The Bubble Generation Manifesto
Stop blaming blockchain\crypto\ICO community — better join&help us!
1. Bubble is not bad. It’s good. Very good.
a. A bubble is an indication that a new idea has appeared and infused itself into many minds. This is the society’s feedback to the fact that somewhere there is a great pain\demand \opportunity that is not satisfied.
b. One of the basic principles of any new modern company is “fail fast” — to launch something fast and abandon the idea in case it hasn’t worked out and then start a new project. It prevents us from establishing zombie-companies that neither grow nor die, and which are so typical of the traditional economy.
c. A bubble is the result of a rapid uncontrolled growth. This is normal for any system that is only being formed. No one knows what will happen in the end, no one knows how to do it right. Growth is the main thing that matters. If it is overly controlled, it will stop, and the system that hasn’t got enough time to form will be weak, and gradually wither and die. Just try to control a one-three-five year old child as much as you control twenty-thirty-forty year olds and he will grow up to be imbecile. A predictable, risk-free imbecile grown up under the full control.
d. Any bubble should burst. And this is normal as this is the way a system stabilizes: having formed it discards the superfluous, leaving only what’s important and necessary. Look at the history of bubbles: there were those people who lost but in a longer term after each bubble companies like Google, Amazon, PayPal and Netflix that were changing the landscape of the economy survived. And, most importantly, they brought a lot more benefit to customers than old players.
e. The rollback and growth of those players who survive after the bursting bubble multifold compensates for the losses from this burst. Blockchain and crypto are like Internet 20 years ago.
f. Some have likened the Bitcoin\Ethereum\ICO craze to Tulip Mania, believing that the bubble is getting ready to burst. But what was Tulip Mania? One of the curiosities of the 17th Century tulip market was that people did not trade the flowers themselves but rather the bulbs of scarce and sought-after varieties. The result, as Dash points out, was “what would today be called a futures market”. Tulips even began to be used as a form of money in their own right: in 1633, actual properties were sold for handfuls of bulbs. As people heard stories of acquaintances making unheard-of profits simply by buying and selling tulip bulbs, they decided to get in on the act — and prices skyrocketed. Things came to a head during the winter of 1636–37, when tulip mania reached its peak. Some bulbs even changed hands up to 10 times during the course of a single day. And then, overnight, the tavern trade disappeared. In early February 1637, the market for tulips collapsed. This was because most speculators could no longer afford to purchase even the cheapest bulbs. Demand disappeared, and flowers tumbled to a tenth of their former values. The result was the prospect of financial catastrophe for many. Disputes over debts rumbled on for years. BUT. (Just as many on Wall Street are warming up to bitcoin, one of the lone financial analysts who forecast a surge when the digital currency was just six cents now has an extremely negative view. “A bearish trifecta — the Elliott wave pattern, optimistic psychology and even fundamentals in the form of blockchain bottlenecks — will lead to the collapse of today’s crypto-mania,” analyst Elliott Prechter wrote in the July 13 edition of The Elliott Wave Theorist newsletter. “The price activity and manic sentiment that led to present prices have dwarfed even the Tulip mania of nearly 400 years ago,” he said.) Today the tulip continues as a mainstay of the country’s economic life, but it plays a much more important role as the cornerstone on which Holland’s leadership as the largest purveyor or plants and seeds in the world is built. It all takes place at FloraHolland, the world’s largest flower auction, where today more than half of the world’s flowers move from grower to distributor and then on to you, the retail customer. It is indeed Holland’s “Wall Street for Flowers.” Royal FloraHolland is a showcase for Dutch expertise in logistics. More than 12 billion plants and flowers — including more than 90% of Holland’s own output — change hands each year at Royal FloraHolland’s four marketplaces throughout the country. The contribution to Holland’s economy is profound: More than 250,000 jobs are the product directly and indirectly of the flower markets. The country continues to be the largest player with a 52% share in global exports of flowers and plants. Some 77% of all flower bulbs traded worldwide come from the Netherlands, the majority of which are tulips. Ok, bubble, in which term is your brain capable of seeing the horizon and in what prospects are you able to look at the picture? (As the saying goes: you need to have the courage to lose sight of the horizon in order to discover new lands).
2. The major fight is not over resources, it’s over talent.
a. Everyone used to fight over resources: land, water, oil, money … Now the main fight is over talents — not about what is already there, but about access to the minds of those who can come up with something cool in the future. Acqui-hiring (acquisition of companies not because of their financial results, assets, products or technologies, but because of the people who work there) has become a widespread phenomenon among the most successful (technology) companies.
b. Now let’s take a look at The Bubble Generation Inc., which unites the world of crypto and ICO. Most probably there are 90 scammers and rascals out of every 100 people (how many people do you really bring value in your company?) but if you count together all ten of each hundred don’t you think that The Bubble Generation Inc. will become the leader in the number of attracted talents within the next 2–5 years?
c. You can say as much as you like that there is no material value behind the crypto and tokens. Ok. But how much the company that aggregates the greatest number of talents is worth? And there no need to push them to work together — they have already agreed on it on their own. They do not need infrastructure because they have built their own technological rails. They do not need external rules, which have been lowered from the top down because they have agreed among themselves on the move. They do not need supervisors because they are a self-organizing community. «For a purely reflexive store-of-value like Bitcoin, the underlying metric to track isn’t number of transactions, it’s number of believers.»
3. It doesn’t mean it’s bad if it’s not clear!
a. A number of regulators around the world ban crypto and / or ICO. Why? Because this new world has become so large that it can not be ignored anymore. And it began to accumulate real resources. Such steps look like they want to own these resources, control their distribution, but do not want to understand the nature of the new things and take risks. But it’s impossible — you need to take risk if you want to create something new and to create a new value. It is a law. Another explanation is that someone just wants to cover their ass (just in case). Let’s be honest — is it so?
b. Almost all major banks refuse to accept money after the conversion of the cryptocurrency. Let’s call things by their own names — traditional banks hate the crypto. But this hatred is stemming from the lack of understanding, fear of uncertainty and laziness rather than anger. The money that bank receives after the conversion of the cryptocurrency goes through compliance department where forty-fifty year old “experienced” employees simply do not understand what it is and where it came from. And here is the most stupid thing: if they spend time to sort out the issue, nobody will praise them for that (therefore they lack motivation), but if they make a mistake, they will be fired. Do you think that something is wrong here?
