The Future Of Bitcoin on CNN

I was delighted to be asked by CNN to be one of the panellists debating the future of Bitcoin this evening via Twitter. Despite the chat overlapping with the livestream of Lawsky’s outline of revisals to New York’s BitLicense, it managed to attract a huge amount of attention around the web.

Whilst I’ve been using Twitter for six years now, it was the first high profile Twitter event that I’ve taken part in. And a pretty full-on hour it was too. Trying to get your answers out whilst responding to others and also scanning the rest of the conversation meant that the time flashed by. And according this report on the debate in CryptoCoinNews, it appears it seemed to be even more chaotic for many of the people who were looking on.

Twitter’s a powerful platform. Ever since it clicked for me that it had nothing to do with everyday mundanities but that it was instead a mainline that led me to all of the key information that I needed (whether I knew that I needed it or not), I’ve been a big fan. To me, the price that you pay for the immediacy of information is the very fact that it can be a bit chaotic. That’s clear if you’ve ever followed trending topics during major breaking news events. Such chaos doesn’t come without certain risks, of course, but the discovery value is clear nonetheless.

Regardless, it was fantastic to be involved. The reality as we are all aware is that the topic can be complex and provoke plenty of strong reactions as any brief glance at the Bitcoin sub-reddit or Bitcoin Talk forum tends to highlight. And even Andreas popped his head in briefly to get involved at one stage:-

https://twitter.com/Jose_Pagliery/status/545626541510918144

So thanks again CNN. I’m pretty certain that this conversation is one that’s going to keep going for many years yet. It’s far from over.

Price Is Not The Key Metric

As the end of the year approaches, there’s been a glut of articles exploring the depressed value of Bitcoin across the web. To be fair, it is one topic that’s never far away from the headlines. Price is inevitably the barometer of success for those who view Bitcoin with varying degrees of distrust and/or misunderstanding and it commands similar attention within the industry also – for example, seven of the top ten stories on CoinDesk in Q3 of this year were about price.

But I don’t think that’s where the focus should be. Just to be clear, I’m not stating that the price has no relevance whatsoever. If you actually sank your life savings into Bitcoin at the height of the market at the turn of the year, you’ve been left with too few pennies to afford that snorkel that you now need to survive underwater, so it matters a great deal. But in the wider scheme of things, I believe that the lower price has been positive for one reason in particular – it’s bought some time to breathe.

Let me explain where I’m going with this. In 2014, we saw far lower levels of price volatility than in 2013. During this year, we’ve watched billion-dollar plus businesses such as Dell and Microsoft accept bitcoins for the first time. But as such global brands have given their seal of approval in a way that was unthinkable less than two years ago, there’s been little impact on the price in general. In fact, if anything, it’s tended to go down when news breaks of adoption by a significant business. The fact that most simply convert their bitcoins to fiat immediately, with this increased supply hitting the market and creating downward price pressure, is no doubt one of the factors.

But the simple fact is this: when you look at the ecosystem, there still remains a huge amount of work to be done to build the companies and organisations that are needed to harness the technology that exists today and to bring it before a mass market. We’ve barely even started – and where the first forays have been made, they have inevitably been focused on disrupting existing models and businesses. If you have even a passing knowledge of the block chain, you’ll understand that this technology is about far more than just money. And as a result, this year in particular, we’ve seen some of the brightest minds on the planet start to really drift towards full-time development of various 2.0 technologies that build upon the foundations that were introduced – lest we forget – only 5 years ago.

Of course, with a rising price, it’s easier to attract more hands to the pump. And as the price ebbs away, some individuals inevitably lose interest. But with each advance, more people’s eyes are opened to the potential that exists. But that is a key point here – we’re talking about potential. If you’re expecting Bitcoin to behave as a fully mature traditional currency with huge exchange volumes at this stage in its development, I suggest that you might be missing the point slightly.

So by removing the pressure of striving to build a business at speed using a developing technology beneath the shadow of a rocketing Bitcoin price, you’re left with a system in which individuals are far less likely to strive for quick wins. A depressed price helps you to build more sustainably for the future by muting that voice in your head that continually whispers that you’d make more money from simply buying bitcoins directly than trying to build a company.

