Gotta ban them all!

26

September

2021

No ratings yet.

Ever since cryptocurrencies have existed, they have been a controversial topic mostly because of their volatility, the electricity needed to mine them, and the legality of the transactions behind them. After several (unsuccessful) attempts to stop cryptocurrency activity in China, the government has passed a bill this Friday, the 24th of September, to make all crypto financial transactions illegal (BBC News, 2021).

China’s first attempt to ban cryptocurrencies dates back to 2013. Eight years later they have decided to take more extreme measures and the results are still to be seen. It’s easy to understand why it is not an easy task, the technology behind crypto is untraceable, and China is responsible for 46% of the world’s current computing processing power used for mining (Al Jazeera, 2021). Nonetheless, the measures seem to be working, as in 2019 this value was up to 75%.

Why is this happening?

Cryptocurrencies’ worth is translated in individual empowerment and in a form of freedom. These are 2 concepts that are not well aligned with CCP’s usual policies. The government would rather hold the population and, most importantly, their information solely under their control, and anything that provides an alternative to that is considered a threat. However, the government justifies these measures with environmental issues and population protection from a dangerous volatile market (Al Jazeera, 2021). The People’s Bank of China claims that “[virtual currency-related business activities] seriously endangers the safety of people’s assets” (BBC News, 2021).

Effects

Despite the drops this news caused in the market the following days, the rest of the world doesn’t seem to care too much about this ban. Ulrik K.Lykke, an executive director at crypto hedge fund ARK36 wrote in an email: “While each time this [China’s crackdown] happens, the markets react with a price drop, each time the effect is smaller and more short-lived. The ‘China bans Bitcoin’ story has gained almost a meme-like status in the Bitcoin community because of this.” (Yue, 2021). The truth is the market has survived every ban news since 2013, and since then, Bitcoin’s value has skyrocketed from just 196 US$ in Oct 2013 to 44,755 US$ in Sep 2021 (Statista, 2021). Cryptocurrencies seem to have come to stay, and China’s efforts to ban their power, just give its supporters more reason to believe it is fulfilling its job of empowering individual freedom for the world.

References

BBC News. (2021, September 24). China declares all crypto-currency transactions illegal. https://www.bbc.com/news/technology-58678907

Al Jazeera. (2021, September 24). Bitcoin slumps as China bans all cryptocurrency transactions. Business and Economy News | Al Jazeera. https://www.aljazeera.com/economy/2021/9/24/bbbitcoin-slumps-as-china-bans-all-cryptocurrency-transactions

Yue, F. (2021, September 25). China’s crypto ban has almost achieved a “meme-like status,” but here are the lingering impacts. MarketWatch. https://www.marketwatch.com/story/chinas-crypto-ban-has-almost-achieved-a-meme-like-status-but-here-are-the-lingering-impacts-11632512981

Statista. (2021, September 24). Bitcoin (BTC) price history up until September 24, 2021. https://www.statista.com/statistics/326707/bitcoin-price-index/

Policy makers have to understand the forces of AI and technology better

12

October

2019

No ratings yet. Fast development and spread of technology, especially AI is reshaping our society and the way value is created. The economy is constantly requiring different skills from the workforce. Aligning human capabilities to the future of technological development is essential for the prosperity of our society. Governments need to be prepared for these changes and empower citizens to be prepared for the labour market of the next decades.

General purpose technologies that reshape several aspects of life such as the steam engine, electricity or the internet have all had significant effects on the way humans work (Jovanovic & Rousseau, 2005). The rise of AI and job automatization is probably not new for anyone reading this post. Predicting their effect on the job market is far from easy though.

Brynjolfsson and McAfee (2015) argue that humans will not be replaced by AI in the way internal combustion engine replaced horses. They believe that some services require interpersonal elements that machines will never be able to substitute. It is indeed hard to imagine seeing robots performing in a theatre or a good therapist without the ability of forming human bonds with the patient. Brynjolfsson and McAfee (2015) also say that the creative innovative capabilities of humans can not be replaced either. The ability of forming goals and hypothesises to reach them distinguishes us from artificial intelligence.

