Archive for the ‘Openness’ Category
The usual plague of so-called “experts” have come out of the woodwork following today’s attack on TheDAO, to tweet, blog and bloviate their hindsight-informed opinions about TheDAO’s “failure” and the implications for the future of smart contracts (despite the fact that most of them barely can barely string together a coherent description of what a smart contract is, let alone write one).
I don’t view TheDAO as a failure. I view it as an experiment that has reached its conclusion. We learnt something important today – we learned that this particular configuration of a DAO doesn’t work. Future DAOs and smart contracts will be better because of what we’ve learned, from the specific bug that the attacker tried to exploit, to the insights we’ve gleaned into voting incentives and DAO governance. We’ve learnt a lot about the benefits of being able to upgrade smart contracts after they’ve been deployed, and the lawyers and regulators have plenty of food for thought and debate, with all the legal questions that have been raised by both TheDAO itself and the proposed use of a hard fork to return investors’ ether.
It’s very easy to criticise the Slock.it team but they got a lot of things right and it appears that, in the end, all TheDAO’s investors will get their ether back (albeit with the assistance of the Ethereum community in implementing a hard fork). That’s no mean feat and they deserve credit and respect for what they achieved.
Most experimentation and innovation happens in private, and all the wrinkles are ironed out long before the final product is unveiled. However, in this area – cryptocurrencies, blockchains, smart contracts and DAOs – the experimentation and innovation is happening in the open.Bitcoin wasn’t invented in a corporate R&D lab. Ethereum was funded by the venture crowd, not a venture capitalist. The downside is that we get to see how the sausages are made and any mistakes are public, but the upside is that anyone can participate, and the degree and pace of innovation – its velocity, for want of a better term – is far higher as a result.
If we want to reap the benefits of open innovation, we also have to embrace the downsides, including the experiments that we learn from, even when the outcome isn’t what was expected or hoped for; we have to applaud those who try, even if they don’t succeed; and, above all, we should elevate those who do above those who merely talk, tweet and blog.
I invested a small amount of money in TheDAO because I believe that the best way to learn is to get involved and put some skin in the game. If I never get the money back, it will have been a small price to pay for the amount I’ve learnt. If I do get it back, then I hope that I’ll have the opportunity to invest it in TheDAO v2 so we can have another try and see if we can’t learn a bit more.
Disclaimer: I am a member of the Open Banking Working Group (OBWG) and was involved in drafting the OBWG report. However, the thoughts and opinions presented here are strictly my own.
The OBWG’s report was published yesterday with the somewhat misleading title The Open Banking Standard. We’re a long way from a standard but this report is a significant step along that path. Its purpose is to lay out a roadmap for defining an Open Banking API standard that can achieve widespread adoption, and to put forward some strawman proposals, intended to generate discussion of their merits and weaknesses, with the objective of generating new and better proposals.
The OBWG’s work follows on from the Fingleton report, which looked at the potential benefits of banking APIs and open data, and HM Treasury’s public consultation on data sharing and open data in banking.
The OBWG was convened with three core objectives:
- Deliver a framework for the design of an open API standard in UK banking focussing on personal and business current accounts;
- Evaluate how increased levels of open data in banking can benefit consumers, businesses and society; and
- Publish recommendations in a paper by end of 2015 outlining how an open API standard can be designed, delivered and administered, alongside a timetable and implementation roadmap for achieving this
It’s important to note that this initiative is separate from – and has a wider scope than – PSD2. However, I would predict with a high degree of confidence that the functionality required to fulfil PSD2’s requirements will form part of the Open Banking API Standard, and I would not be surprised if the UK implements PSD2 by mandating compliance with the Open Banking API Standard.
One of the key challenges in coming up with such a standard is to figure out how banking APIs can be opened up to third parties while ensuring that consumers are adequately protected against fraud and banks aren’t unreasonably held liable for third parties’ failings. Currently, banks control the technology channels that their customers use to access their accounts electronically. Online banking is through the bank’s own website; mobile banking is through the bank’s own app. Liability for any losses rests with either the bank (if their security proves inadequate) or the customer (if they fail to take the necessary security precautions). Opening up banking APIs and granting access to third parties complicates that picture and banks are understandably wary.
