🔮Blockchain & trust; China unveiled; ergodicity; black holes, Gorbachev & pizza++ #231

Most of the great challenges we face can be expressed as failures of trust.

Exponential View

Azeem Azhar’s Weekly Wondermissive: Future, Tech & Society

Hi everyone,

I’m away for my summer holiday for the next couple of weeks. We always strive to make sure EV hits your inbox, so this week my friend Kevin Werbach has agreed to take the reins. 

Kevin is one of the smartest thinkers about tech I know. I first met him in the mid-90s when he was editing the venerated (paper) newsletter, Release 1.0. I’ve always learnt a lot from Kevin. He is one of those incredibly brilliant brains who always makes you feel enriched after a conversation. 

Kevin has put together the best book I have read on why blockchain matters: The Blockchain and The New Architecture of Trust. Several EV members will already have read this book, as part of our author’s preview programme (if you have, please share your thoughts in the comments below!). 

Hot off the heels of his excellent book, I’ve asked him to give us his exponential view.

Please take a moment to thank Kevin by sharing Exponential View on social media. Tweet here or share on LinkedIn.

Cheers,
Azeem

About Kevin

Hello everyone!

It’s an honor to curate EV. My business card and LinkedIn profile say I’m a professor at the University of Pennsylvania’s Wharton School, focused on emerging technologies. But I’ve always thought of myself as a connector of ideas and people. 

Up until now I’ve helped develop US internet policy in the Clinton and Obama Administrations, hosted the Supernova technology conference, and wrote Esther Dyson’s influential Release 1.0, back when tech news arrived monthly on paper. I’ve concentrated on telecommunications regulation, wireless innovation, social technologies, gamification, AI and data ethics, and blockchain, among other topics over the years. My latest book is The Blockchain and the New Architecture of Trust, covering several themes I’ll discuss this week.

You can follow me on Twitter @kwerb

Thanks for reading,
Kevin

Dept of the near future

🚸 Facial recognition companies are tapping into an increasingly lucrative market—kids' summer camps. The system doesn’t (yet) extend to live video surveillance, but summer camps post dozens or hundreds of photos to social media every day, and anxious parents can upload a photo of their child’s face to receive a notification every time a new picture of their child is posted. 

😱 It may not be that long before parents can even check on the smile factor automatically. Amazon says its Rekognition facial recognition program has been augmented with emotion recognition capabilities, including the ability to detect fear. The controversial Rekognition program has been rolled out for US law enforcement, including at the US border. It probably won’t be long before emotion analytics begin to be applied in other contexts where facial recognition is in use. 

🌀 A radical new idea is shaking economics to its core. Ergodicity undermines the well-established economic theory of expected utility, in part by adding the crucial concept of time. ‘The upshot is that a subtle and mostly forgotten centuries-old choice in mathematical thinking has sent economics hurtling down a strange path. Only now are we beginning to learn how it might have been otherwise – and how a more realistic approach could help realign economic orthodoxy with reality, to the benefit of all.’

🧠 Professor Susan Schneider argues that we should be extremely skeptical of any suggestion of merging AI into human brains because the consequence might be the dominance of the artificial at the expense of the biological brain—and, therefore, the human being.

Dept of trust

Most of the great challenges we face can be expressed as failures of trust. We don’t believe our leaders and scientists and journalists; we watch corporations exploit those they claim to serve; and we see our fates increasingly in the hands of inscrutable machines. Weaponization of information through bots, fake news, and recommendation algorithms (plus good old-fashioned propaganda) undermines any consensus about the very nature of truth. Trust is the glue that binds communities and societies toward a common purpose; without it, we are adrift.

What to do? Perhaps, as researchers suggested last week, mice can help ferret out deepfakes, but we shouldn’t hold our breaths for magic technical solutions. The alternative of governments directing content filtering by social media platforms, the norm in China and perhaps soon to be ordered by the US White House, will only worsen the trust crisis. We need to step back. What is trust? And how can we build technological systems that are trust-generating rather than trust-destroying?   

As I explain in my book, trust is confident vulnerability. It’s more than just willingness to act. Facebook’s user numbers and profits haven’t dropped despite its many scandals, because people value convenience and lack alternatives; that doesn’t mean they trust it. Revelations this week that Facebook paid contractors to listen in and transcribe users’ audio messages didn’t help. As a result, Facebook’s Libra cryptocurrency was met with a hail of criticism, even though Libra’s design is, on its face, trust-enhancing. Trust and distrust aren’t entirely rational. That’s something the autonomous vehicle community is learning as well. Statistically lower accident rates in trials won’t convince users and local officials to take the leap and open up public roads. 

We must, in the words of a group of internet CEOs and activists that issued a manifesto this Tuesday on accountability for digital platforms, build tech we trust. That means changing our technologies at a more fundamental level, building in human and regulatory structures. Techniques such as differential privacy and federated learning allow modern AI to function without passing control over data to potentially untrustworthy actors. Such techniques are seeing rapid adoption in contexts such as medical imaging, as this recent article discusses. As many countries develop AI ethics frameworks—including, late to the party, the US—and the regulatory conversation moves beyond defining rules such as GDPR to means of compliance, such approaches deserve greater attention. (Those interested should fly to Barcelona in January for the ACM FAT* Conference, home base of the exploding algorithmic fairness, accountability, and transparency community.)

