Those of you who have been following my recent posts about digital currencies may remember my recent discussion with Alex Tapscott, founder and CEO of Northwest Passage Ventures. He’s the co-author along with his dad, the business theorist Don Tapscott of the best selling book ‘The Trust Protocol: How Blockchain Technology Will Change Money, Business and the World. ” In my last post, we delved a little into the topic of blockchains, those public ledgers that allow digital currencies like bitcoin and others to be sent to others as a form of payment. Here, Alex discusses the different forms that a blockchain can take.
“There are lots of different ways to make a blockchain, with some being public and some private, and a lot of times people don’t really know what that means,” Alex said. “Basically a public blockchain is simply one that is open and permissionless, where anybody can access it regardless of where they are or who they are.
“And typically public blockchains have a native token, a cryptocurrency like bitcoin or in the case of Ethereum—a blockchain-based computing platform that can execute peer-to-peer contracts—a cryptocurrency called ether. Public blockchains have a lot of positive attributes. Because they’re open, they have many different participants, and the more participants there are, the more transaction validity you get.”
Alex acknowledged fears that cryptocurrencies might be hacked, with bitcoins or other currencies actually stolen, but said public blockchains help mitigate the risk.
“The more different people you have, the more distributed it is, which generally speaking reduces the chance of attack, because you have to attack many computers rather than one computer. Also, because you’ve got lots of different computers, there’s more energy and more computing power going into this blockchain, which makes it more secure for the most part.
“Now, there is a flipside to public blockchains which makes it somewhat limited, at least today. Transactions in a public blockchain have to be broadcast across the whole network. This means that the number of transactions that the blockchain can handle is limited because, remember, it does requires a lot of computing power and a lot of energy. So the question of scalability is one that’s still unresolved in public blockchains.”
By contrast, Alex noted that private blockchains are made up of participants who have permissioned access. And with fewer participants a private blockchain can manage a higher transaction volume, he said.
“And it can manage more types of transactions, too, because the rules are set by the participants, and they can change the rules to meet different types of assets. Everyone trusts each other somewhat, and can trust that they each have the necessary computing resources to manage the blockchain. That means it’s unlikely that someone won’t have the ability to participate fully.
“Also, because private blockchains are permissioned, they are, generally speaking, more palatable to regulators, because you could grant permission to different parties in a transaction. One of those parties could be an auditor like PricewaterhouseCoopers, for example. One of them could also be a regulator who could look in to see the metadata and validate what’s happening.”
In future posts, we’ll delve into a lot more about the future of cryptocurrencies, including setting up private blockchains, regulatory aspects, security and more. Watch for it!
I’ve had a great time chatting with cryptocurrency expert Alex Tapscott about the future of digital money, and how it may (probably) change our lives. In my last post with Alex—founder and CEO of Northwest Passage Ventures and coauthor with his dad Don of the book, “The Trust Protocol: How Blockchain Technology Will Change Money, Business and the World”—we discussed the all-important topic of security: Who actually is minding the store on these new types of monetary transactions involving such things as ether, bitcoin and other new digital currencies?
A major issue—perhaps the single most important issue, actually—is trust. There’s plenty of trust in the U.S. dollar, but what about bitcoin and other digital monies? I asked Alex how one establishes trust in this brave new world of digital currency?
“Traditionally we have an intermediary to establish trust, those agencies that verify the identity of parties, perform the processing, and the clearing and maintaining of reliable records. Now, intermediaries—call them banks, credit card issuers, PayPal, you name it—do a pretty good job at that, but they have certain limitations. They’re centralized, they cost money, they capture data, and doing so can slow things down if they’re using old technology.”
Well then, I thought. what’s the new paradigm for digital currency? Who is governing whether bitcoin and other digital monies are “real” or not? Alex discussed a bit about blockchain—bitcoin’s main technical innovation, a public ledger for bitcoin transactions allowing users to connect to the network, and send and verify transactions.
