A few days ago I purchased some Ether from the Ethereum Project Genesis Sale and was curious what other people though about it. In doing so I was led to this this article by economist Hernando de Soto from 2001 on dead capital. You can read the whole article here, but the stand out thought to me was this: 

"To be useful in an expanded market, capital must first be represented in a property document where it can then be assigned a status that allows it to produce additional value. What most people possess outside the West is not “paperized” in such a way as to produce capital."

According to de Soto's research and findings, there is over $9.3 Trillion in dead capital outside of the West. That is, there are $9.3 Trillion in unaccounted for assets that cannot be claimed by anyone. And this value lies among those who are the poorest in the world. This has happened for a number of reasons such as government bureaucracy, politics, and ignorance to name just a few. Unfortunately, this keeps the poor from being able to make any claims or uses of their property. 

So this is where Ethereum can come into play. The project uses the Blockchain concept (which I explained here) but brings it to a whole other level. Whereas Bitcoin is mainly used as a virtual currency that can be used for transactions, Ethereum wants to be the protocol for any kinds of applications to be built on top of and used. In other words, Ether can be used to transact almost anything.

Think of it like this, most of the protocols that have been created have mainly been targeted towards the financial industry. Ethereum is intended to be as general as possible and allow anyone to create specialized applications for whatever purpose they think up. Suddenly we have a way to start representing those trillions in dead capital again. This could be a truly revolutionary concept if it's successful. It has the capability to register property and give those rights to the poor, which in turn can help reduce corruption and could ultimately be the way to help free up a large amount of dead capital.

This isn't just a pipe dream either. I truly hope and believe more technologists and businesses will start using the tools and platforms that are being created right now to start helping more people in the world. Although I know that Ethereum will be used in many other great ways in the future, what it is capable of changing for many people in the world will be truly astounding. This is definitely an area worth keeping an eye on.

Can you imagine how awesome it would have been to be an entrepreneur in 2014? It was a wide-open frontier! You could pick almost any category X and add some AI to it, put it on the cloud. Few devices had more than one or two sensors in them, unlike the hundreds now. Expectations and barriers were low. It was easy to be the first. And then they would sigh, “Oh, if only we realized how possible everything was back then!”

I've been thinking a lot about the information age, artificial intelligence, and how machine learning are affecting society today and it's led me to start pondering a few questions. So I thought I would write them down. Here they are in no particular order. 

• What are the implications of a truly intelligent machine? And by truly intelligent machine, I mean one that doesn't need to take directions from a human, but can instead make decisions based on the information it has gathered and the information it predicts will take place in the future. 
• There has always been talk that machines will take over everybody's job and we will all be jobless. I don't think that is completely true, and there is an excellent argument as to why that won't happen here. But I will argue that machines and software will take over many jobs that can be easily automated leading to many who don't have the correct skills or even the ability to learn those skills to suddenly be out of work. Which leads me to ask how society will deal with these types of changes? Will government have to step in with a new set of regulations or mandate a basic wage for everyone effected? 
• In what ways will machine learning really begin to help push our society forward in the future? This is a question that has really been ringing in my mind for a while. Currently there are a lot of machine learning algorithms that are used to help sell us products we may not know we want or help choose the right movies or music recommendations. But how will it be applied in fields like health, weather, logistics, supply chains, or even sports? The right creative applications in these fields will really change society and I would argue for the better. Health is an area that I think will be truly changed, especially if these apps are combined with hardware elements. Being able to collect data about ourselves and better understand the probabilities associated with certain health issues will truly revolutionize the field and help future generations live longer, healthier lives.
• How far into the information age have we transitioned from the industrial age? I would argue that we are still in the middle of the movement and that this is one of the reasons there is a lot of pain the in economy right now. We are seeing it on an almost daily basis with the types of products and services that companies are creating and how people and governments are reacting to them. Many of the past transitions have been extremely painful for everyone but we still have those movements to learn from. I would recommend this book by Carlota Perez if you want to understand what is happening now. The models she uses really help shed a light on what is happening in our current economy and why. 
• Will it be possible to create a Sentient A.I. and if so, how close to it becoming a reality is it? The answer to this question seems like a pretty good dividing line in the technology world and has already gotten some pretty big players a little nervous. I for one am very interested to know if this is even possible in this lifetime. 

