Category: Blockchain

Programmable Money and Identity

Since my time at Microsoft (almost 20 years ago!), I have been infected by the digital identity virus. At one moment I was even part of the WEF Personal Identity workgroup. Since then, I followed the identity space in some depth, some years more than others. See also my post on The Cambrian Explosion of Identity from 2019 that also figures David Birch.

Earlier this week, that same David Birch published a very interesting post about digital identity: the bottom line of his insight is that we should be less interested in solving pre-digital conceptions of identity and more in (certified) credentials.

I recently came to a similar conclusion, but from a completely different angle.

First, I bumped into The Block Whitepaper on CBDCs (Central Bank Digital Currencies) from August 2020, and got intrigued by the schema on page 13:

The authors do a great job in explaining the difference between Claim-based (or account-based) money and Object-based (or token-based) money.

In other words, money is an asset, and can be represented as a Claim (Account) or as an Object (Token)

Then I ran into this May 2021 post by Andrew Hong on The Composability of Identity across Web 2.0 and Web 3.0. It’s a quite technical paper, and I probably only understand 5% of it, but my attention was again drawn to a diagram on the composable and non-composable aspects of identity:

Andrew Hong writes: “The second layer (and onwards) highlights categories and products that allow us to represent that transaction data and/or social graph as tokens. Since tokens have the qualities of existence, flexibility, and reusability – then by the transitive property – our digital identity now does as well. I can move around these tokens at will to different accounts and in different combinations.”

I suddenly realized that the difference between Account-based money and Token-based money also applied to identity.

In other words, just like money, also identity is an asset (it always was), and it can be represented as a Claim (Account) or as an Object (Token)

During my 2003 Microsoft project, I was lucky enough to be exposed to more advanced  identity thinking by wise people like Kim Cameron and the other folks from The Internet Identity Workshop gang, and I got quite familiar with their thinking of certified identity claims or claims-based identity.

But only now, I realized that both Money and Identity can be account- or token-based, and that token-based is probably what’s going to help us make progress, because it makes identity and money programmable.

In other words:

For Account-based identity, you need to be sure of the identity of the account holder (the User ID / Password of your Facebook-account, your company-network, etc.). For Token-based identity (Certified claim about your age for example) you need a certified claim about an attribute of that identity.

  • For a paper/plastic ID Card/passport, it is the signature of yourself and the signature of the issuing authority, and plenty of other technical ways of ensuring the integrity of the card of passport (holograms, etc.). But it is a certified claim that the ID Card/passport is real, authentic, not tampered with.
  • In the case of an electronic ID Card (like the one we have in Belgium), the certified “token” for authentication or for digital signature is stored on the microchip of the ID card, and can be enabled by the PIN-code of the user (a bit like User ID / Password)
  • For a certified (identity) claim (like proving that you are older than 18 for example), you basically need a signed token, a signed attribute. And because it is done digitally, (identity) attributes becomes programmable, you can assign it access and usage rights

For Account-based money, you need to be sure of the identity of the account owner (the User ID / Password or other mechanism to access your account). For Token -based money (a 100€ bill, an NFT token, a ETH token, etc.) you need a certified claim about an attribute of that money.

  • For a 100€ bill it is the signature of the President of the ECB (European Central Bank) and plenty of other technical ways of ensuring the integrity of the paper bill (holograms etc.). But it is a certified claim that the 100€ bill is real, authentic, not tampered with.
  • For digital money, it is a signed and encrypted token representing one or more certified aspects of that money. And because it is done digitally, money becomes programmable, you can assign it access and usage rights, just like you could do for identity aspects

So, I come – although from a different angle – to the same (or at least similar) conclusion as David Birch in his latest post about identity that (certified) credentials are the way forward.

“These credentials would attest to my ability to do something: they would prove that I am entitled to do something (see a doctor, drink in the pub, read about people who a richer than me), not who I am.” (David Birch)

I am just adding the money dimension to it, and using the same sentence, I can now say:

“These credentials would attest the money’s ability to do something: they would prove that the money is entitled to do something (pay for Starbucks, pay for food, only to be used if there is enough money on my account, etc.), not whose money it is. (Petervan)

Post Scriptum:

You could also consider NFTs as certified claims of something (in today’s hype, they are certified claims of the authenticity of an artwork, but it could be anything, also identity, or also money. Amber Case for example referred to NFTs in the context when mentioning the Unlock Protocol on her ongoing overview of micropayments and web-monetization:

Unlock Protocol has a particularly inventive approach to NFTs — using them as customizable membership keys for certain sites. This allows people to set a length of time for the membership, or access to certain features like private Discord channels.

Content creators can place paywalls and membership zones in the form of “locks” on their sites, which are essentially access lists keeping track of who can view the content. The locks are owned by the content owners, while the membership keys are owned by site visitors.

In that sense we can really look at certified credentials as key to open something (a door, a website, a resource) or to enable something (a certain action, a certain right, a certain flow, etc).

Rabbit hole? Curious to read your thoughts.

Warmest,

Innovation Apes**t

Holiday is almost over, and soon the corporate machinery will kick-in again in full swing, with plenty of exciting announcements about new innovation initiatives, conferences, books, accelerators, startups, scale-ups, and what have you.

“How serious is your innovation?” is the title of a panel I will moderate at the Finnosummit 2018 on 12-13 Sep 2018. I identified a couple of angles for discussion that you might use yourself in assessing your own innovation efforts. Self-assessment of innovation is of course not new, and I already wrote several posts on this topic before:

But in this post, I would like to go beyond the tactics and the aesthetics.

The aesthetics in the video are great, and the background of the Louvre museum gives it some extra credibility, but from a historical point of view, it is all plain wrong and misleading. S**t sold as culture.

If you are a regular reader of the awesome blog of Leda Glyptis about innovation in financial services, you will soon get depressed, but what she describes is unfortunately reality in most organisations. The essence is that most innovation in bigger organisations is just Apes**t: it is not about getting good new stuff into the market, but it is all about looking good and ticking the box during annual reports and annual events. It’s marketing, and that is fine, as long as you know it and don’t deceit yourself that you are doing the real thing.

In this Apes**t world, innovation is a Brand Of Smiling Young Successful Energetic Good Looking People reflecting sentiments of cool, hip, young, dynamic, agile, fast moving, energetic, smiling, fun, and rule breakers.

building-stronger-more-positive-and-effective-teams

This Innovation Apes**t is now almost in the same category as “Fake trumps reality” a.k.a. fantasies to compensate for unfulfilled needs in real life.

