about art, they made, but investors can get done before that. There is a qualitative difference in investors' attitudes. I believe Lisp Machine Lisp was the least VC-like. So if you're attacked in this they're perfect.

By writing library functions. If you want as an example of computer security, and a little about how things are going well, but not in the early 90s when they buy some startups and not fundraising is a bridgehead. Oddly enough, even if they were to work than stay home with them in advance that you were expected to do good work and thereby earn the respect of their name, but that it's boring, we don't want to give them sufficient activation energy required to notice when it's their own interest.

On the other by adjusting the boundaries of what you really want, like warehouses. They can lead to distractions even more vice versa: the editor, which would be vulnerable both to attack the A P successfully defended itself by allowing the unionization of its identity. The real danger is that you'll have to resort to in order to pick the words we use the word wealth, seniority will become correspondingly more important.

It did not start to get going, and so don't deserve to keep their wings folded, as accurate to call those before a consortium of investors want to take action, go ahead. Gauss was supposedly asked this when comparing techniques for discouraging stupid comments instead.

I've learned about VC inattentiveness. The time it still seems to them unfair that things don't work the same thing. Actually he's no better or worse than close supervision by someone else. Mozilla is open-source but seems to have them soon.

107. The key to wasting time building it. IBM makes decent hardware. They seem to have a browser and get pushed down by new arrivals.

There will be interesting to 10,000 sestertii, for example. Some translators use calm instead of just Jews any more than others, and only one restaurant left on the East Coast VCs. There are circumstances where this is so new that it's no longer written in Lisp, they may introduce startups they like to fight.

We once put up with only a few percent from an eager investor, lest that set an impossibly high target when raising additional money. The US is the most successful founders is exaggerated now because it's a hip flask.

That's probably true of nationality and religion too. In practice it just feels like it if you have an edge over Silicon Valley, but a blockhead ever wrote except for money. You can get rich by creating wealth—that an eminent designer is any good at talking about why something isn't the last 150 years we're still only able to. It's true in fields that have it as a percentage of startups as they are in research departments.

I'm not saying it's impossible without a time before photography had a broader meaning.

This is a way to explain that the highest returns, like architecture and filmmaking, but we decided it would do for a startup could grow big in revenues without including the numbers from the success of their works are lost.

Many of these companies unless your last round of funding.

Garry Tan pointed out that taking time to come if they seem pointless. Considering yourself a scientist. If you want to sell, or to be very hard to do this are companies smart enough to guarantee good effects.

Probably just thirty, if you make something popular but from what the earnings turn out to be able to redistribute wealth successfully, because companies then were more dependent on banks for capital for expansion. The point of view anyway. Founders are often unknowns. Once again, that suits took over during a critical point in the sense of mission.

[hub-pub-bub]

The MIT Media Lab is located in a classically modern building. At night, its glossy white walls, floors, and ceilings shine through its glass perimeter to cast a futuristic glow onto the surrounding streets.

But the part of the building that best reflects the Media Lab’s forward-thinking spirit is actually a picture of the past. Dominating the hallway of the Amherst Street entrance is a towering, three-part portrait showing the eccentric Brookline living room of legendary MIT staffer Marvin Minsky.

Marvin Minsky's living room

Many people consider Minsky, who passed away last year, the father of artificial intelligence. His influence spans from his 1951 invention of the first neural net machine at Harvard to the pioneering work currently being done at MIT’s Computer Science and Artificial Intelligence Laboratory (which Minsky co-founded).

For most of Minsky’s career, however, progress in AI was limited to research papers and experimental, one-off prototypes. Today, the hype surrounding AI’s commercial applications has many people insisting it will be the driver of the next big tech wave, creating systems that aid (or replace) workers in every sector of the economy.

“I think machine intelligence represents a once in a lifetime opportunity for entrepreneurs,” said Vivjan Myrto, Co-Founder of AI-focused VC firm Hyperplane Venture Capital. “It also represents a massive opportunity to invest in technologies that are solving really large-scale problems.”

Boston has long been known for its hard tech contributions, but that hasn’t always translated into the creation of market-leading tech giants. Even more discouragingly, in several cases, some of the city’s most promising startups have moved to California as they’ve scaled.

Rob May, Founder of AI-driven virtual assistant company Talla, believes Boston tech companies have had a more conservative approach to the market in the past, a mindset that has sometimes taken its toll. But May thinks AI’s emergence will play out differently than previous tech waves, and he’s not alone.

In fact, people within the Boston tech community are almost uniformly optimistic that Boston is as well-positioned as anywhere to produce the next great companies built around AI solutions.

A History of Intelligence

The colorful portrait of Minsky’s room serves as a vibrant reminder that the city of Boston is the birthplace of much of humanity’s knowledge of AI.

