When One App Rules Them All: The Case of WeChat and Mobile in China

An excellent overview of WeChat, which is championing the paradigm shift from the web, and the “web of apps”, towards messaging and the notification stream. In my opinion, the central linchpin to messaging is its command of identity. The platform’s value is huge because users trust WeChat with their personal contact information, payment information, and personal communication. This trust begets a high-value attention stream for the user, which reinforces the cycle of trust and value in WeChat the platform.

Over time, I predict the notification stream, identity conduits that we call devices, and cloud-native operating systems will become increasingly important. FaceBook wants to become a meta-OS that is device agnostic, while Apple elevates the physical device as the chief arbiter of identity. Expect devices to get better and better at securely recognizing who you are with minimal friction, and expect notifications to become the primary way that you interface with services.

Bitcoin presentation at Goldman Sachs

21 Inc. Founder Balaji Srivinasan and Coin Center Executive Director Jerry Britto give a well-structured, succinct presentation on Bitcoin to Goldman Sachs. Of note is the fact that they believe Bitcoin is a protocol, not a currency, and that it is going to grow in underserved micropayment niche markets first as it establishes creditability to act as an internet of value transfer. Down the road, exciting applications such as near-instatantaneous settlement of very large amounts of value (e.g. millions of billion-dollar transactions per day) are entirely possible with sustainable security.

Will Bitcoin Finally Bring Down The House Of Medici?

From Dan Morehead of Pantera Capital, writing for TechCrunch:

A typical international cross-border payment for a small-to-medium-sized business whose payments are typically on the order of $1,000 to $10,000 can take several days and cost up to 5 percent of the total transaction. Let’s pull back the curtain on the process.

  1. Before a business can make a large purchase from a supplier, the buyer provides a letter of credit from a financial institution to the supplier, which acts as a guarantee of payment. There is a non-trivial fee for acquiring this and it may take several days for a bank to produce.
  2. Once the letter of credit has been provided by, for example, a U.S. business looking to buy from a Brazilian supplier, the supplier sends an invoice for an amount due.
  3. The U.S. business initiates a money transfer at its primary bank for an amount greater than what is due on the invoice. This is in order to cover the many fees required along the payment’s journey.
  4. Over the course of several business days, the buyer’s bank first charges a money transfer initiation fee and eventually moves the money along to its U.S. correspondent bank.
  5. Once the payment hits the first correspondent bank, it grants the buyer’s primary bank a rebate — a finder’s fee of a sort to incentivize the perpetuation of the 600-year old process. This correspondent bank deducts yet another fee for processing the buyer’s payment and moves the buyer’s payment along to a second correspondent bank in Brazil. This relay takes another couple of business days to complete.
  6. Upon receiving the payment, the second correspondent bank converts the buyer’s USD-denominated payment into Brazilian reals with a foreign-exchange spread. While able to exchange currencies at a wholesale rate, savings from doing so are not passed on to the customer but withheld as additional profit for the correspondent bank. Another processing fee for the payment is taken by the second correspondent bank before the payment moves on to the supplier’s primary business bank. The currency exchange and subsequent relay of the payment take an additional couple of days to complete.

Why financial firms are investigating bitcoin tech

Select quotes from a solid summary of Bitcoin and blockchains from CNBC:
  • Arguing that bitcoin’s underlying technology has the opportunity to improve settlement latency and system security for firms, Masters said the market for financial blockchain applications will ultimately be “measured in the trillions.”
  • In the past six months, “everybody realized that bitcoin’s more than a currency,” said Brian Kelly of Brian Kelly Capital. “Everybody had their ‘aha’ moment, and investors with many millions of dollars to spend are starting to see how it can be used.”
  • Now, more than a dozen big banks and tech firms have dived into the field, including Seagate,  Nasdaq,  Overstock, IBM, Samsung, UBS, Barclays, Banco Santander and Intel—to name a few.
  • Garzik, who now works full-time at Dunvegan Space Systems, predicted the myriad applications of the blockchain will eventually help form the infrastructure for a spate of new technologies, much like Transmission Control Protocol/Internet Protocol (TCP/IP)—the basic communication language of the Internet—does now. “You don’t have a conversation today about TCP/IP: This is the lowest layer of a money network,” he said. “You’re not going to say ‘Let’s adopt bitcoin,’ you’re going to say ‘Let’s use this money layer infrastructure.’ You’ll talk about the money web, or something of that nature, you won’t talk about the blockchain itself.”

What Exactly is This Internet of Things?

I found this link from Benedict Evans’ Weekly Newsletter. Excellent information on the Internet-of-Things, which as this author states has become a catch-all term to include any small connected device with an analog component, be it a sensor or a switch.

However, the more I look at the combination of those simple things, the more complex the outcomes. There is not going to be a single operating system or platform to unify all of those devices. Instead, each industry or ecosystem is likely to have its own set of solutions. Just as we talk about “Healthcare Software” or “Human Resources Software”, we are likely to have a “Manufacturing IoT”, and an “Agricultural IoT”. Maybe Apple or Google will wrap up the “Home IoT”, but for everything else I think it is unlikely that we will find a one-size-fits-all solution that we can then label “The IoT”.

McKinsey: The four global forces breaking all the trends

Excellent article from McKinsey that details the 4 main trends that will affect the world in coming years. My only disagreement is the order; I would place technological disruption first, with urbanization second.

Source: McKinsey & Company

Source: McKinsey & Company

Source: McKinsey & Company

Source: McKinsey & Company

Source: McKinsey & Company

Source: McKinsey & Company

Source: McKinsey & Company

Source: McKinsey & Company

The Rise (and Likely Fall) of the Talent Economy

A great article from the Harvard Business Review. I love analysis that focuses on incentive structures as the primary drivers of macro-shifts over time.

The income gap between creativity-intensive talent and routine-intensive labor is bad for social cohesion. The move from building value to trading value is bad for economic growth and performance. The increased stock market volatility is bad for retirement accounts and pension funds. So although it’s great that the proportion of creativity-intensive jobs is now nearly three times what it was a century ago, and terrific that the economy is so richly endowed with talent, that talent is being channeled into unproductive activities and egregious behaviors.

Jon Huntsman on the Future of Global Trade

How will society respond to a world that richly rewards educated innovators while ignoring increased income inequality? The simple truth is that the growth of disruptive technologies isn’t likely to ensure many well-paying jobs. High-tech skills will be at a premium, empowering some, but many high-skill jobs will be increasingly done by automation.