PassWord – 16th December 2015

Speaker A: This program is brought to you by Resonance 104.4 FM. If you like what you hear and want to support our work, please make a donation at fundraiser.resonance.fm.

Speaker B: Hello and welcome to the Password Radio Show on Resonance 104.4 FM with me, Peter Warren. The programme that gives you an insight into the bits and bytes of the technology world. Now, today’s show is a landmark because for the first time we broadcast on digital in Brighton. So hello to the South Coast, an area so high-tech it will soon be known as Silicon Beach. In today’s programme, why the technology giants are causing tremors in the banking industry’s conservative corridors.

Speaker C: The best thing today is the bank or the retailer doesn’t know how the customer will pay. Will he pay using a watch, a contactless payment? And so they have to be ready for all types of gadgets and payment and enable that for the customer.

Speaker B: Some disturbing news about Bitcoin and the secret war between unscrupulous companies on the web. According to the techies, they’re trying to sabotage each other’s websites.

Speaker D: We’re seeing every facet of human competitive or even criminal nature manifest itself in cyberspace just like it in the real commercial world.

Speaker B: We also bring you news about the latest in boating technology. Ever been by the marina in Brighton and had your peace and quiet wrecked by the roar of a high-powered motorboat? Well, those days may be over. We bring you news on a very pricey electric boat. Finally, as we head into the Christmas break, heartening news. We’ve been covering the consequences of the artificial intelligence debate for much of the year. And the possibility that it could cause massive job losses. According to a new book from one of our leading technologists, that’s not the case. We talk to the author about his conclusions. But first, disintermediation— one of those awful words so beloved by the technology and business communities. In plain English, it means taking out the middleman, and the big internet companies are threatening to do that with the banks. Next year, according to the experts, is a year that mobile payments come into their own and we are all going to start buying on our phones. Who knows, this may have been the last traditional Christmas where cash has passed hands. Here’s Smeet Gupta, the global head of banking and finance at the payments company Virtus, on why.

Speaker C: We are in this most exciting time in the payments industry than the last 20 years that I have seen. And a lot of it is because of this whole technology which is sort of making things happen, especially with the advent of the smartphones and the ease of use. And, you know, a lot of the millennials and folks like you and me who have started banking in a different way, you know, it’s, it’s changing the way the banks have to adapt and to work with. So hence you see a flurry of activity in the payment space. I mean, the best thing today is the bank or the retailer or whoever it is doesn’t know how the customer will pay. Will he pay using a watch? Will he use a credit card? Will he use Twitter? Will he use, you know, a contactless payment? I mean, they have no clue. And so they have to be ready for all types of gadgets and payment and enable that for the customer.

Speaker E: But I mean, it’s a bit more than that too, isn’t it? Because, you know, the banks, because they owned the technology, um, because they owned the system, they were actually making everybody pay through the nose, which people did resent. They were very cross about the amount of money that they were being charged for various different services. Now you’re not getting that, and the fact that we all have these mobile devices in our pockets means that that infrastructure is available for anybody to offer a service through it.

Speaker C: Absolutely.

Speaker F: Absolutely.

Speaker C: I think, Pete, you know, if you delve down to the basics, it is about bandwidth, right? I mean, if you go back 20 years or even if you go back 15 years, maybe, you know, an international call would be an international call, right? Today, because availability of Wi-Fi, availability of calls on the internet, and this bandwidth, right? I mean, everything is accessible. I mean, we have it’s easy for a financial technology startup to create a gateway, to create connectivity, and it’s not going to cost much to enable transactions between a merchant and a user and between a merchant and a bank. So what required a lot of investment, required a lot of hardware and software, today it’s so easily available and can be built in cloud. Can be built in a virtual world. And, and, you know, we have a lot of strong security networks, and, you know, it’s built for security too. So that’s what’s causing, you know, a lot of these startups to build things and challenge the banks, which has been their core domain for, for many, many years.

Speaker E: And of course, the banks have got a real problem now because they don’t have the visibility on the high street. They’ve been closing down branches. They don’t have that same sort of branding. And if anything, They’ve got a negative branding because there is a perception that you can’t really trust the banks because of the financial crisis. Whereas the technology companies have got a very, very different message, haven’t they?

