A quick thought on stablecoin, Facebook nation, and government pushback

Just had a thought on creating a digital nation and admittedly I am still just fleshing out the idea so bear with me.

Crypto currencies still have a chance at succeeding, but the issue commenters and the public continue to overlook is that as currencies, Bitcoin, Ethereum, Ripple, and whatever the hell else is out there have no underlying political economies to support them. Currency valuations transmit to the world the value and/or level of economic output a nation has. Bitcoin, for example, is not a nation’s currency. If it were, it would give Zaire’s currency volatility a run for the money. With the advent of stablecoin, particularly Facebook’s expected issue of the digital coin in 2019, we could see the beginning of a truly digital political economy.

Stablecoin is defined as a cryptocurrency pegged to some reserve currency like the U.S. dollar or another crypto currency such as Ethereum. No matter the model, the goal is to provide users with some stability in the coin’s exchange price. Consumers and investors may like the convenience of not having to check Bitcoin’s price every time they want to buy a cup of coffee or make a currency exchange. Stablecoins, at least in theory, helps to avoid all that.

Facebook will reportedly first play in India’s remittance market. As we descendants of the Commonwealth are all to familiar with, the remittance process can be emotionally taxing when the lack of necessary middlemen are not in place to get money to our relatives in Europe, Asia, and the Caribbean.

The blockchain technology platform that Facebook’s stablecoin will use is expected to provide the transparency and peer-to-peer capabilities that ensure that monies are sent and received under a system of trust, verification, and lack of intermediaries.

But I can see Facebook and even Amazon going beyond playing a relatively minor role in a country’s payment system. Not only could Facebook or Amazon issue digital currencies in the next ten years, they could and should go all out in developing their own digital nations.

Facebook could finally add some meat to his currently weak mission of “connecting the world” by leveraging every business and consumer in his network to engage with each other commercially by using his stablecoin. Consumers subscribing to Facebook or Amazon could be assessed annual membership fees or be charged a “tax” substantially less than the average state or local sales tax in exchange for exclusive access to every merchant listed on either platform with the medium of exchange being a stablecoin.

As one of the largest companies in the world with a 2.5 billion people user base, Facebook, via commercial exchange on its platform, can generate the value necessary for traders in currency to express enough faith in the currency to trade in it drive up its value. Unlike current crypto currencies, a “Facecoin” could exhibit more organic and trustworthy movement because it would be backed by a company large enough to be a national economy.

As for local, state, and federal governments, they could be left a few decades from now with nothing left to regulate and tax but physical infrastructure. Would government be understanding and wish more and more taxpayers a fare thee well, or would government act like the pharaoh in the Old Testament, chasing the people with its tax chariots.

The ensuing issue may be the legal relationship between the old State and the new Digital State that online platforms like Facebook and Amazon will hopefully morph into and how best to treat citizens who have to spend time in both worlds.

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Does an “open internet” promote a representative democracy? No, because democracy is not its job

Techopedia defines the open internet as “a fundamental network (net) neutrality concept in which information across the World Wide Web (WWW) is equally free and available without variables that depend on the financial motives of Internet Service Providers (ISP).”

The political debate over net neutrality over the last three years has focused on the ability of ISPs such as Comcast and AT&T to discriminate against third-party content provider traffic in favor of ISP content, to the extent that ISPs are expected to use their gateway status to slow down traffic from certain websites or outright block subscriber access to certain websites.

The internet as a platform plays an important role in American commerce as American consumers are expected to spend an estimated $7.8 billion on Cyber Monday. Net neutrality violations could mean lost advertisement revenues for content providers who are unable to get their products and advertisements in front of consumer eyeballs.  Being cut out of $7.8 billion of revenues during the holiday season could pose an existential threat for small businesses depending on those holiday sales to break even or stay in the black.

Besides the issue of staying in the black is the issue of whether an open internet promotes the components of American political culture; whether an open internet or lack thereof poses an existential threat to the American republic.  I think as currently construed, an open internet does not pose an existential threat to the American republic. On the contrary, when it comes to navigating the political-economic environment of the United States, knowledge on how well American representative democracy is working is best ascertained by reviewing hard political-economic data published by public agencies or academic or other research institutions.

The open internet has inundated the political economy with junk. It has Americans sacrificing value of specialized information for volumes of narcissistic junk.

First, why has the internet not eroded the American republic?  Contrary to the hoopla surrounding assertions that the Russian government sponsored psychological warfare on the American electorate during the November 2016 elections, the populace participated in the selection of the electors that voted for the president of the United States. More votes were cast for president in 2016 (135,719,984) than were cast in 2012 (128,768,094).

