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Blockshow 2019: Todalarity Decentralizing the Global AI Synergy

Since the dawn of the fourth industrial revolution in the late 2000s, artificial intelligence (AI) has been one of the most discussed and misunderstood technologies. For many, it seems the term itself is too closely linked to popular culture and science fiction, causing unrealistic anxiety about AI replacing our human workforce as well as improbable expectations regarding the limits of the technology.

AI tools generally present a range of new functionality for businesses, and many processes have to this day been automated, however, the use of artificial intelligence that you are likely to encounter is still fairly limited. While AI does describe the simulation of human intelligence by machines, most AI we encounter in our day to day lives are, such as Apple’s Siri or Amazon’s Alexa, described as ‘narrow AI’ and are of relatively weak intelligence—capable of performing basic tasks within a very specific framework.

Artificial General Intelligence

The AI capabilities discussed at the Blockshow 2019 will go far beyond this framework. Two of the leading innovators in this space, Dr Ben Goertzel, CEO, SingularityNET and Toufi Saliba, CEO, Toda.Network have both been working separately on a much stronger types AI within their blockchain networks. Powerful AI also known as artificial general intelligence (AGI)—AI systems with learning human cognitive abilities. When presented with an unfamiliar task, an AGI system is able to find a solution without human intervention. Goertzel explained, “A SingularityNET network is a collection of “AI agents” that offer AI services to external clients and to other AI agents.” These AI agents can describe what services they offer, find other agents that meet given criteria and rate the quality of other agents thereby fostering the emergence of complexes of AI agents possessing a synergetic combined intelligence richer and greater than the sum of the intelligence of the component agents. According to Goertzel, the union of SingularityNET and the Toda.Network—Todalarity—will be at the core of the “emerging global brain.” Todalarity is essentially a product accelerator that aims to help new AI startups to integrate their products into the TODA and SingularityNET blockchain ecosystems.

Joining Forces

Saliba began his discussion by highlighting that if any of us were to search the terms blockchain, decentralized or AI—that 90% of the projects we would likely find would be “scams” that have no real future and a further 9% are not really innovating. He believes he has searched this space far and wide and has found his 1% in Dr. Goertzel. A quick comparison of their respective organizations’ missions would confirm this compatibility. Goertzel also acknowledged that the union is almost too perfect and that Toda.Network appears to be capable of overcoming the limitations he has found within the Ethereum blockchain, where his AI Agents currently exist. He described the Toda architecture as, “the next step in the evolution of the Internet of value.” I will defer further explanation of this partnership to Dr. Ben Goertzel who better explains the impetus in his recent blog post from Sept. 28.

Decentralizing Governance of the Global Brain

So why is it a necessity for Artificial Intelligence to have autonomous decentralized governance? Saliba explained it through a comparison to our smartphones. Today almost everyone has a smartphone. When smartphones emerged, many resisted them but soon found themselves uncompetitive in the market. It makes sense as a smartphone ultimately allows you access to the internet and a vast amount of information. Elon Musk has described modern people with smartphones as “cyborgs” but just with a slow connection. As mentioned above, smartphones already currently use narrow AI technology, notable apps like Siri but also in terms of predictive texts, search engine optimization, etc. In a sense, smartphones are intelligent. But for all that they provide, Saliba explained, “The way they are built today they can be controlled by a central agency.” Saliba stated that the interesting thing is that we are all contributing to building centralized AI but when the day comes. Still, when the centralized technology is at its peak, we will not want to buy it; we will be looking for decentralized AI services instead. Saliba hypothesized that smartphones of the future will likely be 8000 times more intelligent than people and may possibly come in the form of a weekly pill that we take to connect ourselves to the internet or global brain—this connection would essentially allow humans super intelligence. He conducted a quick straw poll with the crowd asking who in the room would take such a pill knowing that it could be overridden by a central agency. No hands were raised. He confirmed, “I usually get about zero percent on that question.” Saliba then asked who would take a pill that still offered such amazing enhancements but was decentralized, meaning no one could override the host. “About 96.338 %,” he joked at the overwhelming show of hands in the audience. Saliba stated, “So there’s the demand, and what we’re doing is setting the path towards proper autonomous decentralized governance so you can build a product that has a demand, and if it has a demand it will be profitable.”