As I stated above, these are just questions that are going through my mind at the moment. I don't know the answers to them yet but the direction our society is heading leads me to believe that we will begin to understand them more and more as time goes by.

In my last post I talked about some of the issues that many people have when it comes to trusting Bitcoin. Speculation and volatility are too high and it's seen as a risky move to start accepting it as a regular currency. Luckily, there are a lot of players in the community who are working through these issues to help build trust with potential adopters. I recently came across the news that Coinbase is now allowing merchants to instantly sell their Bitcoin and convert it into dollars. This will help alleviate and hedge any risk that merchants may have with using it for transactions. The hope is that if more companies start making moves like this, more people will start adopting and using it on a regular basis. And that is a good thing for the community that already uses it.

I'm also starting to come across many articles and news stories about Bitcoin entering it's disruptive phase, including this video from Bloomberg. Whether you are interested in this market or not, it is definitely going to start making a larger impact soon. 

I've been thinking a lot about Bitcoin lately and decided that I really wanted to understand it better so the decision was made to compose this essay. After doing a ton of research it became apparent that this technology can be seriously disruptive but that many people don't yet understand the value it can bring. Hopefully this essay will help fill in the blanks for people who don't quite yet understand completely how it works. 

Bitcoin has the capability to be an extremely disruptive technology but it still has a lot to prove. In order for it to really take off, more people need to start using it as an exchange of value. The ability to make everyday purchases with it will certainly help its adoption rate increase. As it stands, many traders and some early adopters are treating it more like a speculative financial instrument, holding it in hopes that the price will increase the way it has been moving over the past six months. But there could be a higher adoption rate if more people would start spending it on goods and services. After all, Bitcoin could be the next natural step in the evolution of money. So how can we get more mainstream adoption, what else can it do, and what could it look like in the future?

For starters, Bitcoin is the first real money (currency) to be born on the internet and used in the real economy. There are over 12.85mn Bitcoins in circulation with a total market cap of $8.3bn. This is astounding seeing as how it was basically mined out of thin air not more than five years ago after Satoshi Nakamoto released his paper. But what is even more astounding is that as a protocol for the exchange of value, it does not need any intermediary (such as a bank or credit card company) to make a transaction happen. All transactions are validated using its public ledger, known as the block chain, by miners. These miners essentially donate their computer power in exchange for the chance to gain Bitcoins. There is also a fixed supply of 21bn coins and no monetary authority creating them. So what does this mean for Bitcoin as a store of value? It means they are deflationary and since no central authority can make monetary decisions with it, it cannot be defended with policy actions.

So what differentiates Bitcoin from other financial technologies? First of all, it is peer-to-peer meaning there is no need for an intermediary to validate any transactions as I stated earlier. It is also open source and yet still securely authenticated with the combination of the miners and block chain validating each block. I won't go into the security mechanisms but I highly recommend anyone read the original paper as it is described how it works there. Finally, it is a self-propelling because it uses its own product to pay the miners who are authenticating each transaction. It is able to function properly based on all these actors and processes participating within in its system.

In order for this system to truly work though there needs to be a higher adoption rate. But it order for that to happen Bitcoin needs to be used more as store and exchange of value, not as a highly speculative financial instrument. With price volatility occurring almost on a daily basis, there could be more cause for concern among people who have not adopted it yet. And eroding the trust of potential users is not what the community should want. If more governments begin offering guidance, then more businesses may be willing to start accepting it, giving consumers a better reason to spend it. However, too much guidance may cause potential entrepreneurs to balk at regulations. Security concerns will also top the reasons for a low adoption rate and the implosion of Mt. Gox sent many negative signals to potential users. There simply needs to be tighter security implemented into future banks and exchanges. Perhaps following the protocols of traditional banks should be looked into. 

