Indeed, the meetup feels like a synthesis between an intellectual salon, a practical hackathon and a political campaign meeting. I might be able to have a perfectly normal — even authentic — conversation with a trader, exchange business cards and talk seriously mining future plans for collaboration, but in the background have a residual awareness that there is some form of manipulation or play going on. Indeed, it is helpful to understand the difference between different banks, brett, financial instruments, scott, and techniques, and for this bitcoin alone immersive experiences can be desirable and empowering. We believe in this world and bitcoin in some other. Brett is a form of deviant anthropological activism. A banker in had two main tools: This generally appeals to people who wish to devolve power scott from banks by mining more diversity into the monetary system.
Robin Hood came to life in when Askeli and a team of artists and critical academics joined forces at the University of Aalto outside Helsinki in Finland. It describes the downfall of something 'old' and archaic — cash — but doesn't actually describe what rises up in its place. We do not want a future society free from people we have to trust, or one in which the most we can hope for is privacy. Hacking the Future of Money, Brett Scott, Contact us at news coindesk. Activists get worried about this breakdown of the self-other divide:
Scott fundamental difference between the note and scott Coke mining be tested by brett simple experiment. Now imagine that 60 million people believe bitcoin that claim. That bottle is a mining of value. The general status quo bias of regulators, who fixate on the negative potentials brett Bitcoin whilst remaining blind to negatives bitcoin the current system, sets the stage for a political battle. Screw escaping to Mars. This technology underpins talk of a future 'cashless society'.
Join if you want. It all forms an odd, tense amalgam between visions of exuberant risk-taking freedom and visions of risk-averse anti-social paranoia. If a ruler was oppressive, you could actually pack up and take to the desert in a caravan.
If you are in the position to be having dreams of technological escape, you are probably not in a position to be exiting mainstream society. You are mainstream society. Wilson is a subtle and interesting thinker , and it is undoubtedly unfair to suggest that he really believes that one can escape the power dynamics of the messy real world by finding salvation in a kind of internet Matrix. That is a healthy radical impulse, but the conservative element kicks in when the assumption is made that somehow privacy alone is what enables social empowerment.
Despite the rugged frontier appeal of the concept, the presumption that empowerment simply means being left alone to pursue your individual interests is essentially an ideology of the already-empowered, not the vulnerable. This is the same tension you find in the closely related cypherpunk movement. We are thus prone to being blind to the power dynamics built into our use of it. If you do not buy into it, you will be marginalised, and that is political.
While individual instances of blockchain technology can clearly be useful, as a class of technologies designed to mediate human affairs, they contain a latent potential for encouraging technocracy.
Interestingly, it is a similar abstraction to that made by Hobbes. In his Leviathan , self-regarding people realise that it is in their interests to exchange part of their freedom for security of self and property, and thereby enter into a contract with a Sovereign , a deified personage that sets out societal rules of engagement.
The definition of this Sovereign has been softened over time — along with the fiction that you actually contract to it — but it underpins modern expectations that the government should guarantee property rights. Conservative libertarians hold tight to the belief that, if only hard property rights and clear contracting rules are put in place, optimal systems spontaneously emerge.
This is essentially the vision of the internet techno-leviathan , a deified crypto-sovereign whose rules we can contract to. The rules being contracted to are a series of algorithms, step by step procedures for calculations which can only be overridden with great difficulty. This, of course, appeals to those who believe that powerful institutions operate primarily by breaching property rights and contracts. Who really believes that though? For much of modern history, the key issue with powerful institutions has not been their willingness to break contracts.
It has been their willingness to use seemingly unbreakable contracts to exert power. Contracts, in essence, resemble algorithms, coded expressions of what outcomes should happen under different circumstances.
On average, they are written by technocrats and, on average, they reflect the interests of elite classes. That is why liberation movements always seek to break contracts set in place by old regimes, whether it be peasant movements refusing to honour debt contracts to landlords, or the DRC challenging legacy mining concessions held by multinational companies, or SMEs contesting the terms of swap contracts written by Barclays lawyers.
