“Back to the Future of Money” David Birch Talks@Mendeley

Where does the money in a £20 note actually exist? It’s the sort of thing you don’t often think about. Unless, of course you’re an expert like David Birch, whose day job is heading a consultancy specializing in secure electronic transactions, and who’s also just published a book called “Identity is the New Money.”

He used that question during his Talk@Mendeley to get the audience thinking about what we understand money to be, and put forward the idea that:

“Technologically, money is a primitive form of memory”

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As the title of the talk suggests, David actually goes back to the past in order to understand the future of money, and what it holds in store for all of us as transactions technology advances.

Paradoxically, he says, we can best understand the Bitcoin phenomenon by studying the stone currency system in the Pacific Island of Yap, where ownership of the valuable, but extremely large and cumbersome carved stones is transferred without the need to physically move them. The entire system is based on accepting the value of the stones and remembering who they belong to at any given time, even if the stone in question happens to be at the bottom of the sea.

The way money works these days is actually quite recent, David explained.

“The birth of modern money dates back only to around August 1971, when Richard Nixon ended the convertibity of the US Dollar, so actually, money as we know it right now is only about 40 years old. It’s not a law of nature.”

Social Anthropologists such as Jack Weatherford agree that the electronic money world looks much more like the Neolithic economy before the invention of money than the market as we have known it for the past few hundred years.

“In a world where everybody is connected to everybody else, what do you actually need the money for? If this was a Neolithic clan, you’d have sets of obligations to each other that you would remember. Money is a marker that allows you to scale that process. But. If you can remember everything, then you might not actually need money at all.”

And that is where technology comes in, making that memory-based system scalable: Old universal currency systems are broken, Birch argues, and they reduce people to having to engage in what he calls “security theatre”.

He illustrated this by recounting a recent experience of trying to buy a cup of coffee using his credit card at a Las Vegas branch of Starbucks, and being asked to present some form of picture ID. In the end he produced an expired security pass which the person serving him accepted in spite of having no real way of knowing whether it was, in fact, genuine.

“There’s no actual security taking place here, but as long as I know my lines and she knows her lines, then everyone is happy. That’s where we are with transactions in general right now. But if I had had my Starbucks app, I could have paid for my coffee using that without any trouble.”

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The idea is that in an age dominated by mobile phones and apps, we don’t need one universal sort of currency that works everywhere. We can instead more easily and securely use “Starbucks Money” or any other kind of situation-specific money, with the same sort of convenience, as technology mediates your transactions for you in increasingly efficient ways.

In this brave new world, crowdsourced resources and systems based on your reputation – such as a LinkedIn profile – are much more appropriate forms of verifying identity than top-down imposed mechanisms:

“I wager money that it’s harder for any of you to forge a LinkedIn profile than it would be to forge a Western Australian Driving License that would get past someone”

disclaimer: Neither David Birch nor Mendeley is advising or in any way encouraging people to try either of these options at home.

Bitcoin does not, therefore, represent the actual future of transactions and money, but this cusp we’ve arrived at where it is not only possible, but safer and more convenient to create lots of different types of money that work within different communities. In this scenario, Bitcoin is the piece of technology that will enable this and allow that to happen. The Flux Capacitor of money if you will.

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You can watch all the talks and Q&As on the Mendeley YouTube Channel Playlist, and to keep in the loop about the next Talks@Mendeley be sure to follow us on Twitter

 

 

“Nobody Knows a Damn Thing” Luke Dormehl Talks@Mendeley

Luke Dormehl - Talks at Mendeley

Our first Talks@Mendeley got off to a great start with a thought-provoking presentation and discussion with author, journalist and filmmaker Luke Dormehl.

After showing off his own Mendeley Profile, Luke spoke to the Mendeley team and guests about how, as a journalist writing for publications such as The Guardian, Fast Company and Wired he was keenly aware of the pervasiveness of technology:

“If you look at any period in history, the imagery and metaphors are drawn from popular science, and today there is no science more popular than computer science. My interest in technology comes from popular culture. If you want to understand popular culture you really need to engage with technology and the questions it poses, which are really key to understanding how the world works and our relationship it, as well as our relationships with each other, and issues with our own identity.”

As a filmmaker himself, he explained how he came across the famous quote from screenwriter William Goldman (who produced screenplays for All the President’s Men, The Princess Bride, and Butch Cassidy and the Sundance Kid, amongst many others) which stated that when it came to the entertainment industry, “Nobody knows a damn thing”.  Luke then set out to discover whether this was indeed true, or whether technology could actually help us to, for example, accurately predict what films would succeed at the box office.

Talks at Mendeley William Goldman

In his book, The Formula, Dormehl talks about how a company called Epagogix claims to be able to do just that by analysing scripts using over 30 million unique scoring combinations. Interestingly, it not only churns out a number, but is also able to make creative suggestions based on the data, adjusting scripts to make them more successful and profitable.

“This represents a vision of a future where machine logic can be embedded in the creative process”

But these processes are certainly not straightforward, even in fields such as academic publishing or law, which would seem, to an outsider, to be less subjective and therefore more suitable for automation.

He then outlined an interesting recent experiment, which illustrated how even turning a fairly binary traffic law into an algorithm that issued speeding tickets to infringers accordingly, could be a lot more challenging than you would think. Given the same datasets, two groups of scientists produced algorithms that issued vastly different numbers of tickets, which highlights the many potential difficulties facing the Google Driverless Car project, for example.

Luke concluded his talk by showing how nothing is sacred as far as algorithms go, not even love. He explained how it was even possible to create a virtual girlfriend though a relationship simulator called Kari.

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Like with any research project worth its salt, writing The Formula left him with more questions than answers, and as you can imagine, the crowd listening to the talk followed up with quite a few insightful points of their own in the Q&A session that followed.

Do watch both videos on the Mendeley YouTube Channel and let us know what you think! We’re also busy arranging another talk on the 18th July, so be sure to watch this space and follow Talks@Mendeley on Twitter for more details!