Let’s consider some other metrics. With traditional financial industry heavyweights joining the party and with network recently seeing the highest number of daily transactions ever, you risk misinterpreting what’s going on if you base your view simply on the price.

At its core, Bitcoin is built using open-source software which means that anybody with an interest can get involved. One of the major benefits of this transparency is that you can actually see the explosion in the number of projects that are being worked on all around the world. Combine that with the massive growth in regular meetups, talks and conferences globally – an exponential growth in investment of intellectual capital, if you like, on top of the record VC capital that’s been pumped in during 2014 – and there’s absolutely no doubt in my mind that we’re looking at an ecosystem that’s coming to the end of an incredibly successful and important year in a far stronger position than every before.

As Benjamin Graham famously pointed out, in the short term the market is a voting machine; but in the long term, the market it’s a weighing machine. Don’t mistake a price based on sentiment today with a price driven by the ultimate value of these new businesses over the longer term. As I tweeted a quote from Bernard Lunn earlier today after the recent seven-year ‘overnight’ success of another disruptive financial industry business, peer-to-peer crowdfunding platform Lending Club that just IPO’d for over $1 billion after starting back in 2006:

It’s been a huge year. But it’s far from over yet. Tomorrow I’m hearing that Benjamin Lawsky is likely to announce an outline of updates to the BitLicense regulations (live stream here) after which I’ve been kindly asked by CNN to take part in a Twitter live chat debate on the future of Bitcoin (#bitcoinfuture). There’s no doubt that this conversation’s set to continue for a long time yet to come.

Satoshi’s Songs: Can Bitcoin Save The Music Industry?

The prospect of a decentralised, definitive record of ownership as introduced by Bitcoin (the technology) is something that I find hugely exciting. Does that make me a nerd? Maybe. But if you’re anything like me, on the same day that it dawns on you that this new system gives us the power to exchange value online with someone (human or machine) that we’ve not previously met without being forced to rely on a middleman, the realisation of just how disruptive such a system is likely to be across all industries starts to take hold.

I have a few personal favourites when it comes to targets for disruption but,  without doubt, one is the music industry. To me there’s a particular poetry about blockchain solutions in that industry given the fact that the vast majority of the online world’s first brush with P2P technologies came from Napster or one of its descendants.

I came across a fantastic essay by Spotify’s artist-in-residence DA Wallach in which he sets out a few thoughts for how crypto-currency could revolutionise the music industry. What’s really interesting is that he doesn’t focus on the obvious advantages of the artist-to-fan internet direct distribution model that everyone knows so well. Instead he applies the power of Bitcoin (or more accurately crypto technologies in general, including Ripple) to explain precisely how this new way of thinking could immediately improve the status quo.

The music industry has its own set of problems, exacerbated by a legacy of confusing IP laws, historical land grabs by competing parties and entrenched resistance to technological innovation, as Apple proved when it decided to sneak up on the big labels and eat their pie just over 10 years ago.

In our collective rush to replace those halcyon days of album cover art with the convenience of digital music, we’re left with a confusing mismatch of precisely who contributed to each track. This has happened because the details of those that worked on each song (whether musician, songwriter or studio engineer) are kept on systems (e.g. ROVI and MusicBrainz) that (much like the banking sector) are closed, proprietary and therefore time-consuming for others to interrogate. This fragmentation of information forces digital music companies to spend time cleaning up this data before using it – and use it they must. It also makes it more difficult for musician’s unions to carry out the essential work in tracking their members’ performances.

On top of such opaque systems, the industry has layered the far more complex world of rights. Any single song can generate revenue that needs to be split and transferred to sometimes more than 20 different parties – whether these are the original songwriters, performers, publishing companies, record companies or performing rights organisations or anyone else that someone has chosen to sell their rights on to.

Let’s set aside for a second the argument that some parties will be excluded from this basket of rights in the future as the music industry evolves. Even if they remain, it’s clear that this complexity is a big issue. Look at Spotify’s model. Taking a total royalty pool, it then distributes this according to each song’s popularity on the platform. But as we’ve seen, one song does not equal only one payment.

This system is inefficient. The result is that both artists and industry members are being paid irregularly because of one simple fact: the system is not fit for purpose.

The answer? Let’s look at the blockchain. But instead of thinking about the value that is transferred upon this technology as being simply bitcoins, let’s think about transferring another type of data that’s clearly valuable. And what do we end up with?