Political liberation is as much about contesting contracts as it is about enforcing them. The point I am trying to make is that you do not escape the world of big corporates and big government by wishing for a trustless set of technologies that collectively resemble a technocratic crypto-sovereign. Rather, you use technology as a tool within ongoing political battles, and you maintain an ongoing critical outlook towards it. The concept of the decentralised blockchain is powerful.
The cold, distrustful edge of cypherpunk, though, is only empowering when it is firmly in the service of creative warm-blooded human communities situated in the physical world of dirt and grime. Perhaps this means de-emphasising the focus on how blockchains can be used to store digital assets or property , and focusing rather on those without assets.
For example, think of the potential of blockchain voting systems that groups like Restart Democracy are experimenting with. Centralised vote-counting authorities are notorious sources of political anxiety in fragile countries. What if the ledger recording the votes cast was held by a decentralised network of citizens, with voters having a means to anonymously transmit votes to be stored on a publicly viewable database?
We do not want a future society free from people we have to trust, or one in which the most we can hope for is privacy. Rather, we want a world in which technology is used to dilute the power of those systems that cause us to doubt trust relationships. Screw escaping to Mars. Hacking the Future of Money Pluto Press: He tweets at Suitpossum.
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How Does Blockchain Technology Work? What Can a Blockchain Do? What is a Distributed Ledger? Why Use a Blockchain? Ethereum What is Ethereum? How Do I Use Ethereum? How Does Ethereum Work? What is a Decentralized Application? How Do Smart Contracts Work? Feb 12, at Gates Foundation Strikes Tepid Tone at Money While it sees potential for distributed ledgers in supporting its mission, the Gates Foundation also notes limitations to the technology. Robin Hood takes a hedge fund and calls it a liberator of precarious workers.
For Geert, though, the tantalizing element of the fund is that it can actually make money to help other radical projects. If you'd like to support my ongoing Creative Commons writing, please consider buying me a virtual beer. And Robin Hood has just announced their first round of distributions.
Akseli is impatient though. According to Akseli, 2. Rather than being based out of Finland, he wants to transform Robin Hood into a decentralized global crypto-fund, built using the underlying blockchain technology of the cryptocurrency Bitcoin.
Unlike a bank that keeps a centralised private database to keep score of your money, the Bitcoin blockchain is collectively maintained by a decentralized network of peers.
It could also be used to record the existence and movement of shares… like shares in an activist hedge fund. Dan Hassan is a software engineer who has joined the team to test out the feasibility of Robin Hood using blockchain technology. He is part of the burgeoning blockchain community that includes groups like Ethereum , and he has come to Milan to run a session explaining blockchain basics.
You bring it to life by getting a network of people to all run the same software, and that software has rules for creating a shared account of reality between those people. The more people involved the stronger it is. Imagine a global network of people using this technology to organise themselves into huge digital co-operatives that facilitate mass collaboration. So, shares in an activist hedge fund could be created and moved around using such a system, but building a next-generation anarchic crypto-entity to take on Wall Street still seems like a pretty tall order.
And that requires an injection of capital to pay proper salaries. So what do you do when you need to kickstart a new, risky company? You get venture capitalists involved, of course. The team is on the prowl for a couple million dollars in seed funding so they can start developing 2. But there are reservations. Getting slick venture capitalists on board potentially brings a different political dynamic.
VC investors want to see big returns, and how will that jell with the original intent of giving away the profits to countercultural groups? I ask Akseli, but his hacker mentality is already fired up with the idea of messing with something new. Underlying this is a realisation that the power dynamics of Big Finance are shifting. In the US, it is not just the banks and funds of Wall Street in the finance game. There are also the West Coast digital tech gods, waging a new cold war on the traditional financial markets, armed with apps, payment gadgets and internet monopolies.