The proposals presented in the report comprise a combination of provisions (including an OAuth-based authentication and authorisation model, and vetting and licensing of third parties) that represent a compromise somewhere between completely open access that would allow even hobbyist programmers to create apps that connect to banks’ APIs, and a overly-restrictive regime with requirements or costs that are too onerous for finch innovators and startups. One aspect that I’m a particular fan of is the idea that API functionality should be permissioned atomically, and that the security standards to which the third party will be held and the scrutiny to which they will be subjected should be commensurate to the level of access they wish to obtain. For example, a startup wishing to offer a personal financial management solution, which requires “read-only” access to accounts would be subject to less onerous requirements than a company seeking access to instruct payments from their customers’ accounts.
I have set up a mailing list to facilitate discussion of the report and future developments in this space. Instructions on how to join the list can be found here.
Fundamentally, I believe that the UK fintech sector will benefit hugely if we can make rapid progress towards an Open Banking API standard, and I believe that there’s an opportunity for the UK to take a leadership role, in the same way that it did in information security standards, with the adoption of BS7799 as ISO27001.
It’s entirely possible that neither the banks nor fintech innovators will be entirely happy with the report’s proposals. If so, then I think we’ve done a good job. Personally, I think it’s a significant step forward and I hope to remain involved at the next stage of establishing an implementation entity to take the concept forward.
The BBC’s Newsnight dug up a great piece of footage from an interview with Steve Jobs from back in the ’90s, for a segment on tonight’s show about the impact of the Apple v Samsung judgment:
“I mean, Picasso had a saying. He said ‘Good artists copy. Great artists steal.’ And we have, y’know, always been shameless about stealing great ideas.”
Original footage, in context, below.
Back in January, I mused that Apple’s insistence that publishers must use the in-app subscription functionality when they sell content to users might provide a boost for Android. Then, a patent troll reared its ugly head, demanding that developers cough up 0.575% of their US revenue from in-app purchases, and this week, just hours after the Financial Times released a web app that effectively bypasses Apple’s terms and conditions altogether, news emerged that Apple is backtracking on it’s in-app subscriptions policy.
Apple’s clearly on the back foot. It appears that they failed to anticipate that publishers would sell subscriptions out-of-band and now they look a little bit greedy (for trying to grab 30% of subscription revenue), incompetent (because the platform they sought to force developers to use turned out to be booby-trapped by the Lodsys patent – even if the patent turns out to be invalid or if it’s proven that Apple’s licence also cover app developers, a lot of damage has already been done) and foolish (because it turns out that, despite all Apple’s efforts, you can simply sidestep the App Store – and their 30% commission – by building your app in HTML5 instead of natively on iOS).
Platforms need to be stable (both in terms of the technology and the commercial terms and conditions the platform owner imposes) to attract and retain 3rd party developers and content providers. How can a publisher formulate a strategy for a platform if you don’t know what the rules of engagement are going to be in six months time? On top of that, those who scrambled to update their apps to incorporate Apple’s in-app purchase functionality by the June 30th deadline are likely seething about the wasted effort.
Because platforms rely on network effects, it’s important to get your strategy and your business model right. If you don’t, problems are magnified by the very same network effects you rely on to make your platform successful in the first place.
The more restrictive a platform, the less attractive it becomes. Had Microsoft imposed T&Cs as restrictive as Apple’s on Windows software developers, Windows would not have achieved the dominance it did during the 1990s. (Incidentally, there’s a certain irony in the fact that FT’s use of HTML5 to escape Apple’s restrictions is reminiscent of the threat that Microsoft perceived the Web as posing to Windows’ position as the dominant OS.)
Similarly, if the platform owner tries to impose too high a price on access to their platform, it makes it less attractive. If everyone who sold content in PDF format had to pay commission to Adobe, I doubt we’d all have Acrobat Reader installed on our desktops.
Network effects mean that a significant portion of a platform’s value is derived from its users. If the platform owner seeks to extract significantly more value than they contribute – through, for example, innovative design and functionality, or the creation of a user-base through marketing – it becomes economic rent.
