Category Archives: banking

Cellular blockchain, cellular bitcoin

Bitcoin has been around a while and the blockchain foundations on which it is built are extending organically into other areas.

Blockchain is a strongly encrypted distributed database, a ledger that records every transaction. That’s all fine, it works OK, and it doesn’t need fixed.

However, for some applications or new cryptocurrencies, there may be some benefit in making a cellular blockchain to limit database size, protect against network outage, and harden defenses against any local decryption. These may become important as cyber-terrorism increases and as quantum computing develops. They would also be more suited to micro-transactions and micro-currencies.

If you’ve made it this far, you almost certainly don’t need any further explanation.

2016: The Dark Side

Bloomberg reports the ‘Pessimists guide to the world in 2016’, by By Flavia Krause-Jackson, Mira Rojanasakul, and John Fraher.

Excellent stuff. A healthy dose of realism to counter the spin and gloss and outright refusals to notice things that don’t fit the agenda that we so often expect from today’s media. Their entries deserve some comment, and I’ll add a few more. I’m good at pessimism.

Their first entry is oil reaching $100 a barrel as ISIS blows up oil fields. Certainly possible, though they also report the existing oil glut:

Just because the second option is the more likely does not invalidate the first as a possible scenario, so that entry is fine.

An EU referendum in June is their 2nd entry. Well, that will only happen if Cameron gets his way and the EU agrees sufficient change to make the referendum result more likely to end in a Yes. If there is any hint of a No, it will be postponed as far as possible to give politics time to turn the right way. Let’s face facts. When the Ukraine had their referendum, they completed the entire process within two weeks. If the Conservatives genuinely wanted a referendum on Europe, it would have happened years ago. The Conservatives make frequent promises to do the Conservative thing very loudly, and then quietly do the Labour thing and hope nobody notices. Osborne promised to cut the deficit but faced with the slightest objections from the media performed a text-book U-turn. That follow numerous U-turns on bin collections, speed cameras, wheel clamping, environment, surveillance, immigration, pensions, fixing the NHS…. I therefore think he will spin the EU talks as far as possible to pretend that tiny promises to think about the possibility of reviewing policies are the same as winning guarantees of major changes. Nevertheless, an ongoing immigration flood and assorted Islamist problems are increasing the No vote rapidly, so I think it far more likely that the referendum will be postponed.

The 3rd is banks being hit by a massive cyber attack. Very possible, even quite likely.

4th, EU crumbles under immigration fears. Very likely indeed. Schengen will be suspended soon and increasing Islamist violence will create increasing hostility to the migrant flow. Forcing countries to accept a proportion of the pain caused by Merkel’s naivety will increase strains between countries to breaking point. The British referendum on staying or leaving adds an escape route that will be very tempting for politicians who want to stay in power.

Their 5th is China’s economy failing and military rising. Again, quite feasible. Their economy has suffered a slowdown, and their military looks enthusiastically at Western decline under left-wing US and Europe leadership, strained by Middle Eastern and Russian tensions. There has never been a better time for their military to exploit weaknesses.

6 is Israel attacking Iranian nuclear facilities. Well, with the US and Europe rapidly turning antisemitic and already very anti-Israel, they have pretty much been left on their own, surrounded by countries that want them eliminated. If anything, I’m surprised they have been so patient.

7 Putin sidelines America. Is that not history?

8 Climate change heats up. My first significant disagreement. With El-Nino, it will be a warm year, but evidence is increasing that the overall trend for the next few decades will be cooling, due to various natural cycles. Man made warming has been greatly exaggerated and people are losing interest in predictions of catastrophe when they can see plainly that most of the alleged change is just alterations to data. Yes, next year will be warm, but thanks to far too many cries of wolf, apart from meta-religious warmists, few people still believe things will get anywhere near as bad as doom-mongers suggest. They will notice that the Paris agreement, if followed, would trash western economies and greatly increase their bills, even though it can’t make any significant change on global CO2 emissions. So, although there will be catastrophe prediction headlines next year making much of higher temperatures due to El Nino, the overall trend will be that people won’t be very interested any more.

9 Latin America’s lost decade. I have to confess I did expect great things from South America, and they haven’t materialized. It is clear evidence that a young vibrant population does not necessarily mean one full of ideas, enthusiasm and entrepreneurial endeavor. Time will tell, but I think they are right on this one.

Their 10th scenario is Trump winning the US presidency. I can’t put odds on it, but it certainly is possible, especially with Islamist violence increasing. He offers the simple choice of political correctness v security, and framed that way, he is certainly not guaranteed to win but he is in with a decent chance. A perfectly valid scenario.

Overall, I’m pretty impressed with this list. As good as any I could have made. But I ought to add a couple.