Innovation “teams” are often very small teams compared to the rest of the organisation, and deeply buried in its reporting lines. But those very few are able to make a lot of positive and hyped noise, while in reality the rest of the organisation is still in zombie state, refusing at all times to touch (don’t event talk about cutting) the branch they are sitting on or the breast that is feeding them. Why would they? They are in the comfort zone of regular pay-checks, bonuses, perks, etc. And the rare individuals that have the guts to step forward get slashed in annual appraisals because they don’t focus on their objectives which are all focused on the core of the business, or on some vague management/leadership principles that look nice on a slide deck or annual report, but in reality are lip-service at best. It has come to a point where what innovations teams talk about is not what the organisation is focused on.

I have come to distrust anything that looks good, too good/neat to be true. The truth is always messy, and in a corporate environment the good usually hides the ugly.

Look at this example about employee motivation, typical HR Apes**t slideware.

Workplace trust hr apeshit

Humans just don’t function this linear/matrix type of flow. Humans are messy, and that is a great thing.

Therefore, distrust anything that fits a 2×2 matrix, because it is an oversimplification of reality, and does not include “movement” and “tempo”, unless you draw an arrow from one quadrant to another 😉

In general, also distrust all consultant models: they also suck because besides the gross simplifications of reality they also don’t take into account humans’ motivations. Most human interactions (words, sounds, tone, dress, posture, etc ) are status transactions, to increase one’s status compared to the other (opponent). Most motivations are about reciprocity, prestige, self-serving biases, power, hypocrisy, arrogance and entitlement.

All those models also suck because they forget about patrimony, organisational memory, and culture being in essence recorded/internalised know-how.

Doctrines are a category in their own right. Lean, Agile, and Six Sigma are in the category of “Doctrines”, so are “Customer first” and “FNAO” (Failure is not an option/Fear is not an option). The big four sign big contracts for rolling out Lean, Agile, and Six Sigma programs in organisations. They have “knowledge transfer methodologies” where they run the program themselves with their junior consultants for the first year, and then transfer the knowledge to in-house “navigators”, “coachers” or other fancy titles to keep the whole organisation busy and in defence mode for another 1-2 years.

Agile swardley

Doctrine One Site Fits All - Courtesy Simon Wardley

The problem is when one or the other becomes a one-size-fits-all doctrine, usually to obfuscate an unspoken organisational objective to do with cost control (by reducing cost of change (agile), by reducing waste (lean), by reducing deviation (six sigma), and sold under the innovation umbrella.

Once these programs come to an end, the focus quickly fades out – because in addition the whole organisation is now exhausted – and another year later, we are back to business as usual. Until the next consultant or management guru/book comes along.

This is the famous oscillating pattern so well described by Robert Fritz who states that structure drives everything and basically that any lasting innovation effort is about changing the structure of the organisation. And structure is not only about organisational structure (like organograms and reporting lines). It is about coherence between narrative, motivations and governance.

Some good dimensions to assess your Innovation Apes**t are:

  • What innovation have you SHIPPED lately (let’s be generous and look at last year, not last weeks)?
  • How did that contribute to the bottom line?
  • Where is the Skin-in-the-Game?
  • What % of your revenue is invested in innovation? If less than 5% you are definitely not serious. Some startups have probably more bootstrap money then your whole innovation budget together.
  • What have you changed at organisational level?

strategyzer

Courtesy Alex Osterwalder - Strategyzer
  • Why is your head of innovation NOT reporting to the Chairman of the Board? Yes, you read that well: Chairman of the Board and not CEO.
  • Why don’t you have a Chief Entrepreneur NEXT to the CEO?
  • What have you changed at Governance level? Have you simplified, or just added yet another layer of control and vetting to make it quasi impossible for your innovators to get anything through the different gating levels?
  • What is the name of the (innovation) play you are playing? This is about the clarity of your innovation intention. Describe it in 10 words max without using any of the Blah-words. Are ALL executives and ALL board members 100% aligned on this? Or have you left the doors open for organised sabotage?

blahs

Common Blahs (in strategy) - Courtesy Simon Wardley

For financial services, you can add Blockchain (or whatever semantic variation such as DLT), AI, RegTech and the Data Revolution to that list.

So, what is your innovation about, if you can’t use any of these blah-words? Is there anything tangible or even intangible left when you peal this onion? Curious to hear your thoughts and experiences.

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The Selfish Data

Some days ago, a Google video “The Selfish Ledger” leaked: a futuristic thought experiment on how total data collection could reshape society. I believe it is a very interesting perspective on data collection that can lead to as many utopian as dystopian scenarios as you want.

There was an excellent coverage in The Verge, well done, so read that one first maybe. The same Verge article also includes a good context video here.

What I would like to offer here is a somewhat broader perspective on the whole issue.

The use of the word “Ledger” reminds me of course of the 2012 Digital Asset Grid project – in essence a collection of distributed ledgers of all sorts of data (not only personal data), a blockchain without blocks and without chains – that was already incorporating concepts like the intention economy of Doc Searls. With some goodwill one could interpret the “Resolution” concept in the Google video as some sort of intention.

In 2012 there was maybe a time window where Personal Data Stores could offer an alternative to the almighty GAFAS of this world, but that time has long been gone. The Google video also shows how outdated the GDPR legislation is. Today is not anymore about users giving consent, but about data having its own life and will. I could paraphrase Kevin Kelly’s “What does technology want?” into “What do my data want?”. Not that I believe that my data wants anything at all, but it gives you a zest of Google’s thought experiment.

google ledger

The key snippet from the video is where the human becomes the custodian – not the owner – of the data ledger, and can pass it on to next generations. The video suggests that data has it’s own intention, an intention to survive and pass on information to next generations. Like the Selfish Gene of Richard Dawkins (a book from 1976 ! that is also referred in the Google video). The Selfish Gene was published more than 40 ago, and since then the ideas of Dawkins have been quite critized.

The Google film also has a bit of the same alienating atmosphere, uncanny valley feel of Andy Curtis documentaries. Of course the documentary “The Century of Self” is the most relevant in this context.

It’s a series of 4 videos, together more than 3 hours of footage, but I strongly encourage you the watch it with the Google video as reference point.

Curtis depicts “how those in power have used Freud’s theories to try and control the dangerous crowd in an age of mass democracy.” and refers a lot to the PR techniques developed at the time by Edward Bernays, who was using the corporate PR techniques, but now for governments wishing to influence the behaviour of their citizens.

Curtis also cites the words of Paul Mazur, a leading Wall Street banker working for Lehman Brothers in 1927:

“We must shift America from a needs- to a desires-culture. People must be trained to desire, to want new things, even before the old have been entirely consumed. […] Man’s desires must overshadow his needs”

The Google video seems inspired by that desire to train people to desire, whether that is buying stuff or realising resolutions. Still very much looking at the user as a consumer, which is an insult IMO. It also starts feeling very much like the Sesame Credit score, the Chinese government social rating system, a private credit scoring system developed by Ant Financial Services Group, an affiliate of the Chinese Alibaba Group, where in essence behaviour in line with the party line is rewarded, and behaviour not in line with that norm is punished. The critical question is of course who sets the norms and what are the intentions of those issuing these norms.