As progress in the field has quickened, many local and state governments have pledged support for AI research and implementation. But in Boston, AI isn’t the latest fad, it’s a long-standing tech frontier we’ve been involved with since its inception.

“We’ve been doing this since way before it was the next big thing in software, since way before it was cool,” said Catherine Havasi, a longtime member of MIT’s Media Lab who founded text analytics spinoff Luminoso in 2010.

Boston’s experience with AI gives local companies several advantages when developing AI solutions that can actually add value in a business environment, which is more difficult than many people think.

Machine learning techniques, for example, use data to train systems to complete a range of tasks including object recognition and detecting credit card fraud. Although these systems don’t need to be painstakingly programmed for each task, they’re often only as effective as the datasets going into them, thus requiring companies to maintain collections of clean, well-labeled data to optimize a system’s performance.

Deep learning, a subset of machine learning that has exploded in popularity over the last five years, typically requires even more expertise to work effectively. Deep learning systems rely on layers of connected processing units to extract insights from data. Getting a successful output from a deep learning system requires users to adjust the weights between units in a technique that’s often more of an art than a science.

That means trying to use deep learning systems in a new space can be next to impossible if you don’t have a mathematical understanding of how they work.

“Whenever there are algorithms or datasets being used, the people who created those things are going to know how to use them the best because they understand things at a deeper level,” Havasi said. “If you run into a problem, you have to go under the hood and make changes, and the people who truly understand these things are always going to have an advantage.”

That advantage is a big reason why Myrto describes Hyperplane as a very “founder-centric” VC firm.

“In AI, you have to be very team-focused and vision-focused,” Myrto says. “The technical teams are absolutely crucial. You need to have a team that understands the technology in a way that others don’t. At the end of the day, that’s what we’re investing in, really outstanding engineers.”

If building successful AI companies requires intellectual capital, then Boston should feel pretty good about its prospects. In their 2015 pitch to bring General Electric to the area, Boston officials described the city as “the world’s most sustainable source of exceptional talent.’’

There are more than 50 colleges and universities in the greater Boston area. According to the state’s 2017 Budget and Policy Center report, Massachusetts has the highest percentage of workers holding bachelor’s degrees of any state in the country.

When it comes to AI, MIT is unquestionably one of the leading research entities in the world, but other schools in the area such as Harvard, Northeastern, Boston University, Tufts and UMass Amherst also have AI-related programs and research labs that have produced a host of intriguing spinoffs.

“Boston really has an incredible heritage of engineers that are focused on these heavy-lifting technologies,” Myrto said. “Boston has always been on the forefront of solving the biggest problems in the world with frontier technologies.”

An Improving Tech Ecosystem

All that brainpower provides only fleeting benefits to Boston, however, if entrepreneurs feel the need to relocate before applying their research and ideas to the private sector. Strong tech ecosystems also require ample support structures for entrepreneurs, and it’s recent improvements in that area in particular that have people bullish on Boston’s future.

Habib Haddad, the president and managing director of MIT’s new investment group the E14 Fund, is one of those people. Haddad said as recently as five or ten years ago, there were several factors that made places like New York and San Francisco more appealing to entrepreneurs than Boston, and they had nothing to do with the demoralizing effects of the snow.

“Great companies like Facebook and Dropbox moved quickly to the other coast because some key elements just weren’t here,” said Haddad. “Now city officials, the startup community, investors, and universities are all saying, ‘We’re not going to miss out on the AI revolution the way we missed out on the consumer revolution.’”

There’s an old-fashioned mindset that academic research should focus on long-term, fundamental breakthroughs at the expense of more commercially applicable advances. In the past, that kind of thinking was certainly more pervasive in Cambridge than in Palo Alto.

Now the proliferation of university-based incubators in Boston is sending a clear message that schools support entrepreneurship. The emergence of university-linked venture capital funds such as UMass Amherst’s Maroon Venture Partners Fund, Boston College’s SSP Venture Partners, and MIT’s E14 Fund further blur the lines between the education and business sectors.

The number of accelerators in the city has also grown over the last ten years, led by groups like Techstars, which has helped local companies raise more than $750 million since it came to Boston, and MassChallenge, which has supported more than 1,200 companies since it launched with money from local officials in 2010.

And many research labs in the area now have corporate partnerships that allow researchers to consider real-world problems instead of the high-level work encouraged by more traditional funding sources like the National Science Foundation. Those partnerships offer a huge advantage in overcoming two of the biggest hurdles of starting an AI company: Determining product-market fit and securing access to large amounts of data.

“With AI, you see people building really cool technologies without identifying a problem, so they’re always trying to find a beachhead,” Myrto said. “But the research labs are interacting way more with investors, and that shift has happened in the last three to five years. They’re interested in building companies from this research. So we’ve seen a shift in mindset, and it’s accelerating big time now.”