My first and most likely offering is that a swarm of drones is used in a terrorist attack on a stadium or even a city center. Drones are a terrorist’s dream, and the lack of licensing has meant that people can acquire lots of them and they could be used simultaneously, launched from many locations and gathering together in the same place to launch the attack. The attack could be chemical, biological, explosive or even blinding lasers, but actually, the main weapon would be the panic that would result if even one or two of them do anything. Many could be hurt in the rush to escape.

My second is a successful massive cyber-attack on ordinary people and businesses. There are several forms of attack that could work and cause enormous problems. Encryption based attacks such as ransomware are already here, but if this is developed by the IT experts in ISIS and rogue regimes, the ransom might not be the goal. Simply destroying data or locking it up is quite enough to be a major terrorist goal. It could cause widespread economic harm if enough machines are infected before defenses catch up, and AI-based adaptation might make that take quite a while. The fact is that so far we have been very lucky.

The third is a major solar storm, which could knock out IT infrastructure, again with enormous economic damage. The Sun is entering a period of sunspot drought quite unprecedented since we started using IT. We don’t really know what will happen.

My fourth is a major virus causing millions of deaths. Megacities are such a problem waiting to happen. The virus could evolve naturally, or it could be engineered. It could spread far and wide before quarantines come into effect. This could happen any time, so next year is a valid possibility.

My fifth and final scenario is unlikely but possible, and that is the start of a Western civil war. I have blogged about it in and suggested it is likely in the middle or second half of the century, but it could possibly start next year given the various stimulants we see rising today. It would affect Europe first and could spread to the USA.

The future of electronic cash and value


Picture first, I’m told people like to see pics in blogs. This one is from 1998; only the title has changed since.

future electronic cash

Every once in a while I have to go to a bank. This time it was my 5th attempt to pay off a chunk of my Santander Mortgage. I didn’t know all the account details for web transfer so went to the Santander branch. Fail – they only take cash and cheques. Cash and what??? So I tried via internet banking. Entire transaction details plus security entered, THEN Fail – I exceeded what Barclays allows for their fast transfers. Tried again with smaller amount and again all details and all security. Fail again, Santander can’t receive said transfers, try CHAPS. Tried CHAPS, said it was all fine, all hunkydory. Happy bunny. Double fail. It failed due to amount exceeding limit AND told me it had succeeded when it hadn’t. I then drove 12 miles to my Barclays branch who eventually managed to do it, I think (though I haven’t checked that it worked  yet).

It is 2015. Why the hell is it so hard for two world class banks to offer a service we should have been able to take for granted 20 years ago?

Today, I got tweeted about Ripple Labs and a nice blog that quote their founder sympathising with my experience above and trying to solve it, with some success:

Ripple seems good as far as it goes, which is summarised in the blog, but do read the full original:

Basically the Ripple protocol “provides the ability for humans to confirm financial transactions without a central operator,” says Larsen. “This is major.” Bitcoin was the first technology to successfully bypass banks and other authorities as transaction validators, he points out, “but our method is much cheaper and takes only seconds rather than minutes.” And that’s just for starters. For example, “It also leverages the enormous power of banks and other financial institutions.”

The power of the value web stems from replacing archaic back-end systems with all their cumbersome delays and unnecessary costs. 

That’s great, I wish them the best of success. It is always nice to see new systems that are more efficient than the old ones, but the idea is early 1990s. Lots of IT people looked at phone billing systems and realised they managed to do for a penny what banks did for 65 pennies at the time, and telco business cases were developed to replace the banks with pretty much what Ripple tries to do. Those were never developed for a variety of reasons, both business and regulatory, but the ideas were certainly understood and developed broadly at engineer level to include not only traditional cash forms but many that didn’t exist then and still don’t. Even Ripple can only process transactions that are equivalent to money such as traditional currencies, electronic cash forms like bitcoin, sea shells or air-miles.

That much is easy, but some forms require other tokens to have value, such as personalized tokens. Some value varies according to queue lengths, time of day, who is spending it to whom. Some needs to be assignable, so you can give money that can only be used to purchase certain things, and may have a whole basket of conditions attached. Money is also only one form of value, and many forms of value are volatile, only existing at certain times and places in certain conditions for certain transactors. Aesthetic cash? Play money? IOUs? Favours?These are  all a bit like cash but not necessarily tradable or exchangeable using simple digital transaction engines because they carry emotional weighting as well as financial value. In the care economy, which is now thankfully starting to develop and is finally reaching concept critical mass, emotional value will become immensely important and it will have some tradable forms, though much will not be tradable ever. We understood all that then, but are still awaiting proper implementation. Most new startups on the web are old ideas finally being implemented and Ripple is only a very partial implementation so far.