In addition, what I refer to as “insurgent” parties, i.e., the Green Party, the Libertarian Party, etc., did better in 2016 than they did in 2012.  The Gary Johnson-led Libertarian Party ticket picked up approximately 4.5 million votes in 2016 compared to 1.3 million votes in 2012.  The Jill Stein-led Green Party almost tripled its 2012 showing during the 2016 campaign, with approximately 1.5 million votes cast for the Green Party in 2016 versus approximately 470,000 votes in 2012.

Rather than eroding representative democracy, an argument could be made that the internet provided less expensive outlets for insurgent parties to get their messages out to the voting public.  I saw more of Gary Johnson and Jill Stein on YouTube than I did mainstream press.

America’s founding aristocracy chose a republic as the best vehicle for promoting the three major components of American political culture: liberty, equality, and democracy.  Does the open internet help promote these characteristics of American political culture? I would argue only if the government expressly decides to use the open internet itself in order to accomplish these goals or requires by charter that every private entity operating on the internet do so.

Liberty is freedom from government control where Americans expect a great degree of economic and personal freedom without the government unreasonably regulating personal and commercial behavior.  The open internet itself does not have this responsibility. In the end it is just a communications platform.  Problems would arise if government were to use the internet for surveillance purposes, i.e., use deep packet reading to ascertain what messages you are sending over the internet or, under the guise of “smart city” technology, surveil minority neighborhoods to regulate citizen movement.

Nor does the internet have the responsibility of creating political equality. Political equality refers to the right to participate in politics equally based on the principle of “one person, one vote.”  Notwithstanding the alleged Russian interference in the 2016 general elections, the “one person, one vote” characteristic of American political culture is, again, the responsibility of national and state governments.  Online voting as a concept is in its infant stage.  And while the Russians allegedly interfered by waging a messaging campaign via social media, there were other outlets, both online and offline, where Americans could get their information and strengthen their “one vote” with knowledge.

Lastly, there is democracy itself, the right to cast that one vote for the candidate of your choice.  How does the unimpeded flow of information across 100,000 interconnected global computer networks impact your ability to choose a leader? The above discussion summarizes the answer: it doesn’t.  Yes, one could go to the internet and look up information on a candidate, but there are millions of Americans with no access to broadband that function normally in society; that buy groceries, go to work, and yes, vote, without having to access the information floating around the internet that is deposited by various sources.  Besides traditional media, they probably access information from the original sources i.e. city council meetings; public access television, government agency public information offices, and make just as accurate a political decision as the woman surfing the internet in her bunny sandals and pajamas.

Yes, the internet has afforded millions of people to express themselves in cyberspace via blogs, websites, podcasts, and online videos, but the open internet neither promotes or hinders democracy.  Only humans can and there are other sources of information through which humans can accumulate knowledge on liberty, equality, and democracy.  Democracy is the responsibility of government and its citizens.  The open internet is neither savior, devil, or panacea….

It will be up to people, not tech, to make government not relevant

Peter H. Diamandis penned an article recently that discusses whether technology, particularly artificial intelligence, will make government irrelevant. Failure to keep up with private sector digitization combined with declining trust on the part of its citizens, argues Dr. Diamandis, contributes to emerging technology knocking government off of its dominant perch.

While I see government remaining behind the private sector in the adoption of artificial intelligence, I don’t see the concept of government going away anytime soon.  If anything, at least in the short and intermediate run, emerging technologies are going to be used to augment what government does.

In addition, at the risk of sounding metaphysical, until humans can abandon corporeal form, they will always need access to physical infrastructure in order to get to work or entertainment venues or have goods transported between physical points.

Part of government’s role, the role that allows it to maintain its dominant perch, is its responsibility for maintaining and administering physical space.  Government in the United States, through its public works initiatives, leverages less than five percent of total national capital to carry out this role.

The American Public Works Association defines public works as the following:
“Public works is the combination of physical assets, management practices, policies, and personnel necessary for government to provide and sustain structures and services essential to the welfare and acceptable quality of life for its citizens.”

Public works is an increasingly information intensive endeavor and rather than allowing an emerging information economy disrupt government’s public management of physical jurisdiction, I see government using the information markets to strengthen its influence and control.

Some local and state governments are at the crossroads when it comes to extracting, organizing, and leveraging information and information technology in order to maintain their viability.  As Michael Ward wrote in 2015 during an assessment of the use of information technology by local and state government in Massachusetts, many of the Bay State’s agencies were not taking full advantage of data especially when it comes to determining how effective their local and state government programs are.