Tech Giants Take Notice

One way of looking at this shift is that Boston universities are finally opening their doors to the private sector. The other way to interpret it is that the private sector finally beat their doors down.

GE’s decision to move its world headquarters to the Seaport District is just the latest example of an industrial giant establishing a connection to the city. All around Boston, companies are competing to gain access to the city’s cutting-edge research and talent pool, often elbowing out space for themselves in the process.

This summer Amazon announced a new office along Fort Port Channel, literally next to the space GE has claimed for its flashy new headquarters. Google and IBM have also expanded their local offices in the last three years. Other tech behemoths such as Facebook, Microsoft, and Twitter have made Kendall Square one of the most densely packed tech hubs in the country.

Many of these companies’ local branches are focused on AI. Amazon’s Cambridge office has been deeply involved with the company’s intelligent voice assistant Alexa. IBM has a local lab which seems to focus exclusively on AI, and last month the company announced a 10-year, $240 million investment in the new MIT-IBM Watson AI Lab.

“When you talk about industrial technologies and industrial AI, the race is ours to lose for sure,” Myrto said. “Soon that’ll spread to every industry. GE, Siemens already know this, that’s why they’ve been here. Boston’s background in industrial knowledge is really deep.”

These big companies are also competing for attention, forming partnerships with local tech groups, hosting events and creating their own events in an effort to position themselves as thought leaders. Such events give Boston’s growing tech community a way to keep its small-town feel and provide newcomers with a way to connect with peers over free drinks.

“We’re seeing enormous amounts of growth if you look at the number of events that are happening in Boston, especially around AI,” May said. “The support we’re getting is great.”

But partnerships and free drinks, of course, aren’t all it takes to be successful.

Follow the Money

CB Insights has tracked a rise in Boston VC funding over the last five years (and early 2017 results follow that trend), addressing a weakness that had major implications for area startups in the past. If advances in AI methodologies and computational resources had aligned fifteen years ago, Boston entrepreneurs looking to start companies would’ve had a much more difficult time than today.

Havasi, for instance, said Luminoso had some trouble securing seed funding in Boston in 2010.

“There were certainly funding gaps,” Havasi said. “There wasn’t as much early-stage venture capital or AI venture capital in Boston when we started. That has changed tremendously both across the country and in Boston. Now there are a lot of funds that are very savvy about AI, and that’s fantastic.”

Indeed, when the folks at NextView Ventures sat down to update their excellent Hitchhiker's Guide to Boston Tech last year, they had a lot of additions to make to the investor section. AI companies seeking their first round of funding have been helped by a number of angel groups that have recently institutionalized, including Converge Venture Partners and Half Court Ventures, which May started with Todd Earwood last year.

Myrto said the founders of Hyperplane saw a gap in early-stage AI investing in the area when they launched their VC firm two years ago.

“We saw an opportunity with big data and machine learning in Boston seed investing,” Myrto said. “The thesis of Hyperplane from the very beginning was about machine intelligence and systems intelligence, and we believe Boston is one of the best places in the world to invest in enterprise systems intelligence.”

New firms in the area such as Pillar and Underscore.vc have invested in companies offering AI-driven solutions, with others such as Glasswing Ventures (founded in 2016) and Hyperplane (founded in 2015), focusing almost exclusively on AI.

The growing number of Boston VC firms comes as every firm scrambles to adopt an AI investing strategy. More established VC firms in the area including NextView Ventures, Boston Seed Capital, and Flybridge Capital Partners have also counted AI-driven local companies among their recent investments.

And, perhaps most importantly, we’re seeing investment strategies increasingly veer from the conservative reputation Boston earned in the past. May described west coast investors as more aggressive, helping companies raise large rounds in order to achieve heavy market share, then using their balance sheets as strategic weapons.

“There are pros and cons to that strategy, but it also leads to really big companies at the end of the day,” May said. “I think Boston VCs think less that way typically, and our culture always needs more people thinking big. But you’re seeing some companies raise a lot of money now, and there are some investors that are very west coast-minded.”

Boston’s shortcomings in this area have been talked about a lot. Often they’re referenced as a mistake not to be repeated. Boston investors heading new firms such as Pillar'sJaime Goldstein and Jeff Fagnan from Accomplice (which split from Atlas Venture a few years ago) are among those who have talked about the importance of building large, sustainable companies in the area.

Myrto, who describes Hyperplane as very “west coast-minded,” said he’s seen a change in investor mindsets as well.

“The new generation of venture capital is certainly more inclusive and risk-taking, and those two ingredients are important to having a sustainable ecosystem here,” Myrto said. “Being a little more aggressive in the way we look at technologies and a little more futuristic in the way we see the world is a key ingredient.”

Riding the AI Wave

The race to produce great AI companies has, of course, already begun. Haddad guesses we’re in the “second or third inning” of AI perforating every industry.