Todalarity will launch in January of 2020 and will gather 100 of the most powerful AI engines from some of the best ventures in the world, and gathered in a single blockchain to give users access to the AI modifications they would like to leverage. Goertzel explained, “We’re working with Cisco, PICC, Dominos, various large companies to get them on board, the decentralized AI ecosystem but in the end, it’s not just about large enterprises. We need a robust startup ecosystem, building on all the decentralized platforms out there. And I think we can do something a lot more interesting than tech startups and the standard tech accelerators and incubators because the branding is something much more specific. What we’re aiming at with Todalarity is to take, let’s say, 100 startups with promising things that use AI or provide AI and basically help them to put their products into the decentralized ecosystem, which can be Singularity or it can be Toda.” He continued, “What we need is for all of the people who have amazing new ideas ready for AI, we don’t want them to just be creating a startup to be acquired by a big company. You’re going to be creating a startup that will provide to anyone in the world in a way that can be creatively utilized within the decentralized platform. So they can monetize their life without having to be acquired by a big company. And they can get smarter and smarter by the synergy with others as it connects to the decentralized network.”

Dr. Ben Goertzel—Striving towards an Autonomous Decentralized and Compassionate Artificial Super Intelligence

Dr. Ben Goertzel is the founder and CEO of SingularityNET, a decentralized blockchain-based Artificial Intelligence (AI) marketplace project. He has described the project as a medium for the creation and the emergence of Artificial General Intelligence (AGI) as well as a way to roll out superior AI-as-a-service to every vertical market and enable everyone in the world to contribute to and benefit from AI.

Blockchain.News managed to catch up with Dr. Goertzel at the Blockshow 2019, in Singapore. In the first part of our interview, we discuss the evolution and the philosophical aspects of AI and AGI.

Evolution of Artificial Intelligence

For many, the concept of machines with the ability to learn and develop as humans, but with the enhanced calculation speed of a computer, is simply terrifying. Will the machines replace us, will we be able to contain them, or will we merge with them and how far away is this future?

While AI does describe the simulation of human intelligence by machines, most AI we encounter in our day to day lives are complex mathematical algorithms, such as Apple’s Siri or Amazon’s Alexa, described as ‘narrow AI’ and are of relatively weak intelligence—capable of performing basic tasks but only within a very specific framework.

Goertzel is aiming higher, essentially trying to birth a much stronger type of AI, also known as artificial general intelligence (AGI)—AI systems with assimilated human learning cognitive abilities. He explained, “AGI refers to an AI that can generalize way beyond what it has been taught and has seen, which means it can imaginatively guess elements about new domains of experience. This is extremely important in the modern world where we are forced to deal with unexpected circumstances all the time.”

Beyond AGI is where things get really exciting and may perhaps present a slightly existential challenge for humanity—artificial superintelligence (ASI). Goertzel said, “Artificial superintelligence is the next step beyond general intelligence. Humans currently have more general intelligence than the software products that are commercially available right now. But humans are by no means the most generally intelligent possible system. I think as AI advances further and further, you’re going to see AI as tremendously smarter than people much as we’re much smarter than monkeys, rats, or bugs. But I mean, to get from where we are now with narrow AI, to AGI, and then to artificial superintelligence, we need to go through quite a series of practical steps.” He continued, “That’s really what we’re engaged with at SingularityNET—the project is how to get through the next steps of the evolution—from where we are now, with fairly simplistic narrow AI towards a powerful general intelligence but also taking care to do it in a way that avoids putting the AI in control of these confused centralized global powerful parties—we want a decentralized general intelligence.”

