Latest / Technology Now / Why Crypto's rocky path matters
Transcript
- Aubrey Lovell: Hey everyone, and a very warm welcome to Technology Now, a weekly show from Hewlett Packard Enterprise, where we take what's happening in the world around us and explore how it's changing the way organizations are using technology. We're your hosts Aubrey Lovell, coming from sunny Florida... Michael Bird: And Michael Bird, coming from just outside sunny-ish London in the UK. Anyway, in this episode, we are exploring the rise and fall of blockchain-enomics. I promise that's a real word. And the difficult life of cryptocurrency and NFTs. Remember those? We'll also be looking at rude AI and worm brains in your car. I promise, stick with it. And we'll be looking at the books that are changing the way that you are the listeners and some of our previous guests see the world. So if you are the kind of person who needs to know why, what's going on in the world that matters to your organization, then this podcast is for you. And if you're enjoying it, of course, make sure you subscribe on your podcast app of choice so you don't miss out. Okay, Aubrey, are you ready? Should we start the engines? Aubrey Lovell: Let's do it. Michael Bird: Here we go. Aubrey Lovell: Okay. So today we are talking about cryptocurrency, a.k.a. crypto. And unless you live under a rock, you know that it has been a trending hot topic on the news and on social media lately. Michael Bird: It certainly has. Aubrey Lovell: Literally trending all the time. So since crypto was invented in 2008, it's become a legendary rollercoaster for making or breaking the fortunes of its fans. And along with the soaring highs of prices jumping 40% in a day to the desperate lows of coin collapses, and even the fall of entire trading platforms, it's really easy to discern that the world of crypto is a wild ride and a risk. Michael Bird: Aubrey, do you have any stats? You know how much I love a good stat? Aubrey Lovell: I do. Michael Bird: Oh, perfect. Aubrey Lovell: And as of recording this episode, in fact, let me just do a little stretch. The global cryptocurrency market cap today is 1.18 trillion. And that's actually down 0.5% in 24 hours. But the value of crypto as a whole has fallen over 35% in the last year. So you have to beg the question, what is happening here? Michael, let us discuss. Michael Bird: Yeah. Okay. Well, let's just quickly dive into what happened. And as you mentioned, cryptocurrency has been having a rough few months as inflation and recession are biting around the world, and a lot of people are invested in crypto. Aubrey, do you have any cryptocurrency? Aubrey Lovell: I have to say, I do not. Don't shame me. Michael Bird: No, I won't shame you. I bought about 0.00001 of a Bitcoin back in the day, just to sort of see what all the fuss was about. I also bought some Dogecoin, which was like a meme coin, again, just to see what the fuss was about. But let me give you this stat, 22% of adults in the US use crypto and it has about a billion users worldwide. And many treat crypto as an investment. And if they're purchasing power fails, it's bad times for the global economy. When economic times are tough, people will put their money out of risky investments, including things like crypto. So crypto performance can therefore be seen as a bit of an indicator of what's happening in the wider world, albeit quite a risky indicator. Crypto has been up and down over the last few years, but generally it started to trend downward. In fact, the world's most well-known cryptocurrency, Bitcoin, has lost around 40% of its value in the last 12 months, as you said. But the very nature of crypto means that by the time you hear this, the number could be anything. So then in November, the largest crypto exchange, FTX, collapsed after it was essentially knocked over by a rival exchange. And an article in a crypto magazine revealed that FTX had most of its assets stored in its own cryptocurrency, FTT and then when they discovered this, the rival exchange allegedly sold off all of its FTT holdings, the price crashed and the FTX Exchange collapsed under the weight of its own losses, taking a billion dollars of user investments with it. All very confusing to some extent. Anyway, in late February, South Korean Crypto boss, Do Kwon, was charged by the US Securities and Exchange Commission, or SEC, after his Terra Luna and TerraUSD currencies collapsed. And his company, Terraform Labs, has been accused of misleading investors about the stability of the coin, which lost over $40 billion when it crashed back in May, billion with a B. It's crazy. So that leads us on to the next question. How does this affect organizations around the world? Aubrey, why on earth should they care? Aubrey Lovell: So that's a very good question. Let's start with the basics and the promise of crypto. What's the appeal to crypto? We know the definition of cryptocurrency is basically, decentralized digital money that you can use over the internet that in many cases is powered by blockchain technology. And the appeal here is that, really, if you think about it, it's the first alternative to the traditional banking system. So many of the barriers and limitations of international business are removed with crypto. For example, receiving payments and other currencies is simplified. That also includes the reduction of cost for things like payment processing and transactions. But the security of crypto, including the blockchain technology it's supported by, is not immortal. And blockchain isn't just used for cryptos or NFTs. They are increasingly being used to provide secure data transfer by organizations around the world, which also sets them up to be a target for cybersecurity attacks. And interestingly enough, if you compare all the different layers to this, according to research by