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Technology

The Hutch Report

The 4 Cryptocurrency Opinions To Avoid

By | Cryptocurrency, Money, Psychology, Technology

The level of trading activity in Bitcoin and other cryptocurrencies has begun to attract the attention of the general public. It seems to be everybody’s favorite subject these days. Discussion and debates about Bitcoin are raging at dinner tables across the nation and around the world. In addition, the number of articles outlining Bitcoin’s future trajectory have increased daily. In spite of the number of financial media channels having previously written it off as a mania, now provide its viewers the latest daily quotes.

It is not so much the promise of this new peer-to-peer technology that operates with no central authority or banks. Nor is it interest in the fact that a collective network carries out the issuance of bitcoins and manages the transactions that have captured the attention of the public. There are a number of early adoptors who have become extremely rich off of the increase in value of Bitcoin and the so called alt-coin market. It is the dream of quick riches that is really driving the interest.

Whenever a technology begins to reach fever pitch, as we are seeing with cryptocurrencies,  a large number of self-proclaimed experts begin to appear. They are suddenly gifted with incredible prediction power. They know where the price will be in 3, 5, 10 and even 20 years. They happen to know that no government will be able to control it or stop it. They seem to know that it will eventually take over the world as the primary form of currency for all transactions.

However, these are not the only voices being heard from the rooftops. There are also those with equally impressive predictive powers. Those that seem to know where the top is. The point where Bitcoin ceases to move up, reverses and begins its long slide back towards where it began. Those  that seem to know that no solutions will ever be found to the current technological challenges that a decentralized digital currency currently faces. Those that seem to know that cryptocurrencies will never be a replacement for the platform of fiat currencies on which our economies currently function. They seem to understand all the weaknesses of these digital currencies and where their limits are.

Nassim Nicholas Taleb, author of “The Black Swan,” presents a convincing case on our inability to predict events with hard-edged analysis. At the same time he stresses to protect yourself from highly improbable events. Therefore, the first thing that should be done is to avoid the following 4 outspoken opinionated groups on the subject of Bitcoin. These groups are all supporting their own interests, which don’t always coincide with the interests of the individual.

1) The Financialists

The Central Bankers and their affiliate bankers around the world see themselves as the guardians of the global economy. In addition to providing a variety of services to the public that enable the economy to function rather smoothly on a daily basis, banks are still for-profit institutions and their principle goal is to generate profits. This is often done by way of complicated products with unsusual naming conventions. They control the money transfer and credit system, therefore, they weild a large amount of control towards the stability of the system. For this reason, they will not tolerate any outside technology that threatens their position. The initial reactions to Bitcoin were that of a pure fad. Further analysis sees them now trying to discover ways to regulate it, or create their own digital currency where they have the full control to profit from it. Their opinions are changing daily based on their confidence in how to manage its evolution. They are worried and rightly so as the initial concept of a decentralized digital currency would make many of their services redundant.

2) The Technologists

Bitcoin and the blockchain are based on technology. They have, not surprisingly, attracted the attention of the technology and developer community. They believe because it is based on technology, and they understand technology that it provides them with more powerful forsight. Once the value of Bitcoin began to rise, the startup community began to move into action and started developing a variety of ideas such as wallets, new exchanges, a variety of platforms etc. It has now become the hot area to be involved in. So hot that public companies that have nothing to do with Bitcoin or the blockchain have changed their names to incorporate the term blockchain only to see their shares rise immediately. The technologist are on a crusade and want you to join the crusade. However, it is wise not to forget that at one point there was once a product called a Betamax cassette which was superior to the competing VHS cassette only to lose out and be banished to history. Apple computer produced a much higher quality product and software than the PC and Microsoft option at the time. Apple computer only managed to acquire 5% of the PC market, much to the surprise of the followers who understood the value behind the technology.

3) The Evangelists

The leader of this group and one of the most vocal has been Andreas Antonopoulos. Antonopoulos became involved with Bitcoin in 2012. He has written two books on the subject, describing in detail the technical rules governing Bitcoin in a way that a novice could understand, and has given more than 200 talks (many of them free) about Bitcoin. Antonopoulos obtained his degree in Computer Science and Data Communications and Distributed Systems from University College London. With his help the Bitcoin evangelists have an ever increasing choir. Some of them understand the technology and find its possibilities fascinating. There are the bandwagon jumpers who want to join the club and fit in with the “cool crowd.” There are those that see it as a great way to transfer money around without the peering eye of the government, or truly a new medium of exchange not governed by any central authority.

Then there are also those who have dreams of striking it rich. Ironically, Antonopoulos, after having spent the last five years of his life traversing the globe and educating people about Bitcoin found himself not only NOT taking advantage of the run up but found himself in debt, until a wrath of Bitcoin evangelists donated to his cause. This came just at the moment when he was questioning what he was doing it all for.

4) The Governmentalists

Governments are the farthest from being Bitcoin advocates. This is not because they don’t believe in digital currencies. In fact, they would garner more control by ridding the economy of hard currency and make everything digital. This would enable them to gain tighter control of the money supply or increse their efficiency of tax collecting. What they don’t appreciate is loss of control. The idea of a collective decentralized managing transactions and digital currency issuance is an idea that they will never accept. Why? They require a centralised authority (which is them). We wrote about the ways in which governments could shutdown cryptocurrencies. It is, therefore, no surpise that they are fighting vehemently against the idea.

So who should you listen to? This is one of those situations where you must truly take matters into your own hands. You have to acquire the knowledge necessary, educate yourself and decide for yourself how this new system of digital currency could affect you personally. This means choosing your information sources carefully. If you do listen to any of these groups, be cynical and don’t take what they say at face value. Double check and do your own research. Depending on who you speak to, you will be labelled as blind if you don’t buy into it or labelled as an idiot if you do. In the end, it is the market as a whole who will ultimately decide the fate of cryptocurrencies.

The Hutch Report

Computer Generated Headlines – Read All About It!

By | Business, Money, Technology

Everybody seems to be lacking time in what we call the New Economy.  In the past few years there has been a wave of innovation in order to address this. There are now more productivity tools and apps on the market than ever before. We have tools to help us stay focused better, improve our channels of communication with friends and co-workers, create projects easier, take better notes, keep your notes better organized, or how to identify distractions in your life so you can cut them out.  All these tools are meant to save you time out of your busy day to do the things you love. Still, nobody seems to be finding that time.

In addition to a lack of time, we need to deal with the massive amounts of information that we are presented with on a daily basis. We spoke about this here (The Hutch Report). There are thousands and thousands of articles being produced and published every minute and there is just not enough time in the day to read them all, along with all our other activities. In order to filter out all the noise we skimm through the headlines hoping to gain an understanding of the big picture.  The Skimm, (https://www.theskimm.com) does just that by providing editorial contents and headlines targeted to women.  Authors and publishers know this so it is imperative that they create the perfect headline that will catch the reader’s eye, also known as click bait, and hopefully tweak their attention enough to where they read the full article.

But wait, this is the New Economy and anything that can be automated and made more productive will be. This includes headlines. I discovered this quite by accident well before there was a New Economy, smartphones or social media.

When I began getting interested in the financial markets I used to spend a lot of time reading all kinds of newspaper articles.  I rarely missed the Wall Street Journal’s daily overview of the previous day’s market action. As time went on I started to notice that there was one headline that would pop up extremely often, “The Dow ends lower on profit taking.”  I didn’t understand the meaning of the headline. How would the writer of the article even know that this was profit taking? When I took losses on my investments, headlines such as that began to get me annoyed.  I thought to myself, “Doesn’t the Dow ever end lower because investors have been forced to take losses?”

I paid more attention to the wording of these headlines and as I did I started to see more and more contradictions.  I found it curious that no matter what the financial markets did, all these newspaper journalists seemed to have an understanding as to why it was, and managed to encapsulate that in a pithy headline. I began to question the validity of the information I was consuming.