Apple make money on each iPhone and iPad they sell. They make money each time someone signs up to become an app developer. They make a commission on every native iOS app sold. Was it wise to also demand 30% of the revenue from paid-for content accessed through those apps?
I went to Google’s Big Tent event today. It’s essentially a conference following on from the far more headline-grabbing Google Zeitgeist, that focuses on “the big issues facing the Internet today”. This year, it was organised in partnership with Privacy International and the Index on Censorship. There was a variety of speakers, including Eric “We view everything as a ranking problem” Schmidt, Jeremy “I’ll ignore the question you actually asked and, instead, answer the question I wish you’d asked” Hunt MP and Wael Ghonim, who unwittingly became one of the faces of the Egyptian uprising after being arrested in Tahrir Square, and held for 11 days.
It was an interesting change of pace from the commercial world I normally inhabit and gave me a lot of food for thought. Some of my takeaways were:
- Despite claims that legislating for online privacy would stifle innovation, nobody could actually cite an example of this happening. Ever.
- Privacy International’s Simon Davies pointed out that existing laws to protect people’s privacy (e.g. the Data Protection Act) are not being implemented anywhere near rigorously enough.
- “I did not want to assume a leadership role… [I believe that] We should always trust the wisdom of the crowds.” – Wael Ghonim speaking about his role in the Egyptian uprising.
- “We voted with our feet, we moved to Hong Kong. We were unwilling to be subjected to the laws of mainland China.” – Eric Schmidt, speaking about the perils of operating in countries with less-than-sparkling human rights records.
- Mr Schmidt also described a French law requiring that passwords be stored in cleartext as “foolish”.
- Google is building a dashboard to let people see all the information Google holds about them.
- Jeremy hunt’s two big predictions for the Internet in the UK: The Need for Speed and Must be Mobile. He spoke about the potential need for the government to get involved in ensuring the roll-out of high-speed broadband, so that the UK could reap the same benefits that countries like South Korea have.
- Google’s David Drummond pointed out that the more the West restricts free speech, the more repressive regimes will use that fact to justify their actions.
- UNOSAT’s Satellite Sentinel Project uses satellite imagery from commercial satellites to monitor places like the Sudan for signs of conflict, then leverages the high profile of celebrities like George Clooney to publicise the fact that atrocities are happening.
- Google’s Jared Cohen (formerly of the US State Department) averred that the rapid, viral spread of the YouTube video depicting the murder of Iranian protester Neda Soltan directly influenced Barack Obama.
I’m a great believer in the potential of open, decentralised platforms to disrupt and disintermediate incumbents, particularly in the social media space.
I’ve been keeping my fingers crossed that the students behind Diaspora will make good on their idea of building an open competitor to Facebook (although, with nearly a year now passed since they raised over $200,000 on Kickstarter, my optimism is waning).
The Tahrir Project is the brainchild of Ian Clarke, who intends to build a “distributed, decentralized, anonymous Twitter”. It’s an idea with huge potential and, given that Ian has a very strong track record in this space, having previously developed Freenet, I’m going to be monitoring its progress with a lot of interest.
Sony have announced that they’ll be releasing two tablets later this year – one is similar to Apple’s iPad while the other is a clamshell design, reminiscent of Nintendo’s DS. The tablets will run the Android OS. Music and video content will be provided through Sony’s Qriocity service (I assume the Qriocity service will be extended to support distribution of apps).
I can’t help thinking about how the Sony PlayStation gatecrashed the Nintendo-Sega party and ended up outselling the N64 three-to-one. The clamshell approach is a brave one and it’s interesting that Sony’s opted to go with the Android OS, given their track record of pushing their own formats (e.g. U-matic, Betamax, 3.5″ floppy discs, DAT, MiniDisc, Betacam, UMD, Memory Stick, Blu-ray), although not entirely surprising, given that Sony Ericsson has embraced Android for its mobile phones.
Sony’s most successful product was the Walkman which relied on the freely-licensed compact cassette. Could they end up exploiting Android in a similar fashion and knocking Apple off the tablet pedestal?