A single global record of music data that is decentralised, open-source, global and controlled by no single entity.

On the face of it, this should be the goal for everyone unless their financial return is directly tied to the inefficiency of the existing system. Whilst previous attempts to unify records have failed, this solution is far more valuable for one reason in particular – this technology enables the automatic and guaranteed distribution of funds directly and immediately to the relevant rights holders with the minimum of human intervention (using smart contracts).

For example, one solution would be for every single song to have its own address. Spotify (in this case) would then transfer the sum directly to the address. In turn, the money (bitcoin, XRP, whatever) would then be automatically distributed according to the conditions set in the smart contracts agreed between the rights holders before the music was released.

No more artists waiting to be paid, unsure of their income. No more confusion (or misappropriation) of funds by any other party in the chain. And transparency driving bad actors out of an industry in which there has been a tradition of unfair and one-sided commercial agreements.

There does remain a question around incentivisation. How do you convince closed platforms to open up and release such data? DA suggests that, much in the same way that Bitcoin miners are incentivised to secure the network by competing for the block reward, this global record of music data could work on a model which charges for access. Those charges could then directly reward those that contributed that data in the first place. My instinct is that this model may have certain issues. But it’s beyond doubt that there’s significant value for all once the participants free this information.

DA’s view is that Bitcoin isn’t best suited for this, suggesting that Codius (Ripple’s smart contracts implementation) would be a better choice. But irrespective of the technology chosen, there’s a huge opportunity here. I know of a few crypto-focused music solutions starting to make waves (like Bittunes) and it’s definitely an area to watch in my view.

Take a blank sheet of paper. Would you choose the industry structure that we have today? Or would you instead look to technology that we now have access to? Combine a permanent, transparent public ledger that credits everyone who deserves it, a system that can automate the contractual payments that already been agreed, powered by micro transactions that can occur in real-time and – at the very least – you have a system in which artists have the potential to earn more money by doing exactly the same thing.

Now that, to me, sounds like progress.

Money Comparison: Gold v Fiat v Bitcoin

As the value of the price of the Rouble collapses and the Russian Central Bank raises the interest rate to 17%, it’s worth taking a high level view at some of the basic options out that some people are facing.

The Traits of Money (Ryan Walker)
The Traits of Money (Ryan Walker)

Sometimes a short post is all that’s needed.

Maybe this new fangled nerd money has something going for it after all.

Digital Ethics in a Connected World

The last couple of months have seen high profile figures in technology painting various ominous visions of Artifical Intelligence bringing about the end of humanity. It’s a fascinating topic but I’ve avoided writing anything on it yet as I feel it’s a nuanced topic that deserves a little bit more detail than simply dealing with it in one of my daily blog posts.

Interestingly though. the topic rears its head once again in this video that I watched today by Gerd Leonhard from TEDx Brussels. Gerd’s a renowned futurist who I’ve been following since he released “The Future Of Music“.

The questions that he poses around ethics and morality when it comes to technological advancement are certainly thought-provoking. As the global network of connectivity tightens, technology continues to develop at warp speed. Yet as humans, we are simply incapable of developing at such a pace. No matter how many people we befriend with on social networks, our social tribe (our hardwired connectivity, if you like) still maxes out at 150 people each.

But like it or not, we can’t stop the exponential development in technology that comes with each passing day, as underlying themes start to take hold and amplify each other’s effects – think of the internet, social media, mobile, cloud computing, big data, 3D printing, renewable energy, the Internet of Things, cognitive systems. robotics. the Smart Grid, the connected car, Smart Homes, Next Generation Eduction, Smart Cities, Next Generation Automation, Connected Healthcare, the Sharing Economy, Autonomous Vehicles, the Maker Economy, the Energy Internet and the Logistics Internet.

Now, one question is becoming increasingly important. Every single advance relies on data to progress – and, increasingly, this data will come from you. Do you genuinely believe that you have the necessary power to decide whether or not this information can be used by Google, Uber or anyone else? If the News Feed that Facebook shows to its 1.2 billion users worldwide daily is indeed being controlled by only 15 people (plus a hugely complex algorithm), shouldn’t you at least have the right to investigate the ethics of these individuals? It’s a question that’s already been asked earlier this year and resulted in Facebook apologising for the way in which they carried out psychological experiments on 700,000 users’s News Feeds back in 2012.