One day by chance I met someone who was working for the Dow Jones Newswire.  I jumped at the opportunity to gain more insight as to how these journalists managed to analyze the day’s activities on the financial markets and identify the catalyst for their movement in such a short amount of time.

The representative from Dow Jones Newswire told me that the markets were constantly changing so it was far more convenient to have the computers generate the headlines.  I learned that they have a database of headlines that are related to any general world news events that may be happening during the day. This could be anything from a company takeover, to gold going up, to gold going down, to oil going up, or to the rumblings of war in the Middle East. For example, if the market drops off the open and oil has gone up, the morning headlines may read, “Dow falls on higher oil prices”. During the day, however, it is not uncommon to have the market reverse and end the day up.  The headlines would then read, “Dow rises on higher oil prices.” These are the contradictions that I recognised that began to show up daily.

This was a revelation because I now understood that the headlines I was reading were actually completely arbitrary and computer generated. In my mind, this reduced  their “news” value to essentially zero because it was not providing me with the big picture overview I wanted.

From the time of my discovery that the Dow Jones Newswire was using a headline generator, the amount of content being produced has gone up exponentially. The ability to make sense of it by way of new technologies such as artificial intelligence has in turn become much more sophisticated. A North Carolina-based startup named, Automated Insights, founded in 2007 and backed by the Associated Press, Samsung and Steve Case built technology to automatically take raw data and translate it into narratives that look like they’ve been written by a human. It uses a technology called Wordsmith to generate stories. Typically, Automated Insights works with large customers to create the templates that the Wordsmith software fills in. The company claimed it was producing hundreds of millions of pieces of content for customers that included Yahoo and Microsoft.

Wibbitz is an AI-driven production software that USA Today has used to create short videos. It can condense news articles into a script, string together a selection of images or video footage, and even add narration with a synthesised newscaster voice.

The large media companies are using all options to become more efficient and more profitable. So now, not only are headlines computer generated but we are moving into an age where complete articles will be written by computers.

As explained in his book “The End of Big”, Nicco Mele explains that it is not all doom and gloom for the future of journalism and journalists. Much of the fact finding mission is now going direct by way of user generated media. The proliferation of blogs and other small grassroots news and opinion Web sites are undercutting the current economic model of news by fragmenting audiences. A segment of the market, such as, The Skimm, is making an effort to “Humanise” headlines and provide the reader with as much information as possible in an efficient manner.

The big challenge facing us now is that as these computer algorithms get more sophisticated, it is getting more and more difficult to identify what is computer generated and what is human generated. If your goal is to be more productive and save time by glancing over headlines in order to understand the big picture, you may be putting yourself at a disadvantage as these headlines may not be providing you the complete picture. Your best bet is to carefully choose your information sources, and that includes companies that propose to summarize the daily news for you, such as Bit·of·News. But beware!  Bit·of·News is powered by PyTeaser, a news summary algorithm that ranks sentences in a news article according to how relevant they are. The top 5 sentences are used to form a “summary”.

In the end, you may find yourself reading a computer generated summary of a computer generated headline that has been constructed from a computer generated article. Although, for the moment as far as I know, the one thing that is not yet computer generated is the actual event being written about!

The Hutch Report

The Business of Vanity

By | Beauty, Business, Health, Technology

The rapid pace of technical advancements these days is mind boggling. It seems that only weeks go by before yesterday’s new innovation is already leapfrogged by another taking its place. We are seeing the proliferation of self driving cars, virtual reality, smarter and smarter robots, new forms of digital currency, a public ledger called the blockchain that threatens to disrupt a number of industries, or new modes of transportation such as the Hyper-loop which promises to transport people across large distances in a fraction of the time that we are now accustomed.

The workforce is clearly getting worried, as they have a right to be. Large numbers of labourers have already been replaced by an army of robots in Amazon’s vast distribution centers. More and more, machines are replacing order takers at fast food chains such as McDonalds and Burger King, not to mention numerous others. Machines are getting so good that clients that call into customer support services at Airline companies, don’t even realise that many times they are speaking to a computer.

Should the self driving automobile revolution take hold, what will happen to the thousands and thousands of taxi drivers, bus drivers, or dare I say it, Uber drivers? If blockchain smart contracts become as fullproof as they are made out to be, what will happen to the legal system, or the intellectual property system workforce. After all, if what is written into a blockchain becomes full taper proof evidence of ownership then what will be the use of that copyright lawyer you always needed to call on?

Whether we like it or not change is upon us. Change has always been upon us and always will.  The history of mankind is a story board of evolution and innovation. It is wash, rinse and repeat. The car took out the hoarse and carriage. Television pushed out the radio. The Internet has been pushing them both out. Just in the past 25 years we have seen the revolutionary impact of computers, smart phones and telecommunications and the Internet. We have seen the combustible engine being slowly replaced by battery powered vehicles. So as a workforce are we forced into the constant threat of thinking our industry could be disrupted any time, no matter what industry we find ourselves in?

Not so fast!

There is one area that has stayed pretty much the same for centuries and for that reason will not likely see much of a disruption. I am talking about anything that is associated with Vanity. Since the dawn of time there has been a demand for any hygiene services or any service that will help you look good. These industries include, Haircuts / Hairstyling, Nail care, Body hair removal, Makeup and numerous others.

The occupation of hairdressing dates back thousands of years. There have been discoveries of ancient art drawings and paintings depicting people working on another person’s hair. There is evidence of ancient hairstyling as Assyrian kings and other nobles had their hair curled with heated iron bars. In Africa, it was believed in some cultures that a person’s spirit occupied his or her hair, giving hairdressers high status within these communities. The Greek writers Aristophanes and Homer both mention hairdressing in their writings.

The status of hairdressing encouraged many to develop their skills, and close relationships were built between hairdressers and their clients. Hours would be spent washing, combing, oiling, styling and ornamenting their hair. Men would work specifically on men, and women on other women. Before a master hairdresser died, they would give their combs and tools to a chosen successor during a special ceremony.

Ancient Babylonian men manicured and colored their nails using kohl, with different colors representing different classes. Cleopatra and Queen Nefertiti popularized the manicure by rubbing their hands in rich oils and staining their nails using henna. Like the Chinese royals who came before them, both male and female members of the Ming Dynasty had perfectly manicured, talon-like nails. To add a tint, they mixed together egg whites, wax, vegetable dyes, and other materials to create different color varnishes ranging from dark red to black.

The two forms of body hair removal that have been around for centuries is Depilation and Epilation. Depilation is the removal of the part of the hair above the surface of the skin. The Egyptians may have been the forerunners of many beauty rituals but they invested the most time into hair removal. During the Roman Empire, the lack of body hair was considered a sign of the classes.

The need to go down to the local barber for a shave has a long history.  In ancient Egyptian culture, barbers were highly respected individuals. Priests and men of medicine are the earliest recorded examples of barbers. Men in Ancient Greece would have their beards, hair, and fingernails trimmed and styled by the κουρεύς (cureus), in an agora (market place) which also served as a social gathering for debates and gossip. Barbering was introduced to Rome by the Greek colonies in Sicily in 296 BC, and barber shops quickly became very popular centres for daily news and gossip.

Although technological advances have led to better tools and methods for improving these various services, the actual services themselves have stayed much as they were in ancient times. If you wanted to get your haircut in order to look good for your date with a Greek Godess, you would make your way down to the local qualified barber to help you out.

The constant in all of these vanity services has been that of socialising and human contact. Even today, a barber, hairstylist or manicurist will lend you their ear for a little chat while they get the job done. It is hard to imagine, although some try, a world where there is no longer socializing. A machine cuts your hair, does your nails, or an epilation. Humans are social beings and need to socialize therefore all services that are based on social interaction are likely to have a long and prosperous future ahead.

