Are you a FAAAN? 5 Companies to Rule Them All.

Remember the 90s? Remember Microsoft’s antitrust troubles? For years, the software giant was in the crosshairs of government officials because it was deemed too dominant and needed to be broken up. Well, those times are back, only this time, nobody is crying foul.

There are now five companies who are ruling the world and have the potential to grow into dangerous quasi-monopolists. All of them were minions or not around the last time anti-trust issues were hotly debated. They are, in no particular order, Facebook, Amazon, Alphabet (Google), Apple, and Netflix. And we love them. They have made life so convenient that consumers even put aside privacy concerns.

Yet their increasing dominance does not bode well for the world in the next decade. Let’s start with the most troublesome one, our beloved Facebook.

The Plumbing of Life: Facebook

Facebook won the social wars. There is no other network that comes even close. With over 1,6 billion users spending hours at at time on the social network, Facebook has become the source of news, the way to connect with friends and family, a place to do business, to consume entertainment content, and actually manage your business.

We are consuming more unedited, biased news than ever before because of Facebook. Everyone’s a journalist now, and it only takes money and cunning to promote your biased views to “news” status. But Facebook is replacing other things too, from letters, birthday cards, photo albums, to television. Millions of people use their profiles to keep “a record of their lives”, millions watch newscasts on Facebook now. Facebook is even becoming a tool of social manipulation, for example with its suicide prevention program. Its cooperation with law enforcement is increasing also. Governments around the world are looking into the feasibility of voting via Facebook, and offering government services on the platform.

Facebook has recently introduced functions for job search that are intended to undermine its competitor LinkedIn more regional competitors like Xing. AI is already threatening recruiters (INSERT LINK), but AI combined with Facebook will make the entire HR industry obsolete.

Finally, Facebook is defining commerce, not as a selling platform per se (that hasn’t really taken off) but by becoming the primary source to learn about new products and trends. It is putting magazines, forums, and other media out of business. Serious nerds may have moved to Reddit, but nevertheless, businesses around the world are increasingly relying on having a Facebook page and driving traffic through it to websites and stores.

Every change Facebook makes affects millions of companies. The platform is so integral to business and marketing that one black-out, one adverse change in the algorithm, one successful attack by a hacker could put the livelihood of millions in peril. Governments control utilities like water and electricity or at least supervise them closely, yet no one is really supervising Facebook. Maybe it is time to think about nationalizing Facebook or turning it into a global utility, because that, in effect, is what is has become.

In commerce, Facebook may be the place to stumble upon cool products. But consumers like to order them on retail websites, none more so than Amazon.

The World’s Retailer: Amazon

The real behemoth in business is, of course, Amazon. It has become virtually impossible to sell anything in America and most of Europe without being on Amazon. Even if consumers buy in a shop or on other websites, they tend to read the Amazon reviews first.

Brick and mortar stores are closing down, local retail websites are feeling the pressure everywhere. Almost 70% of American households have subscribed to Amazon Prime which offers free shipping and other conveniences. Small retailers can’t compete with that. The typical customer journey goes from Facebook (discover the new product) straight to Amazon (check the review and price, then get it shipped quickly and free of charge). The two companies together are already monopolizing business in large parts of the world and continue to expand at breakneck speed.

But even where it is not the dominant retailer, one part of Amazon is ruling the new economy: Amazon’s web services (AWS) are the most powerful tools ever given to companies. The APP economy wouldn’t exist without AWS. In public IaaS, AWS is three times bigger than IBM, Google and Microsoft put together. Businesses everywhere depend on Amazon delivering IT services around the clock at an all-time low price. Outages affect thousands of companies. When AWS sneezes, thousands of startups die of pneumonia.

I predict that Amazon will one day be the largest company on earth, the first with a trillion dollar valuation. Amazon Echo and Alexa, the AI behind it, are ingenious inventions that will soon be part of homes the way we now turn on the light with a switch. Amazon has made buying so convenient that consumers willingly share all their data with the giant.

Echo is just a transition. In the future, you will be talking to your vacuum cleaner and tell it to order its own bags. And as you fill the drum, Alexa in the washing machine will remind you that it’s time to order more Tide. Just like Facebook knows you better than you do yourself, Amazon knows more about your shopping habits than you do. The convenience Amazon brings means customers don’t seem to care about the enormous privacy issues associated with that. Data rules, and we let it rule. Which brings us to the third data monster in the room.

Meet the real HAL: Alphabet

Alphabet’s Google dominates the market for search. If you don’t show up in search results you don’t exist. Alphabet’s move into artificial intelligence, robotics, quantum computing, autonomous cars, and a cornucopia of other ventures, plus its financial clout, mean it is set up to be the monopoly provider of information and services in a long list of industries. Its mobile operating system and browsers have higher market shares than Windows ever had. Your Chrome browser offers increasingly convenient functions, but it also collects a massive amount of data.

“To Google” has long been a word, but as we move away from text search to voice interaction with PCs, it is likely that the AI behind much of the voice computing world will be powered by Alphabet even if we don’t realize it. Unlike Amazon, whose Alexa only has one purpose (to make you buy stuff ), Google’s AI still doesn’t have a shape or form and probably never will. Google has chosen not to give it a corny name because it wants the AI to be part of the software or hardware. Alphabet is also the only company ready to build a truly universal artificial intelligence (Its approach is rather different from IBM for example.) Rest assured, DeepMind may soon be used to evaluate data in important decisions, monitor elections, shape government policy, and much more. Artificial Intelligence is a huge opportunity, but also a big danger, as minds wiser than mind have been warning for a while.

The Big Unknown: Apple

By comparison, Apple seems to the least threatening of these companies. But that is misleading. Apple dominates huge swathes of the online business for music and apps. Despite falling market share and the criticism that it has failed to innovate in the last few years, Apple is still a formidable force. It’s Siri AI is the only competitor to Google sufficiently advanced and generally in the hands of consumers (as opposed to IBM Watson), and Apple will certainly be a leading player in the AI space. We have no idea what devices it is working on, but it won’t just limit itself to yet another iPhone.

What’s more, Apple is dominating the world’s IT supply chains where it counts. One of the reasons companies like HTC were struggling a while back was that Apple monopolizes so much of the phone supply chain that competitors find it hard to secure components. Apple’s influence is also more intangible: look at the Zenbook or Xiaomi’s latest notebook and phone models, and you can see the ghost of Steve Jobs. Whatever Apple decides to do in autonomous cars will have a huge impact on the world.

The big question at this point is whether Apple will continue to focus on devices and the services linked to it, or whether it will expand in the content space. I can see Apple buying a media company such as Disney in order to cement its dominant position. The reason for this is growing competition by the fifth behemoth, Netflix.

The World’s Entertainment Center: Netflix

Netflix is the most underestimated of the five. But think about it that way: traditional movie studios need to budget each film separately. If it fails, they take a loss. If several in a row flop, they may go under or be bought by rivals.

Netflix on the other hand, at the time of writing, has 100 million subscribers who pay USD 12 every month. The company has 1.2 billion every month to do what they like. Big studio bosses only dream of such a revenue stream.

With all that money, Netflix is a position to expand globally, localize, create more and more content, and make its entertainment experience social. There are already Netflix parties going on where users come together to watch the latest shows on Netflix. With the right software, this can be done online, and if Netflix decides to buy Twitter (or develop its own social network), we can finally yap all the way through the movie.

Integration with existing platforms will mean Netflix will quickly become the dominant entertainment platform worldwide. It may threaten the big Hollywood studios, and if it plays VR/AR right (which will be consumed only in a personal space and not the movie theater), it may become more dominant. It may share the stage with Amazon for a while, but so far Amazon content has been rather disappointing. I don’t think an HBO-Netflix merger is ridiculous; I think it is likely. That, or they’ll snap up other studios as they get cheaper.