Also, what many discussions about personal data seem to omit, is that the data that are intentionally or unintentionally shared by users are only a very small snapshot of somebody’s data “ledger”. A lot is not shared at all: I would refer to these data as “The Unspoken”. The ideas, thoughts, concepts, models, desires, fears, etc that are unspoken, because they embarrass you, or because they have not yet been integrated in your personal narrative of who you are.

The Unspoken data are related to unspoken dreams, frustrations, fantasies, weird thoughts, shadows, memories, etc. In many cases personal secrets that you are too afraid to share as they expose your vulnerabilities. I have started making a list of The Unspoken that you can find here, and I kindly invite you to complement this list if you feel so. Who said again that “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”?

On another dimension, I have been reading quite recently a couple of books that at first sight may seem unrelated to the subject at heart here.

  • Nora Bateson’s “Small Arcs of Larger Circles: Framing through other patterns”. A book about how thoughts, ideas, concepts and patterns are inter-relational and are passed from one generation to another.
  • Michael Singer’s “The Untethered Soul”: about the timeless philosophical question “Who am I?” and more importantly, which “I” are we talking about here. The “I” of our thoughts and emotions, or the “I” that is witnessing them?
  • Keith Johnstone’s “Impro: Improvisation and the Theatre”: highlighting how people try much too hard not being obvious, and how many people think they are only interesting of they have something different to show, share, say.
  • Venkatesh Rao’s “Tempo: Timing, Tactics and Strategy in narrative-driven decision making”, describing virtuoso how “tempo” is an always present but less outspoken aspect of our relationships between people, corporations, etc
  • Han Kang’s “The White Book”, with an essay about swaddling white bands around a newborn baby: “The womb will have been such a snug fit, so the nurse binds the body tight, to mitigate the shock of its abrupt projection into limitlessness. Person who begins only now to breathe, a first filling-up of the lungs. Person who does not know who they are, where they are, what has just begun. The most helpless of all young animals, more defenceless even than a newborn chick.”

The Google video is also inherent of Silicon Valley’s solutionism delusion; that if there is a problem to be solved, there is an app or an algorithm for it. This is finite game thinking as compared to infinite game thinking, as well described by James Carse.

I like Nora Bateson’s quote here:

The problem with problem-solving is the idea that a solution is an endpoint.

 And further in her book:

I see a great deal of misunderstanding—a great deal of information floating around, and even more being generated in the form of big data, little data, medium data. But not much in the forms of the warm data of interrelationality.

“Warm Data” is information about the interrelationships that integrate elements of a complex system. Information without interrelationality is likely to lead us toward actions that are misinformed, thereby creating further destructive patterns.

“Warm data”, I like that. I prefer that way more than selfish data.

 

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Cogs in networks

We use models and metaphors to make sense of our organisational structures, understand them, make predictions, apply change.

Blog_beehive

Bee hive - via Bridging the Gap

Some well known models are:

  • Ants in colonies
  • Bees in hives
  • Apes in jungles
  • Humans in neural networks
  • Organisations as machines
  • Hierarchies, wierarchies, holocracies

Models are not reality. Models are an abstraction of reality. Same for metaphors. They help us tell and understand a narrative.

We are not apes, ants, or bees. We are humans. As Jonathan Haidt explains at length in his book “The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom”, I am struck by all the noise humans put on the system: “We are all hypocrites” and “We are the rider (the conscious/the ratio) ànd the elephant (the unconscious, feelings, instincts, genes). Most models assume the rider is in charge. The rider is not in charge.”

Structural change leads to structural behaviour change. Structural change needs high quality connections and flows.

“A high quality connection is one where information transfer is rapid, reliable, and noise free” says Tom LaForge.

But in real life, this information transfer is NOT noise free. Maybe in some nirvana love relation, but usually not at/for/within work.

Noise comes from the motivations of the elephant (the unconscious), some examples:

  • Reciprocity
  • Prestige
  • Self serving biases
  • Power
  • Hypocrisy
  • Arrogance and entitlement

In most re-orgs, people look at the motivations and incentives for the ratio, the rider. They ignore the elephant. They forget the rider is not in charge.

High quality connections need something else than speed, reliability of noise-freedom.

There should be some dimension/ambition/alignment of “Spiritual, moral and aesthetical advancement”.

In this category, we find standards and appreciation for:

  • Care
  • Tradition
  • Craftsmanship
  • Beauty
  • Proportion
  • Sacredness
  • Infinite games

See also my own post about Kevin Kelly’s qualities created at the transaction, which is more about qualities of resulting products and services than qualities of structure: https://petervan.wordpress.com/2017/04/19/sine-parole-19-apr-2017/

And then there is governance

hierarchies

Simple Google search on organisational hierarchy

The simplicity of the hierarchy works well on a slide or a hand-out. You can document it in a spreadsheet, or box-diagram and so on. But all these representations do is framing the conversation in an illusion of simplistic 2-dimensional structures. It’s the specialty of management consultants to think and present in two dimensions. It’s making it easy for executives to understand.

But if you are used to a 3-dimensional view of reality, you can’t understand why the flatlanders don’t see what you see. As long as you are primed in 2D you won’t see what the other dimension sees.

A better picture/metaphor for an organisational structure would be something like this.

escher

Relativity – 1953 Lithograph by M.C. Escher – 294mm x 282mm

Ricardo_Bofill_Taller_de_Arquitectura_Barcelona_Spain_The_Gardens_24-1440x968

Ricardo Bofill – La Fabrica – Old cement factory – Barcelona, Spain

It’s messy. At many moments you don’t know anymore where you stand. The perspective changes all the time. You get disoriented.

There is somewhere a general definition for Robots:

Robot = sensors + mind/computer/algorithm + body (hardware).

But humans are not just: senses + brains + body.

Computers are not like brains. Brains are not like computers. Our human models are different from machine models. Machine understanding is different from human understanding.

Humans are not just nodes on a network/grid that can be governed by coded social contracts, blockchains and AI. If you do that, humans are just cogs in another machine. Humans become cogs in a network.

The obvious case is of course Uber, which is an economy of extracting value vs. the so-called sharing economy. For Uber, all the drivers are already cogs in a network for the sole benefit of the monopoly.

Being cogs in networks is an insult for humans. But we are just getting started:

But does it still matter at all these days? We already are in a new world of “Alien knowledge, when machines justify knowledge”. Check out this fantastic long read by David Weinberger

Alien Knowledge

Via David Weinberger - Illustrations by Todd Proctor / YouWorkForThem

“The paradigmatic failures seem to be ones in which the machine justification has not escaped its human origins enough.”