The Hutch Report

The Social Media Casino

By | Health, Psychology, Technology

Something strange is happening in the world of social media. It is starting to feel like we are all part of a grand neuroscience experiment of Pavlovian nature. Classical conditioning (also known as Pavlovian or respondent conditioning) refers to learning procedure in which a biologically potent stimulus (e.g. food) is paired with a previously neutral stimulus (e.g. a bell). It also refers to the learning process that results from this pairing, through which the neutral stimulus comes to elicit a response (e.g. salivation) that is usually similar to the one elicited by the potent stimulus.

Your smartphone buzzes. You can’t just leave it because the curiosity is just too great. Was it an email for me? A text? Did I get a Facebook notification? Or just a phantom vibration? You grab it out of your pocket without hesitation and check the alert.

Pavlov paired food with a bell; we seem to be pairing our human connection with our phone. We may not salivate at each alert, but our brain is certainly responding.

The digital world has become a crowded place. We have one piece of hardware that has essentially become the portal for all our news, communication, entertainment, and utilities. Making up these distribution channels are millions of companies producing the application, content and software.

Their survival is based on their ability to keep us, the users, engaged as often as they can and for as long as they can. So the need for ways to measure “real” online engagement has never been more urgent. To effectively reach consumers in today’s fragmented media landscape, advertisers and publishers need a deeper understanding of which content resonates when, and on what device. Advancements in online advertising analytics can now show if an ad was actually viewed and this capability is pushing many advertisers, publishers and agencies to think beyond clicks and impressions.

The competition is fierce because if your attention is focused on SnapChat’s application, it is not focused on the latest content being produced by YouTube. The classic marketing messages such as “we are the most convenient,” or “we provide the most value for your money,” don’t seem to work anymore. Therefore, these companies have researched much deeper into our neural connections in order to manipulate them to affect our behaviour towards their products and services. This research has brought about innovations such as autoplay, endless scroll, reverse chronological timelines, reciprocity,  push notifications and many more.

If you’re an app, how do you keep people hooked? You do what Pavlov did, you provide an intermittent reward, or the promise of a reward, such as push notifications, or a bell when you recieve a message. The average person checks their phone 150 times a day. Think about why we do this? Are we making 150 conscious choices? (You can read more on this in Nir Eyal’s book “Hooked”). Tristan Harris equates it to playing a slot machine, and this is coming from a designer at Google that was responsible for many of them. Here is his view of it:

  • When we pull our phone out of our pocket, we’re playing a slot machine to see what notifications we got.
  • When we pull to refresh our email, we’re playing a slot machine to see what new email we got.
  • When we swipe down our finger to scroll the Instagram feed, we’re playing a slot machine to see what photo comes next.
  • When we swipe faces left/right on dating apps like Tinder, we’re playing a slot machine to see if we got a match.
  • When we tap the # of red notifications, we’re playing a slot machine to what’s underneath.

The psychologist Larry Rosen, talks about the fear of missing out. “We also study a particular type of anxiety connected to feeling a need to constantly check in, and feeling anxious if you can’t do so as often as you like. It is similar to the concept known as FOMO—fear of missing out—but it is not really a fear. Physiologically it looks more like a heightened level of “technological anxiety” that continues to rise until you check in with whatever is making you feel that way, and will abate only to start to rise again and again.”

So, if these are the tools and the elicited reactions, then how is it truly affecting us? The best way to find out is to remove the stimulus (smartphone). What happens to us if we are restricted from checking our smartphones? What happens when our addiction to pulling the slot machine lever is taken away?

Numerous studies have confirmed that people tend to undergo a kind of withdrawal: A research study from Swansea University found that people experienced the psychological symptoms of withdrawal when they stopped using social media (this went for all internet use, not just social media).  It tends to triggers more sadness and less well-being. The more we use social media, the less happy we seem to be.

One study conducted in 2013 found that Facebook use was linked to both less moment-to-moment happiness and less life satisfaction—the more people used Facebook in a day, the more these two variables dropped off.

A study from 2014 found that social media use is linked to greater feelings of social isolation. The team looked at how much people used 11 social media sites, including Facebook, Twitter, Google+, YouTube, LinkedIn, Instagram, Pinterest, Tumblr, Vine, Snapchat and Reddit, and correlated this with their “perceived social isolation.” The results indicated that the more time people spent on these sites, the more socially isolated they perceived themselves to be. Perceived social isolation is one of the worst things for us, mentally and physically.

Research found that an eighth-grader’s risk for depression jumps 27% when he or she frequently uses social media. Kids who use their phones for at least three hours a day are much more likely to be suicidal. And recent research has found the teen suicide rate in the US now eclipses the homicide rate, with smartphones believed to be the driving force.

One of the main benefits believed to have arisen our of social media is its “social” aspect. Our ability to be able to connect with others far and wide. However, it has been discovered that more friends on social media doesn’t necessarily mean you’re more social. A study from 2016, by R. M. Dunbar, Department of Experimental Psychology, University of Oxford, found that more friends on social media doesn’t necessarily mean you have a better social life—there seems to be a cap on the number of friends a person’s brain can handle, and it takes actual social interaction (not virtual) to keep up these friendships. So feeling like you’re being social by being on Facebook doesn’t work. Loneliness is linked to a myriad of health and mental health problems (including early death), getting real social support is important. Virtual friendship time has not been seen to have the therapeutic effect as time with real friends.

How can we protect ourselves and limit the effects?

Although not everything connected with social media is detrimental there should be care in limiting the destructive side effects that it can cause. But what are the options at our disposal to achieving this? We can’t expect it to come from the tech companies as that would equate to shooting themselves in the foot. Their goal is to gain users not lose them. We could turn to the government to regulate the use, however, we are already so regulated in so many areas that dealing with something so widespread as the internet and social media would likely see the same effects that they saw during the prohibition period. That didn’t work out so well. Therefore, the onus is placed on the individual or the family. This takes extremely tough discipline when you are up against an industry that is researching your inner core and how better to manipulate it.

Interviews with Bill Gates, Steve Jobs, and other tech elites have consistently revealed that Silicon Valley parents are strict about technology use. In 2007, Gates, the former CEO of Microsoft, implemented a cap on screen time when his daughter started developing an unhealthy attachment to a video game. He also didn’t let his kids get cell phones until they turned 14. Steve Jobs, who was the CEO of Apple until his death in 2012, revealed in a 2011 New York Times interview that he prohibited his kids from using the newly-released iPad. “We limit how much technology our kids use at home.”

The psychologist Larry Rosen suggest the following:

  • Try to slowly wean yourself off the need to respond automatically to alerts and notifications, particularly while you are working on any task that requires concentration and attention. This can be done by turning off notifications, shutting all browser tabs, putting the phone on silent for a specified amount of time, or even just turning the phone off.
  • Instead of checking your messages when you receive alerts, check them on a time schedule. Alert friends, family and colleagues that you are going on a 30-minute plan (or whatever suits you), only checking messages every 30 minutes.
  • Do not work with technology for more than about 90 minutes at a time. Take short 10-minute breaks and do something that doesn’t use technology to calm and reset your brain. Walking in nature works. So does playing a musical instrument, meditating, exercising, listening to music, and taking a hot bath or shower. You know implicitly what calms your brain.
  • Using technology at night ruins your sleep and the important brain processes that happen while you rest. Remove your phone and other devices that are used close to your face for at least one hour prior to attempting to sleep.

Additionally, Tristan Harris, from a movement he started by the name “Time Well Spent”  suggest making the following changes:

  • Allow notifications from people, not machines

Most notifications are from machines, not actual people. They keep our phones vibrating to lure us back into apps we don’t really need to be in. Visit Settings > Notifications and turn off all notifications except those from real people– apps like WhatsApp, FB Messenger or Messages.

  • Keep the tools, put mindless choices at a distance.