Well, this is the lineup for the next few years. My money is on those five companies, literally.

You may have noticed that I am not including Uber or AirBnb in this list. That is because I believe these kinds of exploitative matchmaking technologies will ultimately be replaced by blockchain technology. I don’t know when it will happen, but unless they radically change their business models, they will never become as dominant as the above 5 in the coming decade.

Oh, and Microsoft? Well, they certainly are still around. Recently they have come up with devices that surprised by their elegance and performance. Its AI efforts are admirable. It has bought LinkedIn in order to keep a foot in the door of business social, even though so far it has focussed on the wrong aspects of LinkedIn (Revenue through HR services, rather than making it an all-round business network focussed on people’s existing jobs.)

I still haven’t got a clue what the future of Microsoft will look like, and I think neither does Microsoft. A bit of this and a bit of that do not a strategy or vision make. The company seems to have split up into too many little fiefdoms competing for resources, with no coherent plan. So perhaps what the regulators didn’t achieve two decades ago may come about naturally: a breakup of sorts.


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Tech Countries Will Soon Become Agriculture Giants

Taiwan is an agricultural paradox. On the one hand, the subtropical island is ideal for growing anything from avocados to zucchini and is indeed largely self-sufficient in some important crops, say rice. It produces some of the most amazing fruit in the world. Big, juicy, delicious, and largely GMO-free. Anyone who’s ever visited will tell you that vegetables here taste better than almost anywhere else on Earth. Taiwanese farmers already export massive quantities of their world-class produce, primarily to Japan and local consumers are obsessed with taste, quality, and freshness of produce.

On the other hand, terrain and climate are anything but ideal for agriculture. Every year heavy flooding and typhoon winds wreak havoc on plantations; vegetable prices spike in the aftermath. Due to the small sizes of plots and often steep terrain especially in orchards, farming is still a labor-intensive process. Fruit is hand-wrapped while still on the vine, to protect it from all kinds of crawly critters. The climate isn’t just fertile for plants, it also attracts a lot of pests, which means that vegetables often end up in supermarkets with significant amounts of pesticide residue. Washed out over centuries of over-cultivation, Taiwanese soil needs more fertilizer than comparable countries in the same latitude. Finally, the small size of the country means that it will never be home to the kind of mega-farms (and thus economies of scale) that dominate the American Midwest or Canada.

Yet surprisingly, none of that matters, because the future of agriculture looks very different. In the coming decades, in order to feed a growing world population and deal with climate change and popular resistance to GMOs, agriculture will have to change a lot. The days of tilling the soil and relying on armies of immigrant fruit pickers are over; agriculture is increasingly becoming a lot more like manufacturing.

The future is called “smart farming”

What does smart farming need? Whether it is indoors in multi-storey hydroponic farms or small-size plots of land, whether underground cultivation or large-scale warehoused plantations, smart farming needs the following technologies:  solar technology (for energy needs), lighting technology (different plants grow best a different wavelengths), drone technology (modeling of terrain, soil, water, etc.),  IoT (smart sensors), semiconductors (to create those nifty sensors), software, in particular control software and data mining algorithms, and robotics (for planting and harvesting). Guess what? Taiwan is an industry leader in most of these technologies.

Agriculture is increasingly becoming a lot more like manufacturing. No country in the world is better equipped for this change than Taiwan.

Agriculture of the future is happening today. Crops from salads to sorghum can be grown in strictly controlled environments, continuously watched over by sensors and software, with ideal LED lighting, powered by solar energy, and pest-free to boot. Hydroponics and sensors combined allow Californian almond growers to save millions of gallons of waters. A firm in the UK is growing salads and similar leafy crops underground for London’s top restaurants. Not a snail in sight. Growth cycles have been reduced from 21 to 14 days. LED lighting is tuned so that all of the light they provide is used for photosynthesis and nothing wasted.

Automated, vertical farms with optimized soil and micro-climates are springing up from Sydney to Seville. Some employ bacteria and fungi to optimize crops and soil, eliminate pesticides and chemicals, and make the GMO discussion – for some crops at least – irrelevant.

Even outdoors, smart farming can significantly increase yields, lower water consumption and all but eliminate the need for expensive fertilizers and pesticides. Soil and water sensors deliver delicate data, which is mined and used to calculate the exact amount of water each square centimeter of field needs. Drones fly overhead and send back gigabytes of data per second. Intelligent netting deployed by robots keeps out the pests. Other robots automatically identify which strawberries are ripe for the plucking. [1]

Back to Taiwan and the small tech giants. Very few countries in the world are good at producing ALL the ingredients of this “Agriculture 4.0”. It is almost uncanny. Hundreds of Taiwanese companies deliver the components of intelligent farming to the world, from semiconductor chips to drones and robots, but no one on the island itself seems yet to have realized that smart farming could be the biggest money earner for Taiwan in the next years. For crops like wheat, smart farming may increase by 70-80%, experts estimate. But for vegetables and fruits, Taiwan’s main produce apart from rice, yield increase through smart indoor farming could be several hundredfolds. I can’t think of any other country which excels in all the elements of this new industry at once. Within a decade, the tiny island could become one of the largest and most profitable food producers in the world. It’s strategic location and well-developed transportation links mean it is ideally poised to deliver that produce to neighboring and far-flung countries alike.

All the ingredients are present

If all the ingredients are in place, why then hasn’t smart farming taking off? One of the major obstacles is communication. Explaining IoT to electrical engineers is easy. Explaining the benefits of computer technology, data mining, drone watering and vertical farm stacks to traditional farmers is much harder. Even if they are not Luddites, they do not have the skills to manage modern high-tech applications. Farming is often seen as a deeply emotional connection to the land or plant, a bond between humans and nature where technology has no place. This mindset has to change. Agriculture is all about technology. 

Like anywhere around the world, farmers are a dying breed. The next generation hardly ever wants to toil in the fields like their forefathers. They study at Chiao Tung University and dream of working for TSMC & Co. Bizarrely, Taiwan produces thousands of electrical engineers, semiconductor specialists and robotics wizards every year, a workforce ideally poised to modernize agriculture on the island. Switching Taiwan’s agriculture from traditional to smart will guarantee thousands of jobs for the coming decades while keeping the technology skill sets Taiwan is good at firmly established in the country. The farmer of the future, after all, is a data engineer.

The farmer of the future is a data engineer.

For smart farming to succeed, farmers have to see the benefits of sensors, drone surveillance, artificial intelligence, modeling techniques, indoor farming and computer-controlled irrigation and fertilizing. For that to happen, the language of technology has to change. It’s a fairly simple obstacle to overcome, but it needs smart guidance from government, private industry, and agricultural experts alike. Planners must stop regarding agriculture as a long-ago stepping stone in the country’s spectacular rise to prosperity, but an integral part of its future economy.

The farmer of the future is an electrical engineer and AI specialist.

According to European studies, investment in modern machinery, sensors, IoT etc. pays off quickly by increased yields and massively lower labor costs. Generous government subsidies and a big push for technological understanding in the agricultural industry are necessary to help the transition along. Young farmers, the EUrActiv initiative for smart farming says, need to be trained not in traditional farming but in software and IoT. Yet talk to graduates of tech universities and hardly anyone thinks of farming as their future. Farming is still perceived as backward and dirty, hard labor in the burning sun. That’s no longer true. Smart farming is all about air-conditioned labs, computers, and robots picking, inspecting and wrapping fruit much better than humans can. The best-paying tech jobs of the future may well be right back home on the farm.

Taiwan is already one of the most successful food producers in the world, despite the drawbacks of soil erosion, sinking water tables, and extreme climate. Merging its prowess in electrical engineering, semiconductors, drones and robotics with the Taiwanese farmer’s natural pride for producing the biggest, best and juiciest fruit and vegetables could make Taiwan and countries like it one of the world’s largest and food producers.