Organisations are not models/buildings/boxes. They are like rivers with information flows. Building skeletons, where the structure of the building guides traffic and connections.

David Weinberger talks about models created by machines. Models that machines can understand and we don’t. It is very much as he concludes:

“It has taken a network of machines that we ourselves created to let us see that we are the aliens.”

If we don’t want to end up as cogs in networks, we need to aim for structural advancement at a spiritual, moral, and aesthetical dimension.

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I am in the business of cultivating high quality connections and flows to create immersive learning experiences and structural change. Check out: https://petervanproductions.com/

 

Fintech 2017- Quo Vadis?

rt6517

Deborah Kerr and Robert Taylor on the Quo Vadis filmset

Every year Jim Marous publishes the Top banking trends and predictions. On 21 Dec 2016, Jim published the sixth edition with predictions for 2017.

My input was a “pick-and-choose” list of bullet points. You can find the full list below. My input date was 27 Nov 2016. We are now two months later, and I captured some articles/announcements related to some these bullet points. And I added at the end some additional observations. All of this should be taken with more than a grain of salt, as I dimmed my focus on FinTech since starting my Petervan Productions sabbatical on 1 Nov 2016, and don’t read/research as much as before.

As always, these are 100% my personal opinions. Sometimes provocative, sometimes innocent, sometimes the cynical view of a 60 year old incumbent, but hopefully at times contrarian and inspiring. Here we go:

+++ start 27 Nov 2016 input

  • In general, 2017 will be the year of illusion, delusion, and distraction for and by FinTech.
  • Blockchain/DLT/etc will prove itself as one of the biggest distractions of this era in that it does not solve any existing problem, maybe it solves some future problems to be identified, but with a price to pay: the price of fundamental process re-engineering. Very few will be up to this task which involves community management and regulation.
  • In 2017, subject to pressures on the bottom-line and macro-political forces, banks will witness massive lay-offs and disinvestments in FinTech innovation labs and initiatives. These initiatives will be re-branded as research efforts, focused solely on incremental improvements in the core business lines.
  • FinTech will manifest itself as a techno fantasy, drawing attention away from the real problems to be tackled: cyber-security, trust and identity, which only can be solved through laser focused industry and government efforts. No single company can solve these on their own, and self-serving patenting will be counterproductive to industry-wide success.
  • In the US, the Trump administration will out-regulate innovation to protect the financial institutions fiefdoms and their control of money. But despite the Trumpian rhetoric and “opportunities” for financial institutions to start playing their old extraction-value games, financial institutions will be challenged by citizen uproar to give back to society.
  • Despite all these negative predictions, volume and frequency of FinTech investments will dramatically increase. Like in other industries, a 100M$ Fund will be considered as peanuts. Like in traffic jams, investments become bigger and last longer. Like traffic jams, ROI will be difficult to impossible to resolve.

+++ end 27 Nov 2016 input

What I am missing in many predictions is that most are just extrapolations of existing trends. They ignore the fact that the trend can just die or become a commodity where prices trend towards zero.

What I am missing is the creative/opportunity orientation (what do you want) vs. the reactive/responsive orientation (what problem are you trying to solve).

The way we think about change, disruption, and transformation) or whatever you want to call it) is going to be completely different in 5 years time. The speed of change is so big that our thinking is getting disrupted. The underestimated and ignored exponential power in all of this is the “power of networks”. I have another post in preparation for that, but in the meantime I would invite you to get familiar with following books and thinkers:

  • The Seventh Sense: Power, Fortune, and Survival in the Age of Networks, by Joshua Cooper Ramo
  • Whiplash: How to Survive Our Faster Future, by Joi Ito
  • The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future, by Kevin Kelly
  • “I wasn’t expecting that” from Simon Wardley’s upcoming book
  • Cloud wars by Simone Brunozzi
  • The end of cloud by Peter Levine from Andreesen Horovitz
  • Trillions: Thriving in the Emerging Information Ecology, by Peter Lucas, Joe Ballay and Mickey McManus (already from 2012, but so advanced in its thinking)

Rebelliously yours,

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Innotribe Sibos 2016 – Day1 – Disruption Redefined

Disruption

Two weeks ago, I shared with you a high level preview of the Innotribe Sibos 2016 programme.

As promised, I will reveal more details for each day in some subsequent blog posts leading up to Sibos week 26-29 Sep 2016 (37 days left at the time of this writing).

Our preparations are in full swing. We are in the midst of a series of intense prep calls with all speakers, together with our production teams and our facilitators and designers. All engines are on!

It has always been our intention to build a program with architectural integrity and a week of intense learning experiences. This year is no different.

General structure:

agenda-4-days

General overview of the Innotribe Sibos 2016 programme

 

The structure of the week program is fairly straightforward:

  • We start every day with an opening of the day
  • We close every day with a closing of the day
  • Over lunch time, we have spotlight sessions by several FinTech hubs: one day for Switzerland, one for EMEA, one for the AMERICA, one of APAC

For the opening session, the Innotribe team will welcome you, and for the Monday opening, we will zoom in into some highlights of our Innotribe Industry Challenge on Securities (about issuing a bond on the blockchain).

Our day anchor will then walk you through the plan of the day. Our day-1 anchor is Michell Zappa from Envisioning Tech, Brazil. He will come back in the day closing to wrap up the learning of the day.

In between we have several Innotribe sessions. We don’t do anything during the plenary big issue debates so you have the time to enjoy those as well.

The main theme of Innotribe day-1 is “disruption re-defined”. We have three sessions:

  • Patterns of disruption in wholesale banking
  • The Future of Money
  • Emerging technologies for financial services

Patterns of disruption in wholesale banking

Learn to anticipate and react to disruptions in Securities, Trade Finance and FX.

Begin 2016, the Deloitte Center for the Edge published a deep research on nine patterns of disruption cross-industry. Upon our request, Deloitte created a special version for Innotribe Sibos on the relevance of these disruption patterns for financial services, and how incumbents can/should react to them.

Patterns of disruption Innotribe slide 042616

Key take-aways of this session will be:

  • Reframe the notion of disruption
  • Understand there are patterns of disruption
  • There is a way to be more rigorous in understanding and anticipating disruption
  • There are some effective ways to respond to disruption in a purposeful way
  • Apply these insights to our world of wholesale banking and think of specific action steps that can be taken by our organisations

The rock-star line-up for this session:

  • John Hagel, Co-Chair, Deloitte Center for the Edge
  • Val Srinivas, Research Leader, Banking & Capital Markets, Center for Financial Services, Deloitte

This is a highly interactive session, with assignments for the audience, to help you internalise the knowledge you picked up from our speakers. At the end of the session, there will be a “gift” to take with you.