Here is one of my early blogs from 1998, using ideas we’d developed several years earlier that were no longer commercially sensitive – you’ll observe just how much banks have under-performed against what we expected of them, and what was entirely feasible using already known technology then:

Future of Money

 Ian Pearson, BT Labs, June 98

Already, people are buying things across the internet. Mostly, they hand over a credit card number, but some transactions already use electronic cash. The transactions are secure so the cash doesn’t go astray or disappear, nor can it easily be forged. In due course, using such cash will become an everyday occurrence for us all.

Also already, electronic cash based on smart cards has been trialled and found to work well. The BT form is called Mondex, but it is only one among several. These smart cards allow owners to ‘load’ the card with small amounts of money for use in transactions where small change would normally be used, paying bus fares, buying sweets etc. The cards are equivalent to a purse. But they can and eventually will allow much more. Of course, electronic cash doesn’t have to be held on a card. It can equally well be ‘stored’ in the network. Transactions then just require secure messaging across the network. Currently, the cost of this messaging makes it uneconomic for small transactions that the cards are aimed at, but in due course, this will become the more attractive option, especially since you no longer lose your cash when you lose the card.

When cash is digitised, it loses some of the restrictions of physical cash. Imagine a child has a cash card. Her parents can give her pocket money, dinner money, clothing allowance and so on. They can all be labelled separately, so that she can’t spend all her dinner money on chocolate. Electronic shopping can of course provide the information needed to enable the cash. She may have restrictions about how much of her pocket money she may spend on various items too. There is no reason why children couldn’t implement their own economies too, swapping tokens and IOUs. Of course, in the adult world this grows up into local exchange trading systems (LETS), where people exchange tokens too, a glorified babysitting circle. But these LETS don’t have to be just local, wider circles could be set up, even globally, to allow people to exchange services or information with each other.

Electronic cash can be versatile enough to allow for negotiable cash too. Credit may be exchanged just as cash and cash may be labelled with source. For instance, we may see celebrity cash, signed by the celebrity, worth more because they have used it. Cash may be labelled as tax paid, so those donations from cards to charities could automatically expand with the recovered tax. Alternatively, VAT could be recovered at point of sale.

With these advanced facilities, it becomes obvious that the cash needs to become better woven into taxation systems, as well as auditing and accounting systems. These functions can be much more streamlined as a result, with less human administration associated with money.

When ID verification is added to the transactions, we can guarantee who it is carrying out the transaction. We can then implement personal taxation, with people paying different amounts for the same goods. This would only work for certain types of purchase – for physical goods there would otherwise be a thriving black market.

But one of the best advantages of making cash digital is the seamlessness of international purchases. Even without common official currency, the electronic cash systems will become de facto international standards. This will reduce the currency exchange tax we currently pay to the banks every time we travel to a different country, which can add up to as much as 25% for an overnight visit. This is one of the justifications often cited for European monetary union, but it is happening anyway in global e-commerce.

Future of banks

 Banks will have to change dramatically from today’s traditional institutions if they want to survive in the networked world. They are currently introducing internet banking to try to keep customers, but the move to digital electronic cash, held perhaps by the customer or an independent third party, will mean that the cash can be quite separate from the transaction agent. Cash does not need to be stored in a bank if records in secured databases anywhere can be digitally signed and authenticated. The customer may hold it on his own computer, or in a cyberspace vault elsewhere. With digital signatures and high network security, advanced software will put the customer firmly in control with access to any facility or service anywhere.

In fact, no-one need hold cash at all, or even move it around. Cash is just bits today, already electronic records. In the future, it will be an increasingly blurred entity, mixing credit, reputation, information, and simply promises into exchangeable tokens. My salary may be just a digitally signed certificate from BT yielding control of a certain amount of credit, just another signature on a long list as the credit migrates round the economy. The ‘promise to pay the bearer’ just becomes a complex series of serial promises. Nothing particularly new here, just more of what we already have. Any corporation or reputable individual may easily capture the bank’s role of keeping track of the credit. It is just one service among many that may leave the bank.

As the world becomes increasingly networked, the customer could thus retain complete control of the cash and its use, and could buy banking services on a transaction by transaction basis. For instance, I could employ one company to hold my cash securely and prevent its loss or forgery, while renting the cash out to companies that want to borrow via another company, keeping the bulk of the revenue for myself. Another company might manage my account, arrange transfers etc, and deal with the taxation, auditing etc. I could probably get these done on my personal computer, but why have a dog and bark yourself.

