US government and private sector developing ‘precrime’ system to anticipate cyber-attacks


Martin Anderson at The Stack: “The USA’s Office of the Director of National Intelligence (ODNI) is soliciting the involvement of the private and academic sectors in developing a new ‘precrime’ computer system capable of predicting cyber-incursions before they happen, based on the processing of ‘massive data streams from diverse data sets’ – including social media and possibly deanonymised Bitcoin transactions….
At its core the predictive technologies to be developed in association with the private sector and academia over 3-5 years are charged with the mission ‘to invest in high-risk/high-payoff research that has the potential to provide the U.S. with an overwhelming intelligence advantage over our future adversaries’.
The R&D program is intended to generate completely automated, human-free prediction systems for four categories of event: unauthorised access, Denial of Service (DoS), malicious code and scans and probes which are seeking access to systems.
The CAUSE project is an unclassified program, and participating companies and organisations will not be granted access to NSA intercepts. The scope of the project, in any case, seems focused on the analysis of publicly available Big Data, including web searches, social media exchanges and trawling ungovernable avalanches of information in which clues to future maleficent actions are believed to be discernible.
Program manager Robert Rahmer says: “It is anticipated that teams will be multidisciplinary and might include computer scientists, data scientists, social and behavioral scientists, mathematicians, statisticians, content extraction experts, information theorists, and cyber-security subject matter experts having applied experience with cyber capabilities,”
Battelle, one of the concerns interested in participating in CAUSE, is interested in employing Hadoop and Apache Spark as an approach to the data mountain, and includes in its preliminary proposal an intent to ‘de-anonymize Bitcoin sale/purchase activity to capture communication exchanges more accurately within threat-actor forums…’.
Identifying and categorising quality signal in the ‘white noise’ of Big Data is a central plank in CAUSE, and IARPA maintains several offices to deal with different aspects of it. Its pointedly-named ‘Office for Anticipating Surprise’  frames the CAUSE project best, since it initiated it. The OAS is occupied with ‘Detecting and forecasting the emergence of new technical capabilities’, ‘Early warning of social and economic crises, disease outbreaks, insider threats, and cyber attacks’ and ‘Probabilistic forecasts of major geopolitical trends and rare events’.
Another concerned department is The Office of Incisive Analysis, which is attempting to break down the ‘data static’ problem into manageable mission stages:
1) Large data volumes and varieties – “Providing powerful new sources of information from massive, noisy data that currently overwhelm analysts”
2) Social-Cultural and Linguistic Factors – “Analyzing language and speech to produce insights into groups and organizations. “
3) Improving Analytic Processes – “Dramatic enhancements to the analytic process at the individual and group level. “
The Office of Smart Collection develops ‘new sensor and transmission technologies, with the seeking of ‘Innovative approaches to gain access to denied environments’ as part of its core mission, while the Office of Safe and Secure Operations concerns itself with ‘Revolutionary advances in science and engineering to solve problems intractable with today’s computers’.
The CAUSE program, which attracted 150 developers, organisations, academics and private companies to the initial event, will announce specific figures about funding later in the year, and practice ‘predictions’ from participants will begin in the summer, in an accelerating and stage-managed program over five years….(More)”

Holding Data Hostage: The Perfect Internet Crime?


Tom Simonite at MIT Technology Review: “Every so often someone invents a new way of making money on the Internet that earns wild profits, attracts countless imitators, and reshapes what it means to be online. Unfortunately, such a shift took place last year in the world of online crime, with the establishment of sophisticated malicious software known as ransomware as a popular and reliable business model for criminals.

After infecting a computer, perhaps via an e-mail attachment or a malicious website, ransomware automatically encrypts files, which may include precious photos, videos, and business documents, and issues an electronic ransom note. Getting those files back means paying a fee to the criminals who control the malware—and hoping they will keep their side of the bargain by decrypting them.

The money that can be made with ransomware has encouraged technical innovations. The latest ransomware requests payment via the hard-to-trace cryptocurrency Bitcoin and uses the anonymizing Tor network. Millions of home and business computers were infected by ransomware in 2014. Computer crime experts say the problem will only get worse, and some believe mobile devices will be the next target….

The recent rise of ransomware prompted the FBI to issue a report last month in which it warned that the crime poses a threat not only to home computer users but also to “businesses, financial institutions, government agencies, academic institutions, and other organizations.”