Speaker C: Yeah, I think, you know, technology has always been about ease of use, right? It is when you want it, it is on your time, it is how you want it, it is the interface you choose to deal with it. I mean, if you want to withdraw money at 9 AM in the morning, it’s there for you. If you want to do it just before, you know, you switch off the lights and go to bed, you can do it then as well.

Speaker E: Now, I mean, the other thing about all of this though is that a lot of people are arguing that large technology companies and mobile phone companies could soon force the banks completely and utterly out of business, that the retail banks as we’ve seen them or as we know them are under so much pressure now that they could effectively go under because, you know, they can’t move fast enough.

Speaker C: You know, I wouldn’t go to the extreme of saying they will go under or they’ll close shop and things like that. Definitely we do see a paradigm shift in the way things are going to happen, and you know, that’s evolution, right? I mean, technology evolves, and with that, the way of doing business evolves. So I think we are talking of banks which have been there for, for a very, very long time. Which still today have a lot of capital and have a global reach and definitely employ some of the smartest and the best people around. So I wouldn’t say they would go under and disappear, but yeah, I mean, the way they conduct business today, the way they approach the customers today, that will definitely change, and it is already changing. In fact, the type of people the banks would hire, that is also changing. I mean, the focus is more towards people who have the vision to build something which is forward-looking, which is a different business model, attract customers. So we see that change happening already.

Speaker B: Sumit Gupta of Virtus. Now Bitcoin, like much that we are dealing with in this program, was one of the high-tech trends of 2015. Cool, technologically cutting-edge, the encrypted currency was not only fashionable with the geeks because it ticked the encryption box for the Snowdenistas, but it was also edgy because it was the internet gangster’s currency of choice for buying everything from drugs to computer software weapons. And the attraction for all of those groups was that it was apparently anonymous and beyond the reach of surveillance by the authorities. Well, not so, according to research by Vijay Michelic, an analyst for the technology research house Frost Sullivan. So where does Bitcoin’s myth on anonymity breakdown.

Speaker G: If you look through the documentation of Bitcoin, um, I mean, even in the original white paper, it refers to pseudonymity, which basically means that instead of being totally anonymous where there’s no traceable data that could be attached to any kind of persona, you’ve actually got pseudonyms. You’ve got these user IDs or wallet addresses which are essentially linked to every transaction that a user from a certain wallet has made. So essentially there is perfect visibility across the whole Bitcoin blockchain of every transaction that’s taken place.

Speaker E: So does that mean, I mean, as you say, it’s been trumpeted that Bitcoin’s an anonymous currency. Does that mean that in fact it’s not, that you can actually see an individual, or does it just mean that you can see the pseudonym?

Speaker G: I think the point is that you go from there, from from having that perfect visibility of all the transactions, but with no real knowledge of where the final addresses are. And then what happens is you can actually take some publicly listed addresses and you can then begin using all of these different publicly available addresses to kind of piece together information.

Speaker E: So I mean, essentially what you’re saying is that basically it’s claimed that Bitcoin is anonymous. And to some extent it is. However, what you can do is, as with all data, you can take that history and then you can cross-reference it with other information that’s available on the internet or in other databases and begin to actually extract a, uh, an identifiable individual from behind all of that.

Speaker G: Yeah, and absolutely. And not only that, but I also mentioned that This is almost like an early stage of the analysis that can be applied to the blockchain. With more and more pieces of information, especially when you start to take into account things like massive online data leaks of people’s IP addresses and real-world names and a lot of other information, metadata, that’s attached to people’s online identities, then you can kind of start to complete that picture, and tools will only get more powerful in uncovering this.

Speaker E: I mean, that’s, that’s the point, isn’t it? We’re just at the start of the information age, and as you say, more and more analytical tools will be created, and they will be made that will allow people to do this.

Speaker B: Although it’s not such a bad thing though, is it?

Speaker E: Because the great thing about blockchain is, as people have spoken to me about it, they’ve said that this generates what the banks have been after forever, such a long time, which is this single customer record. So to be able to have a single customer record and to actually be able to put a name to it isn’t exactly a bad thing.

Speaker G: No, but I mean, it is important essentially for to fit in with our current regulatory requirements around the financial system. So things like know your customer and anti-money laundering regulations, it is an important thing. It’s something that the banks have been pushed for. But on the other hand, if you then have all of that personally identifiable information attached to a record, then you have perfect visibility of everything someone spent their money on. And if it’s accessible in the same way that we kind of discussed encryption regulations, if it’s identifiable to governments and banks, then it’s— in some level, it’s eventually going to be identifiable to the general community, if not just nefarious characters, which, you know, then they have a perfect record of everything you spent your money on, which is infinitely worse for the consumer than traditional banking.