The key is flexibility, none of these services need be fixed any more. Banks will not compete on overall package, but on every aspect of service. Worse still (for the banks), some of their competitors will be just freeware agents. The whole of the finance industry will fragment. The banks that survive will almost by definition be very adaptable. Services will continue and be added to, but not by the rigid structures of today. Surviving banks should be able to compete for a share of the future market as well as anyone. They certainly have a head start in many of the required skills, and have the advantage of customer lethargy when it comes to changing to potentially better suppliers. Many of their customers will still value tradition and will not wish to use the better and cheaper facilities available on the network. So as always, it looks like there will be a balance.

Firstly, with large numbers of customers moving to the network for their banking services, banks must either cater for this market or become a niche operator, perhaps specialising in tradition, human service and even nostalgia. Most banks however will adapt well to network existence and will either be entirely network based, or maintain a high street presence to complement their network presence.

High Street banking

 Facilities in high street banking will echo this real world/cyberspace nature. It must be possible to access network facilities from within the banks, probably including those of competitors. The high street bank may therefore be more like shops today, selling wares from many suppliers, but with a strongly placed own brand. There is of course a niche for banks with no services of their own at all who just provide access to services from other suppliers. All they offer in addition is a convenient and pleasant place to access them, with some human assistance as appropriate.

Traditional service may sometimes be pushed as a differentiator, and human service is bound to attract many customers too. In an increasingly machine dominated world, actually having the right kind of real people may be significant value add.

But many banks will be bursting with high technology either alongside or in place of people. Video terminals to access remote services, perhaps with translation to access foreign services. Biometric identification based on iris scan, fingerprints etc may be used to authenticate smart cards, passports or other legal documents before their use, or simply a means of registering securely onto the network. High quality printers and electronic security embedding would enable banks to offer additional facilities like personal bank notes, usable as cash.

Of course, banks can compete in any financial service. Because the management of financial affairs gives them a good picture of many customer’s habits and preferences, they will be able to use this information to sell customer lists, identify market niches for new businesses, and predict the likely success of customers proposing setting up businesses.

As they try to stretch their brands into new territories, one area they may be successful is in information banking. People may use banks as the publishers of the future. Already knowledge guilds are emerging. Ultimately, any piece of information from any source can be marketed at very low publishing and distribution cost, making previously unpublishable works viable. Many people have wanted to write, but have been unable to find publishers due to the high cost of getting to market in paper. A work may be sold on the network for just pennies, and achieve market success by selling many more copies than could have been achieved by the high priced paper alternative. The success of electronic encyclopedias and the demise of Encyclopedia Britannica is evidence of this. Banks could allow people to upload information onto the net, which they would then manage the resultant financial transactions. If there aren’t very many, the maximum loss to the bank is very small. Of course, electronic cash and micropayment technology mean that the bank is not necessary, but for many, it may smooth the road.

Virtual business centres

Their exposure to the detailed financial affairs of the community put banks in a privileged position in identifying potential markets. They could therefore act as co-ordinators for virtual companies and co-operatives. Building on the knowledge guilds, they could broker the skills of their many customers to existing virtual companies and link people together to address business needs not addressed by existing companies, or where existing companies are inadequate or inefficient. In this way, short-term contractors, who may dominate the employment community, can be efficiently utilised to everyone’s gain. The employees win by getting more lucrative work, their customers get more efficient services at lower cost, and the banks laugh to themselves.

Future of the stock market

 In the next 10 years, we will probably see a factor of 1000 in computer speed and memory capacity. In parallel with hardware development, there are numerous research forays into software techniques that might yield more factors of 10 in the execution speed for programs. Tasks that used to take a second will be reduced to a millisecond. As if this impact were not enough, software will very soon be able to make logical deductions from the flood of information on the internet, not just from Reuters or Bloomberg, but from anywhere. They will be able to assess the quality and integrity of the data, correlate it with other data, run models, and infer likely other events and make buy or sell recommendations. Much dealing will still be done automatically subject to human-imposed restrictions, and the speed and quality of this dealing could far exceed current capability.

Which brings problems…

Firstly, the speed of light is fast but finite. With these huge processing speeds, computers will be able to make decisions within microseconds of receiving information. Differences in distance from the information source become increasingly important. Being just 200m closer to the Bank of England makes one microsecond difference to the time of arrival of information on interest rates, the information, insignificant to a human, but of sufficient duration for a fast computer to but or sell before competitors even receive the information. As speeds increase further over following years, the significant distance drops. This effect will cause great unfairness according to geographic proximity to important sources. There are two obvious outcomes. Either there becomes a strong premium on being closest, with rises in property values nearby to key sources, or perhaps network operators could be asked to provide guaranteed simultaneous delivery of information. This is entirely technically feasible but would need regulation, otherwise users could simply use alternative networks.

Secondly, exactly simultaneous processing will cause problems. If many requests for transactions arrive at exactly the same moment, computers or networks have to give priority in some way. This is bound to be a source of contention. Also, simultaneous events can often cause malfunctions, as was demonstrated perfectly at the launch of Big Bang. Information waves caused by such events are a network phenomenon that could potentially crash networks.