[1] Sources: The Economist, Technology Quarterly June 11, et. al.

“Give me a smile!”​ A review of the Trump years

It is 2024. This week, America will elect a new president. Donald J. Trump has announced that he wants to focus on running his media empire, which his sons have spent the last eight years building. TrumpNews is now the most watched news network in the world, guaranteed free of fake news. In the election, Michelle Obama is running against AlphaMind4, Alphabet’s governance AI, which is leading in the AI predictions. (We don’t do polls anymore).

So, on the eve of the first artificial intelligence system being elected to run the world’s most powerful nation, let’s review the Trump legacy.

Last Friday, the Dow Jones closed at 64508 and the Nasdaq at 27820. No one saw that coming! It is of course due to the fact that most profits are now made by a handful of companies who control 95% of the global economy. The broader indices are still lagging far behind. America has reduced its debt to negligible levels. Americans are richer than ever.

After a bumpy ride in 2017-18, during which the Trump administration dismantled most government agencies, the president finally enacted the “Made in America Law”, which mandates that all products sold in America must be produced here, with exceptions granted only to a handful of high-end robotic systems and advanced medical organ replicators. Thousands of companies rushed to set up automated plants. Robots now make the vast majority of all goods. Autonomous ground and personal areal vehicles make up 80% of traffic.

The unemployment rate stands at 68%, except it has been renamed the Happiness Rate. Everyone receives a universal basic income of 80 Trumps a month, financed by the continuous rise in stocks and the Trumpchain trading algorithms (based on blockchain) which link the profitability of America s largest companies, SiemensGE, Apple, Goldman Sachs, Tesla, Nestle-Kraft-Heinz (NKH), Boeing, Green and Alphabet, to the basic income of citizens.

The biggest controversy of the Trump years, replacing the dollar with the bitcoin-based Trump, which led to riots in several cities, is now a distant memory. Most people pay their bills using the TrumpPhone, made by GEFoxconn at their fully automated Ohio plant. It is still called a phone even though it is strictly speaking an implant.

The war raging in Europe and the Middle East is being kept under control very effectively by American drones and battlefield robots. NKH food replicators have been installed in most cities, alleviating the suffering of the civilian population. Mac and cheese is the cheapest item on the menu, but since June 2022 the replicators are also able to make all kinds of artificial meat. Lab-grown meat has almost replaced meat from animals, except in the many Aussteiger counties, kibbutz-like communities which refuse all artificial food and insist on killing animals.

Millions have starved in the Arab world where rising temperatures due to global warming and the revolutions after the collapse of the oil industry have wreaked unfathomable havoc. As it stands, Persia (formerly Iran) is likely to swallow up not just Afghanistan and Iraq-Syria, but also the Arab Peninsula within a few months. Further advances will likely be kept in check by the Eastern Drone Wall, the same defense technology that has helped to protect the Balkans and Europe from refugees since 2020. Trump has called the walling-off of violent Islam his greatest foreign policy achievement.

All borders with the USA are permanently closed. Drones shoot down any aircraft approaching American airspace; underwater barriers prevent the incursion of ships into US territorial waters. The only ships occasionally allowed in are those from Germany and Taiwan, delivering advanced robotic systems the US is still not capable of manufacturing in sufficient quantities, medical robots, and of course semiconductors. After the success of the Mexican Defense Drone Barrier, which has effectively blocked all traffic between the two countries, the Northern Drone Wall with Canada has come online in 2022 and is operating satisfactorily.

American imports have fallen to four million Trumps a year as everything is manufactured using robots and molecular printing systems or MPS in giant plants, the largest of with, owned by SiemensGE, produces almost 90% of all non-food items. By recycling materials and running entirely on solar energy, the so-called GiantMPS near Atlanta has reduced the cost of living to 15% of universal basic income. Food is entirely free, grown in large-scale solar-powered hydroponic farms or made by SiemensGE’s ubiquitous hydrocarbon replicators.

The European Union collapsed in 2018 after the calamitous Frexit decision. The bombing of the Angela Merkel Memorial Mosque by radical members of the now-governing AfD was the main story of 2023. It is universally thought that the rapid rise of nationalism in Germany won’t be a problem. As Trump put it, “It’s different this time. This time we got drones. Many drones. Fantastic drones.”

Since 2021, Green Industries has been part of the Dow Jones and is now the largest purveyor of natural and artificial marijuana (in pill and powder form) to the world. The stock is largely responsible for the meteoric rise of the index since 2022. It contributes 1/2 of the budget for the American Basic Income Social Scheme or ABISS.

Advances in medicine mean that most diseases have been eradicated. Bacteria, viruses and cancer cells are now killed by nanobots in the bloodstream rather than antibiotics or chemicals. Viral therapies, gene therapy, and the Trump Genetic Determinism Project, or “TrumpGene” have greatly enhanced the overall health of the population and eliminated almost all hereditary defects. The average life expectancy has surged to 112 years. There are only two thousand doctors left in the country, the remainder of medical care is being delivered by IBMWatson systems and Walgreens’ AIMed stations.

The Trump Entertainment Network has acquired all American film and TV studios, consolidating them into the world’s largest media organization. TEN is responsible for almost all VR movies now. Actors have been replaced by computer-generated personas. Artificial intelligence systems predict which movies and actors consumers will like and write scripts and generate actors accordingly. The most popular TV series, Melania Live, now in its fifth year, is the only show left featuring a real human.

Mark Zuckerberg is still in jail, but the next president will probably pardon him. The now defunct Facebook, unwilling to censor news and posts, was shut down by the Trump administration in early 2019. Its successor, the VR-based TrumpWorld never really caught on, but with so much weed in circulation and VR movies and games accessible for free in thousands of TEN recreation centers around the country, social media are no longer important.

Autonomous crime-fighting drones have been deployed around the world. They identify violent behavior, agitation, and acts of war, and take out the perpetrators on the spot using electromagnetic rays which keep the bodies intact. Despite our ability to grow any organ from stem cells, these organ donations are still popular in retarded countries for cost reasons. Retarded countries is Trump’s preferred term for countries not in line with American technology leadership.

China, which went bankrupt in late 2021, is slowly emerging from its Big Crash and will soon hold its first democratic election. Two post-Leninist AI personas, TencentMind and MingMind, are standing, with TencentMind predicted to win by a landslide. The human leadership of the Communist Party, “The Core”, calls MingMind the crowning achievement of Chinese science and the realization of the Communist dream–although it is essentially a knock-off of AlphaMind2.

Incidentally, China is the only country where marijuana is still banned and a local alternative, lecao is popular. It has replaced tea on a large scale and its active ingredient has also been added to the water supply. Unsurprisingly, China’s unemployment rate stands at 86%. All necessary goods are produced by AliBuild in its giant factories. China is leading the world in the adoption of solar energy, it’s rivers are now of drinking water quality. Most Chinese are busy writing poetry and creating pottery. Like America, the country has been closed to all new arrivals and walled off by the very same drone wall technology pioneered in Europe. It is however made by Alibaba and called the “AliWall”.

After the great famine of 2020, NKH replicators solved the world’s hunger problem in countries that are willing to adopt the technology. India, having refused to allow the replicators, has been decimated by drought and hunger and is in negotiations to be permanently administered by the Microsoft Humanity Foundation, which has a good record of running countries unable to keep up with robotics and artificial intelligence. As of September this year, the MHF and its Governance AI Cortana are running over 100 countries and, of course, the United Nations.