But the problem isn’t just the lack of trust; it’s also misplaced trust in the untrustworthy. The disgraced Chinese scientist behind the ‘CRISPR babies’ built a circle of trust of influential experts to support his experiments, but it crumbled quickly when the truth got out. And researchers recently showed that geographic clusters of extremely old people, a phenomenon of great scientific interest, are largely artifacts of poor record-keeping for birth certificates. Garbage in, garbage out, as the global financial crisis and the LIBOR scandal reminded us as well.  

Which brings us to blockchain. Yes, it’s an overhyped playground for speculators, cranks, and criminals. (A new report from Ciphertrace says thieves and scammers have already stolen $4.3 billion of cryptocurrency this year.) It’s also our greatest hope to re-architect trust in the veracity of information. Blockchain can replace trust in those who record or verify with trust in a decentralized network secured through cryptography. IBM’s Food Trust was one of the first production enterprise blockchain systems (with Walmart). The French grocery chain Carrefour recently announced that fruits and vegetables whose provenance is tracked through the system sell better. The biggest impact is in China, a famously low-trust environment. The practical challenge for Food Trust, and other enterprise blockchains, is to convince competitors like Carrefour and Walmart to trust the platform itself.  

Although critics appropriately note the paucity of high-volume production systems or consumer applications with significant usage, there are too many experiments and pilots underway to count, in every conceivable industry. A report this week described how Berkeley AI researcher Dawn Song is building a blockchain-based system to incentivize sharing of medical data to power health AI systems, protected with differential privacy.

Developing technologies of trust will be a powerful theme in the coming years. We don’t have a choice.


This issue has been supported by Deloitte Private

Has your company experienced exponential growth over the last four years as a result of technology innovation? 

Yes? Then nominate your company for the Deloitte UK Fast 50 and join the likes of Deliveroo, Bloom & Wild and Checkout.com. The Deloitte Fast 50 is one of the country’s leading technology awards programmes, which celebrates the 50 fastest-growing technology companies in the UK.  

Nominations close Sept 6th, so register now.


🔥 Climate breakdown: 410.73ppm | 3,930 days

Each week, we’re going to remind you of the CO2 levels in the atmosphere and the number of days until reaching the 450ppm threshold.

The latest measurement (as of August 12): 410.73 ppm; 12 months ago: 408ppm; 25 years ago: 360ppm; 250 years ago, est: 250ppm. Share this reminder with your community by forwarding this email or tweeting this.

🌬️ Wind energy prices are at historical lows in the US. The national average price of wind PPAs has dropped to below 2¢/kWh. The dropping price of solar energy is putting pressure on the wind power industry, however. That seems like the kind of competition we can all get behind.

A study of forty-five countries has found that the nature of public debate over climate change depends on how rich the country is. In wealthy countries, climate change is treated as a political debate, whereas poorer countries ‘simply can’t afford to deny climate change — or adapt to it as easily as wealthier countries do.’

Notes from (Greater) China

I just returned from sixteen days visiting seven cities in China with a small faculty group, meeting with companies and alumni to gain a better understanding of the country. 

The dominant themes one hears in the West are that China is very very big, and authoritarian. Both are true, but only part of the story. In some ways, China is a radically decentralized place. Local governments and individual entrepreneurs are empowered to experiment unlike anywhere else... within certain limits, of course. Be skeptical of anyone (including me) generalizing about what China is like, or what the Chinese government does. 

We visited a large factory run by the company that makes one-sixth of the shirts sold in America (you’ve never heard of it). They’ve restructured their entire production process for modularity and customization; their typical order is just 400-500 units of each garment. The same was true of the Flextronics assembly plant that was building personal robots right next to power inverters for solar panels.

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Short morsels to appear smart at dinner parties

🕳️ A supermassive black hole at the centre of our galaxy just produced a mysterious bright flash, and no one knows why.

👀 With a Tesla and a few hundred dollars, a hacker at Defcon created a mobile surveillance station. The car’s built-in 360-degree cameras can be rigged into a system which recognises, tracks and stores faces and license plate data over time.

‘Life began with little bags of garbage’ but how those little bags of garbage (membranes) came to exist has always been a mystery. Researchers think they've found the answer, and it's oddly beautiful.

🍕 Gorbachev made a commercial for Pizza Hut. In an interview in 1997 when the commercial first aired, Gorbachev bluntly explained that he did it for the money in order to fund a research foundation. He also made a commercial for Apple computers in Germany.

Azeem’s end note

I’m grateful to Kevin for sharing his exponential view with us! To thank Kevin, please share his edition on social media (Twitter and LinkedIn, the best).

Cheers from Portugal 🌞


What you are up to—notes from EV readers

Congratulations to Bill Gross and his team at Energy Vault for raising Series B from Softbank Vision Fund! Bill discussed their energy storage solution in this members’ briefing.

Hetan Shah in the FT: our fashionable interest in AI has led us to neglect some older, deeper data problems which need fixing.

Stephanie Hare in The Washington Post: Police in Britain are trying out facial recognition systems. Don’t the people get a say? Stephanie guest-edited EV a few weeks ago. Read her edition here.

Igor Kofman launched an online social game which, as a side-effect, raises money for the eventual Democratic candidate (in collaboration with ActBlue).