“With blockchain, you’ve got a new platform where trust is not established by a third party, but rather established through maximum collaboration and clever code,” Alex replied. “In a public blockchain (more on this later), you have an incentive mechanism in that users commit computing resources to validate transactions, and then are rewarded for reaching consensus on what is ‘true’ by receiving bitcoin or an Ethereum ether.”
But, I asked Alex, how do you validate a crypto transaction? After all, it’s not script, like the U.S. greenback or the euro.
“Right now, there are a whole bunch of different solutions that have been proposed. A mining method is called a ‘proof of work.’ So in exchange for doing lots of work, you have the chance of getting rewarded. But there are other different ways of validating a blockchain, like ‘proof of stake,’ which basically just confers validating power on whomever owns a share of the network.
“So, if you have 10 banks in the network, and each of them owns 10%, then no transaction is valid unless all 10, or some plurality or majority, can reach consensus,” he said.
Since we were dealing with the all-important topic of trust here, I had to ask: How much effort does it take to break a blockchain and steal money? Trust is the key to the new world of digital currency, right?
“One of the great advantages of the bitcoin blockchain is that validating transactions takes a lot of work, so guess what? Hacking transactions to try to break the blockchain—to steal money—takes an equal or greater amount of work! That’s what makes it really safe. So in order to hack a transaction on the bitcoin blockchain—to, say, send the same $20 twice or sell the same share 10 times because you’re trying to make 10 times the profit—you wouldn’t just have to rewrite one transaction. You’d have to rewrite every transaction, basically back to the beginning of the blockchain, and do so in a really short window.”
Alex told me he feels that proof-of-work blockchains that use a native token like bitcoin, or Ethereum’s ether, are the ones that are likely to succeed. “I think that private blockchains that don’t have that could work, but I don’t think they’ll ever be as secure.”
Next time, we’ll look a little closer at public versus private blockchains, to get a better feel for why Alex thinks one may prevail over the other, at least in the short term. Stay tuned!
Recently I had the pleasure to chat with Alex Tapscott, founder and CEO of Northwest Passage Ventures and coauthor—with his dad, the famed business theorist Don Tapscott— of the new book, “The Trust Protocol: How Blockchain Technology Will Change Money, Business and the World,” just published by Penguin’s Portfolio imprint. Together, Alex and I delved into the thorny issue of virtual currency, the uses of blockchain to make financial transactions, and what’s to come.
Here, Alex and I discuss some unresolved issues about cryptocurrencies, perhaps most importantly about who’s minding the store. Heading off hacker thieves is critical, as is—not surprisingly—satisfying regulators that such financial transactions via the various types of blockchains are indeed valid.
It’s not been easy, and that has led to a problem of trust. Alex mentioned to me Mt. Goxand Silk Road, two of the most notable scandals impacting digital currency, which hurt its early reputation badly, but he didn’t have to go back a couple of years. Most recently the Hong Kong bitcoin exchange Bitfinex said it had some $72 million stolen in a serious hack—an amount that has slumped, due to loss of confidence in the currency.
“Yes, there are a lot of issues unresolved right now, and many of them need to be solved in order for blockchains to reach their potential,” Alex said. “The questions of interoperability and scalability certainly are important, but so is the question of law enforcement. How do we make sure that criminals don’t use this, or if they do that we’re able to stop them? And they’re all governance questions really.”
Alex and I discussed the basic question: Who is going to lead and who is going to govern this brave new work of cryptocurrency. Will it be government or the industry itself?
“It’s a governance network, but with a small ‘g,’ ” Alex noted. “Now, that doesn’t mean that there isn’t an important role for government regulation. Regulators are really-critical stakeholders when you’re talking about things of value, like financial assets or money. They’ve always had a strong role in the financial services industry and they will continue to have one. But many of these issues are outside of their expertise. The ecosystem needs a standards network.”
Alex and I discussed the Internet’s standards network, the Internet Engineering Taskforce, that comes up with specific issues on HTML, HTTP, XML and other different protocols. Now, Alex said, the same thing needs to happen with blockchain transactions to enable the full utilization of digital currency.