I am writing this in front of the newly opened Tibetan Embassy in Washington, a magnificent replica of the Potala, 3d printed in only four days. To my right is the 120-foot tall Trump statue with the famous inscription “In Trump We Trust”, which is increasingly used by Trump supporters as a greeting. Across the street is the Embassy of California. It’s basically a small booth with a direct link to DeepCali, the Google algorithm which has been running California for six months now. Semi-independent California, comprising the former states of California, Oregon, Washington, and the city of Las Vegas, is the only part of the US where independent news networks are still operating and homosexuality is not illegal.

So, all in all, eight glorious years for the American Empire! Trump has kept his promise and made America great again, in fact, the greatest nation on Earth. People are healthy, happy, and permanently high.

You are reading this on Trumper, the world’s primary news source, formally known as Twitter. Don’t forget to follow me at @MHiesboeck. Of course, I no longer have a human body, but uploading my mind to a robot which looks like a young Ryan Reynolds was the best thing I ever did. Tomorrow I will be boarding the Elon5 Shuttle and start my new life on the Mars. I’m really looking forward to it! Stay tuned for some great reporting from the red planet! In Trump we Trust!

The True Meaning of Industry 4.0 for Manufacturers

Germany has been bandying about the slogan Industry 4.0 for about 10 years now, yet most people still don’t know what it is all about.  It is an excellent piece of marketing slang, both extremely complicated to understand and yet brilliantly simple. Even those who get it, however,  mostly fail to grasp the implication of this industrial revolution.

So what is Industry 4.0?

On first glance, everything seems to be part of it, from robots to artificial intelligence. Speakers at Industry 4.0 seminars often go on  about cyber-physical systems, enterprise-control system integration, MES, anything from level 1 to level 5 sensoring to IoT, hybrid clouds and finally the “factory of the future.”  Not to mention intelligent feedback and self-learning robots. It’s a veritable hodgepodge of new terminologies that can make your head spin.

None of these taken alone, however, is Industry 4.0. Not even all of them together. The key to Industry 4.0 is integration, i.e. making all of the above work together. And therein lies the problem. Because they just aren’t talking to each other. Yet.

Manufacturers don’t understand CNC machine tools. Press makers don’t get robotics. Robots can’t talk to energy systems. Software engineers have no clue about injection molding. The data coming from various components don’t interface properly with the cloud services designed to increase efficiency and drive automation. This is not just a problem for SMEs; even the best industrial conglomerates like ABB or Siemens are still struggling with it. Industry 4.0 essentially is a problem of communication, not of individual components.

So far, no global “integration” player has emerged, because what we are trying to achieve here is fiendishly complicated. There aren’t enough standards and there are too many variables. Existing machinery supply chains span continents and involve companies at various levels of development. Most have neither the manpower nor the know-how to make their systems ready for Industry 4.0.

And yet, without embracing integration, most machinery companies are doomed.

Read also: Why B2B Companies Need to Embrace Millennials


Integration is the Key – and the Problem

Because integration, data (big and small) and interoperability are the key, most companies won’t be part of  Industry 4.0. They will not be able to hire the software and data engineers necessary to upgrade their products, either because they lack the vision and understanding, or because such talent is simply not available in their country. Machine tools manufacturers need to hire data scientists, not mechanical engineering graduates.

The picture gets bleaker. The ultimate goal of Industry 4.0 isn’t an upgrade of the existing manufacturing base in East Asia. If we are talking fully automated factories with self-regulating processes and self-learning robots who teach each other through the cloud, why base them in China, Taiwan, or Thailand? Wouldn’t it be better to bring the factories – clean, automated, and dependent on highly-skilled engineers rather than cheap labor – back home?

This is exactly what will happen. Advanced economies came to Asia to reduce labor cost. Labor cost is now irrelevant. Forget the banks of Asian workers manually stitching shoes together. Adidas’ new shoe robots make a pair of shoes in 1.8 minutes from scratch. Soon they will be not in the factory, but in the shoe store, where they will build bespoke shoes measured to your feet.  Companies don’t develop robots because they are cool, but to get away from relying on Asian labor.

Read also: It’s Time for B2B Enterprises to Embrace Global Influencers


Imminent Repatriation of Manufacturers

Thus the true significance of Industry 4.0 is ultimately the “repatriation” of manufacturing to Europe and the US, and the relocation of manufacturing from Asian clusters to adaptive small units at the point of sale. Yes, there are a few supply chain issues to be resolved, but these are minor compared to the challenges of getting hundreds of Asian machinery manufacturers to work with standards dictated by Germany.

This is not a vision of the future, but a description of what is happening today. Adidas built their robot factory in Germany, not Kunshan. Tesla makes its batteries in Nevada, not Guangzhou. Foxconn is building automated modular manufacturing units in containers that can be shipped to where they are needed. All over Europe and America, efforts are underway to bring manufacturing back home. Apple is buying a lot of real estate in the American West. Future iPhones will be “made in the US”, not just “designed” there.

One of the main drivers of this shift is of course political. In the wake of the Brexit kerfuffle, Britain’s new prime minister Theresa May has promised a more nationalistic approach, turning back the wheels of globalization. Imagine if Trump gets elected in November. He captured the electorate’s mood on global trade, namely that it is a “threat” and that American products should be made by Americans, in America. Japan never really opened up to the world anyway and will continue its isolationist path towards a robot-based industry. The EU is battling with a terrible refugee and immigration crisis. Bringing high-end manufacturing jobs (i.e. software, data and robotics specialists) home is high on the agenda of national governments and Brussels alike. The EU will invest over 100 billion Euros in Industry 4.0 before 2020.

Read also: Word-of-Mouth Marketing: The Land that Strategy Forgot


Globalization is Coming to an End

The era of globalization and global trade is coming to an end, and technology makes that possible. By and large, the EU and US possess far better talent in the key “integration” technologies than Asian manufacturers, who spent the last 40 years perfecting traditional manufacturing processes. Step by step, manufacturing will inexorably return to a location close to markets. Intelligent, clean factories will mushroom in the West. Shipping firms will suffer as a result. The entire model of designing and selling in the West, but manufacturing in Asia will quickly fall apart. Once molecular manufacturing takes off (think chemistry, not engineering), raw material supplies will be impacted too.

Obviously, certain things will be “made in Asia” longer than others. It’s preposterous to think Apple will be able to make its next generation of iPads and iPhones in Californian factories. For the majority of products, however, the entire supply chain will shift sooner than later. A shift away from manufacturing abroad. A shift away from the OEM model that for decades built the basis of Asian economies.

Read also: Borders, Barriers, and Biedermeier – Technology and the End of Democracy and Old Style Marketing That Still Works on Social Media

Forget Fake News – Here Comes Fake Data

AI voice assistants will cause a flood of fake data

Everyone and their grandma are now working on algorithms to fact-check news. But as manufacturers, marketers and especially as consumers, we are facing a much bigger enemy. It is called artificial intelligence.

This is the present: you run out of milk and go to the store. Or you go online to order. Soon Alexa – Amazon’s AI solution will enter your home, or whatever other systems you choose. Everyone seems to be working on one. Like it or not, Voice AI will be the interface of the future. (Incidentally, why are all sinister AI systems female? Because of the Adam and Eve story? Note to self: ask an anthropologist.)

Now, once you got your new girlfriend up and running and you realize you are out of milk, you can say “Alexa, order milk!” Alexa will perhaps say “which brand?” You could answer “Are there any special offers?” And Alexa will say “at XYZ supermarket, TastesTerrible is having a 2-for-1 sale.” Having never heard of it, you will say “TastesTerrible? Is that a good brand?” And here is where the real kerfuffle begins.

With AI we will rely on automated voice systems to make our purchase decisions, but the AI is based on existing digital information. And that information can be manipulated. How will “TastesTerrible” end up being recommended by Alexa? Either by the number of likes its Facebook page has, or a ‘scientific’ study showing it is the best milk in the world. Or some marketer posting about TastesTerrible in a random foodie forum.