4. Who are the judges? The new system might not be perfect, but the old one definitely needs to be changed.
a. The Edelman trust barometer 2017 reveals the largest ever global drop in trust across the four key institutions of government, business, media and NGOs. For 17 years the Edelman Trust Barometer has surveyed tens of thousands of people across dozens of countries about their level of trust in business, media, government, and NGOs. This year was the first time the study found a decline in trust across all four of these institutions. In almost two-thirds of the 28 countries they surveyed, the general population did not trust the four institutions to “do what is right” — the average level of trust in all four institutions combined was below 50%. They also discovered a staggering lack of confidence in leadership: 71% of survey respondents said government officials are not at all or somewhat credible.
b. Over the past 10 years central banks in developed countries have reduced their interest rates 637 times, the governments have spent $12.3 trillion to acquire assets under quantitative easing programs, but this did not result in significant economic growth or acceleration of inflation. Economists argue that the measures used to stimulate the economy — near zero or negative key interest rates and quantitative easing — have exhausted themselves and new tools are needed. Apparently, such a tool can be ‘helicopter money’. The term was introduced by Nobel winning economist Milton Friedman in 1969 in the paper “The Optimum Quantity of Money”. The basic principle is that if a central bank wants to raise inflation and output in an economy that is running substantially below potential or targeted levels, one of the most effective tools would be simply to give everyone direct money transfers. In theory, people would see this as a permanent one-off expansion of the amount of money in circulation and would then start to spend more freely. The grounds for assuming that ‘helicopter money’ can turn from hypothetical into a real tool to spark economic growth are provided by Citigroup, HSBC and Commerzbank — all published reports to investors on the topic in the past two weeks. In 2002, Ben Bernanke, Chairman of US Federal Reserve Bank, said that ‘helicopter money’ would almost certainly be an effective stimulant to consumption and hence to prices. ECB President Mario Draghi said in March 2016 that the bank had “never discussed” issuing so-called helicopter money, but “it’s a very interesting concept”. Similarly, Peter Praet, the ECB’s chief economist and Member of the Executive Board, said in his interview that all central banks can issue currency and you distribute it to people. The question is, if and when is it opportune to make recourse to that sort of instrument which is really an extreme sort of instrument. “We don’t know for certain that ‘helicopter money’ will be the next attempted silver bullet, however the topic is receiving considerably more attention,” said Gabriel Stein, an economist at Oxford Economics Ltd. in London. “The likelihood is reasonably high of some form being implemented somewhere.” American billionaire Ray Dalio, by one measure the most successful hedge fund manager of all time, has argued that central banks’ ability to invigorate economic growth has atrophied, and predicts a new era of radical monetary policy possibly involving “helicopter money”. Mr Dalio argued in a note to clients that measures like interest rate cuts quantitative easing and even negative interest rates have been exhausted and are increasingly ineffective. “While QE will push asset prices somewhat higher, investors/savers will still want to save, lenders will still be cautious lenders, and cautious borrowers will remain cautious, so we will still have ‘pushing on a string’,” he wrote referring to the situation when monetary policy does not lead to an increase in consumer spending and investment.
c. A survey by the World Economic Forum says the tipping point for bitcoin and blockchain adoption will happen by the year 2025. Blockchain technology is expected to reach its tipping point in the next few years, and by 2023, it’s predicted that the first government will collect taxes using the technology. According to the report, the total worth of Bitcoin in the blockchain is about 0.025% of global GDP now — but by 2027, about 10% of the global GDP will be stored using blockchain. Cryptocurrencies can be an effective tool for distributing ‘helicopter money’ as they are much more efficient in terms of costs and speed than the “printing press”, and they are as transparent as possible from the point of view of control over use and turnover. Transparency and efficiency of managing the new money supply will positively influence and restore confidence in the public institutions. IMF Managing Director Christine Lagarde didn’t rule out that the IMF could at some point develop its own cryptocurrency. She pointed to the IMF’s Special Drawing Right (SDR), a currency the IMF created to serve as an international reserve asset, that could incorporate technology similar to cryptocurrencies. “What we will be looking into is how this currency, the special drawing right, can actually use the technology to be more efficient and less costly,” she said.
5. Data is the new money. Too big to trust: How can we trust Equifax, Yahoo, Deloitte, etc with our private information?
a. Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone else is doing it, so everyone claims they are doing it. Admittedly, “blockchain world” and “big data” are two phrases that are about as buzzy as you can find in the modern business world. But that’s no reason to dismiss either one. Both consumer (B2C) and business-facing (B2B) companies are facing intensifying competition when it comes to customer insights, and the data-science field is expanding in order to help meet the challenge. Not all data analysis qualifies as “big data,” of course, but solutions are multiplying, and 2017 may well be the year that more companies seriously ramp up their investments in the field instead of just talking about it.
b. UBS’s Paul Donovan offered some thoughts on the unintended consequences of negative rate regimes, which — whilst interesting — stimulated a different thought in us related to data. Donovan chimes in on an idea that’s been percolating through our heads for a while: Data is the new money, and data — like money before it — is only valuable if it’s being shared and rehypothecated through the wider network. Furthermore, we put our data into the safekeeping of cloud custodians for precisely the same reasons we put our money into the charge of banks: security, liquidity and utility maximization.
c. In the past the talks and euphoria about “big data” were left to mathematicians and their models and the monetization could be seen only in the distant future. But in the past year we witnessed a huge number of new players in this sector, and the discussions moved into practice. Some startups want to improve drug discovery and health insurance with big data and tailor drugs to individuals so they are more effective. Big data might change the way you find a job. The growth of online lending services and rising interest of telecoms and internet giant created a demand for online scoring, which takes into account not only traditional data (a passport and banking history), but also data from social networks, smartphone manufacturers and mobile operators. A number of startups are using unconventional information to decide if customers are credit worthy. To evaluate the factors that go into administering a loan — identity, fraud risk, credit worthiness — the startups look at mishmash of seemingly tangential information about applicants, such as activity on their social network profiles, how often they use their cell phones, and whether they frequently send text messages. The startups argue that this constellation of data can better (as in faster, more cheaply, and more accurately) hone in on whether the applicant can replay the loan by analyzing how they live, the decisions they make, and how they interact with others. Specifically in regions that lack agencies to provide traditional credit scores, demand is high for non-traditional big data risk profiling solutions. As a result, these types of data solutions have been an important driver of increasing financial inclusion in regions with high percentages of unbanked population.