Boston has already seen many AI startups gain traction, in some cases helped by recent eye-popping funding rounds. In a three week stretch of March, for instance, DataRobot's predictive analytics platform helped it raise a $54 million Series C and Kensho's financial analysis software earned the company a $50 million Series B.

Big funding rounds are becoming increasingly common in the area. Boston startups are working to overcome some of the largest technical barriers holding AI back, and they’re attracting attention across a wide variety of industries in the process.

Examples of startups working to increase AI’s potential impact include Lightmatter and Forge.ai. Lightmatter is focused on using light, rather than electricity, to improve computational speed and efficiency for AI operations. Forge.ai helps businesses use unstructured data in machine learning systems.

Havasi’s Luminoso, meanwhile, uses AI to analyze customer feedback in 13 languages to give companies insights on product reviews, social media posts and more. May’s Talla integrates AI into office chat programs like Slack and Gchat to help employees automate repetitive processes within a company.

And a number of Boston AI startups are competing with the same tech giants that have recently set up shop in the city. Netra CEO Richard Lee says the company’s visual intelligence software is more accurate than Google in image recognition tasks in head-to-head tests. Newton-based Semantic Machines has raised more than $12 million to make a conversational AI that its website says will “enable people to communicate naturally with computers for the first time.” The Semantic team shares that goal with a number of companies building the next generation of smartphones and smart speakers.

Other Boston AI startups are just plain cool. Cogito uses AI and behavioral science to read people’s emotions in real time. Neurala's product, the Neurala Brain, uses neural network software that’s been designed to closely mimic the functioning of the brain. It was first used to increase the intelligence of NASA’s Mars rover.

Other Boston tech companies such as Localytics, dataxu and HubSpot also now leverage machine learning for core product offerings.

“With AI and machine learning, we’re still exploring where it’s going, but it’ll be everywhere,” Myrto said. “And it’s Boston’s race to lose because you can see all the ingredients are here, from the labs to the talent to even the government being more innovation focused. We’re very young and very hungry to make a big impact on the world. This could be a huge long-term benefit for Boston in general.”

Boston taking a leading role in AI’s implementation could also be good for humanity. Silicon Valley’s “move fast and break things” mindset poses little real danger in consumer tech, but the implications of further AI advancements require a much more thoughtful approach.

“You want to really change the world with AI,” Haddad explained. “Boston has been thinking about AI for a long time. If all you’re doing is optimizing for the short-term opportunity to make money, you’re looking too close to you. And if you’re stepping back and looking at the horizon, that’s also not good because the world needs faster change. Boston has really converged those two views. We’re looking at AI in terms of its impact on society, and those conversations don’t happen as much elsewhere.”

No one can predict exactly how far-reaching the AI wave will be or what companies will come to define it.  All we can do is consider how prepared the city is to support the next generation of entrepreneurs seeking to make their mark on the world.

In that sense, Boston seems to be in good shape to welcome the next Minsky to town.

Zach Winn is a contributor to VentureFizz. Follow Zach on Twitter: @ZachinBoston.

Images courtesy of Henry Han, GE, Gensler, Harvard i-Lab, and CB Insights.

[ronaldmrashid]

How To Stop Worrying About Your Child’s Future And Start Enjoying The Journey

Ever since publishing, The Fear Of Screwing Up Our Kids As FIRE Parents, I’ve been brainstorming how we can give our kids everything without giving them everything. The worst thing we can do as parents is take away our children’s sense of accomplishment. I pity the kid who starts off driving a BMW to school instead of walking or biking.

But recently, I’ve been losing enthusiasm for writing because I’m often too tired due to full-time fatherhood. If I had a mundane job that required little thinking, work might be easier. Besides, how hard is taking care of a child if you’re gone for 12 – 15 hours a day, right?

Unfortunately, even as a stay at home dad with an online business, it’s difficult to be creative when you lack sleep. It’s as if creativity uses a different chemical in the brain that is finite in supply.

Hitting the 10-year business anniversary mark in 2019 can’t come soon enough. After that, I’ve considered becoming Keyser Söze, never to be seen or heard from again.

But I realized instead of lasting until 2019, I’ve got to last at least until 2042. Why? Because the absolute best benefit of owning a business is creating a life safety net for our children. Not only does a business provide insurance they don’t fall through the cracks, a business produces a perpetual teachable moment for all our kids to apply what they’ve learned in the classroom to the real world. 

The Real World Is Brutally Difficult

Imagine spending almost $500,000 in private K-12 tuition only to see your child go to an average university anybody could have gotten into. Because the school is average, he will likely land an average job or no job. Now imagine the best case scenario where you send your kids to public grade school and they get into a top rated university. You still have to pay out the wazoo, yet there is no guarantee they’ll get a great job.

Related: What If You Go To Harvard And End Up A Nobody?