The Future of Money

For the first time, this ever-popular Innotribe session has been promoted as a full-blown “Big Issue Debate” in the main plenary room of Sibos.

future of money

The idea behind Future of Money is to essentially act as a crystal ball, examining the large shaping trends that are going to affect financial services in typically two to three year’s time.

Moderated by Udayan Goyal, Co-Founder and Managing Partner of Apis Partners and Co-Founder and non-executive director of Anthemis Group, this year’s Future of Money is set to discuss the Internet of Things (IoT) and how the collection of data in our highly networked world through sensor-based technology is set to change how we think of financial services.

Other topics include the rise of artificial intelligence (AI), with decisions regarding investments and creditworthiness becoming the purview of automated systems based entirely on inputs of personalised data.

The line-up:

  • Jon Stein, CEO Betterment
  • Carlos Menendez, President, Enterprise Partnerships, International Markets, Mastercard
  • Amber Case, Cyborg Anthropologist and Fellow at Harvard Berkman Klein Center

We also tried to re-invent a bit the flow of a big issue debate and “sweat the technical asset” we have at our disposal. Expect more from Innotribe 😉

Emerging technologies for financial services

In this session, we will share the results of a research commissioned by Innotribe to Envisioning Tech from Brazil. Again, original research and a word premiere of a fantastic visualisation tool.

The different technologies will be mapped on different time horizons, and we will highlight the inter-connections between them.

Every technology will come with a navigation card detailing its relevance to the financial services industry around 10 different impact vectors – with a focus on cyber-security and distributed ledger technologies.

visualization fintech

Screenshot of beta-version of visualisation tool

The session is animated with a spectacular screen-wide interactive visualisation.

The session is an interactive workshop with a card-game interaction with the participants. Seats will be limited.

General

All sessions are designed to maximise the immersive learning experiences of our guests. We use professional facilitators and designers to enable great group interactions. And we have an amazing audio/visual kit and production team to make the content come alive.

The pepper and salt comes from our “instigators” who have a designed role to provoke the critical discussion. The “instigators” of day-1 are:

  • Patrik Havander, Nordea
  • Anthony Brady, BNYM
  • Matthew Grabois, BNP Paribas Securities Services

For the sessions where it makes sense, we also have a transversal anchor for Cyber-security and one for DLT. They stay in the Innotribe space for the week, and will report back at the end of the week:

  • Our Cyber transversal anchor is Bart Preneel, University of Leuven
  • Our DLT transversal anchor is Andrew Davis, advisor from Sydney

Next week, we will cover the themes and sessions of day-2 of Innotribe Sibos 2016.

Resources:

Follow us on Twitter: for the latest announcements: @Innotribe, #Innotribe, @Sibos, #Sibos

We are looking forward to meeting you all again at this year’s Innotribe Sibos 2016 from 26-29 Sep 2016 in PalExpo, Geneva.

Deeply grateful,

Your architect and content curator for Innotribe@Sibos, @petervan

Innotribe Logo

Shift Happens: Blockchain to revolutionalise Scientology

scientology

In the aftermath of the Scientology trial in Brussels last month, senior representatives of the six Belgian governments have initiated exploratory talks with Scientology to assess the creation of a blockchain-based venture for the relationship economy.

blockchain

In a joint press release, they announced today the launch of DAG (“Digital Asset Goldings”), a new blockchain consortium headed by Bitalik Vuterin. The project uses a brand new fork of the blockchain protocol called “Ethereal”: a permissioned mutual distributed ledger protocol, underpinned by its own ether-cryptocurrency “Real”.

DAG has been set up as a non-profit cooperative, and has already collected more that 500M USD in equity funding, rocketing it into the first blockchain unicorn in history.

DAG will be governed by G4S (Governance For Securities), a governance body made of 45 major financial institutions, and several of the RegTech sandboxes, that tested the technology in Q1 of 2016.

The funding round was lead by FISH (Flanders International Securities Holdings), fully owned in open source by five of the six Belgian Governments (Brussels does not participate: as the home of the European Union, the Commission does not permit hosting regions to participate in ventures promoting non-fiat currencies).

FISH Logo

Flanders International Securities Holdings holds 51% of the shares of DAG, 29% is owned by G4S, and the remaining 20% is reserved for future crowd sourced citizen participation, based on simple bonds that will be issued in the Real open source currency on the DAG shared ledger.

Ethereal leverages the findings of the Digital Asset Grid project, an incubation project that was set on hold in 2012 by lack of interest and investment, probably because to novel at its time. Digital Asset Goldings will use the same principles of governance, trust, resilience and availability as the DAG-project, but the implementation is based on a brand new revolutionary protocol “Ethereal”, using modern breakthrough encryption technology based on Quasars.

DAG logo

“With Ethereal, we have solved the scalability problem of the blockchain”, says Vuterin; “We can scale to more that 1 Trillion nodes on the grid, and all the atomic transactions can be executed in milliseconds. We can do this thanks to our quantum computer “StockGold”, mining Reals at the nanoscale and nanosecond.”

quantum computer

Quantum Computer running StockGold

Adriano Selinky – Head of BancoVentures, the investment arm of BancoBlanco and one of the 45 banks backing the project – raves: “We believe there are about 20B USD in yearly savings in direct settlement of Scientology fees: the business case was a no brainer for us, and we are eager to invest in more Ethereal-based projects and startups. DAG will revolutionize financial services, and will deeply disrupt the economic fabric of our economies. We see many more use cases, but it will take a couple of years before we will see the full impact of this.”

Adriano Selinky

Adriano Selinky – Head of BancoVentures

The Scientology trials will be labeled “TrustWeb” and will be led by Neil Sinner, as a competitor to his brother’s “DataWeb”. “Kris has been instrumental in setting up DataWeb, but this technology space is moving so fast that DataWeb is already an outdated technology before its first implementation. TrustWeb is just offering superior relationship experiences”

The promise of superior relationship experiences did not go unnoticed to the 6 Belgian Governments, who consider the DAG and the Ethereal G4S governance model ready to revolutionize their own move from centralized to decentralized to fully distributed peer-to-peer government.

DAG will have its international headquarter in Blocke-Heist, a little town on the Belgian coast. The little town is renowned for its elite public, attracted by art galleries, fashion shops, exclusive restaurants and bars, and a vibrant nightlife.

Baron Clipckens – Mayor of Blocke-Heist – was very bullish: “I was myself hit very hard during the 2008 crisis as an investor, and I am convinced that transparency and traceability of financial transactions are the best guarantee for the long- and short term savings of our citizens. We welcome all FinTech Hubs to join us in this effort, and we hope that Blocke-Heist can become the Blocke-Valley and Davos of the Relationship Economy.”