d. Who is next after Deloitte and Yahoo to leak your personal data? They are doing poor job of keeping our personal data safe. Wall street banks too big to fail. Deloitte, Yahoo, Equifax too big to trust? Do they really care if your data exposed? When Yahoo disclosed in December that a billion (yes, billion!) of its users’ accounts had been compromised in an August 2013 breach, it came as a staggering revelation. Now, 10 months later, the company would like to make a correction: That incident actually exposed three billion accounts — every Yahoo account that existed at the time. Several days ago a bombshell report revealed that Deloitte was hit by a major cyber attack (major part of Deloitte’s business is selling cyber security) that compromised its email system and certain client records. The full extent of the hacking episode isn’t clear. The firm confirmed it had suffered a cyber-attack, but played down the significance by saying “only very few clients were impacted.” Other sources claimed the hackers accessed the entirety of the firm’s internal email database, and all administrative accounts. In June a marketing company Deep Root Analytics working for the Republican National Committee accidentally left sensitive personal details of almost 62 per cent of the US population exposed — reportedly the largest breach of electoral data in the US to date. Along with information on about 200 million US citizens’ home addresses, birthdates, phone numbers and political views, the information also included analyses used by political groups to predict where individual voters fall on controversial issues such as gun ownership, stem cell research and the right to an abortion. In July personal data of 6 million Verizon customers was leaked. In the same month Sweden accidentally leaks personal details of nearly all citizens! Several days ago a rental appliance company has suffered a massive data breach that has leaked tens of thousands of Australian private customers’ records online, including identification documents, Centrelink records and financial information.
e. Many emerging technologies you hear about today will reach a tipping point by 2025, according to a report from The World Economic Forum’s Global Agenda Council on the Future of Software & Society. The first government will replace its census with big-data technologies by 2023. As collecting, managing, and understanding data becomes easier, governments may move away from old methods of collecting information and begin to rely more on big data technologies to automate programs. According to the report, this is going to happen sooner than later. More than 80% of respondents estimate that the first government will replace the census with big-data systems by 2023. Some countries, including Canada, have already began experimenting with pulling back on traditional census methods; however, no country has completely replaced the system yet. Maybe we should put all data on a blockchain, decentralizing the system and querying discrete pieces of information as needed. But all these breach should wake us up to how fundamentally broken this system is, and how urgently we need to replace it. Breaches aren’t simply security failures; they’re the inevitable result of a broken data storing system by traditional big institutions.
6. Identity is the new money. Putting consumers back in control of their financial data on the way to “social capital” system
a. In order to start using the majority of mobile apps I just have to download them from the Apple Store or Google Play. Why do I need to go to some physical location, sign papers and talk to someone looking into his eyes when it comes to the majority of new financial services in most countries? The approach looks like “we want a world with electric vehicles, but find a place for our oil” (“because our salary depends on it”, does it?). Single digital ID\KYC — stop making us laugh speaking about it at conferences, it’s not a dream about the future, it’s already a reality, with which you still can not reconcile and finally do it. Blockchain-based fully digital KYC is the essential standard of today. Countries like Estonia, Singapore, Australia, and several others have already started moving this way but there should be much more countries! It would be great if their regulations in this respect were also synchronized.
b. The verification should not have geographical boundaries. Why a person (me, for example), should explain all over again who he is, what he does and where his money comes from in order to use financial or insurance services in a new country? The banking system in each country is primarily aimed at operating in specific geographical boundaries and keeping people within their boundaries. First, who is the main client for the bank — a person or a regulator? Looks like the second. Secondly, look around, people are constantly migrating, industries have already been adapting to the “flat world” for 20 years, while banks have not.
c. Digital KYC should be available not only for people, but for businesses as well. Taking into account the growth of GIG-economy, the rising number of co-workings, freelancers and independent contractors working with marketplaces and on-demand-services such as Uber and Airbnb, we should be able to open accounts and use financial services as individuals or entrepreneurs in any country. Look at such projects as E-Residency in Estonia or Atlas by Stripe — why is not working for them but not for us? We want to establish a “company in the cloud”, open an “account in the cloud”, provide services to people in different countries and be able to move freely.
d. The world of blockchain was initially created as a cross-border and international. Already at the current stage of development it is clear that in the very near future every day there will be more and more new micro-, p2p-, p2b-, SME-, students-, POS- lending platforms created on the basis of blockchain technology and using cryptocurrency in the process of their transactions. The blockchain world was initially built on the foundation of trust and transparency. All these startups will need a universal mediator-intermediary, custodian of “reputational passports”, which they will take into account and apply when assessing the client’s integrity, and where negative comments will be included in case of his unreliability. This solution should be cross-border and seamlessly integrated with the blockchain world.
e. Another question. Why a person having moved to a new country gets a bad credit score simply because you do not know anything about him? The fact that you do not know anything should lower your rating, not mine. Not only verification should get rid of geographical boundaries but also scoring. The customer assessment should be built not only on the basis of financial transactions but should take into account much more (and better speaking of your behavior) of big data: social networks, geolocation, biometrics, messengers, fitness trackers, hundreds of them have already been invented and you are still debiting loans. About the big data: you are not capable of storing even small data, this you have already shown, and you can not regulate this risk either. For the past three years China’s “social credit / trust system” has achieved much more and better results than your dinosaurs in the last 30 years. Your system does not work for 2.5 billion people who have never used financial services — do you “regulate” their exclusion from the future picture of the world?
f. Scoring systems are very different in every country, thus they provide a unique way of determining how capable borrowers are. For example, the German system is quite straightforward with all information reported predominantly coming from banks and controlled by the major reporting agency SCHUFA. In the UK the system is quite similar to US — there are three main consumer reporting companies (CallCredit, Equifax, Experian) and the use of credit reports in lending decisions has been common for several decades. In Canada, reporting companies are mostly the same (Equifax of Canada, TransUnion) with information similar to US. South Africa has quite a robust credit reporting system, with similar to UK companies (Experian, TransUnion, Compuscan). However, we can’t say the same about the rest of Africa. Malaysia, Hong Kong and Singapore have an even more advanced credit reporting systems compared to UK and US due to socio-demographic patterns of its economies, flexible and better technologies. South American credit reporting system is fairly robust, especially in Brazil, due to changes made in the way debt is reported with public and private credit agencies now providing both positive and negative information. The services focused on work with centralized credit bureaus in developed countries, such as the American leader CreditKarma or newcomers, like British ClearScore, are developing in a more predictable and stable way. However, this model restricts their potential and scaling capabilities (from US and the UK) as well. The services, which work in developing countries with users with absent or insufficient credit history, operate in a riskier segment, but their growth potential is unlimited. This is quite natural as credit potential is probably more significant than credit history. The initial drama over Equifax’s September data breach has mostly subsided, but the actual damage will play out for years. The company announced that the total number of people impacted by its breach is not 143 million — the amount it first disclosed — but in fact 145.5 million. Do we really need Equifax (Experian, Transunion, etc) if they are not protecting our data and identities?