Beyond it's currency aspects, there are many other products and services that be built using this technology. For one, it simplifies the process of transferring assets. This is where the block chain really comes into play. For example, by denoting small portions of Bitcoin as physical property, also known as colored coins, it can then be used to publicly identify who currently owns a piece of property, the record of past ownership, and the history of that property. Think of titles of cars, financial contracts, and real estate. Each owner of these coins could then directly transfer their property with out the need of an outside broker (such as a lawyer or notary).

Identity management is another idea that could be implemented with block chain. For example, instead of needing a passport to travel from country to country, one could simply provide their public key, which could then be implemented as an entry on some block chain network. This concept could also be applied to IP addresses where each address is a payment layer. I didn't have time to dig to deep into this idea so I recommend reading this post.

But for any of these ideas to take hold there must be a healthy amount of trust among potential adopters. In order for that to happen, the current Bitcoin community should work on solving those trust and security problems. Another exchange meltdown, security problems, and continued high volatility will create more problems for the system and ultimately keep it from potential new adopters. Although it goes against many of the early and current opinions of how Bitcoin should work within the system, governments that issue guidance and create safeguards for mainstream consumer protection could help the benefits of the technology become more realized.

Bitcoin is a great example of how a truly new and revolutionary technology can seemingly pop out of nowhere. And consumers, companies, and governments should keep a close eye on it because of its potential for impacting many aspects of our lives on a daily basis.

I recently finished reading a few interviews with Ai Weiwei in which he spoke at length about his artistic process as well as many parts of his life's story. The book "Ai Weiwei speaks with Hans Ulrich Obrist" is a fascinating look inside the mind of the polarizing Chinese artist. There were a few comments that I thought were great but one really stuck out to me. The two were talking about a particularly large architecture project he was curating and how many architects were actually involved in the process and Weiwei stated "Architecture is a production of our reailty". This comment really got me thinking and kept circling around in my mind and I began wondering if it could be applied to other types of architecture as well, especially in the digital realm. If physical architecture is a manifestation of who we are and where we live in the real world then digital architecture is an abstract and digital example of who we are, how we look at ourselves, and how we identify with this day and age in the digital form. It is our current evidence that we are alive. 

For better or for worse, software is our mirror. It is how we are currently addressing society and, in turn, we are seeing how society is reacting to it. I find this beautiful and frightening all at the same time. It is beautiful since we build software to use as tools to push our society forward. It has helped us collect, understand, and interpret the data we are building all around us in an effort to make our lives easier. And our lives are much easier than they were even 10 years ago. This is still truly astounding to me. 

But what sometimes frightens me about it is the amount of control we have given to it and how much it consumes our daily lives. It's almost impossible to go a day without interacting with some form of software. One perfect example is our phones. Smart phones are now nothing more than an extension of our bodies. How many times have you left the house without your phone and suddenly feel as though you are missing a part of yourself? I am sure there are many people who do feel that way if that happens. For me, I started leaving it home on purpose and I honestly feel a bit of relief. But that is just me.

I do believe that software should be an extension of our own minds and help us fill in the blanks when answers are needed faster than we can come up with them. Therefore I see it as a great tool to be used carefully. It should help us extend our talents and push our strengths. Software is truly beautiful because it can do that. But there is a fear that we are letting it take over too much of our lives. While I agree that software is eating the world, and that is a snowball that will most likely never be stopped (nor should it be), we do need to take a step back and understand when we should push back to keep it from eating us. 

Here are some random ideas and thoughts I wanted to get out there in the world.