Governments have the most power and responsibility to act and improve the latter strengths of their people. Mitchell and Brynjolfsson (2017) published an article in Nature that examined the capabilities of governments to form policies that can effectively cut the mismatch of the workers’ skillset and the requirements of technological change.

The first problem is that we do not even understand the past changes precisely enough. Among many other researchers, Restrepo (2015) showed that the employment rate in clerical and sales jobs have been sharply decreasing from the first days of the internet until now. Professional jobs were the opposite while the share of service jobs has started to slowly decrease recently. This kind of macro level data is available for policy makers. However, it is not detailed enough to guide successful policy making.

Mitchell and Brynjolfsson (2017) draw the attention to several already existing labour force data sources government could leverage. Universities have detailed profile of their students and their careers. Job-seeker websites have extensive knowledge of the skills required by employers and their dynamics of change. The phenomena of freelancers and gig economy employees are also black spots for the government.

Governments will have to find means to access more job market data and learn to use it for data driven decision making. I believe that it is the common interest of private sector and governments to capture the societal value of sharing this data between organizations.

References

Brynjolfsson, E. & McAffe, A. (2015). Will Humans Go the Way of Horses? Labor in the Second Machine Age. Foreign Affairs https://www.foreignaffairs.com/articles/2015-06-16/will-humans-go-way-horses

Jovanovic, B. & Rousseau, P.,L. (2005) General Purpose Technologies. NBER Working Paper No. 11093. https://www.nber.org/papers/w11093

Mitchell, T. & Brynjolfsson, E. (2017) Track how technology is transforming work. Nature. https://www.nature.com/news/track-how-technology-is-transforming-work-1.21837

Restrepo, P. (2015). Skill Mismatch and Structural Unemployment, Massachusetts Institute of Technology, http://pascual.scripts.mit.edu/research/01/PR_jmp.pdf

Cybersecurity budget increases, option or need?

10

October

2017

No ratings yet. Just yesterday, the Dutch negotiators came to an agreement on leading the country. One of the most interesting things mentioned in the agreement is the increase in the budget for cybersecurity. An increase to 95 million euros in the upcoming years seems necessary, but is it really?

With the increase of the digital economy, digital risks have grown, too. Examples such as the Wannacry ransomware and Cloudbleed hack come to mind. Both hacks have direct on impact on both businesses as private citizens. These risks imply large costs for companies when they actually happen, far surpassing the cost for prevention. But there are large government risks too. In the US, 198 million voter records going back more than 10 years were publicly accessible, exposing a large cybersecurity risk. Closer to our borders we can identify the Macron campaign hack. Hackers dumped 9GB of emails from the party of Macron to undermine his run for the presidency. While these risks may not imply large costs in euros, they imply large social value.

Cybersecurity has been increasingly in the news for the last years and large companies seem to be increasingly aware of the threats. Average security budgets for companies are growing: Where a lot of companies in 2014 spent an average of 4-6% of their IT budget on security, in 2016 this number has grown to an average of 8-10% of this (meanwhile) increased budget. This budget varies based on the industry a company is in. With financial services leading at 12%, IT services sitting at 7% and education only at a mere 1-3%(Sans, 2016).

What about governments? Do they go with the trend of spending on cybersecurity? According to SANS Institute governments on average do spend 7% of their digital budget on cybersecurity, too. Looking at the increase in the upcoming Dutch cybersecurity budget, the table below shows what the spending for the leading countries in cybersecurity may look like based on a percentage of GDP. The Netherlands will grow to a 5^th place internationally, following just behind the UK, France, Denmark and Australia. The US is leading the cybersecurity market by a large margin, mostly driven by its high spending on military (HCSS, 2016).