g. When it comes to printing money in America, there’s the Federal Reserve that has the power to do so by the Constitution, and there are a number of industries that “print money” by selling to a captured market. One of these industries is the credit reporting industry, where the three major credit agencies — Equifax, Experian and Trans Union — make a great deal of money by selling consumers their own data. Credit agencies routinely collect consumer credit data from banks and credit companies that use to calculate a “credit score,” which they sell back to consumers anytime they need to prove that they are credit worthy. Like when they try to rent an apartment in NYC, where landlords want to make sure that they will pay the rent. Besides of selling consumers their own data, credit agencies supposed to help consumers protect themselves from data abuses like identity theft. But judging from the breach in Equifax’s system, the credit rating agencies can become part of the problem rather than part of the solution. Apparently, there’s something wrong with the credit rating system.
h. Your data should be free for you and expensive for others. Traditionally financial data has been an asset held in the hands of big financial institutions and providers who limit availability and charge individual consumers a hefty price in order to access it. For instance, the three big credit bureaus have long held consumer credit data — needed to secure a new line of credit, car loan, or home mortgage — behind a paywall. Given the importance of credit report information and the fact that it determines the outcome of very consequential decisions, it seems to us that consumers should have free and unlimited access to their own records. Unfortunately, given some of the complexity and “protective instinct” that defines parts of the financial industry, we’ve seen less major efforts towards transparency and accessibility of consumer financial data. The credit bureaus continue to sell consumer data to lenders and marketers for profit while blocking consumers from easily accessing their own information on a regular basis, and big financial institutions have yet to provide great APIs for authorized access to their consumer’s financial data. This seems a bit backward. We’re hopeful that between calls for more transparency and startups challenging incumbents, disruption brings an easier flow of data back to consumers. All of these service businesses were built for mobile and transparency, so consumers could make transactions and trades, get alerts and gain insights on-the-go.
i. Because Equifax’s business doesn’t rely on consumer trust, they haven’t suffered yet — though the 145,5 million people affected certainly will. The scope of the attack is difficult to understate, and it’s left many questioning whether large, disinterested corporations like Equifax can be trusted with so much of our personal information. How to kill Equifax via blockchain? There are competing parties — lender vs consumer, lender vs lender, and consumer vs hacker. Lenders want information on consumers, but don’t want to help competitors assess risk. Consumers want access to credit, but don’t want their personal information to fall into the wrong hands. In situations like this, blockchains can act as arbiters. But without delegated computation, consumer privacy needs fall to the wayside. Imagine for a moment we have the privacy technology we need. Contracts can offload access to private data, and request computations over that data. With this new tool, we can build an autonomous credit agency. We need a way for consumers to assert their identities. Identity verifiers request access to that information, which consumers grant via a mobile app. The verifiers then assert that the mobile device and associated public key are, indeed, owned by the person the consumer claims to be. In this system, more verifiers means better security. The power company can assert you live at an address, based on billing and account history. While any one verifier might be hacked, it’s unlikely they all will. Now that we have a strong identity framework, we can tackle credit history. Lenders can assert facts about their interactions with a consumer. These assertions may or may not be true — even the best-intentioned lender could have a mix-up — but they’re a best effort. Consumers can challenge assertions. In the case of a challenge, the assertion goes to arbitration. Lenders must substantiate their claims. For consumers, most disputes will be simple — if a lender can’t substantiate their claim, or they don’t bother, the assertion is struck. Assertions about a consumer’s credit shouldn’t be public. Lenders commit to an assertion on the blockchain, and encrypt assertions with a consumer’s public assertion key. A lender considers a loan application. They have the borrower’s public key, as well as records linking their public key and their real-world identity. The lender wants to review the borrower’s history, using their own in-house risk assessment function to decide whether to back the loan. But the borrower doesn’t want to expose their entire credit history to the lender — not only could they lose it to hackers, but the details are none of the lender’s damn business. By delegating the computation to another party, the lender can be sure the data has been properly evaluated, scoring the borrower for a loan, and the borrower can get their loan, only exposing their credit history to the non-lending party. We just need to find a way for the lender and borrower to delegate computation without exposing the borrower’s credit history to prying eyes, or the lender’s scoring function to competitors. It could be done via multi-party computation. Secure multi-party computation (sMPC) is a class of cryptographic techniques that allow untrusted parties to work together to securely compute the output of a function. sMPC was originally devised by Andrew Yao to solve what he called the Millionaires’ Problem.
j. “The book [Debt: The First 5.000 Years”], by anthropologist David Graeber, argued that historians and economists have wrongly assumed that money grew out of barter. In fact, Graeber argued, and Wences [Casares] came to believe, barter was never common and money was actually an evolution of credit-a way of tracking what people owed to each other. People used to just keep a mental tally of what they owed each other, but money provided a way to expand the system more broadly among people who didn’t know each other. As he read, Wences felt that after twenty years of working on financial technology, he was finally coming to understand money for the first time. He saw that Bitcoin’s lack of any apparent intrinsic value didn’t matter when looked at against the history of money. The reason gold itself had been used as money was not that it was valuable, it had become valuable because it was used as money. And it was used as money because it did what all good money did: it served as a sort of physical ledger on which society could keep track of who was owed what. Each piece of gold represented a slot on the ledger of all outstanding gold, which anyone could verify by checking the mass and volume of the gold.”
k. Money in its current manifestation is broken, David Birch says, because the system we have in place, while suited to the industrial era, is a poor fit for today’s needs and opportunities. Money changes approximately once a generation, says Birch, and we are due for a change. In “Identity is the New Money” Dave Birch lays out the extraordinary change in how we think about both identity and money that new technologies — especially mobile phones — are making possible. As Dave Birth wrote: “The social anthropologist and money historian Jack Weatherford said: “The electronic money world looks much more like the neolithic world economy before the invention of money than it looks like the market as we have known it in the past few hundred years.” What Weatherford means is that ancient society worked on a shared memory of mutual cross-obligations, continuously adjusted and revised. In the clan, everyone knew who owed what and to whom, a structure that does not scale beyond the kinship group. Once clans form into tribes and tribes move into cities, the shared memory is no longer sufficient. We need intermediaries to manage, and money is one of them. If, however, technology gives us back that shared memory, then we don’t need intermediaries to enable transactions. It becomes what some people call a “reputation economy”.” “Social capital (the result of computations across the social graph) is now accessible and usable at the transactional level. Proxies such as high-school diplomas and glossy CVs are being replaced by social capital because it is a more efficient form of the kind of memory we need to make transactions work.” “That social capital will be deployed in smaller and more commonplace transactions, not only getting a job or buying a house. In the long run there will be no need for a single medium of exchange, no need for fiat currency.” “This “social identity” is the basis for a reputation economy, an economy based on trust. It will be reputation rather than regulation that will animate trust in economic exchange, and that social graph, the network of our social identities, will be the nexus of commerce, administration and interaction.” In such a world, cash is no longer needed, and thousands of ‘currencies’ can bloom: what does it matter whether his phone transfers pounds, frequent flyer miles, or Dave dollars as long as the vendor agrees? Recently Dave Birch shared with Chris Skinner his thought about potential of identity based on blockchain: “It will be very interesting to look at this kind of swirling intersection of the blockchain, the Internet of things, and identity. There’s something going on in that space, which could be absolutely huge and, if banks play their cards right, they could potentially have an anchoring role in securing this identity layer for all of these things. That’s definitely an area to focus on.” “People are inventing new kinds of blockchains all the time, and thinking up new ways of using them in new applications.”
