Token Summit II San Francisco

While in the US this month, I attended Token Summit II in San Francisco, courtesy of Techemy, the parent company of Brave New Coin.

Apart from Bitcoin’s latest all-time highs (and of course, CryptoKitties), the main topics on Blockchain solutions, cryptocurrency trading, token issuance programs and digital asset management were:

Governance – bringing transparency, oversight and standards
Scalability – how to grow the technology in a sustainable way
Interoperability – compatibility and connectivity between chains
Regulation – especially of securities as tokens, and vice versa
Decentralized exchanges – making P2P trading truly viable
Metronome – the “first cross-blockchain cryptocurrency”
Messari – “EDGAR for cryptocurrencies”
Transaction computation vs verification – getting the balance/distinction right
Custody – what the institutional markets are looking for in this new asset class

Demonstrating the demand for access to industry thought leaders and information about the best and brightest projects, Token Summit could have filled a venue twice the size – a growth trajectory befitting the asset class.

Next week: MoMA vs SFMOMA

 

Digital Richmond

How significant is one suburb’s contribution to the startup ecosystem in Melbourne, if not Victoria or even Australia? Well, if the recent panel on Digital Richmond (plus the Victorian Minister for Small Business, Innovation & Trade) are to be believed, VIC 3121 is the epicentre of all things startup.

According to the event description, Richmond (and the adjoining area of Cremorne) is “the stomping ground of choice for Melbourne’s established tech companies and aspiring start-ups alike”.

Hosted in the offices of 99Designs (celebrating bringing their HQ back to Richmond), a panel representing some of the biggest names among Australia’s tech companies (and all local heroes) explored what makes “Digital Richmond” tick – but also identified some of the challenges of growing and sustaining scale-up ventures beyond the confines of a few co-working spaces in converted warehouses and textile factories….

Facilitated by Rachel Neumann former MD of Eventbrite Australia (whose Australian HQ is in Melbourne), and briefly head of 500 Melbourne, the panel comprised some key Richmond/Cremorne tenants: Patrick Llewellyn, CEO at 99designs; Jodie Auster, General Manager for UberEATS in Melbourne; Cameron McIntyre, CEO of Carsales; Nigel Dalton, Chief Inventor at REA Group; and Eloise Watson, Investment Manager at VC fund Rampersand.

To set the scene, mention was made of other established Australian tech-based companies also HQ’d in Melbourne (MYOB and SEEK, the latter of which is also relocating its offices to Richmond), recent local successes such as Rome2Rio and CultureAmp (both born in Richmond), and the steady stream of global tech brands that have come to call 3121 their regional/national home, such as Stripe, Slack, Square and Etsy.

It was evident that each of the panel have previous business connections with one or more of their fellow panelists – so maybe there is simply value in being in close proximity to each other. Success begets success, especially when people are more willing to share connections and introduce new contacts into their networks. (Although, what might this say about diversity? And does it reinforce the notion that “it’s not what you know, it’s who you know”?)

Despite the number of co-working spaces and tech companies based locally, there are very few substantial, modern office buildings in the area, and only one business park of note. Local startups that need more space will likely have to relocate elsewhere.

Property aside, the panel considered other local infrastructure is generally conducive to success – access to public transport (although Richmond and East Richmond stations are both in serious need of an upgrade), a solid talent base, great coffee shops and proximity to the CBD.

On the downside, there was criticism at the lack of NBN access in such a concentrated pocket of tech companies and startups (with the associated numbers of contractors, freelancers and other members of the gig economy who live in the area and work from home). Car parking was also an issue, although with Richmond being a major public transport hub, I was surprised that this came up. A lack of child care facilities was also mentioned.

Being an inner city suburb, with strict planning laws and designated “heritage overlay” regulations, there are limits to the amount of development that can take place, especially as Richmond and Cremorne are also established residential areas, with medium to high population density. Getting the balance right between economic growth, urban renewal, modernisation and local community preservation is tricky – pity that the organisers had not thought to invite anyone from the local council.

The panel also bemoaned the absence of any tertiary education facilities in the area (by implication, does that mean the Kangan Institute campus in Cremorne doesn’t meet local requirements?). But maybe there are other ways to connect with academia?

The panel discussion then moved on to topics that are beyond the control of the local council or even the State government, yet each has an impact on the startup economy: corporate tax rates; employment visas; the schooling system; vocational education and training; and the need for inter-disciplinary and inter-generational hiring. (They may as well have added industrial relations laws, the productivity debate and smart cities – oh, and the National Innovation and Science Agenda.)