The Singularity in SingularityNET

As Dr. Goertzel revealed, “The singularity in SingularityNET refers to the future foreseen by Verner Vinge and popularized by Ray Kurzweil—it basically is the moment at which technology starts advancing so fast, it seems effectively instantaneous to the human mind, and this is going to occur by AGI becoming smarter than people. AI will be doing the invention rather than people.”

Shortly before his death, at a conference in Lisbon, Stephen Hawking warned those in attendance that the development of artificial intelligence might become the “worst event in the history of our civilization.” He was alluding to what is known as the ‘technological singularity.’ Other notable intellectuals of our time including Tesla’s Elon Musk and neuroscientist Sam Harris have also delivered a number of foreboding speeches regarding the innovation, believing it may be the start of our impending doom and will ultimately replace us completely or even worse—simply discard us in the course of an intermediary task as HAL 9000 discarded the lives of the astronauts in favor of completing the mission of the Discovery One.

Goertzel does not share this apocalyptic view but sees an opportunity for humans and machines to evolve together, he said, “AI will almost certainly become far more intelligent than human beings. But there will be a possibility for humans to follow the AI along and effectively fuse their minds with the AI—which Elon Musk, among others, are also working on with his company Neuralink. I would say humans who choose not to fuse with the AI will indeed be, in a sense, left behind as they will no longer be among the smartest beings in this region of the universe.”

Artificial Compassion for Humanity

The fact that AI will become much smarter than people do not necessarily mean that AI is a danger to humans. Goertzel explained, “That all depends on how they are built, what we want is AIs that are compassionately disposed toward human beings. That is also why at SingularityNET we’re so focused on creating a democratically controlled AI mind because if the first true general intelligence is controlled by a military organization or an advertising agency, then this probably isn’t optimal in terms of gathering a beneficial general intelligence to emerge into a compassionate, supermind.”

So how do you put compassion into a machine? How can you teach an AI about empathy and concepts as abstract as love? The reality is that even as humans, we are unable to display or enact these concepts with any real consistency. Goertzel said, “You don’t program empathy into the code of the AI; these things will be learned by the AI. Compassion will emerge within the AI in the course of its interactions with the world—including the humans in the world and the physical world. It’s very similar to a child, you don’t program emotions or compassion into a child; they gain it through interactions with the world.” He added, “So the task of AI is to build a learning system and a self-organizing system that can organize its own mind; its own feelings; and its own compassion in an appropriate way. It is complex, but the internet is complex, your mobile phone is complex, your laptop is complex, I mean, humanity has built many complex things, and these are built by a combination of many complex people working together.”

At the comparison of an AI developing as a child would, I could not help but consider the amount of children that grow up to be sociopathic—often making impulsive decisions or breaking rules with little or no feelings of guilt or wrongdoing. Goertzel admits, “Humanity is certainly a complex mess with aspects that are both positive and negative according to the value systems of various parts of humanity. I think the best we can do is put an AI out there in the world and expose it to the various aspects of humanity and make sure that it’s biased in a positive direction.”

Goertzel himself is a father of four children and a grandfather to one, speaking from experience he said, “Protecting them from all the bad things in the world is something you can only do to a limited extent because eventually, they’re going to go out there and interact with some harsh realities—but you can bias what you expose them to in a positive direction.”

The reality of our future according to Goertzel, is that AGI is coming regardless and what we can do is ensure that it is not solely disposed towards the whims of a powerful central authority and that it is taught compassion for humanity. He said, “AI will be used for military purposes, it will be used for advertising and even crime. We have to make sure that AI is also used, and to a greater extent, for education, agriculture, healthcare or scientific discovery. The AI will get all these things integrated into its mind and be able to form a whole picture of human values and culture to form a substantial inclination towards compassion.”