l. Let’s take China as example. To be Chinese today is to live in a society of distrust, where every opportunity is a potential con and every act of generosity a risk of exploitation. When old people fall on the street, it’s common that no one offers to help them up, afraid that they might be accused of pushing them in the first place and sued. The problem has grown steadily since the start of the country’s economic boom in the 1980s. But only recently has the deficit of social trust started to threaten not just individual lives, but the country’s economy and system of politics as a whole. The less people trust each other, the more the social pact that the government has with its citizens — of social stability and harmony in exchange for a lack of political rights — disintegrates. But imagine a world where your score becomes the ultimate truth of who you are — determining whether you can borrow money, get your children into the best schools or travel abroad; whether you get a room in a fancy hotel, a seat in a top restaurant — or even just get a date. This is not the dystopian superstate, but it could be China by 2020. It is the scenario contained in China’s ambitious plans to develop a far-reaching social credit system, a plan that the Communist Party hopes will build a culture of “sincerity” and a “harmonious socialist society” where “keeping trust is glorious.” The ambition is to collect every scrap of information available online about China’s companies and citizens in a single place — and then assign each of them a score based on their political, commercial, social and legal “credit.” Harnessing the power of big data and the ubiquity of smartphones, ecommerce and social media in a society where 700 million people live large parts of their lives online, the plan will also vacuum up court, police, banking, tax and employment records. Doctors, teachers, local governments and businesses could additionally be scored by citizens for their professionalism and probity. There is no national equivalent of the FICO score widely used in the United States, say, to evaluate consumer credit risks. At the same time the central government aims to police the sort of corporate malfeasance that saw tens of thousands of babies hospitalised after drinking tainted milk and infant formula in 2008, and millions of children given compromised vaccines in 2016. Under the social credit plan, the punishments are less severe — prohibitions on riding in “soft sleeper” class on trains or going first class in planes, for example, or on staying at the finer hotels, travelling abroad, or sending children to the best schools — but nonetheless far-reaching. Under government-approved pilot projects, eight private companies have set up credit databases that compile a wide range of online, financial and legal information. A social credit regime could strengthen the credibility of the Chinese financial system by enforcing legal compliance and ultimately, building trust in the marketplace. To compensate for the dearth and inaccessibility of official lending data, Chinese fintech companies often have to use reams of consumer data from a variety of sources: search results, social media, ecommerce purchases, online travel data, location, phone records — even social connections. “One of the biggest problems we had in banks was all the transactions had at least one face-to-face interaction,” says Simon Loong, who worked at financial institutions like Citibank and Standard Chartered before founding WeLab, a Hong Kong-based fintech startup. That means hiring staff and maintaining physical branches to vet potential borrowers. Wolaidai, a credit lending startup under WeLab, on the other hand, has a completely mobile onboarding process. Through technology like facial recognition, text and image analysis, and monitoring users’ online behavior, the fintech startup is able to make credit decisions in one to two seconds. Fintech startups also have to automate fraud detection, like catching people who steal personal IDs to apply for loans. That’s usually done by tracking user behavior, like the way someone types out their ID number, or their physical location, if users agree to share that information. At scale, the cost of data can quickly escalate, especially for startups without multiple consumer-facing platforms like Ant Financial, which can easily access ecommerce data from Alibaba. Relying on third parties to supply data — or in some cases, process it — also requires a fair bit of due diligence. This summer, a Chinese data broker was reportedly shut down by the police for investigation after failing to protect consumer privacy. The onus is also on fintech startups to attain permission for data collection — usually through lengthy terms and conditions statements. “Although the data has been transferred to third-party data brokers for data processing, the main responsibility of protecting the data is still the financial services institute,” says Samuel Sinn, cybersecurity and privacy services partner at PricewaterhouseCoopers, who advises companies on technology risk management. It doesn’t mean that they can release their liability after transferring the data, he emphasizes. China doesn’t have a data privacy act as of today. In China, laws of data privacy and personal data collection are only just starting to emerge. In June, China enacted its latest cybersecurity law, which details different principles and guidelines on cross-border data transfers, data collection, information infrastructure, and more. “China doesn’t have a data privacy act as of today,” Sinn tells Tech in Asia. “It’s covered in the cybersecurity law under personal information collection.”
m. Regarding idea of David Birch, that in such a world, cash is no longer needed, and thousands of ‘currencies’ can bloom: what does it matter whether his phone transfers pounds, frequent flyer miles, or Dave dollars as long as the vendor agrees? The creator of the popular social network VK.com and is rapidly gaining popularity of the messenger Telegram Pavel Durov discussed his adamant stance on independence from the authorities and special services by proposing large corporations like Apple and Google to establish their own independent state. The creator of Telegram asked himself a question: how large successful companies to reduce pressure from governments and intelligence agents, as well as to maintain their independence and the trust of users? He tried to imagine having to go through the heads of Apple, Google, Microsoft, and came to very disappointing conclusions. “All this makes the protection of personal information is incredibly complex, especially considering that Apple and Google — companies that we directly depend for their mobile operating systems — located in the United States. I do not see a simple solution to this problem. We can only hope that the giants like Apple and Google will one day be fully independent from the governments that hinder the embodiment of their ideas. It is possible to achieve this work, if they will create their own independent state,” — ponders the actor.