“It’s going to require people from all these different siloes, Ethereum, bitcoin and private blockchains among them, to begin to discuss and communicate with each other. Technical standards are just one of many different issues that need to be resolved. There’s going to be a need for standards networks for everything from smart contracting, to title and deeds, to standards for financial assets. All these things are still left to be resolved.”
My conversation with Alex about cryptocurrencies was wide-ranging and intriguing. As he said to me about the future of digital monies, “A lot of banks and companies and governments are waking up to the potential of this technology. They love the idea of frictionless payments, of secure networks, of lower cost, of better speed.”
The world of crypto currency continues to evolve. Let’s see what’s next in this brave new world. Will all our payments be in crypto money? In future posts, we’ll delve into a lot more about the future of cryptocurrencies, including more about regulatory, trust and security aspects. Hope to see you there!
Most marketers I talk with today say they are drowning in data. But in reality data they really want sits in disparate systems throughout the organization. Or if their company has invested big money in a traditional data warehouse, the results have fallen short of expectations. This is because traditional data warehouses were never designed to handle the volume, variety and velocity of today’s data-centric applications. So, while most marketers and most companies “talk” about big data they just go on with “business as usual” taking little or no action.
This is not just my opinion. Recently, my UK colleague, Richard Petley, director of PwC Risk and Assurance, conducted a survey of 1,800 senior business leaders in North America and Europe. And only a small percentage reported effective data management practices. 43 percent of companies surveyed “obtain little tangible benefit from their information,” while 23 percent “derive no benefit whatsoever,” according to the study. That means three quarters of organizations surveyed lack the skills and technology to use their data to gain an edge on competitors.
The problem is not access to data. It’s the management of it. What companies really need is the ability to manage large amounts of data in a safe, agile and adaptable fashion. And that means they need a more modern data warehouse.
The overall purpose of a data warehouse is to integrate corporate data from various internal and external sources. Implementing a data warehouse is traditionally a long, costly and risky process. When the solution is ready, it’s often slow, outdated and hard to update as business changes. A modern data warehouse is different – employing new technologies, products, and approaches. Approaches that allow for both speed and agility.
With a modern data warehouse, you only have to query one source to get the data you need. When you add automation to the mix, you can load, clean, integrate, and format the data in record time.
POSSIBLE is a creative agency that brings results-driven digital solutions to some of the world’s most dynamic brands. Every two weeks, analysts faced the herculean task of reporting campaign results based on 10 different data sources, applying 20 different measures on 70+ products delivered by 100+ media partners. They would spend on average 35 hours just processing data before they could begin analysis.
When I spoke to the POSSIBLE team they reported this free demo introduced them to a data warehouse automation tool from TimeXtender. After a surprisingly fast implementation period, the “data munging” performed by POSSIBLE’s analysts has now been reduced 68%. “This has really turned out to be a big win for us. The fact that we can now get actionable data to analysts so much faster allows us to spend more time providing valuable insights to clients,” says Harmony Crawford, Associate Director of Marketing Sciences.
As my colleague Richard Petley likes to say, “Data is the lifeblood of the digital economy.” It can provide insight, inform decisions and deepen relationships, and drive competitive advantage, but only if it’s managed in an agile and adaptable way.
So the next time you find yourself complaining about the problem with big data, stop talking and start researching the modern data warehouse and data warehouse automation.
The year 2016 is gearing up to be a game-changer in the realm of marketing and across several categories, and if one wants to survive in this ever-evolving landscape, it’s vital to take a close look at what’s coming. From content promotion experimentation by content marketers of all kinds to video ads driving engagement, personalization, relevancy and more, there are a number of marketing “influencers” – the “movers and shakers” of this industry – that have made their predictions regarding the burgeoning world of marketing communications and what they feel should be focused on in 2016.
We queried several of these marketing influences for their thoughts and predictions on the direction of marketing in 2016. Their responses concentrated on ve important perspectives:
- Content Continues to Evolve
- Focus on Personalization
- Gathering Good Data is More Important Than Ever
- Knowing Your Audience is Key
- Look Outside the Marketing Box
Take a closer look at each one here 2016-predictions-from-10-top-influencers