Some security researchers predict that 2015 will see significant efforts by criminals to get ransomware working on smartphones and tablets as well. These devices often contain highly prized personal files such as photos and videos….(More)”

From “Bitcoin to Burning Man and Beyond”


IDCubed: “From Bitcoin to Burning Man and Beyond: The Quest for Autonomy and Identity in a Digital Society explores a new generation of digital technologies that are re-imagining the very foundations of identity, governance, trust and social organization.
The fifteen essays of this book stake out the foundations of a new future – a future of open Web standards and data commons, a society of decentralized autonomous organizations, a world of trustworthy digital currencies and self-organized and expressive communities like Burning Man.
Among the contributors are Alex “Sandy” Pentland of the M.I.T. Human Dynamics Laboratory, former FCC Chairman Reed E. Hundt, long-time IBM strategist Irving Wladawksy-Berger, monetary system expert Bernard Lietaer, Silicon Valley entrepreneur Peter Hirshberg, journalist Jonathan Ledgard and H-Farm cofounder Maurizio Rossi.
From Bitcoin to Burning Man and Beyond was edited by Dr. John H. Clippinger, cofounder and executive director of ID3, and David Bollier, an Editor at ID3 who is also an author, blogger and scholar who studies the commons. The book, published by ID3 in association with Off the Common Books, reflects ID3’s vision of the huge, untapped potential for self-organized, distributed governance on open platforms.
The book is available in print and ebook formats (Kindle and epub) from Amazon.com and Off the Common Books. The book, licensed under a Creative Commons Attribution-NonCommercial-ShareAlike license (BY-NC-SA), may also be downloaded for free as a pdf file from ID3.
One chapter that inspires the book’s title traces the 28-year history of Burning Man, the week-long encampment in the Nevada desert that have hosted remarkable experimentation in new forms of self-governance by large communities. Other chapters explore such cutting-edge concepts as

  • evolvable digital contracts that could supplant conventional legal agreements;
  • smartphone currencies that could help Africans meet their economic needs more effective;
  • the growth of the commodity-backed Ven currency; and
  • new types of “solar currencies” that borrow techniques from Bitcoin to enable more efficient, cost-effective solar generation and sharing by homeowners.

From Bitcoin to Burning Man and Beyond also introduces the path-breaking software platform that ID3 has developed called “Open Mustard Seed,” or OMS. The just-released open source program enables the rise of new types of trusted, self-healing digital institutions on open networks, which in turn will make possible new sorts of privacy-friendly social ecosystems.
“OMS is an integrated, open source package of programs that lets people collect and share personal information in secure, and transparent and accountable ways, enabling authentic, trusted social and economic relationships to flourish,” said Dr. John H. Clippinger, executive director of ID3, an acronym for the Institute for Institutional Innovation and Data-Driven Design.
“The software builds individual privacy, security and trusted exchange into the very design of the system. In effect, OMS represents a new authentication, privacy and sharing layer for the Internet,” said Clippinger “– a new way to share personal information selectively and securely, without access by unauthorized third parties.”
A two-minute video introducing the capabilities of OMS can be viewed here.”

Networks and Hierarchies


on whether political hierarchy in the form of the state has met its match in today’s networked world in the American Interest: “…To all the world’s states, democratic and undemocratic alike, the new informational, commercial, and social networks of the internet age pose a profound challenge, the scale of which is only gradually becoming apparent. First email achieved a dramatic improvement in the ability of ordinary citizens to communicate with one another. Then the internet came to have an even greater impact on the ability of citizens to access information. The emergence of search engines marked a quantum leap in this process. The advent of laptops, smartphones, and other portable devices then emancipated electronic communication from the desktop. With the explosive growth of social networks came another great leap, this time in the ability of citizens to share information and ideas.
It was not immediately obvious how big a challenge all this posed to the established state. There was a great deal of cheerful talk about the ways in which the information technology revolution would promote “smart” or “joined-up” government, enhancing the state’s ability to interact with citizens. However, the efforts of Anonymous, Wikileaks and Edward Snowden to disrupt the system of official secrecy, directed mainly against the U.S. government, have changed everything. In particular, Snowden’s revelations have exposed the extent to which Washington was seeking to establish a parasitical relationship with the key firms that operate the various electronic networks, acquiring not only metadata but sometimes also the actual content of vast numbers of phone calls and messages. Techniques of big-data mining, developed initially for commercial purposes, have been adapted to the needs of the National Security Agency.
The most recent, and perhaps most important, network challenge to hierarchy comes with the advent of virtual currencies and payment systems like Bitcoin. Since ancient times, states have reaped considerable benefits from monopolizing or at least regulating the money created within their borders. It remains to be seen how big a challenge Bitcoin poses to the system of national fiat currencies that has evolved since the 1970s and, in particular, how big a challenge it poses to the “exorbitant privilege” enjoyed by the United States as the issuer of the world’s dominant reserve (and transaction) currency. But it would be unwise to assume, as some do, that it poses no challenge at all….”