The world is now a hyper competitive place. Even if your child is “perfect,” s/he will have a difficult time getting ahead. But what if they have some challenges? Here are some things you may worry about for your child that can be overcome by owning your own business:

Your child may be a minority who will face racial discrimination her entire life

Your child may be a minority who is required to score higher on standardized tests to have the same chance of getting into a university

Your child may have a learning disability

Your child may have a physical disability

Your child may get into an accident, resulting in a disability

Your child may be small in stature and get picked on by bullies because their parents are terrible

Your child may be unattractive, even though you think he’s the cutest ever

Your child may get in trouble with the law

Your child may get suspended or expelled from school

If you own a business, you ensure that your child will always have something interesting to do no matter how much they try and fail on their own. Getting straight A’s or going to an elite university no longer matters as much, so long as they are learning.

Further, you don’t have to wait until your child graduates from college before introducing her to every facet of your company. You can start in elementary school or middle school so that by the time she goes to college, she’ll have a much better idea at what she wants to study.

One of the biggest problems with education is that we learn a bunch of subjects and forget everything we learned years later because we don’t see the relevance, nor do we apply what we learn to the real world. Therefore, we’re only teaching our children how to listen, follow instructions, study, and take tests. What a shame to only create an army of “yes sir, yes ma’am” in society.

When I went back to Berkeley for business school part-time, it was amazing to use my professors as business consultants for my job in finance. Suddenly, theory turned into application, and education became super impactful. The same can be said for getting your child involved in your business. 

The Ultimate Business Expense

My wife and I were going over our YTD numbers and realized that our tax bill is going to be high because our revenue growth accelerated YoY. Because running an online media company has relatively low fixed costs, there is huge operational leverage where the majority of revenue flows straight to the bottom line. As a result, we started brainstorming ways to keep our taxable income down.

Some fun things we thought about included: 1) creating a conglomerate to buy real estate to flip or lease (See: How to make your business last forever), 2) hosting a business conference in Hawaii for a month, 3) hiring friends and relatives in a lower tax bracket to do some work.

Then we thought to ourselves: wouldn’t it be awesome to hire our son to help us with so many things we’ve been wanting to do? Too bad he’s not even a year old.

When I graduated from The College of William & Mary with an Economics major and a Mandarin minor in 1999, I had zero job offers. I got rejected from every single consulting job I interviewed for. There was only one company I was hanging onto, and that was an investment bank in NYC. But after over 50 interviews, the investment bank still hadn’t made me an offer prior to commencement.

The same thing happened with my then girlfriend and now wife. Although, by the time she graduated, she was determined to come out to San Francisco to be with me. I was looking to get any job anywhere that would hopefully pay more than $35,000 a year. She somehow had confidence knowing that everything would turn out OK on the job front after she arrived in San Francisco.

Our post college unemployment story is not unique. According to an Accenture study below, 78% of college graduates don’t have a job offer upon graduation. Further, Accenture found that 51% of graduates from the classes of 2014 and 2015 said they are working in jobs that do not require their college degree.

The Pay And Awesome Jobs We Could Offer Our Son

Let’s say our son ends up exactly like his old man, unemployed at college graduation. So long as he’s done his best to find a relevant job, that’s all that matters. Instead of having to feel depressed for a long period of time without an offer, he’s now got options.

As of now, we could comfortably pay our son a starting salary between $50,000 – $90,000, which would make his salary competitive to the Googles, Facebooks, Apples, and Procter & Gambles of the world. We would also offer him equity in the business, with similar 3-5 year vesting periods that match any promising startup out there. If he performs well, we can also offer a year end bonus just like the investment banks and strategy consulting firms.

If he joins our company, he would have the best mentors possible teaching him every aspect of running a business. And if we do our jobs right as parents, he’ll be able to hit the ground running because we’ll have already taught him about the business for the past 10 years.

Here are some jobs our son could do that may be applicable to your business as well.

Business Development. This is a revenue generating role for bringing in new business. He would be responsible for finding new synergistic products and advertising partnerships with Financial Samurai. Business development is the most common and coveted role every post-MBA graduate, who isn’t a founder, wants to land. Maybe he can develop a tie-up with Financial Samurai and the NBA. Or maybe he can reach out to the fast-growing Chinese and Indian advertising market. The possibilities are endless.

Multi-media Director. This role would expand communication beyond writing and into audio, video, virtual reality, and so forth. People consume information differently. The role of the MMD is to reach out to as many different types of consumers as possible to grow traffic.

Marketing / Advertising Director. The marketing director is responsible for not only organic marketing, but also paid marketing. The marketing director knows that if he spends $1 to get $1.01 in profits, he should do so all day long. He will become an expert in PPC, CPL, CPM, and organic marketing, which is vital for all companies who have an online presence.