Take this real-life example. Ask Google Home (or simply google on the web) “What is the best motherboard brand?” The answer you will get is this:

“ASUS, MSI and Gigabyte are the 3 best motherboard makers, saying that one or the other are better is personal preference. By its very nature AsRock cannot be the best motherboard brand since its ASUS’s lower end brand, but since it is a derivative of ASUS it does have very good boards, often at very good prices.”

This is a completely arbitrary answer from a September 12, 2010, post on Tom’s Hardware. It is outdated and factually wrong (ASRock is an independent company, and its motherboards often rank better than the other three brands). (Disclosure: ASRock is my client.)

Whether you agree with that statement is beside the point. However you look at it, we are entering the age of marketing through Voice AI. How, as marketers, do we get any product message across, if artificial intelligence systems will repeat any nonsense they find on the net.


Voice Marketing Concentrates All on the Winner

Product marketing is becoming be a matter of manipulated data. And no one will get a grip on it initially. Big brands will spend billions in creating data to monopolize the AI systems. Your product, dear startup, not having the clout or money to produce that data, will remain invisible. No amount of Facebook or Google ads will change that. Marketers will ultimately become obsolete. Data manipulators will take their jobs. Hashtag #jobsforthefuture.

Well we are not there yet. But don’t underestimate the impact of artificial intelligence on the marketing business in the long term. Siri & co will soon be everywhere. There are companies working on bringing these AI systems to every corner of your life. You thought SEO was a hassle? Try doing SEO for Alexa.

The reason why AI is such a problem is that it’s not AI at all. There is nothing artificial about the intelligence Google, IBM, Apple and Amazon are peddling. It’s human-sourced intelligence. The misleading post above came from a misinformed human being. Just because Alexa says it doesn’t make it “artificial” or authoritative.

So, when Alexa and her girlfriends recommend a product, they are relying on human sources. Manipulating these sources, in other words “AI-SEO” will be the fastest growing business in the coming years. The crux of the matter is, you can create product comparison studies that prove anything. Just think of clinical studies: the ones that are beneficial to pharma companies are published, the rest is buried. AI based on such skewed data will never be authoritative. Or the organic vs. GMO debate. Who will win the data war – green bloggers or big food brands?

As AI rises, we seem to be destined to drown in fake data. Sooner or later we will come up with fact-checking algorithms for news and data. But that could take some time. And even if we do, nothing in marketing is really objective, as we know. The brands that control the data will control the world.

Enough doom and gloom. Here is the silver lining. Even without fact-checking, the more data in the AI system the more objective it will become. Algorithms will improve gradually to weed out the worst offenders. But it will be a painful transition, and for decades to come, brands will fight over data and how to put the right words into Alexa’s mouth.

Read also: Opportunities Created by AI Outweigh Imminent Threats

The Fall of the Language Barrier Brings Huge Cultural Challenges

The time has come when machine translation, first conceptualized in the 1960s, is finally useful.

Google and hundreds of smaller companies have developed algorithms, mined data, used human translation examples and employed syntactic and contextual analysis and every tool in the book to come up with software that essentially breaks down the language barrier completely.

You can now automatically translate every website, and in most languages the result is acceptable. Twitter offers a link under every foreign-language tweet to translate it into a foreign language to translate. (This is powered by Bing and often produces hilarious results!) Some social networks always appear in your preferred language, translating content on the fly.

WeChat has a translation option for every chat that is surprisingly good. Even dating apps have included automated translation options so that you can now easily find a mate who does not speak your language. In other words, millions of people now regularly consume content in a language in which it was not created – often without realizing it.

We will soon live in a world where languages no longer matter.

The rapid advance of machine translation (which is nothing more than human translations mined to excess, plus AI) means that we are now living in a world where languages no longer matter.

A French speaker will be able to talk with a Japanese businessman without either having mastered the other’s language. A first version of this technology is already on the market. For $130 a small gadget in your ear will currently translate 4 languages on the fly.

Soon we will see devices that whisper what the other person is saying not in a computer voice but, thanks to advances in bioacoustic engineering measuring the frequency, wavelength, sound intensity and other properties of the voice in the translated voice of the original speaker.

Detractors claim that human translation will always be more accurate, but that is a fallacy. Modern systems analyze billions of existing ‘human’ translations in seconds, so they will always be faster, better, and at the end more accurate than any single human translator. It is simply a matter of computing power and time. They aren’t after all simple machines translating, but enormous databases mining already perfected human translations.

Facebook is allegedly planning to introduce automated translation of all its pages, meaning that you won’t even know that a person’s profile was originally written in, say, Arabic. Augmented reality devices such as the Microsoft Hololens will offer you the ability to walk around the streets of Seoul and see every Korean sign in English–or the language of your choice. Business will be conducted in any language you like. English will no longer be the lingua franca. Perhaps the European Union will finally begin to function.

But this is where the real problems begin.


The Heart of the Matter

That degree of automation carries within it the seed of a serious problem. Language is also a signaler of culture. Some content will seem odd not because the translation is flawed, but because we lack the cultural context to understand it. I have worked as an interpreter for over 20 years and a lot of it is not translating but explaining – bridging the cultural, not the linguistic barrier.

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A world without a language barrier will lead to fewer people bothering to learn foreign languages. Yet learning a foreign language is not just a process of acquiring linguistic knowledge, it is a journey into another culture.

With no need for interpreters and no one attempting to learn foreign languages, we will either quickly develop a single global culture (unlikely, given the differences in politics and religion) or face the curious situation of being all able to communicate without understanding each other. We may lose the ability to communicate effectively, just because we finally understand each other.

Take languages like Chinese. The way we react to a stranger’s request is often very different in this culture. Chinese people, like many Asians, hardly ever say “no”. It’s considered impolite. While one day perhaps artificial intelligence may catch up, it will be a long time of MT-induced confusion before the software knows when a ‘no’ is a ‘no’, and when it is a ‘yes’, or a ‘maybe’, or a ‘I don’t know’. For a human translator that is much simpler, not because he has mastered the other person’s language, but because he or she understands the other culture.

While the fall of the language barrier means that ideas will be able to flow freely and content be disseminated more easily (religious radicals will be the first to embrace this aspect, just think of ISIS propaganda), it will also lead to a diminishing of the human capacity to empathize and understand foreign cultures.

What was once simply unintelligible and needed the process of translation – and thus explanation – to be absorbed, will, through technology, become weird and perhaps even objectionable. You can try this out by using automatic translation on official Chinese news websites. Many of the AI translations seem funny and are completely unintelligible to someone not versed in Communist propaganda speak. Likewise, some of the nationalistic and religious rhetoric used in the United States, once auto-translated, will be indistinguishable from the zealous messages spread by Islamic preachers in Arabic.

How important the cultural component is was obvious when a Microsoft chatbot recently went on a racist drug rampage. It shows the basic problem: language is an expression of culture.

Machines don’t have a culture. Yet.

The fall of the language barrier will create ample opportunities for misunderstanding and conflict, as messages intended for a particular audience transcend geography and culture and become global battle cries.

A technology intended to bring people closer together may end up making us culturally poorer and ideologically more radicalized. A worrying prospect. But perhaps by then, our biggest challenge is not to communicate with each other, but with intelligent machines. And that’s a whole new bag of worms.

Read also:

Borders, Barriers, and Biedermeier

Beyond the Hype: The difference between Artificial Intelligence, Machine Learning, and Deep Learning

Practical Blockchain Applications Are Taking Off

In my first article on the blockchain I listed some random ideas for non-financial blockchain applications based on my own preliminary vision of the technology. The post received a lot of attention. Many people messaged me saying that I was overestimating the potential or misunderstanding the technology.

Some of the reactions were constructive criticism. In particular I’d like to thank blockchain expert and budding futurologist Vijay Michalik who pointed me towards some interesting applications of the non-financial blockchain already in development.