Index: The Networked Public


The Living Library Index – inspired by the Harper’s Index – provides important statistics and highlights global trends in governance innovation. This installment focuses on the networked public and was originally published in 2014.

Global Overview

  • The proportion of global population who use the Internet in 2013: 38.8%, up 3 percentage points from 2012
  • Increase in average global broadband speeds from 2012 to 2013: 17%
  • Percent of internet users surveyed globally that access the internet at least once a day in 2012: 96
  • Hours spent online in 2012 each month across the globe: 35 billion
  • Country with the highest online population, as a percent of total population in 2012: United Kingdom (85%)
  • Country with the lowest online population, as a percent of total population in 2012: India (8%)
  • Trend with the highest growth rate in 2012: Location-based services (27%)
  • Years to reach 50 million users: telephone (75), radio (38), TV (13), internet (4)

Growth Rates in 2014

  • Rate at which the total number of Internet users is growing: less than 10% a year
  • Worldwide annual smartphone growth: 20%
  • Tablet growth: 52%
  • Mobile phone growth: 81%
  • Percentage of all mobile users who are now smartphone users: 30%
  • Amount of all web usage in 2013 accounted for by mobile: 14%
  • Amount of all web usage in 2014 accounted for by mobile: 25%
  • Percentage of money spent on mobile used for app purchases: 68%
  • Growth of BitCoin wallet between 2013 and 2014: 8 times increase
  • Number of listings on AirBnB in 2014: 550k, 83% growth year on year
  • How many buyers are on Alibaba in 2014: 231MM buyers, 44% growth year on year

Social Media

  • Number of Whatsapp messages on average sent per day: 50 billion
  • Number sent per day on Snapchat: 1.2 billion
  • How many restaurants are registered on GrubHub in 2014: 29,000
  • Amount the sale of digital songs fell in 2013: 6%
  • How much song streaming grew in 2013: 32%
  • Number of photos uploaded and shared every day on Flickr, Snapchat, Instagram, Facebook and Whatsapp combined in 2014: 1.8 billion
  • How many online adults in the U.S. use a social networking site of some kind: 73%
  • Those who use multiple social networking sites: 42%
  • Dominant social networking platform: Facebook, with 71% of online adults
  • Number of Facebook users in 2004, its founding year: 1 million
  • Number of monthly active users on Facebook in September 2013: 1.19 billion, an 18% increase year-over-year
  • How many Facebook users log in to the site daily: 63%
  • Instagram users who log into the service daily: 57%
  • Twitter users who are daily visitors: 46%
  • Number of photos uploaded to Facebook every minute: over 243,000, up 16% from 2012
  • How much of the global internet population is actively using Twitter every month: 21%
  • Number of tweets per minute: 350,000, up 250% from 2012
  • Fastest growing demographic on Twitter: 55-64 year age bracket, up 79% from 2012
  • Fastest growing demographic on Facebook: 45-54 year age bracket, up 46% from 2012
  • How many LinkedIn accounts are created every minute: 120, up 20% from 2012
  • The number of Google searches in 2013: 3.5 million, up 75% from 2012
  • Percent of internet users surveyed globally that use social media in 2012: 90
  • Percent of internet users surveyed globally that use social media daily: 60
  • Time spent social networking, the most popular online activity: 22%, followed by searches (21%), reading content (20%), and emails/communication (19%)
  • The average age at which a child acquires an online presence through their parents in 10 mostly Western countries: six months
  • Number of children in those countries who have a digital footprint by age 2: 81%
  • How many new American marriages between 2005-2012 began by meeting online, according to a nationally representative study: more than one-third 
  • How many of the world’s 505 leaders are on Twitter: 3/4
  • Combined Twitter followers: of 505 world leaders: 106 million
  • Combined Twitter followers of Justin Bieber, Katy Perry, and Lady Gaga: 122 million
  • How many times all Wikipedias are viewed per month: nearly 22 billion times
  • How many hits per second: more than 8,000 
  • English Wikipedia’s share of total page views: 47%
  • Number of articles in the English Wikipedia in December 2013: over 4,395,320 
  • Platform that reaches more U.S. adults between ages 18-34 than any cable network: YouTube
  • Number of unique users who visit YouTube each month: more than 1 billion
  • How many hours of video are watched on YouTube each month: over 6 billion, 50% more than 2012
  • Proportion of YouTube traffic that comes from outside the U.S.: 80%
  • Most common activity online, based on an analysis of over 10 million web users: social media
  • People on Twitter who recommend products in their tweets: 53%
  • People who trust online recommendations from people they know: 90%