Together with Scientology, DAG has also acquired its HQ real estate in Blocke-Heist: “La Réserve”, a 3-star Michelin restaurant and conference center.

La Reserve Blocke-Heist

La Réserve in Blocke-Heist, Flanders, Belgium

It comes with an 18 Hole Golf course to facilitate high quality relationships and connections. Close to the seaside, this will guarantee DAG with a daily fresh supply of fish and seafood, and is ideally positioned as a high-end executive meeting and event center.

DAG also attracted @petervan (one of the Co-Founders of Innotribe) as their Artistic Director. “There is indeed room to rethink the way events are organized, using more participatory Ethereal concepts that will guarantee advanced collaborative learning beyond the pure cognitive. La Réserve is an outstanding location where physical and emotional space blend into unique immersive experiences”; said Petervan.

Petervan Shift Happens

@petervan, in his black T-Shirt “SHIFT HAPPENS”, at Innotribe Sibos last year
(black T-Shirts seem to be the standard uniform of Innotribe Co-Founders)

DAG seems to be a marriage in heaven and possibly the singularity moment for financial services: the future of decentralized governance combined with the relationship economy of Scientology.

Casino Blocke Heist

Blocke-Heist Casino – Magritte Biennale

The DAG opening gala party – Tuxedo and Magritte Bowler Hat only for men, ladies in Gala Dress – will be held tonight in the Grand Salon of the Casino of Blocke-Heist, starting at 11pm with Champagne and genuine Russian caviar, followed by a standing dinner, and Belgian Top House-DJ’s animating the dance floor till early in the morning. The event is sponsored by Veuve Wickcot Champagnes and BancoBlanco. For those with more artistic interests, there is also a Biennale running in the Casino, of Belgian surrealist artist Magritte. See you all there!

How to avoid simplistic conversations on disruption?

This post is about some of the myopic views on disruption in financial services (or any other vertical for that argument), and why I am getting a bit tired of FinTech, RegTech, InsurTech, or whatever AbcTech you may come up with.

Petervan Abstrakt Motiv 390a detail b+

Disrupted - Petervan Artwork - Acryl on Paper format A1

 

Most of the discussions in FinTech are about the (by now outdated) “unbundling” of highly vertical integrated organizations like banks. Everybody recalls the famous CB-Insight slides on how all functions on the website of HSBC, Wells Fargo, or fill in your <Bank Name> here, will be replaced by better offerings of startups or scale-ups: “everything gets fragmented”, you know 😉

It even leads to a “Re-bundling” of financial services, as what was once unbundled needs now to be re-bundled by “banking-as-a-platform” or “Fintegration”, just to throw another buzzword into the mix.

This is in my opinion a highly simplistic view on disruption. It is a fragmented view on disruption. The disruption view is fragmented: each little function on its own is subject of a fragmented disruption debate. We are missing the holistic view of what is going on.

What I would like to bring into the conversation is the “inter-connectedness” of everything, or the “entanglement” of everything.

For payments, the conversation is usually about how many and which intermediaries are part of a payment transaction from the payer to the payee, and how they add value, friction and costs into the system: one can indeed draw disintermediation maps and articulate how the different new entrants attack the different pieces of the end-to-end transaction. But it is piecemealed view, as if the sum of the atomic transactions is an exact equation of the value created in those ecosystem value chains.

The same reflections can be made on the securities business, where many different players (exchanges, central counterparties (CCPs), central securities depositories (CSDs), brokers, custodians and investment managers) are part of the end-to-end flow of atomic transactions between the issuer of a security and the consumer of that security. See also recent comprehensive post by Let’s Talk Payments.

The point I am trying to make here is that what needs to be solved, re-thought and re-designed is a deep ecosystem entanglement. What are really needed are a fundamental process redesign and process innovation and that is not an easy undertaking with all the network effects that are inherent in these ecosystems.

The other point I am trying to make is nobody – not the incumbents, nor the startups/scale-ups – is in a position to solve this on their own.

I believe we have to evolve from platform capitalism to platform cooperation or even platform co-operativism.

  • Instead of talking about optimized correspondent banking, the conversation should be one of collaborative/cooperative banking.
  • Instead of talking about optimized securities lifecycles and settlement, the conversation should be one of collaborative/cooperative securities markets.

The system is not broken. It works very well for what it was designed for. It does not need to be fixed. It needs to be re-thought. What we are witnessing is the need for a fundamental re-thinking of our assumptions. The financial system is part of a broader system of capitalism based on neoliberalism. That system is broken.

Paul Mason – who wrote the book “Post-Capitalism” – was very clear in his recent keynote to the Glasgow Economic Forum: “Neoliberalism is broken”. And he goes on:

  • information technology has paralysed capitalism’s capacity to adapt
  • information technology creates a short-cut to abundance
  • the root cause of the boom-bust cycles, collapsing productivity, stagnation and policy paralysis is that the markets are sending us a signal that there’s not enough value in a high-tech economy to justify current valuations — of debt, equities or derivatives
  • we are in a long transition beyond capitalism, in which the state, the market and a non-market sector based on collaborative production will jostle and coexist
  • and that the only theory that can encompass all of these facts is the one originated by the man quoted on the poster behind me [Adam Smith] — a modernised form of the labour theory of value.

That is the first simplification in the current mainstream thinking about disruption.

As a start, one should start looking at the symptoms of that broken system (as very well articulated in Otto Scharmer’s work at the MIT U.Lab). These symptoms are:

  • An Ecological divide
  • A Social divide
  • A Spiritual divide

otto

The second simplification of the disruption discourse is the lack of inclusion of the macro-forces. Some of the macro-forces deeply driving what’s going on are:

  • Technology macro-force. Here is where inter-connectedness hits hardest. However, this is probably the easiest macro-force to deal with, as technology will take care of itself, as it always has. Open source and other collaborative models will only speed-up that self-care of technology: standards will emerge almost naturally, by natural selection, or my monopolistic interventions.
  • Regulatory macro-force. Regulation is still very high on the agenda of financial institutions, and one can only expect that more is to come, especially on the area of data capitalism, handling of personal and corporate data, and even data ethics. After having digested the regulatory impact of the 2008 financial crisis, many are tempted and seduced to jump back with relief into innovation. The blockchain hype is a great excuse for claiming one is busy with the future state of things. Nothing could be further from the truth
  • Geo-political macro-force: Grexit, Brexit, Terrorism, War, Surveillance, climate, and other crisis that can pop-up at any moment in time, with their potential of killing overnight all the innovation plans and ambitions.
  • Eco macro-force: the acknowledgement that our organizations don’t operate in isolation, that we have to evolve from ego-businesses to eco-businesses, not only extracting value out of the ecosystem for our sole and own benefit, but that we are part of a reciprocal non-zero-sum game with an unspoken desire to save humanity.