Of these, the most interesting and novel  is the use of blockchain for voting. Despite what some responders to our original post claimed, this is not science fiction. It’s already happening. The patent-pending election system process uses the blockchain for an extra level of security. “Because blockchain-based records are time-stamped and signed, post-election fraud is rendered virtually impossible, it’s inventors claim. The system allows for “a transparent, independently-verifiable audit trail that enhances and backs up the paper ballot records.”  This of course is a just a test and in the future you will see paper ballots gone. Existing electronic voting technology will also have to adjust.

Blockchain voting is exiting enough, but I was even more surprised to find out that you can already get a blockchain ID online. Of course I had to get one immediately. Try it here: This is not yet the kind of ID I envisaged in my original post, where I spoke of blockchain as a way to replace real ID cards and passports. But in time they hope to expand their decentralized identity system into something like the Domain Name System (DNS) which will be a radical new foundation for digital services and Identity 3.0. Governments will love this and embrace it more quickly than most people think, because it can save millions by eliminating paper, stamps, biometric options, and everything else traditionally associated with personal identification.

Nasdaq plans to initiate a blockchain-based e-voting system for shareholders in Estonia, one of the most advanced countries when it comes to digital technology. And to show just how fast things are moving, just a day after I posted my first ramblings on the blockchain, Australia Post became the first postal service in the world to announce that they will store identities using the blockchain technology.

Building trust, combating fraud and eliminating corruption — Utopia?

Some responders to my original post made fun of the idea that blockchain could be used to build trust, combat fraud and eliminate corruption. We beg to differ. Everledger is just doing that, specifically for the diamond trade. As for corruption, the brightest minds in the field of anti-corruption are already looking into blockchain as an “incorruptible” solution. The Economist thinks so too, arguing that “The technology behind bitcoin lets people who do not know or trust each other build a dependable ledger. This has implications far beyond the cryptocurrency.” A complete move of all ID and payments systems onto blockchain technology will make tampering impossible and fraud inconceivable.

As for land registry, are working with the Honduran government on a proof-of-concept to secure one region’s land registry using the bitcoin blockchain. Although it has recently received a setback, it will not be the only trial to start in the immediate future.  Separately, Alex Mizrahi has published a proposal that is worth a read even if you are not into land registries. It really opens the door to a million other applications for the blockchain, especially in the public sector. The Swedish government is one of the first to use blockchain for land registry.

Besides land registries, the blockchain is also being adopted for supply chain management. One of the the more promising startups here is UBIMS. It is building a decentralized supply chain model based on Blockchain technology which according to its founder can “democratize global logistics and supply chain management and change the way businesses manage data, adapt to shifting consumer demands, and coordinate the flow of goods around the globe 24.7.365”

The medical industry too is way ahead of me. When I wrote the first blockchain article I expected medical records to be one of the last fields of adoption, due to the conservative nature of the medical industry. Boy was I wrong. There are already trials well under way for medical record blockchains.


“Ride sharing is predestined for blockchain adaptation. And so is much else in the sharing economy.”

Finally, here is the coup de grâce: I mentioned that sharing economy services like AirBnB and Uber could be threatened by blockchain technology at one point. Imagine my surprise when Vijay pointed out to me that a blockchain ride-sharing service already exists. Go have a look. It’s exciting. It’s not exactly what I had in mind, because the blockchain itself could be managed by drivers and passengers without an intermediary; nevertheless, Uber & Co really should watch out, because their entire business model is now under threat.  Meanwhile, if you own an electric car, you may want to recharge it using blockchain technology. A German company has come up with that idea.

The massive impact of distributed verification is the reason why big names are getting behind it. IBM is spearheading the Open Ledger Project. The Hyper Ledger aims to foster blockchain adoption by identifying and addressing important features for a cross-industry open standard.

The startup Open Chain is promoting an open source solution of the blockchain in business applications that looks extremely promising. It allows of maximum flexibility and will facilitate rapid adoption by businesses. It’s simple 4 rules are:

  • Anyone can spin up a new Openchain instance within seconds.
  • The administrator of an Openchain instance defines the rules of the ledger.
  • End-users can exchange value on the ledger according to those rules.
  • Every transaction on the ledger is digitally signed, like with Bitcoin.

This is exactly the framework needed for wide and rapid adoption. As the Hyper Ledger Project puts it: “Blockchain is a peer-to-peer distributed ledger technology for a new generation of transactional applications that establishes trust, accountability and transparency while streamlining business processes. Think of it as an operating system for interactions. It has the potential to vastly reduce the cost and complexity of getting things done.”

“2016 will be the year of some killer proof-of-concept work. Blockchain technology, like the internet, is exponential and we’re only at the very beginning.” – Vijay Michalik

“Blockchain technologies have come far since the genesis block of Bitcoin in 2009” says blockchain expert Vijay Michalik “There are a number of different blockchains with different opportunities now and huge breakthroughs every month in fundamentals as well as new applications. 2015 was the year the ‘business blockchain’ took off, but 2016 will be the year of some killer proof-of-concept work. Blockchain technology, like the internet, is exponential and we’re only at the very beginning. It’s an exciting time to witness!”

Despite all the reservations one might have – and futurologists are always impatient and predict that things will happen faster than they actually do – blockchain isn’t just a concept anymore. It is taking off now, right under our eyes, and the impact it will have is mind-boggling. The blockchain is alive, and it’s here to stay.

The original article outlining possible non-financial uses of the blockchain can be found here.

Deflating Towards Utopia

Politicians and bankers still seem to think that low inflation is a temporary problem. It is not. We are quickly moving towards a complete deflation of the economy.

Central banks have inflation targets. We want inflation, because with inflation, money is more expensive in the future, thus better spent today. Inflation means growth, deflation means debt spiral. That is the lesson from 100 years of modern economics. It is completely wrong.

I have long argued that we will never return to inflation again. We may already be living in a deflationary world. The reasons are not financial or political, they are purely technological.

Ultimately, where does inflation come from? From wage growth. Wage growth means traditional career paths, and over time more money to buy more things. That is what inflation is: the human factor in the economic puzzle. Higher productivity = more work = more money = buy more = more demand = inflation. Sounds convincing, but that is no longer the world we live in.

In May 2016 Foxconn, Taiwan’s world-class maker of electronic gadgets removed 60000 workers and replaced them with smart robots. In the next 5 years not thousands, but millions of workers will be replaced by intelligent machines. The machines aren’t paid wages. The things they make will get cheaper and cheaper.
No work = no wages = products cheaper. That’s deflation.

Enter AI. Increasingly intelligent machines will mine massive amounts of data and make almost all processes cheaper and more efficient. The price of everything from manufacturing to health care will collapse. The cost of knowledge services now provided by white-collar workers will approach zero as machines do a much better job. Think of IBM Watson. It analyses, compares, and diagnoses thousands upon thousands of medical images within seconds. That’s a lot of doctors’ hours you previously had to shell out for.

Solar and wind energy are basically free. This year, several countries around the world have had entire days where they ran completely on renewable energies. Blockchain & Co. will make energy distribution more efficient. Smart materials in everything from the walls of buildings to your clothes will further accelerate the energy revolution. In the long run, the price of energy will approach zero.

Technology is the main source for  deflation.

As we remove human factors of production, we are removing inflationary pressure. Some countries may be affected sooner and faster than others. If Foxconn replaces workers in China with smart machines, the question arises, why keep production in China in the first place? Intelligent machines will reduce and then eliminate the advantages of economies of scale. If a big chunk of the products’ target market is in the US and Europe, why not build the next smart factory there? That saves shipping the robots to China, and the iPhones to America. That in turn lowers transportation and energy costs.