As Gerd rightly points out, privacy holds the key to this discussion. But as another 3 billion people come online in the near future, what will the end result be if we have no moral compass which we can use to guide us when it comes to looking at these issues?

The bottom line is this: technology does not have ethics. It is simply a platform that is in a continual state of development. Almost everything that can be digitised or automated will be. This means that the potential for technology to improve our lives is incredible. But if, in short, technology is all about improved efficiency, what on earth is going to happen to the very human characteristics that are not like those of a machine?

Much of the beauty of human creation can be attributed to mistakes, serendipity and chance. Even the simple existence of inefficiency in the form of playfulness has resulted in much of what we know to be human (take art and music as an example). So when asked (if indeed we are given the choice) how far we wish to integrate computing into our bodies in the years to come, do we just passively agree? Or to put it another way, in search of that added efficiency, are we simply going to make our heads more like machines so that machines can more easily read our heads?

The ethics surrounding this digital transformation are fascinating and slightly scary. It’s an easy call to make to let nanobots get injected into your bloodstream to destroy the cholestrol that might otherwise kill you. I suspect that we’ll generally be willing to accept such actions if the direct result of such ‘cooperation’ results in a greater life expectancy. But where do you draw that line? Is choosing an implant in your brain that can instantly access the Knowledge Graph to give you a headstart in your career prospects just as easy a decision to make? How about if those implants becomes standard and an expected requirement before you can apply for a particular job?

Interestingly, the World Future Society has laid down three simple rules when it comes to thinking about AI:-

  1. Humans should not ‘become’ technology.
  2. Humans should not be subject to dominant control by AI entities.
  3. Humans should not fabricate new creatures by augmenting humans or animals.

I agree with Gerd’s point that we can now safely say that the power of our technology has already surpassed the scope of our ethics. We may be heading into a world of abundance, as Peter Diamandis argues, but we are yet to discover the most ethical way of developing such increased efficiencies – in terms of fully representing the truth that results, being fair to all parties and acting for the benefit of all.

I’m a huge proponent of technology. Always have been and always will be. But I think we can do far worse than to take onboard the punchline of the cartoon used in Gerd’s talk:-

“In the end, remember – we weren’t downloaded – we were born”

 

How Much Does Your Car Know About You?

A week ago I wrote about the Future of Digital presentation on Business Insider. One of the trends that stood out to me is the projected growth in connected cars (i.e. cars with internet access). With predictions that the global market will grow threefold within five years, I believe that it’s going to be an interesting area if only for the simple reason that many technophobes still buy new cars – and will therefore get exposed to the technology, whether they like it or not.

Revenue Forecast for Connected Cars
Revenue Forecast for Connected Cars

However, as Forbes recently pointed out, the introduction of these cars will have to get over some significant obstacles first:-

  • The development cycle for new cars is significantly longer than normal consumer electronics products (such as mobiles)
  • With mandatory eCall systems embedded within cars in Europe that automatically send details of any accidents to emergency services, a controversy has already developed around whether the technology can be used by others to track locations without consent.
  • Car dealers will need to up their tech skills to sell the benefits of the vehicles effectively (and honestly).
  • It’s not clear whether the cars themselves will have inbuilt systems or simply rely on tethering via the driver’s mobile.
  • Car purchases usually involve just one payment. Now consumers have to get used to recurring payments for connected services post-purchase.
  • How high will the hurdles be to getting apps in expensive hardware accepted that address quality and driving safety standards?

Despite all of the obvious benefits, as with all significant advances in technology, there are serious privacy considerations to be addressed as the car becomes your best friend. According to the British Insurance Brokers’ Association, some 300,000 cars in the UK are already using telematics devices that capture details of our driving behaviour (such as the speed with which you take corners). And the payoff for letting someone else keep an eye on you? Reduced insurance premiums.

When it comes to tracking, we’ve already seen issues, even at this early stage. A couple of years ago, TomTom faced a backlash when it sold SatNav data to the Dutch police that helped them to place speed traps. Google’s acquisition Waze announced it was trading user data with local governments, passing across the incredibly accurate second-by-second location tracking that it gets from pinging each user’s mobile phone every second in return for updates from each city’s traffic systems. The information is of course supposed to be anonymous in this case.