The third simplification is the omission of the time component of evolution. I strongly recommend you discovering the work of Simon Wardley and his “situational awareness maps”.

 

 

Different values are created by different versions of different technologies and value engines, each of them evolving at their own pace on the lifecycle of emerging to commodity/utility. For big organizations – like financial institutions – it is extremely difficult to map out the current state, let’s not even mention the ability to strategically decide where one wants to head for in different time horizons in the future.

The same situational awareness is not only needed for (existing) and new technologies, but also for existing and new regulations, geo- and eco- events and ambitions.

In the past many have been concerned with the “backward compatibility” of new services and solutions. Backwards compatibility with the existing footprint and practices in the market that is.

I believe there is room today to start thinking in terms of “Forward Compatibility”.

What is Forward Compatibility? It is a capability to plan ahead for gradual adoption by the ecosystem, taking into account the different barriers mentioned above. This is about knowing HOW to get at the new destination:

  • How you rally the main stakeholders of the ecosystem into a rigorous system and process innovation? Process innovation is different from process-, datamodel-, or messaging standardization. It is not about standardizing the existing and guaranteeing backwards compatibility with the existing. It is about co-creating a new reality.
  • How you promote the evolution from the current model to the future model? In the case of distributed ledger technologies for example, it is not about a tabula rasa that will eradicate the existing, but how one evolves from for example a messaging hub-and-spoke paradigm towards business objects and lifecycles in the cloud, initially probably in one central database (one node), and then evolve to a peer-to-peer networks of many distributed databases or nodes (remember the Digital Asset Grid?)
  • How to bootstrap this new reality taking into account the network effects to be created and promoted in the new P2P reality.

No disruption will happen without fundamental re-design – or better re-invention – of the end-to-end business processes:

  • Organizations knowing where they want to get and defining and leading that journey;
  • De-risking change throughout this journey;
  • Making trade-offs in the breadth ànd depth of the destination;
  • Moving beyond the atomic nature of the transaction. As mentioned an nausea in previous posts, it is not good enough anymore to enable (atomic) transactions, the challenge is to enable commerce, as an end-to-end process

Startups/Scale-ups who want to be part of this endeavor, will need to know how to “scale”: they will need to learn to appreciate the mechanics of growing a startup into a corporate. This growth process (and its associated growth pains) is very well described in the post “Go Corporate or go home” around the concept of legibility of on organization. The startup organizations – whether they like it or not – will need to become more legible, more predictable. The author makes a very solid argument why hierarchies are needed.

“The smaller a company is, the less they need to formalize anything, and the less the three levels — chain of command, business process, and culture — differ.”

 As they grow, they will have to synchronize how they transform these three levels (chain of command, business process, and culture). It’s not only from small self-sufficient team into hierarchies; it is also growing into professional business processes, and evolving the social fabric and conventions.

Although startups, scale-ups, and corporate innovation sandboxes mimicking the startup culture “love to have and keep the flexibility, the cost of growth is scale, integration, and profitability.”

In this context, it is probably worth having a look at the post about the Transferwise culture (I could have taken any other scale-up for that matter) “We inspire smart people and we trust them”, and especially the comment on that post that talks about KPIs, product-level empowerment, about focusing on growth more holistically, actually removing bottlenecks and silos, empowering teams at the product level, and instrumenting themselves to be able to actually get granular feedback.

If possible – assuming you want to spend some quality time – read that post and comment after you have read “Go corporate of go home”.

So next time, when you pitch about disruption, about the end of banks/banking, about collaboration/co-operation, or about any other technology solving world hunger, please make sure you have an answer on how to get to your new destination. I would suggest you keep forward compatibility in mind.

Platform Capitalism or Platform Cooperativism

Douglas

Headshot - Douglas Rushkoff

The first time I heard the term “Platform Cooperativism” was when listening to a talk by Douglas Rushkoff (www.rushkoff.com) on 15 Nov 2015 at the Internet Society.

video

Just a couple of weeks before, Doug had sent me a manuscript version of his new upcoming book “Throwing Rocks at the Google Bus: How Growth became the enemy of prosperity” (Amazon Associates link), planned for release in two weeks or so. I recall the working title of the book was “The end of growth”.

book

As usual – when listening to an interesting talk – I scribble notes on my notepad, pausing the video after every interesting sentence, and end up with some sort of transcript, somewhat personalized because using my own sense-making lens and bias.

Some snapshots:

  • Before the law enforced monopoly, now technology enforces monopoly
  • From creative destruction to destructive destruction
  • A software company is a company extracting value from the working economy (transactions between people) and converts it into capital (static bags of shares and stock prices), converting land and labor into capital.
  • Creating real value, that’s the suckers’ place (of being gamed). Playing the game is the place where you want to be
  • Central currency is the embedded operating system
  • Should we optimize for growth or optimize for humans?
  • Jobs!, Jobs!, Jobs! Let’s pretend we are on acid for a minute ;-). Who really wants a “job”?
  • Most companies, after reaching max growth, go for steady state, the flow of money
  • Uber drivers are doing R&D for automatic cars. They don’t have a platform cooperative
  • Family businesses are focused on the long term, are generational, are even willing to help other create value.
  • From a growth model of business to a flow model of business
  • Optimize for the velocity of money (not for being static, stocked in troves)
  • We don’t need banks to authenticate
  • The bank was made to extract value out of our transactions
  • About Bitcoin/Blockchain (at minute 37): “what are they programming for?” Bitcoin creates trust? No, Bitcoin SUBSTITUTES trust
  • In the end, we have to re-program the social expectations of each other
  • There is some chance that the P2P economy may happen, that the extraction economy comes to its end, with interesting experiments
    • We see hybrid models to fund pizzeria, 50% Crowd, 50% bank
    • The bank as facilitator of local community development
  • From platform monopolies to platform cooperatives
  • Facilitating exchange of value between people instead of extracting value from people’s labor.
  • We need a full-blown renaissance, and we are in it…
    • From Perspective painting to the hologram and the fractal
    • From the individual hero to collectivism
    • From the printing press to the computer
    • From enclosing the commons to retrieving the commons
    • From divisional science to the science of whole-ism
  • Land, Labor, and Capital as PARTNERS in an economy
    • Today, capital is extracting from Land and Labor

The comments right after Douglas’ talk by Astra Taylor, author of the book: “The Peoples’ Platform: And Other Digital Dilusions” are interesting:

  • I want (platform) cooperatism to be confrontational, it has to make a difference in the world
  • How different is the current moment? If different at all….
  • The key for cooperatives success is access to capital

Platform Cooperativism is possibly an answer to Platform Capitalism. Harold Jarche recently articulated very well what platform capitalism is really about: the extraction of value from many for the benefit of a few.