The augmented reality offered by Hololens is another great example. It shows you how we can interact as human beings without being glued to a computer screen typing emails. Computers and social networks don’t enhance our humanity, they make us less human. Widespread adoption of AR will also greatly reduce the need for travel, thus further lowering our carbon footprint and energy needs, i.e. more deflation. I wouldn’t start a new shipping line right now.

The impact of what has been dubbed Industry 4.0 cannot be understated. Networked smart robots will learn from each other. Their software will become self-improving. And if you think scarcity of raw materials could still be a source for inflation, look at Industry 5.0 or so-called molecular manufacturing, which will break traditional supply chains completely.

Which leaves us with a dilemma: how can we make permanently deflationary economics work in favor of humans?

At the end of the line, we will live not in a deflationary world, but in a world without money at all.

My speculative answer will surprise you: I don’t think we’ll have to. I think the problem will solve itself. Smart machines will reduce the incremental cost of manufacturing rapidly and massively. That means the next generation will simply not need that much money to buy the same amount of goods. Once we can 3D-print food from recycled molecules, the basic cost of living will approach zero. At the end of the line, we will live not in a deflationary world, but in a world without money at all.

I believe we are in an exiting  transition phase where we need to embrace those technologies which ultimately guarantee our freedom from economic serfdom. That doesn’t mean saving jobs better done by machines. It means quickly deploying the machines so costs can fall even faster. It means fully automated industrial-scale hydroponics and molecular food grown in labs, not better fertilizers and bigger combine harvesters. Once food thus produced is so cheap they’ll give it away for free, those who want can keep tinkering with their organic veggies in their own backyards.

Jobs are for machines. Once they do everything, we can focus on living again. This will happen in the next 2 decades.

Once we have armies of smart machines and molecular replicators, big data and AI which prevent problems before we need to solve them, automated hydroponic farms and electricity delivered by intelligent materials, and nuclear fission as Bill Gates is betting on, most of us won’t need jobs. Food and goods will be free. Utopian? Definitely. Achievable? Certainly. Unavoidable? I think so.

We need to work towards these technologies that allow us to be truly human again. We need to create a world without economic needs and only human needs instead. A world where molecular replicators produce all we need for free and robots take care of all the work. A world where we can do what we like without having to worry about “making a living”. A world where we can focus on exploring the universe, writing novels, building cabins in the wood by hand, and doing some creative gardening.

In short, a world where being is more important than having.

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Blockchain Is the Most Disruptive Invention Since the Internet

By now you are sure to have heard of Bitcoin and the blockchain technology. Even so, very few people seem to realize that the blockchain won’t just kill banks, brokers and credit card companies. It will change every transactional process you know.

Simply put, blockchain eliminates the need for clearinghouse entities of any kind through the principle of a distributed ledger. And that means a revolution is coming, a fundamental sea change in the way we do business.

Here’s the often overlooked reason why: A blockchain carries no transaction cost. (An infrastructure cost yes, and increasingly an energy cost, but no immediate transaction cost.)

The blockchain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net.

The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible. Bitcoin uses this model for monetary transactions, but it can be deployed in many other ways.

Read also: How Blockchain Will Save the World

Blockchain and ticketing

Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the blockchain.

The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket blockchain. Just as a monetary transaction on blockchain is a unique, independently verifiable and unfalsifiable record, so can your ticket be. Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain train route, or even the entire train network, comprising every ticket ever sold, every journey ever taken.

Not only can the blockchain transfer and store money, but it can also replace all processes and business models which rely on charging a small fee for a transaction. Or any other transaction between two parties. Various technologies are appearing that combine the transaction with micropayments, but that’s neither here nor there.

Read also: The Future of the Internet of Things (using blockchain to monetize our lives)


Blockchain and the sharing economy

Even recent entrants like Uber and AirBnB are threatened by blockchain technology. All you need to do is encode the transactional information for a car ride or an overnight stay, and again you have a perfectly safe way that disrupts the business model of the companies which have just begun to challenge the traditional economy. We are not just cutting out the fee-processing middleman, we are also eliminating the need for the match-making platform.

Because blockchain transactions are free, you can charge minuscule amounts, say 1/100 of a cent for a video view or article read. Why should I pay The Economist or National Geographic an annual subscription fee if I can pay per article on Facebook or my favorite chat app. You can charge for anything in any amount without worrying about third parties cutting into your profits.

Blockchain may make selling recorded music profitable again for artists by cutting out music companies and distributors like Apple or Spotify. The music you buy could even be encoded in the blockchain itself, making it a cloud archive for any song purchased. Because the amounts charged can be so small, subscription and streaming services will become irrelevant.

It goes further. Ebooks could be fitted with blockchain code. Instead of Amazon taking a cut, and the credit card company earning money on the sale, the books would circulate in encoded form and a successful blockchain transaction would transfer money to the author and unlock the book. Transfer ALL the money to the author, not just meager royalties. You could do this on a book review website like Goodreads, or on your own website. The marketplace Amazon is then unnecessary. Successful iterations could even include reviews and other third-party information about the book.

One of the greatest features of blockchain is traceability of transaction, for example for supply chain or food: Can Blockchain Technology Solve the Food Chain Crisis?


Doom and gloom in the world of finance?

In the financial world the applications are more obvious and the revolutionary changes more imminent. Blockchains will change the way stock exchanges work, loans are bundled, and insurances contracted. They will eliminate bank accounts and practically all services offered by banks. Almost every financial institution will go bankrupt or be forced to change fundamentally, once the advantages of a safe ledger without transaction fees is widely understood and implemented. After all, the financial system is built on taking a small cut of your money for the privilege of facilitating a transaction. Bankers will become mere advisers, not gatekeepers of money. Stockbrokers will no longer be able to earn commissions and the buy/sell spread will disappear.


Blockchain will bring down Google

Blockchain technology could even bring down Google. It makes all its money charging for ads. But who needs centralized ads in a universe of minimal free transactions? A dedicated ad blockchain – like the one for ebooks – for text and display ads would offer all the functionality of Google AdWords without paying Google a cent. Instead, website owners and those who click on the ad would pocket the money. If other search engines are quick enough to adapt, this may be the beginning of the end of Google.

It doesn’t have to be ads. Systems like steemit show how money can be earned for content without intrusive ads anywhere.

Blockchain will certainly hasten the demise of email. Already threatened by integrated chat apps like Line and Wechat, and soon Messenger and Whatsapp, emails are nothing else but 1-1 transactions. A sends a piece of text to B. Transaction is verified, encoded, executed, and kept on record in a distributed network owned by no-one. Blockchains will make email safer, not to mention potentially spam-free. If one email costs a minuscule amount, we will be happy to pay for it if it is safe. For spammers, sending emails to millions of accounts will no longer be economical.


Blockchain in medicine

Another application are medical records. Not just paying for your doctors’ fees, but an actual blockchain for each person with all the relevant medical data. Seeing the doctor would unlock the information. You will be able to visit any hospital in the world with your entire medical history, vital signs, and even complete DNA encoded as a safe, unfalsifiable, blockchain record, not owned by any insurer or data host like Apple Health.

Education is the next candidate. Going to school is nothing else but paying money (the taxpayers’ or your own) to receive credits and certificates. In other words, a transaction. Which is exactly what blockchain does. Your grades will be encoded in your personal education blockchain. This company is working on the technology:

Combine all the above together and you have a unique and permanent record of an individual’s life, transaction by transaction, from the cradle to the grave, as one long unique personal blockchain. Blockchains won’t just replace banks and transactional business processes, they will replace IDs, passports, fingerprints and other biometric options too, if deployed right. Because the blockchain exists in millions of copies simultaneously, it is unfalsifiable. Any attempt to even alter one bit in your personal transactional record would immediately be spotted.