Limit your first page of apps to just tools– things you use for in-and-out tasks like Maps, Camera, Calendar, Notes, or Lyft. Move the rest of your apps off the first page and into folders.

Launch other apps by typing

Swipe down and type the app you want to open instead of leaving bad habits on the home screen. Typing takes just enough effort to pause and ask, “do I really want to do this?”

On Android you can use the Search box on your home screen.

iOS: For best results, turn off Siri Suggestions (Settings > Siri & Search > Siri Suggestions to off)

  • Charge your device outside the bedroom

Get a separate alarm clock in your bedroom, and charge your phone in another room (or on the other side of the room). This way, you can wake up without getting sucked into your phone before you even get out of bed.

The main thing to remember is that nobody is making us respond so quickly, or respond at all to alerts and notifications. Nobody is enslaved to technology. If you practice waiting and not checking your alerts you will find that the anxiety and mental need to check in will abate with time, and then you will be in control of your technology rather than your technology controlling you.

As we explained in our article “The Illusion of Understanding,” if you think that you understand the workings of social media and how it affects you, you probably don’t.

The Hutch Report

The Digitisation of Fraud

By | Cryptocurrency, Law, Money, Technology

Whether we speak about the new economy; the old economy or any economy, fraud is still fraud. It is the wrongful or criminal deception intended to result in financial or personal gain. Yet even though there has been a large amount of publicity surrounding some very high profile cases of fraud nothing seems to change. Auditors and accounting professionals seem to remain impotent when it comes to fraud detection.

The truth is, the audit of traditional financial statements were never designed to detect fraud. The audit is simply a process of checking a company’s math and application of accounting rules. This is probably why it has been so prevalent in large corporations in spite of the fact that they have an army of accountants from the largest auditing firms scouring their books yet no cases of deception to show for it.

According to the findings in the “Report to the Nations on Occupational Fraud and Abuse” study released by the Association of Certified Fraud Examiners in 2014, the higher-ranking the fraudster was, the greater the losses. In addition, financial fraud is more difficult to uncover because the perpetrators have less of an emotional connection to what they are doing than they do for other types of crime. The fact that they are not actually touching money as opposed to fudging documents, they feel less guilty of committing a crime.

There seems to be less leniency towards drug dealers and petty criminals as opposed to, say bankers, but the truth is financial fraud has destroyed just as many or more lives through the theft of millions taken from shareholders and pensions plans.

The report estimated that the typical organisation loses five percent of its revenues each year to fraud. That would work out to a global impact of $3.7 trillion, however, it is also believed that there are so many more cases that are not discovered.

So now we find ourselves living in a digital world with the increasing development of the Internet and our dependence on it. We have seen the introduction of the blockchain with which has come the proliferation of a number of crypto-currencies chief among those being Bitcoin.

With the advent of a new technology that has the capacity to disrupt our financial system, it is not surprising that with it comes a new breed of criminals. Cybercrime is already costing the U.S. economy as much as $120 billion a year and as much as $1 trillion globally, according to a study released in 2013 by McAfee and the Centre for Strategic and International Studies. Seeing that it is so difficult to regulate Bitcoin, it has been the tool of choice for these cybercriminals.

It is not surprising to see so many come out and chastise this new technology, especially those with a weak understanding of its merits. Equally not surprising is the large number of financial industry participants at the forfront of these critisisms. Ironically it is those same participants who have already been responsible for billions of dollars of fraud in our financial system.

The truth is, it doesn’t matter what the weapon is. If you kill somebody using a gun, knife, poison or your own hand, the end result is that they are still dead. If you steal money from someones purse, removed the funds from their bank accounts, knowingly overcharged them for services never rendered or expropriated funds via Bitcoin, the result is the same.

Liberty Reserve was founded in Costa Rica by Arthur Budovsky. Through his website it was possible for anyone to transfer money with very little regulation. The only required details were name, e-mail address, and birthday. Liberty Reserve never actually handled the funds, as it converted the fiat deposits into Liberty Reserve Dollars or Liberty Reserve Euros, whose values were pegged to the value of the US dollar and euro respectively. This made it ideal for funneling criminal funds. The authorities eventually closed in on Budovsky’soperation and shut it down. In January 2016, Budovsky pleaded guilty to money laundering and admitted that he had secretly moved at least $122 million.

When it comes to Bitcoin, the case that is cited the most is that of the Silk Road bust. In the Silk Road case the federal government had seized more than $33 million worth of bitcoin from the computers of the site’s alleged founder, Ross William Ulbricht. It is believed that the operation generated roughly $1.2 billion in sales over three years. Tracing that money and recouperating it would be deemed as next to impossible.

We can compare these two “digital” cases with that of Enron. Enron Corp. was essentially an energy trading company that reached dramatic heights, only to face a dramatic collapse. The story ended with the bankruptcy of one of America’s largest corporations. Enron’s collapse affected the lives of thousands of employees and shook Wall Street to its core. At Enron’s peak, its shares were worth $90.75, but after the company declared bankruptcy on December 2, 2001, they plummeted to $0.67 by January 2002. Enron shareholders filed a $40 billion lawsuit although only ended up receiving limited returns from the lawsuits, despite losing billions in pensions and stock prices. This was the largest bankruptcy in US history until Worldcom a few years later.

The means and methods were different in these cases but the results were the same. Fraud is fraud.

The Hutch Report

Tools for the Crypto Millionaire

By | Cryptocurrency, Money, Technology

With Bitcoin prices and cryptocurrencies surging to all time highs the hype and noise is reaching fever peach.  Unbridled enthusiasm on one side and unbridled doom and gloom on the other side. With that said, those who have not invested are suffering from FOMO – the fear of missing out. Many readers continue to ask us how does one go about investing in cryptocurrencies. We have therefore put together a list of those necessary tools to get you started in building your cryptocurrency investment stash for the future.

We have also heard, firsthand, recent stories of people now placing their entire retirement or IRA savings in Bitcoin. For anyone in their twenties and this amount is small, why not … there is time in life to recover before retirement in the case things do not go as hoped. For anyone in middle age or older – well, this is probably a bit foolish. A common sense advice purported by serious and ardent advocates for crpytocurrencies is to invest 1% of assets into cryptocurrency. If it does well, great. If the whole thing comes crashing down, losing 1% would not be a disaster. As a reminder, “hope” by itself is not a great investment strategy.

In addition, the fact that cryptocurrencies are decentralized means that you are responsible for your cryptocurrency investments. If you should lose or have them stolen, there is no central authority which you can turn to. Therefore, you need to inform yourself on the proper security measures to take in order to protect your cryptocurrency investments. We have therefore provided three of the best hardware wallets on the market to help you to do so.

We would like to remind all readers that this website and content is produced for general interest, is not specific to you, is for entertainment only and is not intended to provide nor constitute financial advice. In full disclosure, the authors may or may not be holding positions in any of the vehicles mentioned. Prior to making any investment decision you should undertake your own due diligence and/or seek the advice of a qualified and registered securities professional. With the preceding in mind, listed below are some of the websites and platforms that some of our readers have indicated they are using:

Market Prices and Market Capitalizations

Coinmarketcap  is probably the most trusted comprehensive index of crypto market prices capitalization ranking as well as which coins are being traded on which exchanges. The nice thing about this site is that you can easily select which fiat currency in which you would like to see the prices compared. Do note that the prices listed are the average prices across exchanges. It is possible on this platform to drill down and see the prices on each specific exchange as well. The astute individual would remark the discrepancy of prices on the different exchanges and see an opportunity for arbitrage. However, in this case one would also want to pay attention to volumes and liquidity which would impact the ability for arbitrage.

Cryptocompare also provides a comprehensive listing of cryptocurrency market caps and prices and allows different currency comparisons.

Cryptocompare USD for a listing of prices as compared to US dollar.