In recent weeks, two US-based organisations that represent some of the world’s biggest car manufacturers have unveiled an agreement on privacy standards for securing the data that the connected cars will generate. You can check out the principles here. Interestingly, initial commentary views them as falling short of what would be required in Europe were they to apply across the Atlantic.

There’s no doubt that we can look forward to yet another battle to find a balance between valuable consumer products and privacy in the near future.

Trust Me, I’m A (Block Chain) Computer

Noted polymath Nick Szabo published a new article yesterday, “The Dawn of Trustworthy Computing“.

Celebrated within the Bitcoin community, he’s the guy that came up with the concept of BitGold before Bitcoin and has written some of the most significant essays in the field over recent years (see ‘Shelling Out – The Origins of Money’ and his seminal paper on Smart Contracts, ‘Formalizing and Securing Relationships on Public Networks‘).

There are a few points from this new piece that really drive home the power of the technology that underpins the system. I recommend that you go and read it yourself (here) but given its importance, I thought that for today’s post, I’d try to give a high level summary of what is invariably, yet again, another excellent piece of work.

Szabo starts by pointing out that we currently rely on a system that is designed in such a way that the ‘other end’ of our computers (i.e. the web servers etc) has to be run by an individual or collection of people that we are required to trust. The system simply could not work unless you did. This has a significant downside as it means that no security measures will ever be able to prevent the data that you share in this way from being hacked or leaked if it is sufficiently valuable to someone else.

But think of how commerce operates. When you pay to see a film at the cinema, you simply hand across the money. We benefit from controls embedded within the system (the guy behind the desk checks you’ve paid the right money and gives you a ticket without asking your name). OK, so the process may be slow if there’s a queue but we receive a ticket and the cinema can control how many people get into the screening. However, compare that with an online transaction online. As we’ve established, the system of computers that we currently rely on is not very trustworthy, given that it is liable to hacks or leaks. However an online transaction will usually force you to fill out forms containing additional valuable personal data. We are forced to accept the risk of this data being lost because the time-saving from having computers involved (rather than requiring all customers to visit a shop to pay in cash, for example) is so significant.

But block chain computing changes all of this.

In this new system, a virtual computer that is protected by cryptography and consensus technology is now shared across many computers. It is a system in which each computer is required to check the work of the other computers in the network. The result? We can now explore interactions that were just too risky before this system was invented. We no longer need to place our trust in an individual or group on the other end of our computer.

The use of the word trust can often be confusing. For newcomers who are confused by people talking about ‘trustless’ systems, Szabo suggests ‘trust-minimised’ would be more accurate.  So instead of having to rely on (i.e. trust) unknown third parties to do what they’ve promised, each computer will reliably execute the instructions that we provide (subject to the 51% issue of course). Within this new network, we couldn’t trust the computers if we relied on them as individuals. But together, when all of the computers are constrained by mathematical rules, the end result is a reliable and secure network.

This is a powerful concept. Initially, we’ve seen block chain computers have been used primarily to develop a currency solution, namely Bitcoin. But now we are faced with an unforgeable record of transactional data being recorded in the block chain, we’ve can start to accelerate the development of further applications.

One area that fascinates me in particular is that of smart contracts. As Szabo writes:-

“The block chain can also make the search, negotiation, and verification phases of contracting more reliable and secure. With on-chain smart contracts we will be able to buy and sell many online services and financial instruments by button and slider instead of by laboriously filling out forms that disclose our private information.”

It’s worth noting that in order to achieve such powerful advantages of security and reliability, the decentralisation inevitably costs more (in terms of both money and time) when compared directly with the current system in which you rely on one web server alone. However, those advantages outweigh the negatives by an order of magnitude. Be careful however not to assuming that it is merely the fact that this improvement is simply because of the fact that the system has been decentralised:-

“It’s actually the protocol (Nakamoto consensus, which is highly distributed) combined with strong cryptography, rather than just decentralization per se, that is the source of the far higher reliability and and much lower vulnerability of block chains.”

It appears to be Szabo’s intention to follow up in the future by really digging into some of the applications are now possible on top of such a trust-minimised block chain. I can’t wait to see what he comes up with. In the meantime, if you’re more interested in the computer science behind the block chain itself, check out this handy list of papers.