Mobile and the Internet of Things

  • Number of global smartphone users in 2013: 1.5 billion
  • Number of global mobile phone users in 2013: over 5 billion
  • Percent of U.S. adults that have a cell phone in 2013: 91
  • Number of which are a smartphone: almost two thirds
  • Mobile Facebook users in March 2013: 751 million, 54% increase since 2012
  • Growth rate of global mobile traffic as a percentage of global internet traffic as of May 2013: 15%, up from .9% in 2009
  • How many smartphone owners ages 18–44 “keep their phone with them for all but two hours of their waking day”: 79%
  • Those who reach for their smartphone immediately upon waking up: 62%
  • Those who couldn’t recall a time their phone wasn’t within reach or in the same room: 1 in 4
  • Facebook users who access the service via a mobile device: 73.44%
  • Those who are “mobile only”: 189 million
  • Amount of YouTube’s global watch time that is on mobile devices: almost 40%
  • Number of objects connected globally in the “internet of things” in 2012: 8.7 billion
  • Number of connected objects so far in 2013: over 10 billion
  • Years from tablet introduction for tables to surpass desktop PC and notebook shipments: less than 3 (over 55 million global units shipped in 2013, vs. 45 million notebooks and 35 million desktop PCs)
  • Number of wearable devices estimated to have been shipped worldwide in 2011: 14 million
  • Projected number of wearable devices in 2016: between 39-171 million
  • How much of the wearable technology market is in the healthcare and medical sector in 2012: 35.1%
  • How many devices in the wearable tech market are fitness or activity trackers: 61%
  • The value of the global wearable technology market in 2012: $750 million
  • The forecasted value of the market in 2018: $5.8 billion
  • How many Americans are aware of wearable tech devices in 2013: 52%
  • Devices that have the highest level of awareness: wearable fitness trackers,
  • Level of awareness for wearable fitness trackers amongst American consumers: 1 in 3 consumers
  • Value of digital fitness category in 2013: $330 million
  • How many American consumers surveyed are aware of smart glasses: 29%
  • Smart watch awareness amongst those surveyed: 36%

Access

  • How much of the developed world has mobile broadband subscriptions in 2013: 3/4
  • How much of the developing world has broadband subscription in 2013: 1/5
  • Percent of U.S. adults that had a laptop in 2012: 57
  • How many American adults did not use the internet at home, at work, or via mobile device in 2013: one in five
  • Amount President Obama initiated spending in 2009 in an effort to expand access: $7 billion
  • Number of Americans potentially shut off from jobs, government services, health care and education, among other opportunities due to digital inequality: 60 million
  • American adults with a high-speed broadband connection at home as of May 2013: 7 out of 10
  • Americans aged 18-29 vs. 65+ with a high-speed broadband connection at home as of May 2013: 80% vs. 43
  • American adults with college education (or more) vs. adults with no high school diploma that have a high-speed broadband connection at home as of May 2013: 89% vs. 37%
  • Percent of U.S. adults with college education (or more) that use the internet in 2011: 94
  • Those with no high school diploma that used the internet in 2011: 43
  • Percent of white American households that used the internet in 2013: 67
  • Black American households that used the internet in 2013: 57
  • States with lowest internet use rates in 2013: Mississippi, Alabama and Arkansas
  • How many American households have only wireless telephones as of the second half of 2012: nearly two in five
  • States with the highest prevalence of wireless-only adults according to predictive modeling estimates: Idaho (52.3%), Mississippi (49.4%), Arkansas (49%)
  • Those with the lowest prevalence of wireless-only adults: New Jersey (19.4%), Connecticut (20.6%), Delaware (23.3%) and New York (23.5%)