• It’s important to never lost your head to a vague or open ended dream. It is import to plan to the end. In other words, focus is one of the most important ideas anyone can apply to any and all aspects of their life. When Bill Gates was asked what the single most important factor in his journey through life was, his answer was “focus”.
• It is critical to form a concrete idea of the what the goals are you want to reach. What are you going to do once you reach those goals? This could go back to the first idea up and applying focus to your life.
• How do you model the world around you? Each and everyone one of us lives within our own models of the world. And those models are what we apply to how we live our lives day in and day out. Train yourself to step back and try to see the larger things and ideas taking shape beyond your immediate vision. Trying to analyze the world on a macro level can be a mind opener and many times it isn’t very comfortable. There may be many ways we think that the world works and maybe it doesn’t. But it is a great way to start understanding how people think. And understanding how people think will show the stuff that isn’t so different.
• Change can be super uncomfortable for a lot of people so it’s important to understand why that change makes people feel that way. I’ve worked for a tech startup now for a little over three years and I have had first hand experience as to how fast this industry is changing the world around us. Technology may be making the world a better place to live but it is also displacing a lot of people from jobs and the security they once knew. That is an idea that may be hard for someone isolated in a silo to understand.
• Speaking of startups, there were quite a few companies created over the past few years whose goal was to be the main platform (Facebook, Twitter, Tumblr, YouTube) for content to go. Now that these companies are the new norm, perhaps we will really start seeing more businesses that are built around creating better content to be put up on these platforms. Vice and Buzzfeed are good examples of what that type of content may look like for now, but I am sure it will change over the years. Especially since the content will become more and more targeted (which I will get to next).
• Targeting is going to get crazy scary or crazy exciting over the next few years. Contextual applications will become the new norm and we will get sucked into using them. Why? Because they offer a convenience that was almost unheard of just five years ago. For example, an application built around context will be able to learn about you and understand your needs. Advertisements will be targeted even more specifically. Not only will advertisers and companies know what demographic you belong in, but they will know where you have been and at what time you were there (GPS in real-time), what you are saying and how you say it (Natural Language Processing), buying recommendations (machine learning) and who you are with (Facebook check-ins, Foursquare). For some this is a truly exciting time to be living in. For other, it may just be downright scary and bit to intrusive. Hopefully there will be a lot more “opt-ins” than “opt-outs”. Robert Scoble has a great book on the subject that I suggest everyone should read. It explains a in depth over view of where technology is going.
• According to the book Technological Revolutions and Financial Capital byCarlota Perez, we are out of the “installation” phase and now in the “deployment” phase of the information age. Deployment is where all the technological building has been finished and after a rather bad financial collapse, the technology begins to take over and change most every aspect of our lives. If you look around, this seems to be true. Technology is changing our behavior in ways that we haven’t even begun to understand yet. Also, that was a very simplified version of her main thesis. Chris Dixon has a nice essay that goes into more detail. If you have never read the book before I recommend reading it. It can be rather dry if straight economics isn’t your thing but it is incredibly mind opening and even helps explain a lot about what is happening with the economy right now.
• There is still a lot more change a foot as well since there are more industries that are still ripe for change. The two biggest industries ripe for change are finance and manufacturing. Finance will be a tough nut to crack because of its resistant to change. However, since Bitcoin was created by Satoshi Nakamoto in 2009, that line of thought has since changed. I haven’t seen so much excitement around a piece of technology since the late ‘90's when I first discovered how to surf the information super highway (couldn’t resist). So what is so exciting about it? I will save a super thorough explanation for another essay but for now I will just say that Bitcoin is a way to store and share value through the internet without the need for a third party. The other industry that is ripe for change will be manufacturing and this could be done by 3D printing. These printers are pretty damn cool but they are mainly used by bigger manufacturers and shops that can afford them. So once 3D printers are priced at a level that is affordable to anyone, the more people will understand them and use them for whatever they need. I think they will be great for businesses that need quick turnaround on parts that may be hard to come by. Instead of waiting days or even weeks for an order to arrive, they will be able to print it right there in the shop and have a much quick turn around time. I haven’t used one myself yet, but I look forward to when I can because they look like a lot of fun.
• Finally, “Be Nice to People”. This is a truism not only because it is simple but because it is the right thing to do. Be nice to people. Prominent V.C. and blogger Fred Wilson wrote up a nice post about it, so you should check it out.