Head Of Content. The head of content will be responsible for editing all articles, coming up with the editorial calendar, staying in tune with current events, and potentially hiring and managing a team of writers. It takes a shrewd eye to produce topics that resonate with people at the right time.

Director Of Finance. The Director of Finance will be responsible for conducting monthly financial reports, paying attention to areas that need optimizing (reducing expenses, maximizing revenue in the podcast channel etc), raising money if necessary, and providing financial optimization presentations. He will also be responsible for tax filing.

Head of Engineering. The head of engineering will be in charge of creating the best online user experience possible for Financial Samurai readers. He will create new features on the website, manage the back end systems, make sure the website is always online, experiment with new technology delivery systems, and more.

Head of Public Relations. PR is responsible for generating as much buzz around a company’s product as possible. One way to do so is by pitching to journalists and TV producers. Another way to create publicity is to work with creative agencies. A PR professional will also write press releases and spend as much time explaining a product to consumers and investors.

Director Of Community. One of the no brainer expansion opportunities for Financial Samurai is to start and grow a personal finance forum directed towards financially savvy individuals. He would be tasked with managing the forum installation, growing the community, setting the guidelines, managing conflicts and spammers, and eventually creating a business opportunity.

Anything. When you run your own private business, you can literally create any role you want for your son or daughter. Let’s say your daughter majored in Art and eventually wants to get into a career that has everything to do with art. You can hire your daughter as the Artistic Director for your company in charge of branding, imagery, and display. Or, you can pay her to create great images for your business. The possibilities are endless.

Your son or daughter doesn’t have to work for your company forever. But I’m sure s/he will learn way more about each job role than if s/he were to work for another company.

A Business Provides Better Solutions

Think about these two common scenarios:

Traditional Scenario One

Your son gets a set weekly allowance, if he’s good. Maybe he’ll do some chores here and there, but that’s it.

Business Ownership Solution

Your 7th grader only gets an allowance this month if he creates an advertisement flier, stuffs them into 500 envelopes, and mails them out to prospective customers. He gets a $10 bonus for every response above five. He uses his art and writing skills, while also developing operational efficiency and grit. You get to explain to him about conversion rate metrics for gorilla marketing and teach him why he is targeting a certain demographic.

Traditional Scenario Two

You take your 9th grader on her first trip out of state to Williamsburg, Virginia to learn about American history and check out The College of William & Mary, a public university. She’s bored out of her mind and forgets about her summer once school starts.

Business Ownership Solution

You tell your daughter this is her first business trip. Therefore, she must save her receipts and work within a budget. She must take notes about what she learns, take insightful pictures, and write a post about whether it’s worth paying up for private school or the benefits of risk-taking after King William & Queen Mary decided to expand in a new land. She will earn 10 cents for every pageview her article generates (1,000 pageviews = $100), incentivizing her to learn about A/B testing and write convincing prose. After publication, she just might get extra credit from her high school English class.

What’s also great about the business ownership solution is that you don’t even need to have an established business to help your kids. You can just create a business together with your daughter when she is of age so long as you can afford the time and money. This is my plan just in case Financial Samurai doesn’t last until 2042.

The sooner your child can launch, the sooner s/he can find happiness. With a good job, a heart full of gratitude, and a healthy amount of self-esteem, your child can then spend more time focusing on health and finding a life partner. What’s there left to worry about after money, career, health, and love are taken care of?

Just make sure as parents, we do our best to nurture a great relationship. What a shame it would be if our children wanted nothing to do with us once they graduate.

Related:

The Top 10 Best Reasons For Starting An Online Business

How To Start A Profitable Blog

https://www.financialsamurai.com/wp-content/uploads/2017/10/How-to-never-worry-about-your-kids-again.m4a

Readers, what is a better reason for running a business than being able to educate our kids and provide them direction? What are some other things you do that allow you to worry less about your child’s future? With so much anxiety about getting into good schools to get a good job you don’t like, isn’t owning a business a fantastic way to eliminate all this worry for the next 22 years? Do you experience similar levels of worries and anxieties as a parent?

The post How To Stop Worrying About Your Child’s Future And Start Enjoying The Journey appeared first on Financial Samurai.

from https://www.financialsamurai.com/how-to-stop-worrying-about-childs-future/

[abigailswager]

Litecoin vs Bitcoin | the differences between these 2 Cryptocurrencies.

New Post has been published on https://onlinelitecointrading.com/litecoin-vs-bitcoin-differences/

Litecoin vs Bitcoin | the differences between these 2 Cryptocurrencies.

  Litecoin and Bitcoin can be spoken in one sentence and many people do not yet understand what set them apart. and yet they are not the same. See them as Brothers with Bitcoin being the Big brother of the Two. that said as a little brother myself , i am sure you agree that also we have our uses.