Spending on

Cybersecurity risks will keep growing as the digital economy is taking a bigger part of the total economy each year. For governments, elections and citizen private information are issues to be more aware of. As the Internet of Things is growing, so do the risks going arm in arm with this. The Netherlands seems to realize the risks with this new agreement, showing Europe and the world that they should too.

https://www.nu.nl/internet/4957952/tientallen-miljoenen-extra-cybersecurity-nieuwe-regering.html

Click to access HCSS-Dutch-Investments-in-ICT.pdf

https://financieel-management.nl/artikel/wereldwijde-uitgaven-cybersecurity-72-miljard-euro

https://www.sans.org/reading-room/whitepapers/analyst/security-spending-trends-36697

Top 3 Leading Cybersecurity Countries

A digital driver’s license in the Netherlands: do we really want that?

6

October

2016

No ratings yet. On the first of October 2006, the paper driver’s license got replaced by a plastic card in the Netherlands. Main reason for the replacement: better security against fraud and forgery. Besides, the Netherlands was following other EU-countries, and in this way all the identity documents could be produced at one single factory. Fourteen years after the launch of the plastic card, the card will be unnecessary, since the RDW (Dienst Wegverkeer – ‘department road traffic’) is planning on developing an app for your driver’s license in 2020.

In a few years, the app should function as a replacement of the plastic card and serve as legal identification, according to the RDW. Next to this ambitious goal, not much is clear about the way the app will work, the RDW itself doesn’t even know how it will work. May be it won’t be an app, but another method with a smartphone. The core will be ‘Remote Document Authentification’, a method that is already tested on another project: Idensys. With this method, smartphones can read data from the current plastic driver’s license which are produced after the end of 2014. These driver’s licenses contain a chip from the Dutch company Gemalto. The RDW states that the option for a plastic card will remain, as not everyone has a smartphone.

One of the reasons for digitalizing the driver’s license is efficiency. For example, it won’t be necessary to renew your driver’s license every ten years. Personally, I doubt if the improvement in efficiency, outweighs the cost of such IT-project. Another reason for this app is of course the safety: better security against fraud and forgery. But if we take a look at other big IT-projects of governmental organizations, one could doubt if it really will improve the security against fraud and forgery. I will discuss a few examples that will explain my doubts about the added value and safety of the digital driver’s license.

The OV-chipcard for public transport got hacked easily, which meant that with a simple NFC-reader, one could travel for free. Second example: a huge automation project at the ministry of security in 2013 failed. 25 million euro was budgeted, but in the end it costed over a 100 million and the system was not used by its users. Another example, the electronic patient record, took 15 years and costed 300 million euros before it was cancelled. The development of the C2000 communication system for the emergency services costed 1 billion euros, but the communication system failed at crucial moments. If you aren’t convinced yet that the Dutch government and IT are a horrible combination: More than 30% of the big IT-projects fail in a way that the system that is developed will not be used at all. The cost for society? Between 1 and 5 billion euros a year, according to the parliamentary committee.

Of course I believe it is important as government to make processes as efficient and safe as possible. But will our digital driver’s license be more safe in 2020? And are these kinds of digitalisations really necessary, do they add enough value, compared to the price the IT-projects have?

Sources:

http://www.bnr.nl/nieuws/10128802/weer-mislukt-een-ict-project-bij-de-overheid

https://tweakers.net/nieuws/95618/een-derde-van-grote-ict-projecten-overheid-faalt-zodat-systeem-wordt-geschrapt.html

http://www.joop.nl/economie/detail/artikel/5907_justitie_investeert_in_falend_ict_systeem_voor_politie/

http://www.ad.nl/binnenland/rijk-faalt-bij-ict-projecten-het-gaat-mis-op-alle-niveaus~a354c62f/

https://tweakers.net/nieuws/95618/een-derde-van-grote-ict-projecten-overheid-faalt-zodat-systeem-wordt-geschrapt.html

https://androidworld.nl/apps/rdw-applicatie-fysiek-rijbewijs-vervangen/

https://tweakers.net/nieuws/116331/rdw-werkt-aan-app-die-rijbewijs-kan-vervangen.html