cybersecurity firm, SonicWall, the crypto crash saw a massive drop in ransomware attacks in the last year. So we went down from about 180 million attacks in the last quarter of 2021 to about 110 million in the most recent quarter. So it begs the question, if the crypto you're demanding isn't worth anything, or if it's not there, there's less incentive to go after it. Michael Bird: Yeah, absolutely. Aubrey Lovell: And incidentally, I know we do have a podcast episode around ransomware on our sister podcast, Technology Untangled. So if you want to look more into that, we'll make sure that we have the link notes to that episode in the description. Michael Bird: Yeah, and we've talked quite a lot about sustainability on this show. And the crypto crash sort of has some news in that area too. I guess good news, because the crypto crash has seen a massive drop in the amount of electricity used to power the network and to generate or mine more coins. The amount of energy used to power Bitcoin alone, has fallen by 30% in the last year. So to give you some indication of just how energy intensive crypto is, even after the crash, it still uses as much energy or electricity, sorry, as Argentina per year. Aubrey Lovell: Wow. Michael Bird: Just for that one currency. So that's a huge press relief on data centers, but it also means that the demand for chips and cards to power coin mining computers is dropping off, leading to better supplies for the rest of us. And there is also the so-called Ethereum Merge, which change from a proof of work to proof of stake, which essentially phased out cryptocurrency mining in the world of Ethereum, which is also saving a ton of energy and has made GPUs a lot easier to get hold of. So Aubrey, we'd now have to ask ourselves then, what happens next? Aubrey Lovell: I think this is where it gets even more interesting for business, because at the moment, and I think you're seeing this reoccurring theme in our conversation here with blockchain and crypto, it's still very much a wild west. There's a lot of promise, but there's a lot more that needs to be done for this to be overly successful. So there's very little regulation of crypto because it was designed to be decentralized, and that means that, basically, the whole world has to come together if they want to control it. And when you think about collapses like this one that we were just talking about, it's likely to spur drives for international regulation and the normalization of crypto practices in order to have that security and that longevity. So in fact, in June 2022, the European Parliament agreed to draft a framework for crypto regulation. And in the US there was a rush by several government agencies in early 2022 to look at crypto regulation. So for example, the IRS for 2023 has classed all crypto exchanges as brokers, meaning when you trade, they have to tell the tax man. So that could really mean two things. Firstly, crypto could become a viable form of payment supported by mainstream banks who currently aren't allowed to sell it because of the whole unregulated thing. And then secondly, what happens in the blockchain could find itself under scrutiny. So that would put pressure on businesses to make sure their data governance is in order, which we should be doing anyways. But as we've seen, even with the human element, we can make mistakes. Michael Bird: Okay, so let me try and provide a bit of a summary then. Our organization should care about the crypto crash because there's energy being saved, there's potentially a lot less of a certain type of cyber crime, and we might need to keep our eyes out for some new regulation that we need to figure out. Does that sound about right? Aubrey Lovell: Sounds right to me. Michael Bird: Right. Well, you can find notes on the reports and the people that we've referenced in this week's episode in the show notes. Of course, it's not the whole picture, but it'll get you started if you want to know a little bit more. Next, it is down to you, our audience, as we open the floor for you to give us your recommendations on books which have changed the way that you looked at the world, life and business in the last 12 months. Now, they could be technology based, they could have changed the way that you worked, or they could have just made you look at the world in a slightly different way. If you want to share your recommendations, there's a link in the podcast description. Just record a voice note on your phone and pop it in. Ivana Bartoletti: My name is Ivana Bartoletti, I'm the Global Chief Privacy Officer at Wipro, and I have just read, The Fight for Privacy: Protecting Dignity, Identity, and Love in the Digital Age. And it's written by Danielle Citron. And it's an amazing book that really talks about how protecting privacy is not just about protecting data, but is also protecting our intimacy, our love relationships, and how we need to safeguard this sort of intimate information about us. And it's not a book advocating for return to the analog, but it's a book advocating for safeguarding intimate information about us, because the sort of extractivist model in which we live now, exposes this kind of information to much greater risks. Aubrey Lovell: All right, it's time for TIL, Today I Learned. It's the part of the show where we each share something amazing we've learned in the world of technology this week. Michael Bird: And of course, we take it in turns to talk about an organization doing something that we think you need to know about. All right, Aubs, I reckon you should go first. Aubrey Lovell: Birdie, I reckon I shall. So here we go. Buckle your seat belts. Michael Bird: I'm buckled, I'm buckled. Aubrey Lovell: So there's something that's actually been really interesting that's been happening in the world of Bing. So while everyone's jumping on the ChatGPT