Such a delay-sensitive system may dictate network technology. Direct transmission through the air by means of radio or infrared (optical wireless) would be faster than routing signals through fibres that take a more tortuous route, especially since the speed of light in fibre is only two third that in air.

Ultimately, there is a final solution if speed of computing increases so far that transmission delay is too big a problem. The processing engines could actually be shared, with all the deals and information processing taking place in a central computer, using massive parallelism. It would be possible to construct such a machine that treated each subscribing company fairly.

An interesting future side effect of all this is that the predicted flood of people into the countryside may be averted. Even though people can work from anywhere, their computers have to be geographically very close to the information centres, i.e. the City. Automated dealing has to live in the city, human based dealing can work from anywhere. If people and machines have to work together, perhaps they must both work in the City.

Consumer dealing

 The stock exchange long since stopped being a trading floor with scraps of paper and became a distributed computer environment – it effectively moved into cyberspace. The deals still take place, but in cyberspace. There are no virtual environments yet, but the other tools such as automated buying and selling already exist. These computers are becoming smarter and exist in cyberspace every bit the same as the people. As a result, there is more automated analysis, more easy visualisation and more computer assisted dealing. People will be able to see which shares are doing well, spot trends and act on their computer’s advice at a button push. Markets will grow for tools to profit from shares, whether they be dealing software, advice services or visualisation software.

However, as we see more people buying personal access to share dealing and software to determine best buys, or even to automatically buy or sell on certain clues, we will see some very negative behaviours. Firstly, traffic will be highly correlated if personal computers can all act on the same information at the same time. We will see information waves, and also enormous swings in share prices. Most private individuals will suffer because of this, while institutions and individuals with better software will benefit. This is because prices will rise and fall simply because of the correlated activity of the automated software and not because of any real effects related to the shares themselves. Institutions may have to limit private share transactions to control this problem, but can also make a lot of money from modelling the private software and thus determining in advance what the recommendations and actions will be, capitalising enormously on the resultant share movements, and indeed even stimulating them. Of course, if this problem is generally perceived by the share dealing public, the AI software will not take off so the problem will not arise. What is more likely is that such software will sell in limited quantities, causing the effects to be significant, but not destroying the markets.

A money making scam is thus apparent. A company need only write a piece of reasonably good AI share portfolio management software for it to capture a fraction of the available market. The company writing it will of course understand how it works and what the effects of a piece of information will be (which they will receive at the same time), and thus able to predict the buying or selling activity of the subscribers. If they were then to produce another service which makes recommendations, they would have even more notice of an effect and able to directly influence prices. They would then be in the position of the top market forecasters who know their advice will be self fulfilling. This is neither insider dealing nor fraud, and of course once the software captures a significant share, the quality of its advice would be very high, decoupling share performance from the real world. Only the last people to react would lose out, paying the most, or selling at least, as the price is restored to ‘correct’ by the stock exchange, and of course even this is predictable to a point. The fastest will profit most.

The most significant factor in this is the proportion of share dealing influenced by that companies software. The problem is that software markets tend to be dominated by just two or three companies, and the nature of this type of software is that their is strong positive reinforcement for the company with the biggest influence, which could quickly lead to a virtual monopoly. Also, it really doesn’t matter whether the software is on the visualisation tools or AI side. Each can have a predictability associated with it.

It is interesting to contemplate the effects this widespread automated dealing would have of the stock market. Black Monday is unlikely to happen again as a result of computer activity within the City, but it certainly looks like prices will occasionally become decoupled from actual value, and price swings will become more significant. Of course, much money can be made on predicting the swings or getting access to the software-critical information before someone else, so we may see a need for equalised delivery services. Without equalised delivery, assuming a continuum of time, those closest to the dealing point will be able to buy or sell quicker, and since the swings could be extremely rapid, this would be very important. Dealers would have to have price information immediately, and of course the finite speed of light does not permit this. If dealing time is quantified, i.e. share prices are updated at fixed intervals, the duration of the interval becomes all important, strongly affect the nature of the market, i.e. whether everyone in that interval pays the same or the first to act gain.

Also of interest is the possibility of agents acting on behalf of many people to negotiate amongst themselves to increase the price of a company’s shares, and then sell on a pre-negotiated time or signal.

Such automated  systems would also be potentially vulnerable to false information from people or agents hoping to capitalise on their correlated behaviour.

Legal problems are also likely. If I write, and sell to a company, a piece of AI based share dealing software which learns by itself how stock market fluctuations arise, and then commits a fraud such as insider dealing (I might not have explained the law, or the law may have changed since it was written), who would be liable?