 

 

Size Does Matter: Microsoft Gets Some Coins

So there’s only really one story today for me – and no surprises for guessing what that might be…

I woke up to read that Microsoft were now accepting Bitcoin. That’s huge. And a bit out of the blue to say the least.

I couldn’t help but think back to May 2014 when a similar early morning glance at the headlines on my mobile told me that 50 miles away, CeX in Glasgow had suddenly not only unveiled a brand new Lamassu Bitcoin ATM in the store but had chosen not just to promote but to enforce a Bitcoin-only payment option for all customers for a three day period. OK, a *slightly* different scale but still.

Kudos to BitPay for delivering this. Coinbase were clearly pulling ahead in terms of integrations with billion-dollar business so it’s good to see the Atlanta team strike big. The result benefits everyone in the Bitcoin ecosystem – proving that when you’re in such a fast-growing marketplace, competition really is irrelevant. There’s plenty of pie to go around for everyone.

Now as you’ll see when you dig into the details, this isn’t a full integration – yet. They’re letting people use Bitcoin to add funds to Microsoft accounts that can then be spent on various Microsoft services  (such as software, Xbox games, apps for Windows phones). But the importance of this announcement cannot be understated for a number of reasons.

There’s a natural value in using Bitcoin to fund Skype credit and to potentially address the in-game microtransaction payment opportunity that exists via the Xbox. But fundamentally – and most importantly – this is acceptance by a company that the vast majority of people are aware of. Yes, Overstock and Dish are big business (in the US), Dell is well-known (but not to my mum) and Expedia has a strong brand (if you book your own online travel). But I’d hazard a guess that everyone who actively uses a computer today (in the West at least) has – at the very least – heard of Microsoft.

Of course, Microsoft were hardly attracting positive commentary about the pace of their innovation or general strategy under Steve Ballmer’s stewardship. From here, it’s hard to tell whether this move is simply a case of Ballmer’s replacement Satya Nadella being a Bitcoin fan (as has been claimed) or simply a change of direction approach within the business to become more receptive to innovation following a change in leadership.

But ultimately, it doesn’t matter. Because of this:-

It’s been a big 2014. Roll on 2015.

AI and The Legal Profession

Working in the legal profession for well over a decade gave me a pretty good insight into the mindset of others in the industry – or, more specifically, their attitude towards change and innovation. What follows is necessarily a generalisation to some extent but I believe the observation remains no less valid because of that.

I vividly remember giving a talk as a trainee back in 1999 on why the invention of Napster’s file-sharing growth was so important. Most of my colleagues at the time looked on with barely-disguised expressions of confusion and boredom. It wasn’t the first time that I felt that my attitude towards adopting and experimenting with change made me feel very different to others within the industry over the course of 13+ years.

I was always a fan of Richard Susskind’s work over that time. For a man who predicted in his book “The Future of Law” in 1996 that email would become the predominant form of communication between lawyers and their clients (provoking a response from the Law Society of England and Wales along the lines that Susskind shouldn’t be allowed to speak in public because he clearly didn’t understand the way that the industry functioned and or the rules surrounding client confidentiality), he’s continued to push the industry kicking and screaming into the modern era throughout.

I just watched a talk that he gave over the summer in which he gave a 50 year view on the impact of AI and the law.

Susskind starts by setting out the four stages of resistance that he inevitably sees from members of the legal profession when faced with technological progress:-

  1. This is worthless nonsense
  2. This is an interesting but perverse point of view
  3. This is true but quite unimportant
  4. I have always said so.

And it was this first stage that reminded me of that Napster talk all those years ago. It’s reminiscent of Gandhi’s quote that gets bandied around frequently in Bitcoin circles when someone brings up the usual adoption hurdles:

“First they ignore you, then they laugh at you, then they fight you, then you win”

Susskind’s history is interesting because he actually built a so-called Expert System with a leading expert lawyer back at the end of the 1980’s – basically transferring a human’s knowledge and expertise into a computer system for others to use. Not an easy call to take “a dense web of barely intelligible interrelated rules” and turn that into 5 1/4 inch floppy disks. But the end result was a system that would ask you a series of questions before giving you an answer.