What Mr. Ward found were local and state agencies in general and public works agencies in particular using inadequate work order systems, relying instead on antiquated technology such as Post-it notes and e-mail.  He also found that in the era of big data, machine learning, and deep learning that not only were data entry skills lacking, but also lacking were the skills necessary for analyzing data.

But government, at least on the local and state level, doesn’t appear quite ready to abdicate its role in developing or deploying public infrastructure due to a failure to use data adequately.  One example is local government exploration of the use of geographic information system technology for public works projects.

National Geographic defines a geographic information system as a computer system for capturing, storing, checking, and displaying data related to positions on Earth’s surface.  There is an efficiency resulting from this type of mapping tool as it allows various amounts of data, i.e., vegetation, buildings, roads, etc., to be shown on one map. Combining various types of data allows easier analysis of patterns and relationships.

ESRI, in a 2006 white paper, provided examples of best practices for local governments that choose to use this tool for data gathering and management.  Extracting and sharing data within public works agencies and with other local government agencies is one benefit.  According to ESRI, public works employees can tap into data collected by GIS in order to create maps,, design new projects, build infrastructure, and manage existing assets.

But if information technology such as GIS exist, why the concern that government may become irrelevant as a result of emerging technologies such as artificial intelligence, deep learning, and machine learning?  Is it just wishful thinking on the part of libertarian-leaning technologists?  Is it a belief that technology is deterministic of how political power is going to be balanced or exercised? Is it the perception that government is notoriously slow to respond to change?

The answers to the above questions may be “yes”, but I believe that the existence or relevance of institutions such as government lays in the hands of the humans that created them.  Government and politics are social relationships that may be enhanced by technology.  Technology does shape how social and political actors engage each other, whether from attending a town hall meeting in person in 1960 to listening in via telephone in 1984 to streaming it live and watching on a smart phone in 2018. It won’t change, however, the need for humans to form factions that compete against one another for the control and management of public resources.

Government will remain relevant. In what form is always the question.

 

 

 

FCC to vote on a 5G order designed to deploy more broadband

On 26 September 2018, the Federal Communications Commission will vote on an order that members of the Commission believe will help pave the way for deployment of the small cell technology that supports 5G technology.

5G refers to a next generation wireless technology that promises to deliver wireless communications at faster speeds with increased data capacity.  Writing for TechTarget.com, Margaret Rouse describes 5G as a technology that could provide data traffic speeds of 20 gigabits per second while enabling increases in the amount of data transmitted due to more available bandwidth and advanced antenna technology.

“In addition to improvements in speed, capacity and latency, 5G offers network management features, among them network slicing, which allows mobile operators to create multiple virtual networks within a single physical 5G network. This capability will enable wireless network connections to support specific uses or business cases and could be sold on an as-a-service basis.” — Margaret Rouse

Unlike current 4G Long Term Evolution wireless technology that relies on the deployment of large cell towers, 5G depends on the deployment of small cell antenna sites that are placed on utility poles or rooftops.  5G is designed to operate in frequencies between 30 GHz and 300 GHz allowing for greater data capacity but over shorter distances.

Commissioner Brendan Carr has been given credit for driving the development and release of this order.  Mr. Carr has been traveling the United States advocating for streamlined regulations that in turn would facilitate deployment of 5G technology.  Mr. Carr sees local and state regulations for cell tower and other facility siting as an issue and is making the argument that Sections 253 and 332(c)(7) of the Communications Act of 1934 can be leveraged to make local and state regulations less adverse to 5G deployment.

Under Section 253 of the Communications Act, the Commission may preempt any local or state statute or regulation that prohibits an entity from providing intrastate or interstate telecommunications services. States and localities can regulate telecom companies in order to preserve universal service, protect the public safety and welfare, and manage public rights-of-way.  Section 332(c)(7) maintains a state or local government’s authority over decisions regarding placement, construction, and modification of personal wireless facilities.

Mr. Carr argues that the order will generate $2 billion in cost savings for the wireless industry while generating an additional $2.4 billion in wireless investment.  Actual deployment is still nascent with expectations as to what 5G can do versus what it is actually doing.  Phones using 5G standards, according to Ms. Rouse’s article, are expected in 2019.  Cities are still constructing their blueprints for reconciling their smart city concepts and the “internet of things” with 5G expectations.  It may not be until 2030 that 5G becomes commonplace.