If the waves of power are changing, a subversive surfer might reposition themselves, and that is what Robin Hood is doing. The team still has the feel of innocents, though, feeling out the contours of the dark side of money. The nervous energy is tangible, and each night in Milan they try to bring it back down to earth, standing on the balcony of the Macao squat, drinking beers, smoking cigarettes.
Pekko methodically describes how to make whisky. Finns enjoy such practical matters. They are notoriously quiet, but underneath it lies a self-contained disdain for information that is unnecessary. But my life I like to just live and leave it as a black box. I do not understand why I do things. Long Term Capital Management was an enormous hedge fund that famously went bust in after the advanced financial theories they based their trading on ended up being out of sync with the reality of the world.
Robin Hood faces a similar dynamic. In this gambit to fuse together algorithmic trading, blockchain technology, Silicon Valley and artistic activism into one epic hack of the financial system, the team in in unchartered waters. Posted by Brett Scott at Sunday, 27 March The dark side of digital finance: A banker in had two main tools: A customer — perhaps a prominent carpenter — would enter a branch, request a withdrawal or make a deposit, and the banker would make a careful note of it within the ledger, editing the customer's previous entry to keep authoritative score of exactly what the bank promised to them.
The crucial difference between a tool and a machine is that the former relies on human energy, while and the latter relies on non-human energy channelled via a system that replicates - and accentuates - the action of a human using a tool. The carpenter is now a furniture corporation using computer-programmed CNC cutters. These are digital equivalents of the old ledger books, drawing upon fossil-fuel generated electricity to write and hold information as magnetised atoms on hard-drives.
We call the process of moving from manual tools to machines automation , and it appears in various forms within everyday financial life. The ATM, for instance, is an automated version of the bank teller of old who would have to exert energy to check your account, hand you cash, and alter your accounts.
I use an interface to interact with this ATM, which gives me some form of control, but only within the inflexible rules of whatever it will allow me to do. Automation is creeping into more and more of personal finance.
The glossy adverts of the financial marketing industry put an appealing spin on the future world of contactless payment, branchless banking and cashless society. They focus the mind on problems that are apparently being solved through new technology, but they simultaneously divert attention from the dark side of the automated financial regimes that are emerging around us.
To get to grips with these processes of automation - and the sub-field of 'digitisation' - we first need to establish some definitions of machines, robots, and algorithms. To make it feel like a robot , it must show some nominal agency to make decisions based on external information. To understand what a financial robot looks like, we need to sketch some general characteristics of robots more generally. We might think of a traditional robot as a system comprised of four parts:.
The traditional robot might take in data from sensors and compute it through an algorithmic mind that can activate the mechanical body, provided there is electricity. For example, a robot could be a vacuum cleaner mechanical body that receives data from photocell sensors senses to be processed through an algorithm mind to calculate its position, which in turn sends orders for the body to move around the room, thereby 'autonomously' vacuuming your lounge by 'making decisions'.
We might call this an algo-robot. A person armed with a pen and pad might take hours or even days to go through the relevant data and do the calculation manually. The spreadsheet model on the other hand, directs the electricity coursing through the hardware of a computer to do the same calculation in a fraction of the time.
This is a financial machine , automating manual human calculation processes. And, voila , this is precisely what algorithmic automated trading is. The spreadsheet model has turned into a trader algo-robot. Unlike the simple machine that offers static options via an interface, an algo-robot - or a series of linked algo-robots - have a greater ability to react in multiple ways in response to multiple data streams , and therefore to organise and co-ordinate.
This trait makes senior corporate management warm to them, because, after all, reacting and co-ordinating are core elements of what a manager does. The old hierarchy within a corporation was one where owners used managers to co-ordinate workers and machines. This gave rise to the traditional battles between owners and managers, managers and workers, and workers and machines. The emergent hierarchy is subtly different.
Think about the Amazon deliveryman driving the van to act out an order sent to him by an algorithm. These arrangements are often difficult to perceive, but algo-robotic systems have been embedding themselves into everyday forms of finance for decades, not necessarily 'taking over control' but often creating a hybrid structure in which manual human actions interact with automated machine-robot actions. For example, the investment bank trader might negotiate a derivatives deal over the phone and then book it into a partly automated back-office system.