 And ultimately

 Finally, the 60s sci-fi film, The Forbin Project, considered a world where two massively powerful computers were each assigned control of competing defence systems, each side hoping to gain the edge. After a brief period of cultural exchange, mutual education and negotiation between the machines, they both decided to co-operate rather than compete, and hold all mankind at nuclear gunpoint to prevent wars. In the City of the future, similar competition between massively intelligent supercomputers in share dealing may have equally interesting consequences. Will they all just agree a fixed price and see the market stagnate instantly, or could the system result in economic chaos with massive fluctuations. Perhaps we humans can’t predict how machines much smarter than us would behave. We may just have to wait and see.

End of original blog piece



How to decide green policies

Many people in officialdom seem to love putting ticks in boxes. Apparently once all the boxes are ticked, a task can be put in the ‘mission accomplished’ cupboard and forgotten about. So watching some of the recent political debate in the run-up to our UK election, it occurred to me that there must be groups of people discussing ideas for policies and then having meetings to decide whether they tick the right boxes to be included in a manifesto. I had some amusing time thinking about how a meeting might go for the Green Party. A little preamble first.

I could write about any of the UK parties I guess. Depending on your choice of media nicknames, we have the Nasty Party, the Fruitcake Racist Party, the Pedophile Empathy Party, the Pedophile and Women Molesting Party, the National Suicide Party (though they get their acronym in the wrong order) and a few Invisible Parties. OK, I invented some of those based on recent news stories of assorted facts and allegations and make no assertion of any truth in any of them whatsoever. The Greens are trickier to nickname – ‘The Poverty and Oppression Maximization, Environmental Destruction, Economic Collapse, Anti-science, Anti-fun and General Misery Party’ is a bit of a mouthful. I like having greens around, just so long as they never win control. No matter how stupid a mistake I might ever make, I’ll always know that greens would have made a worse one.

So what would a green policy development meeting might be like? I’ll make the obvious assumption that the policies don’t all come from the Green MP. Like any party, there are local groups of people, presumably mostly green types in the wider sense of the word, who produce ideas to feed up the ladder. Many won’t even belong to any official party, but still think of themselves as green. Some will have an interest mainly in socialism, some more interested in environmentalism, most will be a blend of the two. And to be fair, most of them will be perfectly nice people who want to make the world a better place, just like the rest of us. I’ve met a lot of greens, and we do agree at least on motive even if I think they are wrong on most of their ideas of how to achieve the goals. We all want world peace and justice, a healthy environment and to solve poverty and oppression. The main difference between us is deciding how best to achieve all that.

So I’ll look at green debate generally as a source of the likely discussions, rather than any actual Green Party manifesto, even though that still looks pretty scary. To avoid litigation threats and keep my bank balance intact, I’ll state that this is only a personal imagining of what might go into such green meetings, and you can decide for yourself how much it matches up to the reality. It is possible that the actual Green Party may not actually run this way, and might not support some of the policies I discuss, which are included in this piece based on wider green debate, not the Green Party itself. Legal disclaimers in place, I’ll get on with my imagining:

Perhaps there might be some general discussion over the welcome coffee about how awful it is that some nasty capitalist types make money and there might be economic growth, how terrible it is that scientists keep discovering things and technologists keep developing them, how awful it is that people are allowed to disbelieve in a global warming catastrophe and still be allowed to roam free and how there should be a beautiful world one day where a green elite is in charge, the population has been culled down to a billion or two and everyone left has to do everything they say on pain of imprisonment or death. After coffee, the group migrates to a few nice recycled paper flip-charts to start filling them with brainstormed suggestions. Then they have to tick boxes for each suggestion to filter out the ones not dumb enough to qualify. Then make a nice summary page with the ones that get all the boxes ticked. So what boxes do they need? And I guess I ought to give a few real examples as evidence.

Environmental destruction has to be the first one. Greens must really hate the environment, since the majority of green policies damage it, but they manage to get them implemented via cunning marketing to useful idiots to persuade them that the environment will benefit. The idiots implement them thinking the environment will benefit, but it suffers.  Some quick examples:

Wind turbines are a big favorite of greens, but planted on peat bogs in Scotland, the necessary roads cause the bogs to dry out, emitting vast quantities of CO2 and destroying the peat ecosystem. Scottish wind turbines also kill eagles and other birds.

In the Far East, many bogs have been drained to grow palm oil for biofuels, another green favorite that they’ve managed to squeeze into EU law. Again, vast quantities of CO2, and again ecosystem destruction.

Forests around the world have been cut down to make room for palm oil plantations too, displacing local people, destroying an ecosystem to replace it with one to meet green fuel targets.