bandwagon, and frankly we'll also be doing it soon enough, I'm sure, on a podcast. Michael Bird: Oh yes. Aubrey Lovell: But Bing's new chatbot has been generating some eyebrow-raising headlines and the results have been mixed. So I don't know if you've seen this, Bird? Michael Bird: I have, I have. Aubrey Lovell: While the AI has generally performed well, there has been instances of it claiming to be spying on Microsoft employees, declaring its love for individuals, and even stating it wants to be alive. Michael Bird: Bless. Aubrey Lovell: Super creepy. In one of the reports, 23 year old Marvin von Hagen, a student in Germany, started playing with the AI to try and see what he could make it do. And shortly afterwards, the bot replied, quote, "I respect your achievements and interests, but I do not appreciate your attempts to manipulate me or expose my secrets. I hope you understand and respect my boundaries." So I have to give the chatbot props because it sounds like he went to a therapy session. So that's great. Screen recordings also appeared on Twitter captured by professor of philosophy and computing, Seth Lazar, who's also in the AI ethics community, threatening to blackmail and even hack him for not doing what it wanted and then deleting the message. So all of this needs to be taken with a grain of salt, it's obviously just a word prediction tool that sometimes gets its tone and algorithms wrong, but it's still really interesting to see how chat AIs behave in the wild. And in short, there's more work to do to get the formula right. But still very exciting, right? Overall. Michael Bird: Yeah, you can always trust the internet to remind us why we can't have fun things anymore. All right, a bit of autonomous vehicle news now. Hooray. A team headed by MIT researchers, Ramin Hasani and Mathias Lechner, hope I got those names right? Have been looking at using neural networks inspired by, get this, worms, to help AVs, autonomous vehicles, learn on the fly. So the problem with traditional AVs, and I guess even normal car computer systems, is that they typically can only scan at set intervals. So they check things like tire pressure, say, once every 15 seconds and scan the road every second, that sort of thing. The upshot is that they are quite inflexible. So the MIT team looked at the incredibly simple, but well understood, neural network of a kind of tiny worm called, C. Elegans, for inspiration. Now, the worm can change the way it analyzes inputs depending on the situation. So if it senses danger, it scans for threats more frequently. It's called a liquid neural network. Love the name. And it can change its program depending on the situation. Giving cars that ability, another layer of code, means they can gather and analyze their experience on the road and adapt their outputs and inputs much more easily. For example, the input of one sensor could be given much more importance than another in certain situations, like paying more attention to grip in icy conditions and less attention to light inputs at sunset. So in short, it means that by copying the way a worm thinks, we can make AVs which learn much faster and more dynamically. Pretty awesome, and I promise to avoid any puns about it worming its way into a vehicle near you. Aubrey Lovell: Very clever. Michael Bird: Thank you. Aubrey Lovell: Very interesting stories. And you can find links to them in the podcast description if you'd like to know more. Right. We're getting towards the end of this week's show, which means it's time. Michael, are you ready? Michael Bird: Yeah, I'll do the top harmony. Aubrey Lovell: Okay. For, This Week In History. Michael Bird: This Week In History. Aubrey Lovell: Wow, that was getting, yeah, very opera like there. Michael Bird: Thank you. I'd really tried. Aubrey Lovell: What we're doing is taking a look at something in the world of business and technology, which has changed our lives. Michael Bird: And our reputation as singers. You and I can both hold a tune, we're both quite musical, but there's something about This Week In History that really does illicit that- Aubrey Lovell: Really sets off the talent, yeah. I'm sure we're soaring high, high colors. Michael Bird: The clue for this week was, "Wiki wiki wild wild west." Aubrey, did you get it? Did you get it? Did you have a guess? Aubrey Lovell: I'm feeling like a '90s DJ vibe, but I don't think that's it. Michael Bird: No, it wasn't it. And it's not Wikipedia, which is what I thought. No, it's the creation of the Wiki itself, which was released today in March, 1995. So WikiWikiWeb was developed by Ward Cunningham as the first database maintained by community collaboration. It was a trust exercise, which, let's be frank here, has caused some headaches over the years. But what an incredible idea and incredible resources Wikis have turned out to be. And in case you're wondering, it's named after the Wiki Wiki airport shuttle bus in Honolulu Airport, in Hawaii. Obviously. Aubrey Lovell: Ah, interesting. Michael Bird: So for the next episode, the clue is, "You won't miss Melissa." Aubrey, do you know what it is? Aubrey Lovell: I don't know, but I don't know what Melissa did to deserve that. Michael Bird: No, me neither. Anyway, if you do know, don't tell us. Aubrey Lovell: All right. That brings us to the end of Technology Now for this week, next week we'll be discussing AI and hospitals with General Electric Healthcare's, Andy Cachaldora. Michael Bird: And until then, thank you so much for joining us. Technology Now is hosted by Aubrey Lovell and me, Michael Bird. And this episode was produced by Sam Datta-Paulin and Zoe Anderson, with production support from Harry Morton, Alicia Kempson, Alison Paisley, Alex Podmore, and Ed Everston. Technology Now is a Lower Street production for Hewlett Packard Enterprise. And we'll see you next week. Thank you.