I was also surprised at one of the reasons given for 99Designs bringing their global HQ back to Australia – the appeal of an ASX listing. I know that Australia has one of the largest pools of pension funds in the world, and nearly every person in Australia has direct or indirect investments in Australian equities within their superannuation portfolio. But despite being ranked 15th by market capitalisation, the ASX represents less than 2% of the global market, and even after 25 years without a recession, Australia’s capital markets risk being left behind. If we are to grow the local tech sector, there needs to be much more alignment between where (and what type of) capital is needed, and where the pension funds and other institutional investors like to put their money.

Finally, I always get worried when the likes of Carsales, REA Group, MYOB and SEEK are held up as poster children for the local tech and startup sectors – great businesses, sure, but all about to be totally disrupted by the next wave of startups, and not quite the high-tech sectors that the Victorian government wants to champion (FinTech, MedTech, BioTech, NanoTech, AgriTech, Cyber Security, Smart Manufacturing, EduTech….).

Next week: The NAB SME Hackathon

 

Law and Technology – when AI meets Smart Contracts…

Among the various ‘X’-Tech start-up themes (e.g., FinTech, EdTech, MedTech, InsurTech) one of the really interesting areas is LegTech (aka LawTech), and its close cousin, RegTech. While it’s probably some time before we see a fully automated justice system, where cases are decided by AI and judgments are delivered by robots, there are signs that legal technology is finally coming into its own. Here’s a very personal perspective on law and technology:

Photo by Lonpicman via Wikimedia Commons

1. Why are lawyers often seen as technophobes or laggards, yet in the 1980s and 1990s, they were at the vanguard of new technology adoption?

In the 1970s, law firms invested in Telex and document exchange (remember DX?) to communicate and to share information peer-to-peer. Then came the first online legal research databases (Lexis and Westlaw) which later gave rise to “public access” platforms such as AustLII and its international counterparts.

Lawyers were also among the first professional service firms to invest in Word Processing (for managing and drafting precedents) and e-mail (for productivity). Digitization meant that huge print libraries of reference materials (statutes and case-law) could be reduced to a single CD-ROM. Law firms were early adopters of case, practise, document and knowledge management tools – e.g., virtual document discovery rooms, precedent banks, drafting tools.

2. But, conversely, why did the legal profession seem to adopt less-optimal technology?

The trouble with being early adopters can mean you don’t make the right choices. For example, law firms in the 80s and 90s seemed to demonstrate a preference for Lotus Notes (not Outlook), Wang Computers and WordStar (not IBM machines or MS Office Word), and DOS-based interfaces (rather than GUIs).

Some of the first CD-ROM publications for lawyers were hampered by the need to render bound volumes as exact facsimiles of the printed texts (partly so lawyers and judges could refer to the same page/paragraph in open court). There was a missed opportunity to use the technology to its full potential.

3. On the plus side, legal technology is having a significant a role to play…

…in law creation (e.g., parliamentary drafting and statute consolidation), the administration of law (delivery of justice, court room evidence platforms, live transcripts, etc.), legal practice (practice management tools) and legal education (research, teaching, assessment, accreditation). Plus, decision support systems combining rules-based logic, precedent and machine learning, especially in the application of alternative dispute resolution.

4. Where next?

In recent years, we have seen a growing number of “virtual” law firms, that use low-cost operating models to deliver custom legal advice through a mix of freelance, part-time and remote lawyers who mainly engage with their clients online.

Blockchain solutions are being designed to register and track assets for the purposes of wills and trusts, linked to crypto-currency tokens and ID management for streamlining the transfer of title. Governments and local authorities are exploring the use of distributed ledger technology to manage land title registration, vehicle and driver registration, fishing permits and the notion of “digital citizenship”.

We are seeing the use of smart contracts powered by oracles on the Ethereum blockchain to run a range of decision-making, transactional, financial, and micro-payment applications. (Although as one of my colleagues likes to quip, “smart contracts are neither smart nor legal”.)

Artificial Intelligence (AI) is being explored to “test” legal cases before they come to trial, and more knowledge management and collaboration tools will continue to lower the cost of legal advice (although I doubt we will see lawyers being totally disintermediated by robots, but their role will certainly change).

There is further opportunity to take some of the friction and costs out of the legal system to improve access to justice.

Finally, and this feels both exciting and scary, is the notion of “crowd-sourcing policy“; some governments are already experimenting with hackathons to develop policy-making models, and even the policies themselves. But this does sound like we would be moving closer and closer to government by mini-plebiscites, rather than by parliamentary democracy.

Next week: Digital currencies are the new portals

 

Personal data and digital identity – whose ID is it anyway?