7. Should SWIFT as oligopoly of big banks be afraid of blockchain technology?
a. The vast majority of international interbank messages and transfers takes place on the SWIFT network. In cross-border transactions, there are generally multiple stops a payment makes before it goes from the payer to the receiver. If, for example, someone in India wanted to send $1,500 to someone in the U.S., that person would probably visit a local bank perhaps unable to make that transfer, so that bank would send the payment to another Indian bank that could. The payment then goes to a U.S. bank which sends it to the recipient’s local bank, where the customer would finally pick it up. Each stop along that payment’s way eats up time and money in exchange and holding fees. The most common misunderstanding about SWIFT wire transfers is that “OUR” instruction means you pay all transfer charges. In reality “OUR” means that you pay all bank charges payable to your bank. There will be more fees — the correspondent bank(s) will deduct “correspondent bank fee” from the amount you transfer — the receiver will receive less than you sent. Usually this difference is about $10. But sometimes this difference is a much greater — about $100 or even more (especially when there are several correspondent banks in the chain). Also the receiver’s bank may take another fee from the receiver. Usually your bank cannot tell you how much will cost the transfer (how much fees correspondent banks will deduct from the transfer). Some bank employees (newbies) even don’t know about this dirty practice. Also this is not stated clearly in the Terms of Service and Tariff Guide (it is obfuscated with legal jargon — it means that this theft is completely legal). Some European banks are working with several correspondent banks in chain, therefore there will be a several correspondent bank fees taken by every bank from the chain. They are saying they don’t know what’s the fee for them to receive funds. And if I were to request a SWIFT confirmation, they want to charge me more money for it. This is total scam, and this “scam” is completely legal.
b. How SWIFT mafia works: With the role of the middle man in financial services increasingly under threat from a host of new startups and technologies, designed before the digital age international banking co-operative SWIFT always bids to save correspondent banks from extinction and protect their interests (not consumers’ rights and needs). Correspondent banks the world over see their traditional roles eroded by a multitude of new real-time money transfer services and innovative technologies like Ripple, which make no bones about their intentions to cut out the middle man in the creation of a frictionless payments network based around distributed ledger technology for both intra-bank and interbank transactions. And what is important to remember — SWIFT is protecting interests mostly of American banks, US Dollar and American financial system. Prior to this hacking expose, the BRICS collective were already exploring alternative to the SWIFT bank transfer system in a bid to insulate themselves from the fiat financial crash. «De-listing from the SWIFT network remains one of the primary financial weapons wielded by the US and its allies in their increasingly important financial warfare campaigns.»
c. When SWIFT announced that it had successfully completed the first phase of the global payments innovation (GPI) pilot with 15 banks to increase the speed, transparency and end-to-end tracking of cross-border payments, Ripple was questioning the value of GPI: “Swift’s GPII does not address the antiquated infrastructure that makes real-time settlement a constant challenge. GPII does not change the underlying infrastructure at all, it merely makes a minor adjustment to its current settlement requirements”. (Seven large banks including Bank of America, Santander and the Royal Bank of Canada have teamed up to create a global blockchain payments network using Ripple’s distributed ledger technology. Some say this could even replace the existing SWIFT network.) SWIFT’s biggest problem is that of “nostro accounts,” basically correspondent bank accounts — and that’s where Ripple can provide real value to the system. Blockchain could prove to be enormously transformational, potentially even replacing the SWIFT network for inter-bank payments. Next to that it seems as though blockchain could not only replace SWIFT but also increase the security, expediency, and accuracy of the system. Recently Credit Suisse in its report “Bitcoin: The Trust Disruptor” — SWIFT is described in the report as slow, expensive and old-fashioned. Transactions via the SWIFT network certainly cannot happen in real-time. An international transaction may take days to settle and the fees are more than 10 percent of the total transaction costs. The recent surge in cyberattacks in Bangladesh (Hackers had an easy time stealing nearly $100 million from the New York Fed account of Bangladesh’s central bank because the Asian bank did not have a firewall), Vietnam and Ecuador have highlighted the vulnerabilities in cross-border transaction banking, and particularly in the SWIFT network. Ripple recently announced that it has reached agreement with several major banks to create the Global Payments Steering Group (GPSG). This new platform, that includes names like Bank of America/Merrill Lynch, Santander, UniCredit, Standard Chartered, Westpac Banking Corporation, Royal Bank of Canada and Canadian bank CIBC, aims to form the foundation of a global network that performs a similar service as SWIFT inter-bank messaging but with near-instant settlement times. Ripple is looking to “capitalise” on the recent cyberattacks on the SWIFT network by introducing a multi-sign feature on its consensus ledger. The nostro problem is a big part of Ripple’s value proposition. If we can do real-time settlements then we don’t need a whole store of nostro accounts. If not, then we always need a buffer of funds in each account and that buffer is just locked away. We shouldn’t have to put a lot of money away so we can exchange money between banks.
8. Let’s be honest — traditional banks hate you
a. Bitcoin’s capitalization is around $70 billion, ether’s capitalization is around $30 billion, the total funds raised through ICOs — more than $2 billion. No one is waiting for you (yes, all of you!). Anson Zeall, the head of Singapore’s Cryptocurrency and Blockchain Industry Association, or Access, said his organization had heard from 10 companies which had encountered problems with their banking relationships in Singapore. The banks didn’t give a reason for their action, Zeall added. Chia Hock Lai, president of the Singapore Fintech Association, said some of his organization’s members also experienced account closures. Barclays closed down student’s account after his dealings in bitcoin: Charles Bartlett, a 17-year-old student and aspiring entrepreneur, is still waiting for an explanation after being “sacked” by his bank earlier this year. Unfortunately, his is not an isolated case. A small number of people, estimated to be in the low thousands each year, are told that their bank has made a “commercial decision” to close their account. Banks tend to offer no explanation and customers who ask for one are brushed off. The market for ICOs has exploded to $2.2 billion — and how all of these post-ICO companies will (convert and) spend their “millions”? “Millions of nothing” — if traditional banks will not be open-minded enough to work with the new economy.
b. If you convert crypto into fiat and transfer to your bank account less than $50,000, most likely, everything will go smoothly, and you will tell the market that there are no problems and everything works without failures. If you convert from $100K to $300K, the situation is 50\50. But if more than $500K, you will definitely have to talk to your bank’s compliance. KYC, AML, source of funds… It would even be good that they ask all these questions if they were more tech-savvy (quick and convenient), and if they really wanted to figure it out. But no one wants to sort out your issues; therefore, you get your “account freeze” and “notification of the need to close within 30 days.”