Sources

The Age of ‘Infopolitics’


Colin Koopman in the New York Times: “We are in the midst of a flood of alarming revelations about information sweeps conducted by government agencies and private corporations concerning the activities and habits of ordinary Americans. After the initial alarm that accompanies every leak and news report, many of us retreat to the status quo, quieting ourselves with the thought that these new surveillance strategies are not all that sinister, especially if, as we like to say, we have nothing to hide.
One reason for our complacency is that we lack the intellectual framework to grasp the new kinds of political injustices characteristic of today’s information society. Everyone understands what is wrong with a government’s depriving its citizens of freedom of assembly or liberty of conscience. Everyone (or most everyone) understands the injustice of government-sanctioned racial profiling or policies that produce economic inequality along color lines. But though nearly all of us have a vague sense that something is wrong with the new regimes of data surveillance, it is difficult for us to specify exactly what is happening and why it raises serious concern, let alone what we might do about it.
Our confusion is a sign that we need a new way of thinking about our informational milieu. What we need is a concept of infopolitics that would help us understand the increasingly dense ties between politics and information. Infopolitics encompasses not only traditional state surveillance and data surveillance, but also “data analytics” (the techniques that enable marketers at companies like Target to detect, for instance, if you are pregnant), digital rights movements (promoted by organizations like the Electronic Frontier Foundation), online-only crypto-currencies (like Bitcoin or Litecoin), algorithmic finance (like automated micro-trading) and digital property disputes (from peer-to-peer file sharing to property claims in the virtual world of Second Life). These are only the tip of an enormous iceberg that is drifting we know not where.
Surveying this iceberg is crucial because atop it sits a new kind of person: the informational person. Politically and culturally, we are increasingly defined through an array of information architectures: highly designed environments of data, like our social media profiles, into which we often have to squeeze ourselves. The same is true of identity documents like your passport and individualizing dossiers like your college transcripts. Such architectures capture, code, sort, fasten and analyze a dizzying number of details about us. Our minds are represented by psychological evaluations, education records, credit scores. Our bodies are characterized via medical dossiers, fitness and nutrition tracking regimens, airport security apparatuses. We have become what the privacy theorist Daniel Solove calls “digital persons.” As such we are subject to infopolitics (or what the philosopher Grégoire Chamayou calls “datapower,” the political theorist Davide Panagia “datapolitik” and the pioneering thinker Donna Haraway “informatics of domination”).
Today’s informational person is the culmination of developments stretching back to the late 19th century. It was in those decades that a number of early technologies of informational identity were first assembled. Fingerprinting was implemented in colonial India, then imported to Britain, then exported worldwide. Anthropometry — the measurement of persons to produce identifying records — was developed in France in order to identify recidivists. The registration of births, which has since become profoundly important for initiating identification claims, became standardized in many countries, with Massachusetts pioneering the way in the United States before a census initiative in 1900 led to national standardization. In the same era, bureaucrats visiting rural districts complained that they could not identify individuals whose names changed from context to context, which led to initiatives to universalize standard names. Once fingerprints, biometrics, birth certificates and standardized names were operational, it became possible to implement an international passport system, a social security number and all other manner of paperwork that tells us who someone is. When all that paper ultimately went digital, the reams of data about us became radically more assessable and subject to manipulation, which has made us even more informational.
We like to think of ourselves as somehow apart from all this information. We are real — the information is merely about us. But what is it that is real? What would be left of you if someone took away all your numbers, cards, accounts, dossiers and other informational prostheses? Information is not just about you — it also constitutes who you are….”