Cryptocompare BTC for a listing of prices as compared to Bitcoin (BTC)

Cryptocompare EUR for a listing of prices as compared to Euros.

Coinvision provides AI-powered alerts for cryptocurrency market news.

Exchanges and wallets

In order to buy a cryptocurrency you have to have an account on one of the exchanges that allows trade in the currency. Cryptocurrencies can be traded similarly to stocks including features such as limit orders. Only a handful of currencies can actually be bought directly with fiat currency such as US dollars or Euros. The most common denominator is BTC. BTC can be bought for US dollars or Euros and then BTC can be used to buy the other currencies.

Some of the exchanges also provide wallet services and vice-versa.

In choosing an exchange we would recommend choosing one that has volumes otherwise you may suffer liquidity issues. Some of the most popular Bitcoin and cryptocurrency exchanges are:

Poloniex : A US based company, Poloniex allows trades in about 107 different cryptocurrency markets, with most volumes from Ripple. Ethereum and Litecoin.

GDAX : GDAX is a US based company, and as of this writing only trades in Ethereum, Bitcoin, and Litecoin. It does facilitate fiat currency purchase in USD, EUR and GBP for Bitcoin.

Kraken :  This is a US based exchange that allows trades in about 40 markets and does facilitate USD and EUR purchases for Bitcoin, Ethereum, Ethereum classic and Litecoin as well as a few other currencies.

Korbit : This is a South Korean based exchange currently only trading in Ethereum, Ethereum Classic, and Bitcoin and allows fiat purchases using South Korean Won.

Bitstamp : This company is based in Slovenia and London and trades in Bitcoin, Litecoin, Ethereum, Ripple and soon Bitcoin Cash.  They facilitate fiat currency purchases in USD and EUR. For purchasing Bitcoin via Bitstamp it works very well for a variety of options including credit card, however, credit card purchase of Bitcoin do carry a 2.5% fee. SEPA (European standard) wire transfers are efficient with Bitstamp.

Bittrex : This is a US based exchange that supports over 190+ cryptocurrencies. This is the platform recommended by many of our readers. Bittrex does not facilitate direct fiat currency purchases. What some of our readers do is they buy Bitcoin on one of the other platforms that allows purchases in fiat currency and then they send the Bitcoins to their Bittrex wallet and then purchase the other currencies using their Bitcoins. The same process would be followed in reverse to extract fiat currency.

Coinbase : A US based company, Coinbase is a wallet for Bitcoin and Ethereum. It also facilitates an exchange and allows purchases for both of these cryptocurrencies in USD. Coinbase also enables the quick purchase of Bitcoin by linking your bank account  or credit card account. Credit card is a more expensive option and you will pay a 2.5% fee for the transaction. Currently, Coinbase only allow a maximum purchase of $50 worth of Bitcoin a week using a credit card so if you want to buy more you would probably need to link your bank account.

Xapo :  A US company, Xapo is also a wallet with exchange services as well as the ability to link a debit card. The debit card feature is pretty cool, it allows you to use your Bitcoin holdings for everyday spend, in USD for example, at any stores that accept normal debit cards. A main feature of Xapo is that it is probably the most secure online wallet in the industry. Their hardware is put together under the eyes of security and their servers are stored in protected vaults hidden in the Swiss mountains.  Xapo is good as a wallet, however, if you want to buy Bitcoin Xapo may be an expensive choice. The minimum purchase amount, whether credit or debit card, that Xapo will allow is $10’000 purchase.

Hardware Wallets

Trezor is a hardware, USB wallet that allows you to easily and securely store your Bitcoin and other supported cryptocurrencies yourself. There are several hardware wallets, Trezor is one of the most popular and has already, in the relatively short life of cryptocurrencies, proven itself at navigating very well the complex world of blockchain forks. In addition they are integrated with many of the major exchanges like Bitstamp (mentioned above) which makes it super easy to securely store your Bitcoin offline but move them back in within a few clicks when you want to trade or transact.

Ledger Nano S is a another hardware wallet that stores Bitcoin, Ethereum and other supported cryptocurrencies.

Digital Bitbox is a minimalist bitcoin hardware wallet packed with security and privacy that allows you safely hold and spend your coins with peace of mind. This is a very easy to use is a plug-and-play wallet also with second-factor authenticator that combines the highest security of cold storage with the convenience of software wallets.

DIY (Do-it-Yourself ) and other Wallets

The bitcoin.org site lists several bitcoin wallet solutions (https://bitcoin.org/en/choose-your-wallet). If you become adept at a specific cryptocurrency you may want to download the wallet specifically for those alternative currencies from the organization directly. For example if you are into PIVX, at https://pivx.org/ you can download the defacto PIVX wallet for your operating system directly. The advantage of using the wallet provided by the organization is that you can potentially also benefit from mining or staking and earn extra coins from the wallet. This is the case with the PIVX wallet which allows you to earn PIVX by keeping your wallet on and keeping PIVX in it. Whatever you do, be sure to make back-ups of your wallet and where possible use 2 or even 3 factor authentication.

A parting word…

You can keep your crypto-money on the exchanges directly or store it in a wallet.  Exchanges are not as secure and may not support forks when they occur.

We hope you have found this article useful. If you did, remember to sign-up for our newsletter by registering via the “subscribe” link at the top and to follow us on Twitter or Facebook just click their icons below. Check out the suggested reading material as well if you are interested in learning more.

The Hutch Report

The Relativity of Space, Time … and the RIF6 cube mini-projector

By | Technology

As someone who travels and has traveled frequently for business there are definitely some gadgets and pieces of technology that have made life easier and indeed fun. One of these that for which I have actually taken a small leap and bought for myself is the palm-sized handheld mini RIF6 projector.

While not a mind blowing leap into the future it is still a nice incremental step in miniaturization and bringing what used to be super expensive in a much larger size into both a physically smaller and lower cost realm.

It fits in the palm of your hand and can be used to project screen presentations from your smartphone or an sd card. It is super portable and can be projected onto any flat surface. The cube is not for anyone seeking super high definition resolution. The cube is for anyone seeking a super portable, rugged and functional mini smartphone projector. It is awesome for what it is and what it can do.

Two main reasons why I bought it:

  1. Giving impactful business presentations (pdf, powerpoint, keynote, etc) or demoing things (apps, navigation, etc) from my smartphone.  Great for when meetings are in conference rooms with no projector or for impromptu meetings in a coffee shop or non-traditional environment. This has made a huge difference in the quality of discussion of my meetings and the following outcomes. This has freed me up from the stress of wondering how I will be able to present and share my ideas, plus since it is relatively new and not so common, people are always intrigued. That makes it fun.
  2. Speaking of fun, it is awesome for sharing movies or content from my smartphone with friends and family. Just project them up onto the wall.

What is included:

  • It comes with a super easy to use small tripod
  • Two mini HDMI cables, one for Samsung phone, one compatible for most other android devices
  • Plug in wall adapter (although you may need one for your country if purchasing outside the US)
  • A small remote control

What is not included

  • It does not have Bluetooth or wireless connectivity options. This is ok in my book, saves on battery power.
  • iPhone cable: It does not include an HDMI adapter for iPhones. To use an iPhone with it you need to get a lightning-to-hdmi adapter. That’s ok too, they are easy to find and a link where you can order this online is included in this post.
  • Headphone/speaker cable: You would only need this if you need better sound. The built-in speaker is very basic, so if you did want to watch a movie (Netflix, Apple, Amazon Prime, Youtube, Vimeo, etc) or any other content from your phone you would want to plug in an external speaker. I have a small portable palm held speaker that works just fine in these cases. Most portable speakers come with the required cable, the rif6 has a standard 3.5mm audio socket jack (same as smartphone audio-jack). Included in this post is a link for the perfect small speaker to go with your Rif6. There is a perceptible noise from the fan on the device, but it is not loud and is not an issue. Any projector big or small has the same issues so this is not really unique to the Rif6.