Then on 6 August 1991, the web happened. But still the law firms didn’t cotton on to the fact that the world was changing. And of course, why would they? When your business is built on an hourly billing model, what possible use could you have for an Expert System that reduces a process that usually takes 10 hours down to 10 minutes?

But of course the signs are now undeniable and change is inevitable. As he points out, this key paper from 2011 points out that in terms of initial document reviews, intelligent search systems can now outperform junior lawyers and paralegals. And remember – that’s the worst that that technology is ever going to be in the future.

I’ve always been drawn to Susskind’s simple argument which goes along these lines: following Moore’s Law, the average desktop computer in 2020 will have more processing power than the human brain. And in 2050, the average desktop machine machine will have more processing power than the whole of humanity put together. So it might just be time for the legal profession to accept that change is coming. It just cannot be that the internet, computer science, natural language processing, speech recognition, big data, intelligent inference, machine learning, speech synthesis and so much more is transforming every single corner of society and yet somehow this effect will not extend into the legal profession – which after all is, of course, one of the most information- and document-intensive professions in the world!

His conclusion is that by the 2020’s, we’ll have legal IT systems that are not modelled on brains (i.e. we’ll move away from modelling AI based on human intelligence alone), fuelled by brute force computing, utilising speech recognition, with real-time machine language translation, natural language processing, an ability to discern otherwise hidden legal risks through the analysis of big data, perfect search and a mixture of deductive, inductive, analogical and lateral inference.

Face-to-face legal consultations will become the exception rather than the rule and “communities of legal experience” will develop – networks within which ordinary people who have consulted lawyers or solved problems themselves will share their experiences with others who want to access that knowledge.

And yet, the majority of lawyers are still in a state of denial. Most believe that the current state of the industry represents little more than a temporary blip in the standard state of affairs before things return to normal, with an economy similar to the one that existed before 2007. Yet whilst some more successful ‘firms’ are looking at the disaggregation of legal work (using paralegals, offshoring, on-shoring etc.), the real disruption will come over the next decade when technologies will be able to do the work that we originally thought could only be done by “intelligent human beings”.

Of course, it’s very easy to criticise from the outside. Which is why innovation often comes from elsewhere. And, with technology, hindsight is always 20/20. But disruption is a certainty. In a world in which Google’s stated aim has always been “to organise the world’s information and make it universally accessible and useful”, the information that provides the foundation of value upon which the profession is built is gradually being made free. I can’t wait to see where we get to once AI really starts to kick in.

It’s not hard to imagine a demand for having IBM’s Watson as an app on your mobile dishing out legal advice whilst it also saves your life, is it?

 

Easy Access: Mail Order Keys

A late night tonight after returning from speaking at another Creative Currencies Chiasma warm-up event, this time in Glasgow but just time for a quick post.

More than a few folk have had issues with keys in the Bitcoin world. But such concerns are nothing new. I suspect that even Charles Chubb and Linus Yale, Sr. might have been somewhat concerned if a business such as KeyMe had been knocking around in their respective days.

KeyMe has an iPhone app that lets you upload a photograph of your keys and upload them to the company’s servers. After that, you can get a new set 3D printed and sent out to you immediately – or even have them cut in one of their vending machine in New York while you wait. Of course, it raises all manner of questions about security (how hard can it really be to simply steal someone’s keys briefly to photograph them for nefarious purposes)? For users there must surely also be an echo of that slightly uncomfortable feeling that anyone who uses a password manager synced via the cloud must also feel periodically.

Wired had a good article on the business a few months ago. The convenience of being able to immediately rescue yourself from a lock-out situation is obvious. But I couldn’t help but think of the parallel with handing someone your private keys to act as a custodian of your Bitcoin funds. The only difference is, in this case, you don’t just risk the money. Because of course, someone might just use the service to relocate other valuable items of yours to which you’re likely to have a far greater emotional attachment than boring old, fungible money.

This brings me perilously close to the 3D printed gun/Defense Distributed debate. But it’s already way too late so maybe another time.

I’ll leave you with this quote from the Wired article that sums up the power of the technology:-

“If you lose sight of your keys for the better part of 20 seconds, you should consider them lost,” says Jos Weyers, a Dutch lockpicking guru and security consultant. “If you find them later, consider them a souvenir.”