You can talk with employees behind the Barclays counters, but often they are just there to enter data into a centralised system that tells them how to deal with you. To some degree these employees have agency — the ability to make quasi-autonomous decisions — but the dominant trend is for them to become subservient to the machinic system they work with, unable to operate outside the bounds set by their computer.
Indeed, many bank employees cannot explain why the computers have made the decisions they have, and thus they appear as the human face put there to break the news of whatever the algorithm has decided.
We might even say they are a human interface to an otherwise algo-robotic system that is accountable only to the senior corporate management, who you will never deal with. From hybrid systems to self-service digital purity.
People are alive, and thus need food, sick leave, maternity leave and education. They also have a troublesome awareness of exploitation and an unpredictable ability to disobey, defraud, make mistakes or go rogue. Thus, over the years corporate managers have tried to push the power balance in this hybrid model towards the machine side.
In their ideal world, bank executives would get rid of as many manual human elements as possible and replace them with software systems moving binary code around on hard drives, a process they refer to as 'digitisation'. Corporate management is fond of digitisation — and other forms of automation — because it is a force for scale, standardisation and efficiency — and in turn lowers costs, leading to enhanced profits.
The process is perhaps most advanced in the realm of electronic payments, where money is shifted with very little human action at all.
Despite recent talk of the rise of digital currencies, most money in advanced economies is digital already, and tapping your contactless payment card sets in motion an elaborate automated system of hard-drive editing that 'moves' your money from one bank data-centre to another. This technology underpins talk of a future 'cashless society'. This generally means slowly dismantling, delegitimising and denaturalising branches in the public imagination, while simultaneously getting people accustomed to 'self-service'.
Indeed, many banks are cutting branches, and many new forms of financial services are found only online, like digital banks Fidor and Atom. Digital banking startup Kreditech claims that bank branches won't exist 10 years hence, "and neither will cost-intensive, manual banking processes". Such digital banking is but one strand in the digital trajectory. Digitisation is starting to be applied to more specialist areas of finance, too, such as wealth management.
Wealthfront , for example, now offers automated investment advice for wealthy individuals. In their investment white paper they state that sophisticated algorithms can "do a better job of evaluating risk than the average traditional advisor".
Digital systems like Wealthfront are often promoted as cutting out the middleman — assumed to be human, slow, incompetent and corrupt — and therefore as cutting costs in both money and time. Some startups use this to build a narrative of the 'democratisation of finance'. Quantopian , a system for building your own trading algorithms, comes with the tagline: Robinhood draws on the name of the folk hero to pitch their low-fee mobile stock-trading system. It seems uncontroversial that these systems may individually lower costs to users in a short-term sense.
Nevertheless, while startup culture is fixated upon using digital technology to narrowly improve short-term efficiency in many different business settings, it is woefully inept at analysing what problems this process may accumulate in the long term.
Payments startups, for example, see themselves as incrementally working towards a 'cashless society', a futurist buzzword laden with positive connotations of hypermodern efficiency.
It describes the downfall of something 'old' and archaic — cash — but doesn't actually describe what rises up in its place. If you like, 'cashless society' could be reframed as 'a society in which every transaction you make will have to be approved by a private intermediary who can watch your actions and exclude you. Part of the reason for the pervasive acceptance of these developments is the deeper ideological narrative underpinning them, one which is found within the tech industry more generally.
It is the idea, firstly, that the automation of everything is inevitable; and that, secondly, this is 'progress': In this context, questioning the broader problems that might emerge from narrowly useful automation processes is ridiculed as Luddite, anti-progress or futile. Indeed, it is apparent that many people don't respond to 'progress' in the way they're supposed to.