Speaker E: Well, I mean, to an extent. However, that was the holy grail of the marketeers and everybody else. That was the holy grail of many of the people who saw the ways to make money out of the internet. So it’s almost a bit of a paradox, isn’t it?

Speaker G: Yeah, absolutely. I mean, essentially it is the argument there is between privacy and security of consumers and obviously the interests of marketers and people running online businesses where they can profit from that personal data. I mean, there’s also another subset of users, and this isn’t the mass market, but it’s an important user base to acknowledge uses the system, and that’s people who are living in either politically oppressed regimes or people who for any other reason need to stay anonymous and stay outside of traditional systems in their countries. And that includes people like, you know, investigative journalists, people like whistleblowers. Communications that can go undetected now, anonymous now, won’t be as anonymous in the future.

Speaker B: Vijay Mishra taking the lid off Bitcoin. Not quite as unknown as we thought it was. Something that is, however, is a battle that is going on in the internet as businesses fight each other for page rankings, hit rates, and online transactions. According to the computer security company Kaspersky, 48% of companies believe that their competitors are trying to sabotage their websites by swamping them with automated messages to slow down computers and servers and provide their customers with a poor service. According to the computer security company Kaspersky, 48% of companies believe that their competitors are trying to sabotage their websites by swamping them with automated messages to slow down computers and servers and provide their customers with a poor service. It’s known as a distributed denial of service attack and was used in the recent TalkTalk hack. Here’s Ashley Stephenson of Carrero, a company that protects businesses against the attacks of the crooks and shady companies, the guns for hire in this war for commercial advantage.

Speaker D: I think it’s just the normal business competitiveness that existed in the physical world for years, trying to outdo your competitors, is now crossing over into the virtual world of business too. So many of the same techniques, even extortion, you know, Bitcoin ransoms, etc. Extortion in the old world has moved to the new world, and so we’re seeing every facet of human competitive or even criminal nature manifest itself in cyberspace just like it did in the real commercial world.

Speaker F: So you say that in the patterns of data that you’ve seen, you’ve seen suspicious patterns of data that would seem to indicate that some people are sabotaging another competitor’s website. How does that happen?

Speaker D: What do they do? Well, what we are able to observe with all of the security sensors that we have in the internet at large, you know, placed on behalf of our customers, our paying customers who use our service to protect their websites or their online services, what we see is we see the evidence or collateral information of attacks taking place on third parties. So we collect a lot of information and we can see attacks form, amass, target victims, and then fade. And we can even see patterns within industry sectors. So it could be things like gaming or online gambling that’s very competitive in the real world. Those websites, online websites, whether they’re located legally, you know, in local countries or illegally in Western Asian countries, for example,, then they compete for the business of those bets. And we see those sites come under attack during events for which there’s a very strong commercial benefit for some of the other players in those markets.

Speaker F: So how do you go about this? Do you go out into the dark web and buy these services, or do you go and find some sort of dodgy company and in that time-honored Monty Python way go, nudge, nudge, wink, wink, could you do this?

Speaker D: Well, you don’t— I don’t think you have to be as explicit as that even. You know, as a very reputable corporation, large multinational corporation, you might hire an advertising agency or a promotion agency to market your products or to improve your web rankings or to try and have more hits to one of your new sites. And those companies in turn will hire other, you know, web experts who might know how to increase your search engine, your Google ranking, etc.. And you know, they hire consultants and you don’t know from the top of the chain with the legitimate order you place exactly how it’s going to be implemented 3 levels down. But the net result on which everybody’s measured is that your net promoter score went up, or worse still, your competitor had more bad reviews last month. Now it could be that during your campaign your competitor was unlucky and their hotels weren’t as comfortable or something, but you have to You have to realize that it is business and money talks. And if there are enough people in the cyberspace working on your behalf, you can’t control every technique they choose to use to meet their objectives.

Speaker F: And also presumably I can buy some sort of services in the dark web. I mean, how do you know that people are buying those services in the dark web? Do they just last for a certain amount of time and then stop?