c. Why does bank compliance is not willing to understand your issues? First, they already have a large and understandable business (with which they are familiar), and they are not interested in a new and small (albeit fast-growing) business because its profitability is still small, the risk of losing the current big business is big, and there are many issues they will have to deal with. Second, imagine a specialist in compliance. He/she is 40/50 years old, not highly paid, without any career perspectives. Their mindset is built on the past (instead of the future) and their decisions are conditioned “how to avoid something bad to happen” (instead of “how to help something good to grow easier and more convenient”). They see a lot of transactions daily and finally they see some odd transaction after the conversion of the crypt, and … they block it. Why? Not because they are bad people. Simply because they don’t know anything about blockchain, cryptocurrencies and ICO — and in their world “everything that is odd is forbidden”. They could even address the matter and the client, but it would take too much time and no one would give them a premium for this. But if they make a mistake, they will be fired. Therefore, they send a page or two of dreary questions, and then simply block the account.
d. Are there any “workarounds”?? For sure. In return to one or two pages of questions provide ten to twenty pages of meticulous and detailed answers, thus, “starving the bank out.” However, you need substantial capital for this purpose as you will have to spend money on your back office (lawyers and accountants) in order to collect and accurately store all papers, electronic statements and screenshots of all transactions on mining, receiving, buying and selling of the cryptocurrency; to be able to quickly reply with exhaustive explanations (with schemes and conclusions) about blockchain, cryptocurrencies and ICO; describe how you and your contractors underwent KYC, AML, source of funds procedures; provide full review and conclusion on your partner exchanges. You should better hire a large audit company (such as Deloitte or E&Y) $30–50K, which regulatory verifies what kind of business you do, who you cooperate with and how, where your crypto comes from and how you spend fiat money. You will also need to come up with different purposes of payments from your bank because the “receiving bank” will have questions about the origin of funds, and regular similar transactions with the same justifications will raise questions.
e. Alternatively, you can find some shitty bank in a third world country that will not ask you questions. But in practice the questions will not disappear anywhere and will arise each time you make a payment outside your shitty bank. Let’s assume you have found a shitty bank that is friendly to this type of operations, or have armed yourself with an army of lawyers / accountants / auditors and defeated your clear and large traditional bank. The problems will still be there. If you make transactions in US dollars (and most transactions are sooner or later transferred to dollars at some stage), then you face the “problem of correspondent banks” in the SWIFT system (see above). Your bank should have a correspondent bank in the United States, so that its transactions are conducted around the world through such “superfluous intermediaries”. If suddenly your bank “gets on the radar” (will raise questions) of the correspondent bank (and sooner or later, especially with the growth of such transactions, questions arise), then your friendly bank will get to know who it should (not) be friends with. And this is the point when you need to make your choice whether you want to be as inconspicuous as possible in order not to attract attention, and be constantly hiding and avoiding questions. Or you have legally earned your money and want to build new services and a new economy, and do not want to waste time and resources on any political and bureaucratic nonsense?
f. Why the existing cryptocurrency wallets and cards can’t solve this problem? Since these are half-hearted solutions (it’s like gluing more and more plasters on the arm affected by gangrene). You depend on your partner bank. And if you reach some large amounts within its cash flows (in fact the business strategy of such partner banks that agree to such an additional risk is to “drown” your transactions in their core business so that they are not noticed, and receive additional income for the risk), the risks that this bank will be approached by senior bankers (regulators and correspondent banks) and asked to stop working with you are not eliminated but simply deferred to a later date. Check the spending limits for these kinds of cards — though it’s great that such cards do exist, — but the limits allow you to painlessly buy coffee and t-shirts, while such limits will not work for larger purchases or full-fledged business. They work only for retail customers. What shall companies or freelance entrepreneurs do??
9. Open architecture only. Monopoly over infrastructure is evil
a. The legacy financial system is like holy condoms put on one another: each time when the previous one is unable to withstand the load or satisfy the needs of customers, it is torn, and a new one in the form of add-ons to the software or supporting services is out on top of it. Such systems are hard and expensive to change; their support costs a huge amount of money and man-hours (which is beneficial for service providers). Sometimes it’s cheaper and simpler not to try to show that the corpse is alive passing electricity through it and making it move, but to write the system anew.
b. Modern services should be able to communicate through the open API.
c. In the world where almost everything can be found on the SaaS model we need bank-as-a-service platforms, broker-as-a-service, insurance-as-a-service… AWS business is twice the size of Amazon’s core business and traditional players will either assimilate this experience, or they will support their licenses and infrastructure (and regulators will support it), or they will die. Infrastructure is no longer a competitive advantage for anyone, if it is not open.
d. By the way, what about government-as-a-service? For example, from Estonia or Singapore. Judging by the reaction of some countries’ regulators to innovation — the world will only benefit from this.
10. How to whitewash the black&grey market of cryptocurrencies and ICOs? The rules are of course necessary, but what if the old ones do not fit, and who should come up with new ones?
a. At the meetings with representatives of cryptocurrency wallets, cryptocurrency exchanges and marketplaces, as well as those with whom they want to work (banks that issue cards and open accounts, regulators that make claims), one can constantly hear the same questions: Who are these customers? What do you know about them? How did you check them? Where did they get this money from? Who bought these tokens and from whom?
b. In the early 1990’s following the fall of the Berlin Wall, the USSR began to dissolve its state owned enterprises as part of its privatization plan. All in all, it’s estimated that 45,000 state-run firms were split up and their shares distributed. The government ‘sold’ off these firms in the form of vouchers from 1992 to 1994. In those years, shares in state enterprises were handed out democratically to 98% of the Soviet population, from children to grandparents. Shares were equally distributed in order to avoid ownership concentration among Russia’s mafiosos and rich bureaucrats. However, the recipients were often poor, hungry, unsophisticated investors, who quickly sold off their vouchers to savvy speculators, allowing a few to become very rich off aggregated ownership of state assets, while many remained impoverished. ICOs today present a parallel but reverse opportunity to retail crypto-investors. Savvy speculators with whitepapers offer mom-and-pops investment opportunities in vaporware, which could wipe out savings and wealth in much the same way the Russian voucher-speculators did, if left unchecked. When it comes to blockchain’s development, we are still early in the first quarter. BTW, though there is overhype, the technological and investment opportunities it presents are very, very real.