Innovation in the Government Industry


in Huffington Post: “Government may be susceptible to the same forces that are currently changing many major industries. Software is eating government, too. Therefore government must use customer development to better serve customers else it risks becoming the next Blockbuster, Borders, or what the large publishing and financial services companies are at risk of becoming…
Government is currently one size fits all. In a free market, there is unblunding and multiple offerings for different segments of a market. For example there’s Natural Light, Budweiser, and Guinness. Competition forces companies to serve customers because if customers don’t like one offering they will simply choose a different one. If you don’t like your laundromat, restaurant, or job, you can simply go somewhere else. In contrast, switching governments is really hard.
Why Now
Government has been able to go a very long time without significant innovation. However now is the time for government to begin adapting because the forces changing nearly every industry may do the same to government. I will reiterate a few themes that Fred Wilson cited in a talk at LeWeb while talking about several different industries and add some more thoughts.
1. Organization: Technology driven networks replacing bureaucratic hierarchies
Bureaucratic hierarchies involve chains of command with lower levels of management making more detailed decisions and reporting back to higher levels of management. These systems often entail long communication lags, high costs, and principal/agent problems.
Technology driven networks are providing more efficient systems for organization and communication. For example, Amazon has changed the publishing industry by enabling anyone to publish content and enabling customers to decide what they want. Twitter has created a network around communication and news, enabling anyone who people want to hear to be heard.
2. Competition: Unbundling of product and service offerings
Technology advancements have made it cheaper and easier than ever before to produce a product and bring it to market. One result is that it’s become easier for an entrepreneur to provide one offering of a larger offering as a standalone offering. It provides customers with the option to buy what they want without having to pay more for stuff they don’t want. In addition, the offerings can be improved because producers are completely focused on that specific offering. For example, we used to buy one newspaper and get world, local, sports, etc. Now it’s all from different sources.
Bundling exists because it was more efficient than attempting to contract in the market for every tiny service. However some of the technology driven networks (as described above) are helping markets become more efficient and giving customers more customizable buying options. For example, you can buy a half hour of education, or borrow money from a peer.
We’re starting to see some of the governments offerings begin to be unbundled. For example, Uber and Hyperloop are providing transportation. A neighborhood in Oakland crowdfunded private security.
3. Finance: Lower payment transaction fees and crowdfunding
Innovation in payments, including Bitcoin, has made it cheaper and easier than ever to transfer money. It’s as easy as sending an email, clicking a hyperlink, or scanning a QR code. In addition, Bitcoin is not controlled by any regulators or intermediaries like the government, credit card companies, or even PayPal.
Crowdfunding enables the collective efforts of individuals to connect and pool their money to back initiatives, make purchases, or fund new projects. A school in Houston crowdfunded some exercise equipment instead of using government funding.
4. Communication: We are all connected and graphed
Mobile devices have become nearly as powerful as desktops or laptops. There are many things we can do with our phone that we can’t do on our desktop/laptop. For example, smartphones have sensors, are location aware, can be carried with us at all times, and are cheaper than desktops or laptops. These factors have lead to mass adoption of mobile devices across the world, including in countries with high poverty where people could not previously afford a desktop or laptop. Mobile is making innovative offerings like Uber and mobile payments possible.
Platforms like Facebook and Twitter provide everyone with access to millions of people. In addition, companies like Klout and Quora are measuring our reputation and social graph improving our ability to transact with each other. For example, when market participants trust one another (through the vehicle of a reputation system) many transactions that wouldn’t otherwise happen can now happen.This illustrated in the rise in popularity of collaborative consumption platforms and peer to peer marketplaces.
Serving Customers
The current government duopoly inhibits us from selecting the government that we want as well as from receiving the best possible service because of lack of incentive. However the technologies described above are making it possible to get services previously provided by the government through more efficient and effective means. They’re enabling a more free market for government services….
If government were to take the customer development route, it could try things like unbundling (see above) so that people could opt for the specific solutions they desire. Given the US government’s current balance sheet, it may actually need to start relying on other providers.
It could also rely more on “economic feedback” to inform its actions. Currently economic feedback is given through voting. Most people vote once every two or four years and then hope they get what they “paid” for. Can you imagine paying for a college without knowing which one you would be going to, know what they would be providing, or being able to request a refund or switch colleges? With more economic incentive, services would need to improve. For example, if there was a free market for roads, people would pay for and use the roads that were most safe.”

A World Of Wikipedia And Bitcoin: Is That The Promise Of Open Collaboration?