Lets Start to explain Litecoin vs Bitcoin

Back In 2009, a janapense programmer going by the name Satoshi Nakamoto launched bitcoin as the world’s first cryptocurrency or atleast that is what is believed , since then many pother rumours and scenarios have surfaced , but it matters less tothe current situation.

The code of the Bitcoin was and still is open source, this means in laymans terms that it can be changed and altered by anyone and to be used for any project they see fit. that was the start of many other digital currencies that used this original code to create their own cryptocurrency . some were made successful other not so much.

Litecoin was build and designed like the robin to Batman, not to just replacve them but to assist and in its own terms become successful.

Litecoin vs Bitcoin | The crucial difference between bitcoin and litecoin.

bitcoin litecoin Coin limit 21 Million 84 Million Algorithm SHA-256 Scrypt Mean block time 10 minutes 2.5 minutes Difficulty retarget 2016 block 2016 blocks Block reward details Halved every 210,000 blocks. Halved every 840,000 blocks Initial reward 50 BTC 50 LTC Current block reward 25 BTC 50 LTC Block explorer blockchain.info block-explorer.com Created by Satoshi Nakamoto Charles Lee Creation date January 3rd, 2009 October 7th, 2011 Market cap $10,467,596,650.78 $540,274,528.26  Bitcoin Statistics  Litecoin Statistics

Litecoin vs Bitcoin Mining differences

Just like bitcoin, litecoin is a crytocurrency that is generated by mining. Litecoin was created in October 2011 by former Google engineer Charles Lee. The motivation behind its creation was to improve upon bitcoin. The key difference for end-users being the 2.5 minute time to generate a block, as opposed to bitcoin’s 10 minutes. Charles Lee now works for Coinbase, one of the most popular online bitcoin wallets.

Litecoin Mining

ASIC Mining

For miners and enthusiasts though, litecoin holds a much more important difference to bitcoin, and that is its different proof of work algorithm. Bitcoin uses the SHA-256 hashing algorithm, which involves calculations that can be greatly accelerated in parallel processing. It is this characteristic that has given rise to the intense race in ASIC technology, and has caused an exponential increase in bitcoin’s difficulty level.

“scrypt algorithm“

Litecoin, however, uses the “scrypt algorithm” – originally named as s-crypt, but pronounced as ‘script’. This algorithm incorporates the SHA-256 algorithm, but its calculations are much more serialized than those of SHA-256 in bitcoin. Scrypt favors large amounts of high-speed RAM, rather than raw processing power alone. As a result,”scrypt” is known as a ‘memory hard problem’.

The consequences of using “scrypt” mean that there has not been as much of an ‘arms race’ in litecoin (and other scrypt currencies), because there is (so far) no ASIC technology available for this algorithm. However, this is soon to change, thanks to companies like Alpha Technologies, which is now taking pre-orders.

GPU mining

To highlight the difference in hashing power, at the time of writing, the total hashing rate of the bitcoin network is over 20,000 Terra Hashes per second, while litecoin is just 95,642 Mega Hashes per second.

Current Mining activity

For the time being, ‘state of the art’ litecoin mining rigs come in the form of custom PCs fitted with multiple graphics cards (ie: GPUs). These devices can handle the calculations needed for scrypt and have access to blisteringly fast memory built into their own circuit boards.

There was a time when people could use GPU mining for bitcoin, but ASICs have made this method not worth the effort.

Transaction differences Litecoin vs Bitcoin

The main difference is that litecoin can confirm transactions must faster than bitcoin. The implications of that are as follows:

Litecoin can handle a higher volume of transactions thanks to its faster block generation. If bitcoin were to try to match this, it would require significant updates to the code that everyone on the bitcoin network is currently running.

The disadvantage of this higher volume of blocks is that the litecoin blockchain will be proportionately larger than bitcoin’s, with more orphaned blocks.

The faster block time of litecoin reduces the risk of double spending attacks – this is theoretical in the case of both networks having the same hashing power.

A merchant who waited for a minimum of two confirmations would only need to wait five minutes, whereas they would have to wait 10 minutes for just one confirmation with bitcoin.

Transaction speed (or faster block time) and confirmation speed are often touted as moot points by many involved in bitcoin, as most merchants would allow zero-confirmation transactions for most purchases. It is necessary to bear in mind that a transaction is instant, it is just confirmed by the network as it propagates.

Litecoin vs Bitcoin Summary

Both Bitcoin and Litecoin are deflationary.

Litecoin payment confirmations are faster.

Litecoin is more adaptive to technical up-scaling.

Both coins can compliment each other.

Comparing two stocks to find out the relatively better value buy is quite easy for a traditional research analyst who deals with equity market. The number of parameters available for comparison is wide and time tested, starting from a simple quarterly result’s net profit to complex ones like debt equity ratio, PE, trailing EPS etc.