 

Here is a good review from our friends at idownload blog.

In summary, for the price/quality/intended-use ratio, I am very pleased with the RIF6 cube and it’s relationship to space and time. Who knows, you may even want to use it while you are being chauffeured around in your driverless car or being fed by your smart refrigerator while kicking back to watch a movie with some robot friends.

The Hutch Report

The Virtual Reality…Reality!

By | Business, Technology

The Hutch Report produced two reports on virtual reality. One dealing with the technology of virtual reality and another one specific to its use in the real estate industry.

At the time of researching these papers it was difficult to get to specifics amongst the amount of hype in the air.  Most articles were dealing with what was to come, how big the market was going to be, how everything was going to be virtual reality.

We wanted to check in to see what the current environment is like.

The best place to start is with the leading headset, Oculus, which Facebook bought three years ago for as much as $3 billion. Facebook has been apparently silent about shipment numbers, but several people familiar with Oculus said that fewer than a quarter million Rift headsets were sold during their first year on the market. When queried by CNET, Facebook declined to comment on Rift sales.

This past February, Facebook decided to remove their VR demo stations from hundreds of Best Buy stores. Some shops were going days without giving a single demo of the Oculus Rift headset.

Since then there have been a number of price reductions by Oculus and its competitors however it is unclear how these price changes may have boosted sales.

Recently, Nokia announced that it would cease building its pricey OZO virtual reality cameras after finding that the VR market was developing “slower than expected”. They will be laying off up to 310 people as part of the move.

Premium content owners and other content creators are currently still experimenting with the medium, but there can’t be an expectation of ROI at this time. Poor video quality is already a leading contributor to subscriber churn. Imagine how consumers would feel if they were paying for VR video content and the experience was laggy and pixilated, and sucked up all their bandwidth?

For virtual reality to really materialise for the masses all the pieces need to be in place. There is no use in having harware developed if nobody is producing the content. If the visuals don’t add up to an exceptional viewing experience then consumers become immeditately disillusioned. If that happens, content producers pull back and don’t make the investments which leaves the hardward producers out in the cold.

Virtual reality has long overpromised and under-delivered. With its origins in the gaming world (Sega VR were present in amusement arcades 20-plus years ago), virtual reality resurfaced a few years later in the 3D world of Linden Labs’ Second Life, then basically disappeared until Oculus Rift. Since then there have been some impressive improvements, yet market acceptance has been slow. Today, VR is just a $7.2 billion-a-year industry. This is mainly attributed to the fact that most equipment is cumbersome to wear, a lousy visual experience, and easily induces nausea. A reflection of that was seen recently as Oculus made a change to their return policies making it easier for consumers with buyers remorse to get their money back.

Many VR insiders have been citing the hype cycle graph from Gartner Research. They are using this as evidence that everything’s fine. The graph shows that new technology normally enters a “trough of disillusionment” after a period of inflated expectations. VR is seen as currently in or emerging from its trough of disillusionment, and if it follows the graph it’ll soon move onto the “slope of enlightenment” where the technology matures and then it’ll hit mainstream adoption. Perhaps a principle issue here is that over the years, virtual reality, as well as 3D have visited this trough of disillusionment many times before.

The Hutch Report Hype Cycle

Technology holds many promises for many industries so it is too early to start calling for the demise of virtual reality.  In the end, the consumer will be the judge. If there is not enough percieved value, there will be no market. If the market just isn’t there, investment will dry up and there will be less innovation and fewer products.

The Hutch Report

What Is The New Economy?

By | Business, Cryptocurrency, Economics, Startups, Technology

We often talk about the “new economy” but it is a bit of a misnomer as it can be argued that the economy is always new. It is dynamic and always changing. In spite of that, the name has become a buzzword describing new, high-growth industries that are on the cutting edge of technology and are the driving force of economic growth.

One of the main features of the new economy is the extraordinary rate of productivity improvement. It is not just that computers and software are getting better or that communications are becoming more rapid. They are improving at sustained rates that have never been seen in the recorded economic statistics.

A large part of the new economy – particularly software – is characterized by a cost structure that is peculiar to information: it is expensive to produce but inexpensive to reproduce. Combined with the communications power of the Internet, this means that any digitized information can be reproduced and transmitted around to world in virtually limitless numbers at virtually the speed of light. These are the most powerful economies of scale known to date.

Another aspect identified with the new economy is its strong network characteristics. Networks can have powerful economic impacts in several dimensions. They have strong rates of adoption and a strong tendency toward market dominance or even monopoly.

In order to survive in the new economy it is necessary to understand the changes that are happening and embrace them. Those that resist will be left behind. We have seen it before. When the personal computer was first introduced on the market there were many that refused to adopt it. Their resistance quickly found them segregated from the rest of the market in terms of opportunities and skills.  Now we find ourselves in a world where not a day goes by where we have some kind of interaction with a computer. In fact you can’t avoid it.

To help understand some of the changes and disruptions that are happening in this new economy we look at a few below that are making the biggest impact.

The Sharing Economy

The sharing economy is thought of as an umbrella term which encapsulates a wide variety of ideas. However, there has been a lot of criticism around the idea. Critics have said that it’s not really “sharing” if people have to pay for a service. It might seem like semantics, but the implication is more communal than corporate, and in that sense, misleading. It is also known as the On-Demand Economy, or the Gig Economy. Gig Economy is a fitting term for people interested in supplementing their income by taking small, temporary side jobs. But for workers that do this full-time or even beyond, their work should certainly be considered more than a gig. Especially when companies like Lyft offer incentives to work 50 hours a week, this service has become their livelihood. Calling their work a “gig” is almost reductive.

For argument sake we define the sharing economy as a socio-economic ecosystem built around the sharing of human, physical and intellectual resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organisations.

To include this in the new economy seems slightly banal considering the fact that sharing is nothing new. Giving someone a ride, having a guest in your spare room, running errands for someone, participating in a supper club—these are not revolutionary concepts. The revolutionary part is the fact that it has become part of the economic structure and for that to happen money has to change hands.

The best current examples of the “sharing economy” include the following:

Airbnb

Airbnb is an online marketplace and hospitality service, enabling people to lease or rent short-term lodging including vacation rentals, apartment rentals, homestays, hostel beds, or hotel rooms. The company does not own any lodging; it is merely a broker and receives percentage service fees (commissions) from both guests and hosts in conjunction with every booking. It has over 3,000,000 lodging listings in 65,000 cities and 191 countries, and the cost of lodging is set by the host. In short, anyone can rent a room out in their house or apartment for a fee. The impact it has had on the hotel/hospitality industry is not to be trivialised in the New economy.

Uber/Lyft/BlaBlaCar

These companies all do essentially the same thing. For consumers looking for a ride somewhere, they are a convenient, inexpensive taxi service. You can hire a private driver to pick you up and take you to your destination by means of an application installed on your smart phone. The nearest driver is often at your pickup location within minutes. Not only is this an on-demand car service, but you can even watch as your driver is en-route to come pick you up. For drivers, these companies provide allow you to be your own boss/set your own hours. Take on fares whenever you wish (work as much or as little as you desire).

Etsy

Etsy is an online buyer and seller community similar to eBay, except it focuses on hand-crafted or vintage goods. Most products sold fall into the category of arts, crafts, jewelry, paper-goods, housewares, and artisan candies or baked goods. Vintage items must be at least 20-years old to qualify and can range from costumes, clothing, jewelry, photos and housewares. In the past, most crafters and artisans sold their goods at fairs, open markets, and on consignment. While the Internet opened doors to reaching consumers beyond their local area, many craftsman didn’t want the hassle of setting up their own website, credit card processor or ecommerce platform in order to sell their goods online.  While eBay and other e-commerce DIY sites helped, Etsy provided a marketplace specifically for crafters. Etsy currently has well over 54 million users registered as members.