Science 2.0: “Open Collaboration, defined in a new paper as “any system of innovation or production that relies on goal-oriented yet loosely coordinated participants who interact to create a product (or service) of economic value, which they make available to contributors and non-contributors alike” brought the world Wikipedia, Bitcoin and, yes, even Science 2.0.
But what does that mean, really? That’s the first problem with vague terms in an open environment. It is anything people want it to be and sometimes what people want it to be is money, but hidden behind a guise of public weal.
TED’s lesser cousin TEDx is a result of open collaboration but there is no doubt it has successfully leveraged the marketing of TED to sell seats in auditoriums, just as it was designed to do. Generally, Open Collaboration now is less like its early days, where a group of like-minded people got together to create an Open Source tool, and more like corporations. Only they avoid the label, they are not quite non-profits and not quite corporations.
And because they are neither they can operate free of the cultural stigma. Despite efforts to claim that Wikipedia is a hotbed of misogyny and blocks out minorities, the online encyclopedia has endured just fine. Their defense is a simple one; they have no idea what gender or race or religion anyone is and anyone can contribute – it is a true open collaboration. Open Collaboration is goal-oriented, they lack the infrastructure to obey demands that they become about social justice, so the environments can be less touchy-feely than corporations and avoid the social authoritarianism of academia.
Many open collaborations perform well even in ‘harsh’ environments, where some minorities are underrepresented and diversity is lacking or when products by different groups rival one another. It’s a real puzzle for sociologists. The authors conclude that open collaboration is likely to expand into new domains, displacing traditional organizations, because it is so mission-oriented. Business executives and civic leaders should take heed – the future could look a lot more like the 1940s.”
See also: Sheen S. Levine, Michael J. Prietula, ‘Open Collaboration for Innovation: Principles and Performance’, Organization Science December 30, 2014 DOI:10.1287/orsc.2013.0872

Building Creative Commons: The Five Pillars Of Open Source Finance


Brett Scott: “This is an article about Open Source Finance. It’s an idea I first sketched out at a talk I gave at the Open Data Institute in London. By ‘Open Source Finance’, I don’t just mean open source software programmes. Rather, I’m referring to something much deeper and broader. It’s a way of framing an overall change we might want to see in the financial system….

You can thus take on five conceptually separate, but mutualistic roles: Producer, consumer, validator, community member, or (competitive or complementary) breakaway. And these same five elements can underpin a future system of Open Source Finance. I’m framing this as an overall change we might want to see in the financial system, but perhaps we are already seeing it happening. So let’s look briefly at each pillar in turn.
Pillar 1: Access to the means of financial production
Very few of us perceive ourselves as offering financial services when we deposit our money in banks. Mostly we perceive ourselves as passive recipients of services. Put another way, we frequently don’t imagine we have the capability to produce financial services, even though the entire financial system is foundationally constructed from the actions of small-scale players depositing money into banks and funds, buying the products of companies that receive loans, and culturally validating the money system that the banks uphold. Let’s look though, at a few examples of prototypes that are breaking this down:

  1. Peer-to-peer finance models: If you decide to lend money to your friend, you directly perceive yourself as offering them a service. P2P finance platforms extend that concept far beyond your circle of close contacts, so that you can directly offer a financial service to someone who needs it. In essence, such platforms offer you access to an active, direct role in producing financial services, rather than an indirect, passive one.
  2. There are many interesting examples of actual open source financial software aimed at helping to fulfil the overall mission of an open source financial system. Check out Mifos and Cyclos, and Hamlets (developed by Community Forge’s Matthew Slater and others), all of which are designed to help people set up their own financial institutions
  3. Alternative currencies: There’s a reason why the broader public are suddenly interested in understanding Bitcoin. It’s a currency that people have produced themselves. As a member of the Bitcoin community, I am much more aware of my role in upholding – or producing – the system, than I am when using normal money, which I had no conscious role in producing. The scope toinvent your own currency goes far beyond crypto-currencies though: local currencies, time-banks, and mutual credit systems are emerging all over
  4. The Open Bank Project is trying to open up banks to third party apps that would allow a depositor to have much greater customisability of their bank account. It’s not aimed at bypassing banks in the way that P2P is, but it’s seeking to create an environment where an ecosystem of alternative systems can plug into the underlying infrastructure provided by banks

Pillar 2: Widespread distribution
Financial intermediaries like banks and funds serve as powerful gatekeepers to access to financing. To some extent this is a valid role – much like a publisher or music label will attempt to only publish books or music that they believe are high quality enough – but on the other hand, this leads to excessive power vested in the intermediaries, and systematic bias in what gets to survive. When combined with a lack of democratic accountability on the part of the intermediaries, you can have whole societies held hostage to the (arbitrary) whims, prejudices and interests of such intermediaries. Expanding access to financial services is thus a big front in the battle for financial democratisation. In addition to more traditional means to buildingfinancial inclusion – such as credit unions and microfinance – here are two areas to look at:

  • Crowdfunding: In the dominant financial system, you have to suck up to a single set of gatekeepers to get financing, hoping they won’t exclude you. Crowdfunding though, has expanded access to receiving financial services to a whole host of people who previously wouldn’t have access, such as artists, small-scale filmmakers, activists, and entrepreneurs with no track record. Crowdfunding can serve as a micro redistribution system in society, offering people a direct way to transfer wealth to areas that traditional welfare systems might neglect
  • Mobile banking: This is a big area, with important implications for international development and ICT4D. Check out innovations like M-Pesain Kenya, a technology to use mobile phones as proto-bank accounts. This in itself doesn’t necessarily guarantee inclusion, but it expands potential access to the system to people that most banks ignore

Pillar 3: The ability to monitor
Do you know where the money in the big banks goes? No, of course not. They don’t publish it, under the guise of commercial secrecy and confidentiality. It’s like they want to have their cake and eat it: “We’ll act as intermediaries on your behalf, but don’t ever ask for any accountability”. And what about the money in your pension fund? Also very little accountability. The intermediary system is incredibly opaque, but attempts to make it more transparent are emerging. Here are some examples:

  • Triodos Bank and Charity Bank are examples of banks that publish exactly what projects they lend to. This gives you the ability to hold them to account in a way that no other bank will allow you to do
  • Corporations are vehicles for extracting value out of assets and then distributing that value via financial instruments to shareholders and creditors. Corporate structures though, including those used by banks themselves, have reached a level of complexity approaching pure obsfucation. There can be no democratic accountability when you can’t even see who owns what, and how the money flows. Groups likeOpenCorporates and Open Oil though, are offering new open data tools to shine a light on the shadowy world of tax havens, ownership structures and contracts
  • Embedded in peer-to-peer models is a new model of accountability too. When people are treated as mere account numbers with credit scores by banks, the people in return feel little accountability towards the banks. On the other hand, if an individual has directly placed trust in me, I feel much more compelled to respect that

Pillar 4: An ethos of non-prescriptive DIY collaboration
At the heart of open source movements is a deep DIY ethos. This is in part about the sheer joy of producing things, but also about asserting individual power over institutionalised arrangements and pre-established officialdom. Alongside this, and deeply tied to the DIY ethos, is the search to remove individual alienation: You are not a cog in a wheel, producing stuff you don’t have a stake in, in order to consume stuff that you don’t know the origins of. Unalienated labour includes the right to produce where you feel most capable or excited.
This ethos of individual responsibility and creativity stands in contrast to the traditional passive frame of finance that is frequently found on both the Right and Left of the political spectrum. Indeed, the debates around ‘socially useful finance’ are seldom about reducing the alienation of people from their financial lives. They’re mostly about turning the existing financial sector into a slightly more benign dictatorship. The essence of DIY though, is to band together, not via the enforced hierarchy of the corporation or bureaucracy, but as part of a likeminded community of individuals creatively offering services to each other. So let’s take a look at a few examples of this

  1. BrewDog’s ‘Equity for Punks‘ share offering is probably only going to attract beer-lovers, but that’s the point – you get together as a group who has a mutual appreciation for a project, and you finance it, and then when you’re drinking the beer you’ll know you helped make it happen in a small way
  2. Community shares offer local groups the ability to finance projects that are meaningful to them in a local area. Here’s one for a solar co-operative, a pub, and a ferry boat service in Bristol
  3. We’ve already discussed how crowdfunding platforms open access to finance to people excluded from it, but they do this by offering would-be crowdfunders the chance to support things that excite them. I don’t have much cash, so I’m not in a position to actively finance people, but in my Indiegogo profile you can see I make an effort helping to publicise campaigns that I want to receive financing

Pillar 5: The right to fork
The right to dissent is a crucial component of a democratic society. But for dissent to be effective, it has to be informed and constructive, rather than reactive and regressive. There is much dissent towards the current financial system, but while people are free to voice their displeasure, they find it very difficult to actually act on their displeasure. We may loathe the smug banking oligopoly, but we’re frequently compelled to use them.
Furthermore, much dissent doesn’t have a clear vision of what alternative is sought. This is partially due to the fact that access to financial ‘source code’ is so limited. It’s hard to articulate ideas about what’s wrong when one cannot articulate how the current system operates. Most financial knowledge is held in proprietary formulations and obscure jargon-laden language within the financial sector, and this needs to change. It’s for this reason that I’m building the London School of Financial Activism, so ordinary people can explore the layers of financial code, from the deepest layer – the money itself – and then on to the institutions, instruments and networks that move it around….”

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