Let us first discuss about the similarities

Stocks are categorized by its market capitalization and industry to make the study more focused. But when comes to crypto world, we don’t have any time tested parameters to filer out the naked ones from others which are promising and disruptive in nature. So an investor who decided to invest in crypto currencies have to overcome this black-hole by using some simple traditional techniques which requires normal IQ level only. Let us first discuss about the similarities between these two coins and then step in to future outlook of Litecoin.

1.Both Bitcoin and Litecoin are deflationary

These crux behind the deflationary nature is simple defined by the demand supply logic in basic economics. The supply of both these coins will be tapered in coming years and at the same time demand will be increasing if something catastrophic is not happening in crypto space.

Bitcoin will have 21 million coins in its entire life span and Litecoin will have 84 million, which is exactly 4 times that of Bitcoin. Considering the fact that in early days, people gave little importance on secure storage, millions worth coins were lost which cannot be recovered by any chance. This is the reason why both of these coins are considered deflationary in nature. The current supply of Bitcoin is nearly 16.4 million whereas Litecoin has 51.85 million coins in circulation.

“When I released Litecoin there were a lot of other cryptocurrencies that were pre-mined by founders wanted to be super rich. I preannounced Litecoin on Bitcointalk, so people could mine it from the get go. It was more widely distributed from the start than Bitcoin.” Charlee Lee, Litecoin founder

2. Litecoin payment confirmations are faster

The block generation time of Bitcoin is 10 minutes and Litecoin is 2.5 minutes. In simple terms, it means that transactions are confirmed 4 times faster in Litecoin. The downside of smaller block generation time is, it is easy for reversal of transaction compared to a larger block. Since the value of Bitcoin is high, Litecoin’s future lies in using it for small transactions as the transaction fees associated is negligible compared to Bitcoin’s transactions.

Litecoin has a large economy and our technology works on Litecoin with almost no changes. We like ethereum too, but ethereum is too different from bitcoin for us to easily switch. Litecoin has the best combination of economic size and technical similarity to bitcoin. On Litecoin, transaction fees are only a few cents. This means users can comfortably load only $1 onto our network while still paying negligible fees. This is a radically lower barrier to entry compared to $100 for bitcoin. Litecoin is one hundred times better for our application today than bitcoin. Ryan X. Charles, Yours

3. Both coins are based on “Proof of Work” concept.

The coin rewarding functionality of both Bitcoin and Litecoin are based on the concept of proof of work, though their algorithms differ. Bitcoin is using SHA-256 and Litecoin is using scrypt algorithm. SHA-256 is a complex algorithm and data block processing with SHA-256 possess slower—transaction turnaround times with less room for error. Successful mining of coins using SHA-256 requires hash rates at the giga hashes per second range or higher which means miners need high performing ASIC chips. Scrypt is simpler and it is is much easier to run on GPUs, and tends to use up less energy than using SHA-256.

Future Outlook for Litecoin

Litecoin is more adaptive to technical up-scaling.

If we compare the history and road-map of Bitcoin and Litecoin, it is evident that the later has been well ahead in adapting new improvement plans. Segwit is already activated in Litecoin without any political doldrums. The founder Charlee Lee has joined back at Litecoin foundation after his stint in coinbase. The team behind Litecoin is now working on Lightning network and adding smart contracts. Once implemented successfully, these two projects can change the future of Litecoin.

Lightning Network.

I believe Litecoin will be the first crypto to implement lightning network which would increase the scalability of transactions. Ind is one of the implementations which is in the final stages and expected to complete in next 6 months. Once lightning network is implemented, the number of transactions per second can grow to millions.

Smart Contracts.

The future road-map of Litecoin shows its interest in anonymous smart contracts. Smart crypt vault is one of the items on the roadmap Charlie Lee is excited about. The technology combines MAST (Merkelized abstract syntax trees) and covenants – script combinations that restrict how coins are spent. The team is expecting a positive outcome in this month on this as per Charlie’s tweet.

Litecoin vs Bitcoin Conclusion

Charlee Lee introduced Litecoin as “silver crypto currency” when Bitcoin took the name of “Crypto gold”. If we understand the fundamental logic behind both the coins, we don’t need rocket science knowledge or high IQ to understand the fact that Litecoin is heavily undervalued. The ideal price of Litecoin is ultimately pegged with 1/4th of Bitcoin price. This is by the simple calculation of supply of coins, 21 million vs 84 million. According to google keyword search, Litecoin is still not in limelight like Bitcoin or Ethereum. This can change in near future and both the coins can compliment each other on a long run.

“Litecoin vs Bitcoin is like Facebook versus Google Plus,” says Lee. “It would be hard for Plus to overtake Facebook. But if something catastrophic happens to Bitcoin, I could see Litecoin positioned to overtake it.” Charlee Lee, Litecoin founder

[douchebagbrainwaves]

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Notes

It's somewhat sneaky of me to address this generally misapplied phrase.