TaskRabbit

TaskRabbit is a marketplace that connects people who need help with something, with a network of pre-approved and background checked individuals, who have the time and skills needed to complete the listed task. The company allows people to outsource small jobs and tasks to others in their neighbourhood. Since the inception of TaskRabbit there have been numerous startups following the same model.

Where the Sharing Economy leads only time will tell. Will we live in a world of empowered entrepreneurs who enjoy professional flexibility and independence? Or will we become disenfranchised digital labourers jumping between platforms in search of the next short term gig?

Cryptocurrency

What is cryptocurrency? A Cryptocurrency is simply an online version of money, a digital asset to be precise. The name is derived from the Cryptography, which is used to encrypt transactions and control the production of the currency. It is a strictly monitored process, as it uses the Blockchain Technology.

Blockchain technology is a distributed database that is used to used to manage & maintain a growing list of data blocks, using a peer to peer network collectively. These data blocks may be situated in different locations and not connected to the same Processor. A database is a collection of records. A distributed database is one which may be located in different locations and not be attached to a common Processor – but it may be located in the same or different physical locations and dispersed over a computer network. In a Blockchain, once a piece of data is recorded, it cannot be edited or changed.

There are predictions that the underlying technology of the blockchain is going to impact our world more than the internet has. This is seen as the technology that could democratize the global financial system so everybody has equal access. The peer to peer concept allows online payments to be sent directly from one party to another without going through a financial institution, and cryptocurrencies are considered by their supporters to be a faster, cheaper and a more convenient alternative to other payment mechanisms such as sending payments via banks, transferring money via money transfer operators or buying goods and services over the internet, using a credit card. For this reason, the payments industry players are closely watching these developments, because of the ability that cryptocurrencies have to potentially disrupt and transform the existing global financial infrastructure.

As of June 25, 2017 there were approximately 900 currencies currently available with the most popular being Bitcoin and Ethereum. Yet while world economies, business and consumers have been caught up in the whirlwind of activity surrounding cryptocurrencies, the benefits and risks are still unclear and the future of any one particular cryptocurrency is not yet secured. In addition, there are a number of legal and political interpretations still developing.

Virtual Reality / Augmented Reality

This is by no means the first appearance of virtual reality. It has actually been around since the 1950’s. As technology has become more sophisticated over the years, every so often the dream of experiencing a virtual world is revisited. We are now back here again.

Virtual reality immerses a user in an imagined or replicated world (such as video games, movies, or flight simulators) or simulates presence in the real world. Examples of hardware players in virtual reality include the highly mediatised Oculus, now owned by Facebook, Sony PlayStation VR, HTC Vive, and Samsung Gear VR.

Augmented reality overlays digital imagery onto the real world. Examples of hardware players in augmented reality include Microsoft HoloLens and Google Glass.

The difference between the two is where VR uses an opaque headset (which you cannot see through) to completely immerse the user in a virutal world as opposed to AR which uses a clear headset so the users can see the real world and overlay information and imagery on to it. We recently saw an excellent example of AR with the success of the game Pokeman Go, although for various reasons its user base is in decline.

The promises of Virtual Reality to revolutionize the fields of medicine, marketing or entertainment are many yet there are also a long list of challenges before we see significant adoption. We already know that spending too much time staring at a screen can harm our vision over the long term. VR headsets are essentially a digital display mounted directly in a user’s face, raising real questions about the effects over time. Some people are also prone to nausea, dizziness and vertigo after just a little time spent in VR. For the industry, that motion sickness issue remains a largely unsolved problem.

Virtual Reality has come and gone a few times over the years and has yet to really solidify its mark on society.

Big Data

A large part of the new economy is about information. This is not only about information that we have access to but also our means of acquiring information. Organizations collect data from a variety of sources, including business transactions, social media and information from sensor or machine-to-machine data. These multiple sources makes it difficult to link, match, cleanse and transform data across systems. Data also comes in all types of formats – from structured, numeric data in traditional databases to unstructured text documents, email, video, audio, stock ticker data and financial transactions.

Big data is a term we use in the New economy that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. While the term “big data” is relatively new, the act of gathering and storing large amounts of information for eventual analysis is ages old.

The amount of data that is now being created and stored on a global level is almost inconceivable, and it just keeps growing. However, it’s not the amount of data that’s important. It’s what organizations do with the data that matters. At the moment only a small percentage of data is actually analyzed. The promise of big data in the New economy is precisely that, to gain key insights from all kinds of information in the hopes of making key discoveries.

Hyperloop

Existing conventional modes of transportation of people consists of four unique types: rail, road, water, and air. These modes of transport tend to be either relatively slow (i.e., road and water), expensive (i.e., air), or a combination of relatively slow and expensive (i.e., rail).

Enter the Hyperloop. Hyperloop is a new mode of transport that seeks to change this situation by being both fast and inexpensive for people and goods. It is unique in that it is considered an open source transportation concept. The authors encourage all members of the community to contribute to the Hyperloop design process. Iteration of the design by various individuals and groups can help bring Hyperloop from an idea to a reality.

Hyperloop consists of a low pressure tube with capsules that are transported at both low and high speeds throughout the length of the tube. The capsules are supported on a cushion of air, featuring pressurized air and aerodynamic lift. The capsules are accelerated via a magnetic linear accelerator affixed at various stations on the low pressure tube with rotors contained in each capsule. Passengers may enter and exit Hyperloop at stations located either at the ends of the tube, or branches along the tube length.

The goal is to get people from LA to SF (for example) in just about 30 minutes, which is almost three times faster than flying, while producing its own electricity from solar power, with round-trip tickets projected to cost between $40-$60.

Hyperloop One on July 12,  announced that it had conducted a successful first test of a specially designed vehicle to travel in a vacuum environment. In the test, which took place earlier this year, the company achieved controlled propulsion and levitation of a Hyperloop One vehicle at 70 mph on a 315-foot test track in the Nevada desert. The test vehicle reached nearly 2Gs of acceleration during its brief 5.3 second test run on the specially built track.

There are still a number of technical challenges to address with the Hyperloop but it is advancing. Should this project be fully realised it would revolutionise transportation in the new economy.

Artificial Intelligence

Of all the areas of the new economy artificial intelligence (AI) is, without a doubt, the most hyped and the least understood. According to technopedia the definition of AI is “a branch of computer science that aims to create intelligent machines.” More precisely, the term “artificial intelligence” is applied when a machine mimics “cognitive” functions that humans associate with other human minds, such as “learning” and “problem solving.” Otherwise said, machines that can think for themselves and make autonomous decisions and in turn learn from their decisions. All this leads to questioning to what point will machines control humans?

The machines haven’t taken over yet, however, they are seeping their way into our lives, affecting how we live, work and entertain ourselves. From voice-powered personal assistants like Siri and Alexa, to more underlying and fundamental technologies such as behavioural algorithms, suggestive searches and autonomously-powered self-driving vehicles boasting powerful predictive capabilities, there are several examples and applications of artificial intelligence in use today.

What many companies are calling AI are not truely AI. Software outputs due to an algorithm that responds based on pre-defined multi-faceted input or user behaviour can’t be considered AI.

A true artificially-intelligent system is one that can learn on its own, such as neural networks from the likes of Google’s DeepMind, which can make connections and reach meanings without relying on pre-defined behavioral algorithms. True AI can improve on past iterations, getting smarter and more aware, allowing it to enhance its capabilities and its knowledge. That will lead us to give them more responsibility, even as the risk of unintended consequences rises. We know that “to err is human,” so it is likely impossible for us to create a truly safe system.