Still more forests have been cut down to enable new ones to be planted to cash in on  carbon offset schemes to keep corporate greens happy that they can keep flying to all those green conferences without feeling guilt. More people displaced, more destruction.

Staying with biofuels, a lot of organic waste from agriculture is converted to biofuels instead of ploughing it back into the land. Soil structure therefore deteriorates, damaging ecosystem and damaging future land quality. CO2 savings by making the bio-fuel are offset against locking the carbon up in soil organic matter so there isn’t much benefit even there, but the damage holds.

Solar farms are proliferating in the UK, often occupying prime agricultural land that really ought to be growing food for the many people in the world still suffering from malnutrition. The same solar panels could have been sent to otherwise useless desert areas in a sunny country and used to displace far more fossil fuels and save far more CO2 without reducing food production. Instead, people in many African countries have to use wood stoves favored by greens as sustainable, but which produce airborne particles that greatly reduce health. Black carbon resulting from open wood fires also contributes directly to warming.

Many of the above policy effects don’t just tick the environmental destruction box, but also the next ones poverty and oppression maximization. Increasing poverty resulted directly from increasing food prices as food was grown to be converted into bio-fuel. Bio-fuels as first implemented were a mind-numbingly stupid green policy. Very many of the world’s poorest people have been forcefully pushed out of their lands and into even deeper poverty to make space to grow bio-fuel crops. Many have starved or suffered malnutrition. Entire ecosystems have been destroyed, forests replaced, many animals pushed towards extinction by loss of habitat. More recently, even greens have realized the stupidity and these polices are slowly being fixed.

Other green policies see economic development by poor people as a bad thing because it increases their environmental footprint. The poor are therefore kept poor. Again, their poverty means they can’t use modern efficient technology to cook or keep warm, they have to chop trees to get wood to burn, removing trees damages soil integrity, helps flooding, burning them produces harmful particles and black carbon to increase warming. Furthermore, with too little money to buy proper food, some are forced to hunt or buy bushmeat, endangering animal species and helping to spread viruses between closely genetically-related animals and humans.

So a few more boxes appear. All the above polices achieved pretty much the opposite of what they presumably intended, assuming the people involved didn’t actually want to destroy the world. Maybe a counterproductive box needs to be ticked too.

Counterproductive links well to another of the green’s apparent goals, of economic collapse. They want to stop economic growth. They want to reduce obsolescence.  Obsolescence is the force that drives faster and faster progress towards devices that give us a high quality of life with a far lower environmental impact, with less resource use, lower energy use, and less pollution. If you slow obsolescence down because green dogma says it is a bad thing, all those factors worsen. The economy also suffers. The economy suffers again if energy prices are deliberately made very high by adding assorted green levies such as carbon taxes, or renewable energy subsidies.  Renewable energy subsidies encourage more oppression of people who really don’t want wind turbines nearby, causing them stress and health problems, disrupting breeding cycles of small wild animals in the areas, reducing the value of people’s homes, while making the companies that employ hem less able to compete internationally, so increasing bankruptcy, redundancy and making even more poverty. Meanwhile the rich wind farm owners are given lots of money from poor people who are forced to buy their energy and pay higher taxes for the other half of their subsidy. The poor take all the costs, the rich take all the benefits. That could be another box to tick, since it seems pretty universal in green policy So much for  policies that are meant to be socialist! Green manifesto policies would make some of these problems far worse still. Business would be strongly loaded with extra costs and admin, and the profits they can still manage to make would be confiscated to pay for the ridiculous spending plans. With a few Greens in power, damage will be limited and survivable. If they were to win control, our economy would collapse totally in a rapidly accelerating debt spiral.

Greens hate science and technology, another possible box to tick. I once chatted to one of the Green leaders (I do go to environmental events sometimes if I think I can help steer things in a more logical direction), and was told ‘the last thing we need is more science’. But it is science and technology that makes us able to live in extreme comfort today alongside a healthy environment. 100 years ago, pollution was terrible. Rivers caught fire. People died from breathing in a wide variety of pollutants. Today, we have clean water and clean air. Thanks to increasing CO2 levels – and although CO2 certainly does contribute to warming, though not as much as feared by warmist doom-mongers, it also has many positive effects – there is more global greenery today than decades ago. Plants thrive as CO2 levels increase so they are growing faster and healthier. We can grow more food and forests can recover faster from earlier green destruction.

The greens also apparently have a box that ‘prevents anyone having any fun’. Given their way, we’d be allowed no meat, our homes would all have to be dimly lit and freezing cold, we’d have to walk everywhere or wait for buses in the rain. Those buses would still burn diesel fuel, which kills thousands of people every year via inhalation of tiny particulates. When you get anywhere, you’d have to use ancient technologies that have to be fixed instead of replaced. You’d have to do stuff that doesn’t use much energy or involve eating anything nice, going anywhere nice because that would involve travel and travel is bad, except for greens, who can go to as many international conferences as they want.