c. South Korea and Taiwan decided to ban ICOs right after China. Bitcoin and ICOs had been in trouble in China since February, when the central bank, aiming to stem illicit capital flows, ordered exchanges to halt virtual-currency withdrawals until they could identify their customers (KYC, AML, “source of funds”). AngelList co-founder Naval Ravikant called the policy a “huge gift to Silicon Valley and its resident financiers.” Australia’s securities watchdog warned consumers that they must understand potential ICO risks and be wary of scams. The UK financial watchdog sounded a similar warning on September 12. Experts claimed the move could bring some much needed law and order to the market, by toughening up on fraud and scams. Cryptocurrencies have seen increasing mainstream adoption, with celebrities such as Paris Hilton and Michelle Mone getting involved. “Whenever you start to hear about Hong Kong taxi drivers becoming millionaires from buying bitcoin, you start to think this is not necessarily driven by fundamentals,” said Mark McFarland, chief economist at Union Bancaire Privee SA HK in Hong Kong. “So you will get quite substantial pullbacks at some point.” Regulators are stirring. In America, the Securities and Exchange Commission announced this week that it would create a cyber unit, which, among other things, will tackle misconduct in digital currencies. In Japan, hitherto a haven, the Financial Services Agency will start placing exchanges under close surveillance in October. Australia, Canada and Europe are talking of tougher rules. But Hu Bin, deputy director of the finance institute at the China Academy of Social Sciences, an institution directly under the State Council, or cabinet, has said “What are we stopping? Illegal ICOs.” That said, nearly all the ICO organizers interviewed by Reuters agreed the ICO market was getting out of control and needed change. VC Fred Wilson penned a thoughtful post comparing China’s approach to that of the SEC in the US, opining that “We needed a cooling off period.” So, seems the biggest issue for cryptocurrencies and ICOs is KYC\AML\”source of funds” questions. Such approach like blockchain-based digital KYC\AML (or even “reputation economy” based on digital “identities” with connected “social capital”) can help to solve this issue. And it could be very useful for all of these crypto-wallets, crypto-exchanges, ICO-platforms and ICO-backed startups.
d. Cryptocurrencies don’t exactly have the best reputation thanks to their penchant for attracting unscrupulous people. But what if there was a currency that encouraged people to cooperate? What if people were incentivized by a spirit of growth, rather than of greed? Under the ideal model, a network of cooperative businesses and services would coordinate with each other as a single unit. The coin would be shaped democratically by this co-op (shaped not controlled). Instead of rampant online speculation, every user would have incentives to help the network grow as a whole, and the use of a blockchain would help make the process be fair. Cryptocurrencies are still in their infancy, and it’s hard to tell where the path for most of the major currencies is headed. What is the “finish line” that they are aiming for? What will the end game be? If you have a large community and a co-op on top of an immutable blockchain, that the coin can be worth more than its market price. A currency needs to grow with the people, not past them.
e. In this regard, the crypto\ICO world would do well to have another kind of verification — verification of human values. The companies like Zappos (I consider myself to be Tony Hsieh’s follower to some extend) are good at building a successful business based on the right values and culture (instead of right technologies and functional knowledge / skills). Moreover, holacracy as a way to organize and manage, professed in this company, is a perfect fit to the nature of blockchain world. It should be added that the financial sector is one of the most “masculine”, the technological one is the most masculine: in this context, crypto\ICO world is in double trouble. (IMF Managing Director Christine Lagarde told she expects the IMF will play a role in regulating the fintech industry going forward. She pointed to distributed ledger technology like blockchain that can help make the banking system more inclusive. “I think of women in some of the developing countries that have to carry cash around who are at risk of violence and all the rest of it,” she said. “If they can use their cell phone and operate in a much more discreet and efficient way, it would be terrific.”) Since it’s a nascent new economy, it’s important that it has a sufficient number of diversity advocates and it is right from the very beginning. Values should be higher than profits.
f. It’s nice to talk about the benefits of getting out of the comfort zone, drinking an 18-year-old whiskey for a corporate account and sitting in an expensive leather chair. It’s nice to talk about the agile approach, the entrepreneurial spirit, “lean-startups in a garage” and build corporate accelerators thinking only about getting you (multy) millionth annual bonus. There are too many (corporate) innovation labs and too few innovations. Clayton M. Christensen, who coined the term ‘disruptive innovations’, in The Innovator’s Dilemma analyzes how large and successful corporations continue to be successful and innovative (this is the “innovator’s dilemma” — the lack of motivation to disrupt yourself if you are already big and successful) and concludes that the only way is to completely separate your new business from the old one. The new business should have its own goals and objectives (not overlapping with the old business), its people and corporate culture, even its own separate buildings and uniform. The same story is with blockchain, cryptocurrencies and ICO — trying to shove them into the old framework, processes, approaches and regulation, you stumble upon the fact that they are rejected and do not take root, they die and damage the “old body”.
g. It is only possible to give life to a new economy by giving it a certain degree of freedom (the opportunity to take risks, try, make mistakes and not be punished — the fear of making mistakes destroys any innovations: this is a long-proven axiom). We must admit that the old rules and regulations do not work if we really want to grow something new and useful for society. While the new ones are non-existent, they just have to be created. Therefore, the regulator should regulate with caution: not as a judge, but as a mentor. Regulators are able to kill anything, but no regulator is able to create something — this is the destiny of entrepreneurs. Given that rules are only being formed, players should not be punished for what was committed before their introduction. You shouldn’t regulate too harshly what has not yet appeared and formed — you can only kill it this way. We are for the fact that if regulation comes into conflict with logic, progress and benefit for clients — such regulation should be changed. Rules are not the Bible, they were invented looking up the past (instead of the future). They are created to help achieve some goal, and if the goal is changing, then the rules should change! If something is not clear, it does not mean that it is something bad. This is something that challenges us to study it, to help it grow.
P.S. Dear Jamie Dimon & Co,
Do you call us a “bubble”? Ok, then we are The Bubble Generation. Blockchain\crypto\ICO — our new rock-and-roll. Vitalik Buterin is our new Kurt Cobain. Fuck off. Or better join us! We aren’t going to fuck anyone over — but we can be wrong (because you can’t do anything new without making mistakes!). In order to make fewer mistakes and our mistakes not to be so dramatic, we need help from you, from other bankers and regulators around the world! We are not against rules and regulations — we are just for creating new ones (with your help? or resistance?) because the old rules do not fit the new economy.
The Bubble Generation manifesto — it’s not the Bible, not the American Constitution, it’s an invitation to you, the supporters of crypto\ICO and their opponents to a joint dialogue. We are open and we want to communicate. Without communication and with harsh criticism and pressure, this (huge in its size!) industry will move from the current “gray” zone not to “white”, but to “black” one. And then this underground will really become a Big Problem! For everyone.
Sign this petition to show that we are not alone, as many people are banned simply because some do not understand what and how they do.
If people so actively took up defending their rights and freedoms, as they do ICO, then we would live in a marvelous new world. Let’s try to fix it by trying to formulate the questions that concern us, the problems that we would like to be solved, and the principles on the basis of which we see that it is possible to find consensus and dialogue.
We don’t want to fight, we want to build.