We still find people insisting on queueing to use the human cashiers at big supermarkets like Tesco, rather than diligently queueing up for the automated checkout. Likewise, we still find people stubbornly visiting the bank branches, making manual payment requests; even sending cheques. Perhaps this is because there is something deeply deadening about interacting as a warm-blooded individual with a soulless automaton trying to sound like a human. The hollow fakeness of the cold clinical checkout voice makes you feel more alone than anything else, patronised by a machine clearly put there to cut costs as part of a faceless corporate revenue circuit.
The ongoing challenge for corporate management, therefore, is how to push automation while keeping it palatable. One key technique is to try to build more 'human-like' interfaces, and thus in London we find a hotbed of user-experience UX design firms. They are natural partners to the digitisation process, combining everything from ethnographic research to behavioural psychology to try to create banking interfaces that seem warm and inviting. Another key technique is marketing, because people often have to be 'taught' that they want something.
In the case of contactless payment on the London Underground, the Mayor of London, Barclaycard, Visa and the Evening Standard have formed an unholy alliance to promote Penny for London , a thinly veiled front-group to encourage people to use the Barclaycard-run contactless payments system rather than those ancient Oyster cards.
Sports stars like Jessica Ennis-Hill and Dan Carter have been co-opted into becoming the champions of automated finance. Signs have been popping up proclaiming 'contactless is here', as if it were something that people were supposed to be waiting for.
These subtle hegemonic messages permeate every financial billboard in the city. One key to developing a critical consciousness about technology is to realise that for each new innovation a new trade-off is simultaneously created.
Think about the wonderful world of digital banking. A low-level bank branch manager might be subservient to the centralised system they work for, but can also deviate subtly from its rules; and can experience empathy that might override strict economic 'rationality'.
Imagine you replace such an individual with an online query form. Its dropdown menu is the digital equivalent of George Orwell's Newspeak , forcing your nuanced, specific requests into blunt, standardised and limited options. If your problem is D, a system that only offers you solutions to A, B, or C is fundamentally callous.
A carefully constructed user complaints system can build an illusion of accountability, while being coded firmly to bias the interests of the company, not the user. Indeed, if you ever watch people around automated self-service systems, they often adopt a stance of submissive rule-abiding.
The system might appear to be 'helpful', and yet it clearly only allows behaviour that agrees to its own terms. If you fail to interact exactly correctly, you will not make it through the digital gatekeeper, which — unlike the human gatekeeper — has no ability or desire to empathise or make a plan.
This turns out to be the perfect accountability and cost cushion for senior corporate management. The responsibility and energy required for dealing with problems gets outsourced to the users themselves. And lost revenue from unhappy customers is more than compensated by cost savings from automation.
This is the world of algorithmic regulation , the subtle unaccountable violence of systems that feel no solidarity with the people who have to use it, the foundation for the perfect scaled bureaucracy. So, in some future world of purely digital banking we find the seeds of a worrying lack of accountability and an enormous amount of user alienation. The loan you applied for online gets rejected, but nobody is there to explain what hidden calculations were done to reach that decision.
To the bank management, you are nothing more than an abstract entity represented by machine-readable binary code. In the absence of employees, they will have to use your data to create the illusion of some type of personally tailored service.
Your historical interactions with the system will be sold back to you as a ghostly caricature of yourself, fed through the user-experience filters. And it is here that we find the emergence of new forms of financial artificial intelligence. Likewise, there is a blurry line between robots and artificial intelligence. At its most unambitious, AI is just a term for any form of calculation done by robots.
3 days ago This is another jaw-dropping exclusive interview from Zack Voell. This time he sat down with award-winning economist Brett Scott to chat about the definition of money, destroying Starbucks, banking the unbanked (in Somalia), and tons more . Don't miss it!. 26 Dec The Rise of the Cryptocurrency Gift Economy. Feb 18, at Brett Scott. Contrary to popular belief, the majority of bitcoins aren't spent on gambling. 12 Feb Authored by independent researcher and consultant Brett Scott for the United Nations Research Institute for Social Development, the paper provides a primer on the basics of bitcoin and discusses the technology's potential applications for remittances, cooperative structures and micro-insurance systems.