Algorithms and Algocracy – II

In the previous post, I provided a simple definition of an algorithm to then explore their use in the digital world. While algorithms live from the inputs they are feed, digital programs such as mobile apps and web platforms are comprised of a series of algorithms that, working in sync to, deliver the desired output(s). Algorithms sit between a given input and the expected output. They take the former, do their magic and yield the latter.

There is a direct relationship between the complexity of the planned output(s) and the coding effort required. The latter is usually measured by the number of coding lines in a given program. For example, Google is said to have over 2 billion coding lines (2×10^9) supporting its various services. You certainly need an army of programmers to create, manage

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Smart contracts are not that smart

Smart contracts are perhaps one of the most touted features of blockchain technology. While the idea itself dates from the end of last century,  blockchains provided the platform for actual implementation in the Internet era. Undoubtedly, Ethereum was the real disruptive innovator by enhancing the original but limited Bitcoin architecture with a plethora of programmable new features, smart contracts being one of them.1 In fact, Ethereum is defined as a Turing-complete platform.. This same development also opened the door for clearly distinguishing between blockchains and cryptocurrencies, the latter being just one application of the former, a general purpose technology of sorts.

Analysis of smart contracts can be undertaken from at least three different angles. These are 1. Finance; 2.

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Endnotes   [ + ]

1. In fact, Ethereum is defined as a Turing-complete platform.

Waste no time waiting for e-Waste data

The town where I currently reside is planning to change its e-Waste collection policy starting next year. As it is today, town people can go downtown once a month and drop their old computers, laptops, monitors and the rest. This will now be reduced to one day per year. Missing that date will entail people having to go to some other place out of town to take care of business. Or one could try to go to a nearby and more affluent village where one can drop the stuff at any time. Probably not kosher, though.

I am not sure if this change is the result of budget cuts or lower demand for such service  – or both. I am not really following town decision-making processes. But I do know that e-Waste collection is a state law, and all towns must thus take care of business. Note that appliances such

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ICOs: Endangered Species

As expected, ICOs are finally cooling down. There are several reasons for this. First, ICO oversight by regulators in many countries has substantially increased. Regulators are poking not so much into new ICOs. Instead, they are doing deep dives into those that have already been completed and going after those who look fraudulent. Second, the token market is in a massive downswing. Some tokens have lost at least 90 percent of their value thus leading to substantial loses for ICO investors. As a result, crypto tokens have become much less attractive.

Third, many of the successfully completed ICOs are having a hard time showing or delivering on the ground results in spite of massive infusions of capital. While lack of maturity and technology constraints might play a role here, it may also

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The Scale of the Blockchain Scalability Constraints

According to latest estimates, global Internet penetration was close to 54 percent by the end of 2017. That is roughly 4 billion people. Figures for the number of unique cell phone users show that 5 billion people have access to the technology.1 BTW, this means that 1 billion people have a cell phone but are not connected to the Internet. But that is another story.

Armed with this numbers, I asked a business acquaintance who is a blockchain enthusiast and practitioner if the most popular blockchain platforms could effectively cater to all those users. Answer: “Not at this moment. But do not worry, we are working on it.”

The reason for this stems from the scalability constraints the most reputed blockchain platforms face. As I see, the scalability issue is related to three factors: 1.

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Endnotes   [ + ]

1. BTW, this means that 1 billion people have a cell phone but are not connected to the Internet. But that is another story.

Have You Ever Seen a Blockchain?

A silent but intense competition seems to be taking place when it comes to defining blockchain technology. A Google search for the question “What is blockchain” yields over 120 million possible results. This number includes thousands of guides, videos, FAQs and other “educational” material on the subject. A shining example is a video depicting a blockchain expert trying to explain the technology to a 5-year-old kid. Really?

One common trait of all these resources is the lack of agreement on a single and straightforward definition of a blockchain. So take your pick. But, as mentioned in a previous post, this is probably not that relevant. After all, many people use mobile phones on an hourly basis and have no idea how they work. They do not need to, nor do they seem to care about it. The

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Bitcoin Inequality

In the short and medium term, technology and inequality seemed to be positively correlated. In the long term, however, things are not as clear-cut. With the right policies and democratic institutions in place, technology could become a catalyst to reduce income and wealth inequality. Historical evidence from last century clearly supports this claim. Will digital technologies of the 21st Century follow the same path?

The long-term is still quite a few years away for digital technologies such as AI and blockchains. In this post, I will look at the world of Bitcoin and explore its links to income and wealth inequality. I will assume the Bitcoin network is a country on its own with defined financial ties to the rest of the world mostly via crypto exchanges and miners.

Last May, the total

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Blockchain Mining Costs and Revenues

In a previous post, I pushed the idea that mining is part of the real sector of the blockchain economy. Unlike financial speculation, mining requires investment in hardware, electricity, space, human resources, etc. This also applies to small miners who undoubtedly will have to defray a lower investment amount but who can join a mining pool to share mining revenues. Also, miners face intense competition which in turn is a reflection of the high level of profitability in the sector.

Mining calculators seem to proliferate in the web. Such sites offer potential mining investors a rough idea of how much they can make on a daily and/or monthly basis given the current price of the crypto being mined and the hashing the investors is willing to purchase. For example, I am told that if I buy Bitcoin

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Checking ICOs, Again

It has already been three months since I last checked the ICO scene. At the time, I suggested ICOs were probably slowing down. New data seems to confirm this but all points to other trends not detected before. Figure 1 presents the latest data

ending on 31 May. 159 ICOs were successfully completed between March and May raising over 4 billion dollars. The data includes the Telegram wh.ich collected over 1.7 billion dollars in spite of not holding a public ICO phase. Telegram can indeed be seen as a statistical “outlier” making last April the most successful month ever. Note that the number of successful ICOs did not increase overall. March matched February with 57 ICO but was much more skinny regarding resources. April and May are fatter but do not exceed the number of ICOs of the previous

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The Real Sector of the Blockchain Economy

Most cryptocurrencies are now over 60% down from their December 2017 peak. While prices are still quite volatile, the trend for the last five months is decidedly downwards. While some still expect a recovery to the glorious days of last year, others see overvaluation all around accompanied by a financial bubble about to burst. Comparisons to the good old dot-com boom and subsequent crash of 20 years ago are cited as empirical evidence of what is coming.

Indeed, the current blockchain boom has similarities with the previous one. But there are also some fundamental differences springing from by the very nature of what we can call the blockchain economy. The first one is the marriage between technology and finance. Not that in the past the financial sector refused to use new technologies.

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