Yes, bitcoin exchanges have been hacked. But never the blockchain itself. It cannot be hacked, at least not in a way we currently understand. So just to make things clear: I don’t think Bitcoin is the future. Bitcoin is just one incarnation of the blockchain principle. But blockchain technology is here to stay, regardless of hacking concerns. What’s more, blockchain technology itself could prevent hacking. A mischievous login into a system – the most common way of hacking – is essentially a transaction.

Substituting this procedure with a blockchain recording every login ever made would make it completely unhackable (although we have to be careful with that word), since it would involve changing the login chain on millions of computers simultaneously. No need for fingerprints or iris scans either.

The applications described will create a need for a massive increase in computing power, but I do not see that as a problem. Quantum computing will be uniquely positioned to take care of that. Dedicated systems will be deployed to manage blockchains with unimaginable speed.

Note: how quantum computing will affect blockchain applications is still questionable. Likewise, we don’t yet have a model to monetize transactions universally.

Read also: The Future of the Internet of Things


Every transactional business model will be impacted

I can barely think of an industry, process, or technology not disruptable by blockchain, which is why I consider it the most fascinating and disruptive invention since the Internet itself. It has the potential to undermine government sovereignty but it could also be a huge boon for bureaucrats. All interactions between citizens and government are essentially transactions, from birth records to ownership transfers of real estate. All can be simplified and made tamper-proof by using blockchains.

Because each transaction block is linked to its history and verified in millions of instances, it completely eliminates the problem of trust inherent in existing transaction models. I do not think even its inventor realized how widespread the technology could be used.

The deceptively simple blockchain technology has the power to end corruption and crime, perhaps even the need for government oversight. Personalized, that is, non-anonymous blockchain records would be far safer than passport checks. Replacing currencies with blockchains would give criminals a really hard time. Think of it this way: with personal financial blockchains, every coin and banknote you ever held in your hands would be transactionally linked to you permanently.

In the shorter term, blockchain certainly will impact the financial world first, then go on to replace business models based on charging for transactions. But because it can be used to safely encode ANY transaction, it has the potential to become not just the first global currency ever, but a universal way to store transactional information. Once we figure out the tremendous implications this has for both the economy and privacy of course. I shall leave that to smarter minds than mine.


A few caveats

There are a few unknowns here, which – whether true or not – time will tell. First is the question of hackability. While distributed over a large network, that does not mean hackers won’t find a way around this, especially with the help of artificial intelligence.

The second big problem is the proof-of-work process every computer has to execute: it is slow and energy-intensive. Recent evidence shows that bitcoin mining is consuming massive amounts of energy.

The third question is whether with the rapid advances in computing (like quantum computing) we won’t come up with a disruptive technology that will make the blockchain obsolete before it can live up to its potential.

Read also: How Blockchain Will Save the World

Are We Facing a Deluge of VR Disorders?

Psychological disorders caused by prolonged exposure to PC games are already a serious issue. In 2015, two Taiwanese men died from marathon gaming binges within three weeks of one another. Deaths have also been reported in China, Korea, the USA, and Vietnam. Excessive gaming reportedly causes problems with logical thinking and the ability to interact socially. In some jurisdictions, it is classified as an addiction. In May 2013, the American Psychiatric Association (APA) proposed criteria for video game addiction in the Diagnostic and Statistical Manual of Mental Disorders but shied away from including it as an official mental disorder.

This may be about to change. We now have the technology and soon the virtual worlds which will bring about a whole new canon of psychological and physiological problems. So far, users have reported dizziness and disorientation after just a few minutes in VR environments. In April last year, Sheryar Ali, Samuel Vaughn, and James Williams published a paper called “Physiological and Psychological Effects of Virtual Reality”. In it, they report that users in a VR environment show increased heart rate, dizziness as well as nausea (cue the Dramamine) in comparison to those who observed the game. It’s obvious if you think about it. You aren’t just playing a game, you are INSIDE another reality. Your body will react to gaming scenarios as if they were real.

Skeptics of virtual reality concern themselves with the negative psychological effects of virtual reality such as sensory conflict theory. One study defined sensory conflict theory as having the visual and vestibular systems at odds while in an immersive, virtual environment. The authors explain this as follows: “You are using the Oculus Rift and are in a moving car. You see the buildings pass by which signals by your visual sensory system that you are moving. But, you do not feel your hands turning the wheel, or your foot pressing the gas, which signals by your vestibular system that you are not moving.”

Efforts are underway to address this problem, notably by the Max Planck Institute in Munich, Germany, which proposes a Star-Treck-style Holodeck to bridge the divide between perception and reality.

Much more worrying are the prospects for serious mental illness caused by long VR exposure. A study by Aardema et. al. showed that VR causes a significant increase in dissociative experience (depersonalization and derealization), including a lessened sense of presence in objective reality as the result of exposure to VR. However, no one has yet studied the effects of long-term immersion in virtual reality, because of far we don’t have applications that allow for such tests. This is going to change in 2016. With the Hololens, the Oculus Rift and HTC Vive reaching consumers and companies rolling out VR applications from games to pornographic films, you can expect a slew of new medical conditions to make headlines.

Imagine, if you will, widespread use of virtual reality in everything from social media to hard-core gaming. After all, why did Facebook buy the Oculus other than with the aim of turning Facebook into a VR world? Total immersion will cause disassociate disorders, behavioral changes, and mood swings, especially in children. Parents are already hard-pressed restricting computer time and watching out for the effects often violent games have on their offspring. Imagine your child spending hours or days not just playing Call of Duty, but actually inhabiting the CoD virtual world? Killing people in a traditional game does not seem to cause violent behavior in the real world (some experts disagree). But if the experience seems completely real, as it does in VR? How will that affect the development of the young mind?

Some experts fear that once VR, AR, and MR really take off, you will encounter people for whom family, school or work life seems no more real than the time they spend inside Facebook-VR or their favorite game. VR will be used in education, social networking, research, to navigate file systems and software applications, in engineering and even medicine (doctors are using it for surgery) In other words, we may inhabit many different worlds for a large part of our existence. Will our minds cope? The realities will meld to a point where ‘gaming’ for example isn’t experienced as an activity but as an alternative reality, giving rise perhaps to schizophrenia and dissociative identity disorder, depression, anxiety, obsessive-compulsive disorders, eating and sleeping disorders. One article I found used the term VRIDD for virtual reality-induced dissociative disorders. Expect many more VRI-conditions.

The problems are not just psychological, Dr. Ling-har Kuo of National Taiwan University Hospital assures me. Day-long VR immersion will send conflicting signals to the body. If you eat in virtual reality, will you feel full? After how many hours in a VR world will your mind perceive it as 100% real and forget the world outside?

If gamers can already die of over-gaming today, how many deaths will occur once VR-gaming cafes are ubiquitous? This company is bringing full-immersion VR to 100 million gamers in China right now. Similar cafes are already open in Taiwan, Japan, and the US. HTC sees a great market here and hopes to set its Vive as the de-facto standard. But who will be responsible when hundreds of people “disappear” into virtual reality, lose all sense of time, or end up regarding home and school life as ‘artificial’ and their gaming personas as ‘real?’

Traumatic events are often the cause of the main types of dissociative disorders, i.e. dissociative amnesia, dissociative fugue, depersonalization disorder, and dissociative identity disorder. Even in the real world people with such disorders are hard to diagnose and treatment is often difficult. With VR becoming a part of our lives, trauma may be caused by events inside the virtual space. Imagine being fully immersed for hours and then being shot or seriously injured. How will our minds and our bodies cope with that?

I am sure we will adapt to the new technologies somehow, but I also expect plenty of crazy stuff happening on the way there. One of the biggest challenges is for people to keep their social skills intact. One thing all industry insiders agree upon is that along with gaming, pornography will be a massive driver of VR adoption. In a world where you can “virtually” live and have sex with your favorite movie star or a perfect Prince Charming, the temptation for escapism is enormous.

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