Speaker D: That’s a good question. So first of all, there are more of those services popping up and they’re more sophisticated and suggest that they’re investing more compute power in them, which suggests they’re making money. So they’re funding them through their profits. Another thing we’ve observed is that sometimes we see attacks on different parts of the industry with attack tools that look very similar. In fact, we’re almost sure they’re the same attack tool. And then we see things like the attack lasts for exactly 30 minutes. And when you wonder about this, well, why wasn’t it a 25-minute attack or a 45-minute attack? It’s most likely when you look on the sites and see their tariffs that people are buying the 30-minute attack special for so many bitcoins or, you know, the 2-hour attack special or take, you know, take somebody down for a whole day kind of service. And those do exist. You can, on the dark web, you can browse to those sites. You can anonymously purchase a service like that.

Speaker B: Ashley Stevenson, the chief executive of Carrero. Now, if you’ve made your fortune from your internet business and managed to protect it from online sabotage, you might be looking for some leisure interest to spend your money on, something to float your boat. And what better than the latest electric superyacht? According to Cardia Yachts, its manufacturer, manufacturers, the €700,000 craft are the ultimately environmentally friendly vessels. Quiet, easily powered by renewable energy, and pollution-free. But water and electricity are a match made in hell, so will the idea sink or swim? Here’s Jure Valand of Kardia Yachts to tell us more about his brainchild.

Speaker H: The problem is with the weight of the batteries, and the problem is the size of the boat. So we found the the best option, the best size of the boat and the best hull type which can actually sail 3 hours with 2 tons of the batteries, which means exactly 350 kWh batteries. But if you ask me, there is very, very small possibility to build a bigger boat, bigger boat with exact the same characteristics as we have. So we can sail 3 hours with 24 knots, which means about 130 kilometers in these 3 hours can be reached with, with our boat. And this is very, very, very unique and very high-tech hull we made with this boat.

Speaker B: So the hull is, is, it’s a specially designed hull, isn’t it, to hold the batteries?

Speaker H: Exactly, yeah, it’s completely differently designed, you know. It is still somehow, it’s similar to classic yachts, but it’s completely different. So we need as much as less torque, you know, on the water. And as you know, let’s say that if we compare a car and the boat, yacht in our case, it is completely different situation because The power we are using from the batteries with the car, it is something completely different than with the yacht. If I can explain you, the yacht is something very, very similar to the, to the truck fully loaded going up the hill. So it means the usage of the batteries is very, very high, and potentially you need to have very good management of the batteries. Otherwise you can have problems as you can have with the batteries on the phone. Of the mobile phone, they can get so hot they can explode actually.

Speaker B: So that’s your biggest issue? I mean, I would have thought that’s not an issue because you’re in contact with the water, so that will cool it down.

Speaker H: Yeah, absolutely, absolutely. We manage it, we manage it. But anyway, you know, the consumption of the, of the batteries is so, is so strong, is so high that this management is— the management of the batteries is completely different than managing the batteries of the car, electric-driven car, you know.

Speaker E: So I mean, you say that there’s an optimum length and there’s an optimum weight of battery.

Speaker B: How long is this electric-powered yacht that you’re talking about?

Speaker H: Ah, it’s actually 10 meters, 10.2 meters. At the moment, this is maximum what we can make.

Speaker E: The big issues of these are what?

Speaker B: They’re meant to be very environmentally right on, aren’t they? Very quiet, and you can charge them with renewable energy.

Speaker H: Absolutely. This is something completely new. The sailors will know, and the yacht’s owner, they will know that when they will step on this yacht and they will start it, the motors, they will know that this is something completely different. It is so quiet, you know, and they will only hear the waves, so the sound of the waves and the sound of the the air and actually anything else, and they will be able to hear his wife or his partner on the boat. So this is something completely different, and actually we are not using— so we are not polluting the sea, you know, because this is one of the biggest issues at the moment. We don’t have any exhaust driven directly into the water as the diesel or or other boats have.

Speaker B: So we are completely green. Jérémy Vallant of Cardia Yachts. But in this world of the future where the rich will make robots and algorithms and quietly sail the seas, what of the rest of us? As we’ve heard this year, many of the people working on AI say there is nothing they can’t make. And first Oxford University and then the Bank of England have warned that a third of all jobs in the UK could be lost to machines. So will we be consigned to a grim future where we stare resentfully at the rich as they enjoy a life of leisure far from us? Not so, according to James Dagg, one of the UK’s top technologists who himself has made a successful career from mobile phone systems. James has just published ‘Are the Androids Dreaming Yet?’ in which He explores the state of development for this new world, and he’s actually very optimistic about the future we will all inhabit.