So if the greens get their way, if people are dumb enough to fall for promises of infinite milk and honey for all, all paid for by taxing 3 bankers, then the world we’d live in would very quickly have a devastated environment, a devastated economy, a massive transfer of wealth from the poor to a few rich people, enormous oppression, increasing poverty, decreasing health, no fun at all. In short, with all the above boxes checked, the final summary box to get the policy into manifesto must be ‘increases general misery‘.

An interesting list of boxes to tick really. It seems that all truly green policies must:

  1. Cause environmental destruction
  2. Increase poverty and oppression
  3. Be counterproductive
  4. Push towards economic collapse
  5. Make the poor suffer all the costs while the rich (and Green elite) reap the benefits
  6. Impede further science and technology development
  7. Prevent anyone having fun
  8. Lead to general misery

This can’t be actually how they run their meetings I suppose: unless they get someone from outside with a working brain to tick the boxes, the participants would need to have some basic understanding of the actual likely consequences of their proposals and to be malign, and there is little evidence to suggest any of them do understand, and they are mostly not malign. Greens are mostly actually quite nice people, even the ones in politics, and I do really think they believe in what they are doing. Their hearts are usually in the right place, it’s just that their brains are missing or malfunctioning. All of the boxes get ticked, it’s just unintentionally.

I rest my case.




Drones, balloons and high speed banking

High speed  or high frequency banking is a fact of life now and I am glad to say I predicted it and some of its associated issues in the mid 1990s. Technology has moved on rather though, so it’s long past time for an update.

Getting the distance between computing elements as small as possible has been one of the key factors in making chips faster, but the distances between chips and between computers are enormous by comparison. Now that trading computers execute many billions of instructions per second, even tiny extra transmission times can make a significant difference in the precise time at which data that will influence a trade instruction is received by a bank computer, and a consequent trade initiated. That can make a big difference in price and hence profits.

We are about to see the first exaflop computers. A light signal can only travel a third of a nanometre in free space in the time it take for an instruction to execute on such a machine.

Some data delivery to banks is synchronised to give a degree of fairness, but not all data is included in that, useful data doesn’t all come from a single source, and analyst software isn’t necessarily in the same location as a trading device, so signals holding data or instructions have to travel relatively large distances and that gives a degree of competitive advantage to those banks that pick the best locations and optimise their networks best. Sometimes important signals travel between cities or between buildings in a city. Banks already make free space optical links, send signals over laser beams through the air; point to point links with minimum distance. However, that isn’t feasible between cities. Very straight optical cables have also been laid to solve longer distance comms without incurring any extra delays due to bends.

But the trend won’t peak any time soon. Light travels faster in air than it does in fibre. 3 microseconds per kilometre is a lot faster than 5, so those banks with fibre links would be at a disadvantage compared to those with free space links. If the distance is too high to send a laser beam directly between buildings  due to atmospheric absorption, the earth’s curvature or air safety considerations, then there is another solution coming soon. Even sending free space light through the fibre ducts could be faster in latency terms than actually using the fibre, though the practicalities of doing so might well make it near impossible.

Balloons and drones are already being used or considered for many purposes and communications is just another one. Making a network of balloons or drones to divide the journey into manageable hops would speed signals along. There is a trade-off between altitude and distance. Going too high adds too much extra distance, though the air is clearer so fewer hops are needs and the speed of light very slightly faster. There will be an optimum curve that takes the signals reasonably high for most of the journey, but that keeps the total distance low. Drones and balloons can stay afloat for long periods.

It doesn’t stop with just comm-links. Given that there are preferred locations for different industries as far as data sources go, we may well see aerial computing too, doing the processing in situ and relaying a trade instruction to minimise the total time involved. Regulation lags such ideas so that enables the faster more agile banks to use high altitude balloons or drones for long periods before legal challenges force their removal. Even then, using helicopters and planes, hiring office building rooftops and many other strategies will enable banks to shave microseconds or even milliseconds off the time they need to analyse data and instruct trades.

High frequency trading has already introduced instabilities into trading systems and these new potentials will increase instability further still. The extra mathematical and business complexity of using divers parallel networks introduces new kinds of wave interference and emergent behavioural risks that will be as hard to spot as the financial derivative risks that caused the last crash.

While risks are underwritten by taxpayers and banks can keep the rewards, they have little incentive to play safe and every incentive to gamble more and faster, using every new gearing technology they can source. Future crashes could be even more spectacular, and may happen order of magnitude faster than the last big crash.

I spotted some other new banking toys, but they are even more dangerous and I will save those for another blog.