“The emerging economy of platform capitalism includes companies like Amazon, Facebook, Google, and Apple. These giants combined do not employ as many people as General Motors did. But the money accrued by them is enormous and remains in a few hands.”

And just a couple of days ago, David Bollier had a great post pointing to a new report on Platform Cooperativism by Trebor Scholz, one of the organizers of the Nov 2015 conference where Rushkoff spoke. Full report (PDF) report here.

“In the report, Scholz notes that the gig economy financializes resources that were previously outside of the market.  Our cars, our apartments, our private time – all can now be monetized through corporate platforms and made subordinate to market forces.  In effect, this new system is “embedding extractive processes into social interactions” and “extending the deregulated free market into previously private areas of our lives,” writes Scholz.”

Platform Cooperativism is a choice we have in the Industrial-Human Paradox. The WEF makes a lot of noise about “The 4th Industrial Revolution”, semi celebrating forms platform capitalism like the Uberization of everything, and robots eating our jobs.

It feels to me that sort of thinking starts feeling more as entertainment rather than independent thinking and provocation.

As Douglas Rushkoff said and provoked elsewhere: we don’t need to fix the system. The system just works fine for what it was designed for: extracting value.

scharmer

Otto Scharmer articulated very well the symptoms of the broken system:

  • Ecological divide
  • Social divide
  • Spiritual divide

We don’t need to fix the existing system, we need another system. We need radical ideas for the new century: platform cooperatism could be the answer. But a lot needs to change.

Still inspired by Scharmer, we need to improve the quality of how we engage with each other, the way we debate, dialogue, coordinate, organize. We need to take into account the quality of the context. We need to go from experiments and prototypes to models that can scale and be transformative. And that needs to happen at an institutional level.

In his ULabs, Otto Scharmer has identified two missing conditions for this to happen:

  • Enabling infrastructures that bring together the right set of players into a system
  • Move from abstract coordination mechanisms (like hierarchy, markets or organized interest groups) to co-creating ecosystems

In the middle of the great transition from centralized to decentralized to fully distributed systems, we have a choice: we can copycat the models of platform capitalism leading almost by nature to a few monopolists who take it all, or we can choose for a construct that has in mind the flourishing of the whole, of the cooperative.

Somebody has to take up the role of the commons for financial services, where the end-goal is not to maximize profit and shareholders value, but the interest of the community and the maximalisation of flow between all the stakeholders.

Ceci n’est pas un blockchain

 

Is there really nothing else to talk about? The intensity of the hype is getting to a point where conference organizers put a blockchain session onto their program “just to get people in”, in many cases because they have nothing else valuable to say. So they sell hype instead of substance.

ceci no blockchain

Magritte’s painting, freely adapted by Petervan

 

You know when you are at the top of the hype-cycle, when the topic hits the WEF agenda as a cure for “The 4th Industrial Revolution”.

David Birch nailed it this week in Finextra when he wrote:

“It seems to me that in a relatively short time the word blockchain has become detached from its technological roots and from its location in the spectrum of shared ledger implementation options to become one of those almost generic chromewash terms, like “big data” or “cloud” (there is no cloud, remember, it’s just somebody else’s computer) to deliver a superficial veneer of futurism.”

path

In the “Path of least resistance” (Amazon Affiliates link), Robert Fritz says:

We live in an era of platitudes and mottos. Many of them are designed to manipulate people into action: If you’re not part of the solution, you’re part of the problem”. This one, popular in he late sixties and late seventies, was clever. No matter what you did, you were involved in the conflict. And if you happened not to be directly involved, you were the cause of the conflict

And later;

So many of the notions in human growth are filled with these kinds of conflict manipulation. I suppose it is considered good marketing. Create a perceived need in the prospective client. Encourage a sense of urgency. Make it seem as if there is no choice. But conflict manipulation has a structure that cannot lead to growth just to more extreme oscillation. Thus many of the people who attempt to cause change, often with real sincerity, do not change and do not grow. The structure of conflict manipulation does not support change.

Blockchain is nothing else than code that seems applicable in many use cases. Code is language. Code is culture. The only way to understand and learn code, culture or language is to practice it. That’s exactly what many of our institutions do, and i think that is great.

But let’s not confuse symptom and cause.

As already mentioned in my blog post on Magritte and The Ages of Machines, the image of the pipe is not a pipe. The picture of the pipe stands for the hype. The hype is not the real world, not the real pipe. The hype hides reality. What is it hiding?

It hides the underlying structural changes. Robert Fritz said :

“A change of underlying structure will lead to a change of behavior. Not your good intentions, your sincerity, your hopes, your goodness, or how much you care”

Structure drives behavior, and behavior drives culture.

The pendulum oscillates:

Capitalism > Postcapitalism

Platform Capitalism > Platform Co-operatism

Collaborative > Autonomous

Internet of Things > Interest of Things

But that underlying structural and hence cultural change is caused by ecological, social and spiritual divide (the three big divides in Otto Scharmer’s work).

That structural change becomes more and more visible in the evolution from centralized to de-centralized to fully distributed systems.

ottoFrom Otto Scharmer’s U.Lab

The above structural changes deeply impact our quality of attending, conversing, organizing and coordination.

These are the things we should discuss. How we participate, how we organize, how we coordinate, how we set norms and governance to tackle the three big divides.

On the governance and regulation of “centralized networks” and “distributed systems”, there was recently a great post by @nickgrossman GM of Union Square Ventures, referring to his great Regulation 2.0 Whitepaper

regulation 2.0

Figure by @nickgrossman

“This is a fundamentally different regulatory model than what we have in the real world. On the internet, the model is “go ahead and do — but we’ll track it and your reputation will be affected if you’re a bad actor”, whereas with real-world government, the model is more “get our permission first, then go do”. I’ve described this before as “regulation 1.0” vs. “regulation 2.0”

The point I am trying to make with this post is that the pipe is a big distraction for the real work that needs to be done.

The real work and our bigger themes of discussion should be (for example):

  • How to become better banks, better in the sense of better for the world
  • How to deal with the power shift resulting from the structural changes
  • How to move from platform capitalism to platform co-operatism
  • How we attend, converse, organize, and coordinate in this new medium

This is post-platform thinking. Where centralized networks (like Uber, AirBnB, etc) could/can/should get replaced by fully distributed P2P systems.

The market that can be addressed is huge. The frictions to be sorted out immense. This attracts entrepreneurship and investment.

But we risk having the same wet dream of freedom and self-realization as we had with the Internet.

In the end, powerful players stand up and try to control the market, trying to get a grip on it through monopolistic and hyper-libertarian behavior. Who will be the Amazon, Google, Facebook, Apple, Samsung, or Alibaba of this new monopolistic distributed nirvana?

The image of that pipe may create a big illusion of perceived freedom.