Speaker E: According to Dag, we’re different from robots.

Speaker I: We’re able to do things that you can prove that a computer would not be able to do, in particular mathematical creativity. So you can find mathematical theorems that are definitely non-computable because of Turing’s original proof, and yet a human being has done it.

Speaker E: Right, because I mean, one of the— some of the robot engineers say that they would have no problem being able to generate the different sort of lights and the different eyes that we have, that they can make anything.

Speaker I: Well, eventually I think you could make anything, but what they’re saying at the moment is something very different. What they’re saying is that the laptop computer that I have is the same as the computer that sits inside my brain, and all I need to do is wait 20, 30 years, and because of Moore’s Law, they will simply catch up.

Speaker G: And I will—

Speaker I: I have no essentially complex work to do. I just wait and computers will be like a human. And I’m saying that’s not the case. But they’re fundamentally different types of machines, and you’ve got a lot more engineering work, you know, maybe 200 or 300 years of engineering work to do to make a machine that would catch a human.

Speaker E: But also, is one of the points that you’re making then that perhaps we’re not ever going to be the same anyway? Why would we want to be? And also, does that therefore mean that there are some things that computers do really well and some things that people do really well?

Speaker D: Yes.

Speaker I: There are some things they do better than us, clearly maths and remembering, but I think of the important things that we like to do, we’re able to do some of them and they are simply not.

Speaker B: Okay.

Speaker E: Because, I mean, it’s interesting, isn’t it? There have been two reports that have come out just recently which have sort of shaken people and worried them. One was the Oxford University report just a year and a month ago, which said that by 2014 we, um, over a third of jobs would go.

Speaker I: A lot of people say that, but when you actually look at companies that have automated and put in computerization, whether it’s artificial intelligence or not, they tend to actually grow and become larger and employ more people because the people have become more efficient. So it’s a, it’s a classic paradox of computation, which is computers should displace human beings, but in fact the companies that computerize get bigger.

Speaker E: So these algorithms that are going to replace everybody in, say, the legal sector or in the finance community, what they’re going to do is simply just move people into other jobs?

Speaker G: Correct.

Speaker I: That seems to be not only what I’m arguing, but what seems to be happening.

Speaker E: And so those areas— I mean, in the Oxford study, it was claimed that those areas that would be— that the jobs would be available in would be creativity and religion.

Speaker I: Is that something that you’ve found? Creativity, yes. I couldn’t possibly comment on religion.

Speaker B: Okay, creativity then.

Speaker E: What do you mean by that? Because creativity is such a broad thing. I mean, what is that area? Where is the creativity?

Speaker I: Where is the free will? Composition, writing novels, writing films, screenplays, anything that we consider to be generally creatively creative.

Speaker E: So does that mean then that more of us will start to write plays, books, films, make music?

Speaker I: Well, yes, and I mean, that’s to some extent happening already. If you look at the number of people in creative arts jobs, it’s grown massively in the last 50 years.

Speaker E: Okay, because I mean, that comes up to the next thing, doesn’t it, which is we were interviewing quite a few people over the past month or so, and they said that there would be these great societal changes because one of the problems is if you don’t have a job, you can’t get paid. And, you know, robots don’t actually— or robots or AI programs don’t actually want to do anything that involves them being paid.

Speaker B: That’s the purpose of them.

Speaker E: So how does an economy work in, in that sort of system? Does that mean that we will start selling our art?

Speaker I: Yes, I think we’re going to see more art. I think though that you’re going to start seeing things which are more like experiences, things like secret cinema, you know, where there’s actually a high human involvement in the art as opposed to just something that’s sort of produced digitally.

Speaker B: That was James Dagg on the world of art and learning many technologists say will provide our future employment. You’re listening to Password on Resonance FM with me, Peter Warren. And if you’ve just joined us, then I’m afraid you’ve missed it. If you want to learn more about the world of technology and what it means to us, or find out more about the stories mentioned on the show, go to our website, Future Intelligence, at www.futureintelligence.co.uk. Password is a Future Intelligence production and is produced by Tim Smith.

Speaker A: Thanks for listening. Goodbye. This program has been brought to you by Resonance 104.4 FM. If you liked what you heard and want to support our work, please make a donation at fundraiser.resonance.fm.