The Hutch Report

Blackout! – The Danger of Solar Wind Disruption

By | Science, Technology

It feels like everyday we are becoming more and more dependent on our computers, smartphones, and tablets. We now use them to read the news, send messages, call people, watch TV, get directions, make reservations, pay for things, take pictures, edit pictures, and read books. We use them as alarm clocks, weather stations, instrument tuners, metronomes, flashlights, blood pressure monitors, pedometersand the list goes on and on and on.

So what happens if it all stops?

Lights out!

On March 13, 1989, the entire province of Quebec, Canada suffered an electrical power blackout. Although hundreds of blackouts occur in some part of North America every year, the Quebec Blackout was different, because this one was caused by a solar storm!

The Quebec Blackout was by no means a local event. Some of the U.S. electrical utilities experienced their own problems that required attention. New York Power lost 150 megawatts the moment the Quebec power grid went down. The New England Power Pool lost 1,410 megawatts at about the same time. Service to 96 electrical utilities in New England was interrupted while other reserves of electrical power were brought online. Fortunately the U.S. had the power to spare at the time, but it was just enough. Across the United States from coast to coast, over 200 power grid problems erupted within minutes of the start of the March 13 storm but luckily none of these caused a blackout.

So what are these solar storms that can cause so much disruption to our electrical infrastructure on earth? There are many kinds of eruptions that occur on the sun’s surface. One is known as a coronal mass ejection (CME). It is a gigantic explosion of energy. A solar flare is also produced from an explosion of energy from the sun although it does differ from the CME. The difference lies in what they emit during the explosion. They also look and travel differently, and they have different effects near planets. The two phenomena do sometimes occur at the same time and the strongest flares are almost always correlated with coronal mass ejections.

Both eruptions are created when the motion of the sun’s interior contorts its own magnetic fields. Similar to the sudden release of a twisted rubber band, the magnetic fields explosively realign, driving vast amounts of energy into space. This phenomenon can create a sudden flash of light, also known as a solar flare. These flares can last minutes to hours and they contain tremendous amounts of energy. Traveling at the speed of light, it takes eight minutes for the light from a solar flare to reach Earth. Some of the energy released in the flare also accelerates very high energy particles that can reach Earth in tens of minutes.

When a CME arrives at Earth, its magnetic field interacts with that of our planet’s and disturbs the ionosphere — the layer of the atmosphere through which radio signals travel. Thousands of satellites also drift through the ionosphere, so a serious CME could disrupt the world’s entire telecommunications infrastructure.

On September 1-2, 1859 the earth experienced a massive solar storm, known as the Carrington Event. It was a powerful geomagnetic solar storm that hit the Earth’s magnetosphere and induced one of the largest geomagnetic storms on record. Auroras were seen around the world. At the time, electricity was used mostly to power telegraph systems, which failed all over Europe and North America, and in some cases gave telegraph operators electric shocks. Because the electrical infrastructure in place at the time was miniscule in comparison to what we have to day, the damage was limited in terms of the disruption it caused to people’s daily lives.

The Quebec incident in 1989, in comparison to the Carrington Event was considered a relatively minor CME. However, it was strong enough to shut down power for 6 million people in Canada. It is believed that a stronger geomagnetic storm could shroud about 130 million in darkness, possibly for months or years.

The San Francisco Treat

On April 22, 2017, a massive power outage created chaos in San Francisco for most of the work day. The outage was triggered by a fire in a PG&E Corp. utility substation and caused disruption toSan Francisco’s normally bustling financial district, home to banks and technology companies.

Traffic signals were knocked out, paralyzing businesses and halting the city’s famed cable cars. Office workers were unable to access elevators or use their keycards. Wells Fargo & Co closed 13 bank branches and four office buildings, while the New York Stock Exchange said its ARCA options trading floor in San Francisco was briefly unavailable. Employees in Goldman Sachs’ financial district office were sent home. For many others, there was little to do but wait.

Not in full flight!

On July 21, 2016, Southwest Airlines canceled 1,150 flights. The trouble stemmed from a “system outage,” and the ground stop lasted for just over an hour.

On August 8, 2016, Delta Air Lines flights were grounded for at least six hours by a global computer system outage, causing large-scale cancellations and stranding hundreds of thousands of passengers. Delta, the world’s second largest airline, said the problem was a power outage at its Atlanta hub. The local electric utility, Georgia Power, said the problem was “a failure overnight in a piece of equipment known as switchgear” that affected only Delta.

On May 27 of this year, thousands of British Airways customers had their flights cancelled or delayed after a worldwide computer failure. Screens went blank at British Airways check-in desks across the globe as the company’s computerised passenger and baggage handling system failed. Apparently, a problem within the hub of their system, based near Heathrow, had led to a power outage. British Airways has a very large IT infrastructure with over 500 data cabinets spread across six halls in two different sites near its Heathrow HQ.

It was later determined that the root cause of the London flight-grounding IT systems was “a power supply issue”. The airline cancelled all flights from London’s Heathrow and Gatwick amid what BAconfirmed to be a “global IT system failure”.

Down and out Bankers

On 9 June, 2012, the worst banking meltdown to date hit millions of customers of the Royal Bank of Scotland, NatWest and Ulster Bank, locking them out of their accounts for days, and in the case of Ulster Bank customers, for weeks. The meltdown hit not only customers of the three brands owned by the RBS Group, but also people who were expecting salary payments from businesses that held accounts with the bank and other transfers between banks. The incident is believed to have cost the bank more than £100m.

On August 04, 2012, the U.S. Bancorp experienced a two-hour outage that affected its 8,000 automatic teller machines across the nation. The owner of the Minneapolis-based U.S. Bank said that a power failure in Oregon was to blame. The U.S. Bank has more than 3,000 bank offices in 25 states. It’s the fifth-largest commercial bank in the U.S., with $353 billion in assets.

On January 26,  2014, Lloyds Bank and TSB experienced a technological meltdown, which led to many people being unable to withdraw money or use their cards. Lloyds said the problem was affecting debit cards and its internet banking service but not credit cards, while TSB said some customers were unable to use debit cards or withdraw money from ATMs.

On June 17, 2015, RBS suffered another IT incident where it admitted that it could take days for customers to receive 600,000 payments that failed to enter accounts overnight.

Hack Attack

On October 21, 2016, Dyn, a company that controls much of the internet’s domain name system (DNS) infrastructure, had their servers hacked. They remained under sustained assault for most of the day, bringing down sites including Twitter, the Guardian, Netflix, Reddit, CNN and many others in Europe and the US. The cause of the outage was a distributed denial of service (DDoS) attack, in which a network of computers infected with special malware, known as a “botnet,” are coordinated into bombarding a server with traffic until it collapses under the strain.

On November 24, 2014, a cyberattack was launched on Sony Pictures. Employees logging on to its network were met with the sound of gunfire and scrolling threats. The attack wiped out half of Sony’s global network. It erased everything stored on 3,262 of the company’s 6,797 personal computers and 837 of its 1,555 servers. To make sure nothing could be recovered, the attackers configured a special deleting algorithm that overwrote the data seven different ways. When that was done, the code zapped each computer’s startup software, rendering the machines brain-dead.

We are at risk of coronal mass ejections taking down our electrical grids and computer infrastructures.

We are at risk of power outages knocking out computer systems leading to mass disruptions in numerous areas of our lives, which could be caused by natural disaster or human error.

We are at risk of foreign or domestic cyber attacks which could take down our systems and steal our identification.

So, the question is, as much as we enjoy our technological advances and gadgets that are supposed to be making our lives more productive and easier, are we being irresponsible by placing ourselves at the mercy of their flawless continued functionality?

The Hutch ReportThink about that next time you are stranded because you have had your flight cancelled, be rendered helpless by the theft of your identification and medical records, left penniless because you can’t access your savings or just left in the dark because the application that controls the lighting in your internet of things home has been rendered useless.

Look on the bright side, the last example can be rectified by some matches and a good old candle. It has been functioning since the dawn of man.