In an earlier blog on privacy in the era of Big Data and Social Media, I explored how our “analog identities” are increasingly embedded in our digital profiles. In particular, the boundaries between personal/private information and public/open data are becoming so blurred that we risk losing sight of what individual, legal and commercial rights we have to protect or exploit our own identity. No wonder that there is so much interest in what blockchain solutions, cyber-security tools and distributed ledger technology can do to establish, manage and protect our digital ID – and to re-balance the near-Faustian pact that the illusion of “free” social media has created.

Exchanging Keys in “Ghostbusters” (“I am Vinz Clortho the Keymaster of Gozer”)

It’s over 20 years since “The Net” was released, and more than 30 since the original “Ghostbusters” film came out. Why do I mention these movies? First, they both pre-date the ubiquity of the internet, so it’s interesting to look back on earlier, pre-social media times. Second, they both reference a “Gatekeeper” – the former in relation to some cyber-security software being hijacked by the mysterious Praetorian organisation; the latter in relation to the “Keymaster”, the physical embodiment or host of the key to unleash the wrath of Gozer upon the Earth. Finally, they both provide a glimpse of what a totally connected world might look like – welcome to the Internet of Things!

Cultural references aside, the use of private and public keys, digital wallets and payment gateways to transact with digital currencies underpins the use of Bitcoin and other alt coins. In addition, blockchain solutions and cyber-security technologies are being deployed to streamline and to secure the transfer of data across both peer-to-peer/decentralised networks, and public/private, permissioned/permissionless blockchain and distributed ledger platforms. Sectors such as banking and finance, government services, the health industry, insurance and supply chain management are all developing proofs of concept to remove friction but increase security throughout their operations.

One of the (false) expectations that social media has created is that by giving away our own personal data and by sharing our own content, we will get something in return – namely, a “free” Facebook account or “free” access to Google’s search engine etc. What happens, of course, is that these tech companies sell advertising and other services by leveraging our use of and engagement with their platforms. As mere users we have few if any rights to decide how our data is being used, or what third-party content we will be subjected to. That might seem OK, in return for “free” social media, but none of the huge advertising revenues are directly shared with us as ordinary end consumers.

But just as Google and Facebook are facing demands to pay for news content, some tech companies are now trying to democratise our relationships with social media, mobile content and financial services, by giving end users financial and other benefits in return for sharing their data and/or being willing to give selected advertisers and content owners access to their personal screens.

Before looking at some interesting examples of these new businesses, here’s an anecdote based on my recent experience:

I had to contact Facebook to ask them to take down my late father’s account. Despite sending Facebook a scanned copy of the order of service from my father’s funeral, and references to two newspaper articles, Facebook insisted on seeing a copy of my father’s death certificate.

Facebook assumes that only close relatives or authorised representatives would have access to the certificate, but in theory anyone can order a copy of a death certificate from the UK’s General Register Office. Further, the copy of the certificate clearly states that “WARNING: A CERTIFICATE IS NOT EVIDENCE OF IDENTITY”. Yet, it appears that Facebook was asking to see the certificate as a way of establishing my own identity.

(Side note: A few years ago, I was doing some work for the publishers of Who’s Who Australia, which is a leading source of biographical data on people prominent in public life – politics, business, the arts, academia, etc. In talking to prospective clients, especially those who have to maintain their own directories of members and alumni, it was clear that “deceased persons” data can be very valuable to keep their records up to date. It can also be helpful in preventing fraud and other deception. Perhaps Facebook needs to think about its role as a “document of record”?)

So, what are some of the new tech businesses that are helping consumers to take control of their own personal data, and to derive some direct benefit from sharing their personal profile and/or their screen time:

  1. Unlockd: this Australian software company enables customers to earn rewards by allowing advertisers and content owners “access” to their mobile device (such as streaming videos from MTV).
  2. SPHRE: this international blockchain company is building digital platforms (such as Air) that will empower consumers to create and manage their own digital ID, then be rewarded for using this ID for online and mobile transactions.
  3. Secco: this UK-based challenger bank is part of a trend for reputation-based solutions (e.g., personal credit scores based on your social media standing), that uses Aura tokens as a form of peer-to-peer or barter currency, within a “social-economic community”.

Linked to these initiatives are increased concerns about identity theft, cyber-security and safety, online trust, digital certification and verification, and user confidence. Anything that places more power and control in the hands of end users as to how, when and by whom their personal data can be used has to be welcome.

Declaration of interest: through my work at Brave New Coin, a FinTech startup active in blockchain and digital assets, I am part of the team working with SPHRE and the Air project. However, all comments here are my own.

Next week: Investor pitch night at the London Startup Leadership Program