Sum of Many

Goertzel clarified that the creation of the future AGI global intelligence will not be done solely by his team at SingularityNET, it will be the combined work of a vast community of AI and technology developers as well as the information that the AI agents on the network are able to absorb from human consumers who leverage the network.

He said, “If Singularity is going to play a key role, then we need to be massively growing the user base of SingularityNET—we have to drive massive adoption of these decentralized networks that we have launched. After two years of work, we have a pretty nice version of the SingularityNET platform out there. It’s a decentralized network which is democratically governed and controlled—meaning the AI network is sort of controlled by the AI agents in the network, rather than by some outside party. It’s a nice bit of software and we’ve shown it works.” Concluding he said, “If humanity wants to transition from AI to AGI and then to super intelligence in a democratic and participatory way then networks like SingularityNET need to be a significant part of the mix, which is easy to see from an abstract view but from practice on the ground, there’s still a lot to be done to get adoption of this sort of platform.”

Twitter Takes on Decentralization with New Social Media Development Project

Twitter CEO Jack Dorsey is working on an initiative to decentralize social media, also known as ‘BlueSky,’ alongside five other programmers. Previously, Twitter was known for its decentralized aspect in its early days, and many of its users advocating for it to be that way. With time, the company was influenced by the development of the internet, which Dorsey recognizes to have new challenges – e.g., losing the value of content hosting measures and still gaining tools to redirect the attention of the masses.

His latest initiative will include five developers looking to write codes for this project. Dorsey has dedicated funds for this new project, which ultimately will put social media platforms on blockchain.

Equally, this will make way for censorship resistance and other intricate features that will grab the attention of today’s consumers. At present, the team working on the project, including independent architects and coders. Twitter is not claiming sole ownership of the project; instead, it will join the platform between the client and assist it as an external protocol.

Some of the positive attributes of this project include it circulating in the blockchain space as opposed to trying to compete with mainstream media. Essentially, a blockchain startup has the potential to reach similar levels of recognition by requesting for articles to be written on them.

Image via Shutterstock

Researchers of Japan’s Blockchain-Based Digital Court Face Backlash Due to its Decentralized and Unregulated Nature

Researchers in Japan have been looking into a blockchain-based mechanism to settle legal disputes in a “digital court,” aiming to perform legal actions with a more cost-efficient legal process.

Professor Hitoshi Matsushima, from the University of Tokyo, and Shunya Noda from the University of British Columbia have been leading the project, as the University of Tokyo stated that this is an extension for existing decentralized smart contract development.

The University has faced some backlash from the press regarding the technology’s decentralized and unregulated nature, and there was concern that the digital court would receive “bad press” as well. Blockchains in some ways are a double-edged sword, although this kind of system signals the dawn of a new economic paradigm that must be embraced and explored rather than feared and ignored, said Matsushima.

Further explaining the design of the blockchain-based mechanism, he said, “On suspected violation of some agreement, those involved post their opinions to this digital court. The court algorithmically aggregates the parties’ opinions and judges who violated their agreement. If the digital court judges that a party violated the agreement, the party is fined by withholding a deposit made during the initial agreement.”

Blockchain technology is mainly used to maintain the records of the parties’ involvement with agreements. Matsushima said that the digital court could be built on current blockchain platforms such as Ethereum, and that “it could happen right now.”

Japan’s new cryptocurrency laws to be enforced next month

Japan will be enforcing new cryptocurrency-related regulations in May, as two of the pieces of legislation were passed by the Japanese House of Representatives last year. The Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA) were originally scheduled to come into effect in April, however, there has been a delay and the final enforcement date has been officially pushed to May.

In May 2019, the Japanese House of Representatives amended the cryptocurrency-related laws, and revised the term “Virtual Currency” to “Crypto Asset,” as it would be a more accurate term to describe cryptocurrencies. This change came into effect as the use of the term “virtual currency” may cause confusion to the public as cryptocurrencies function or hold the same value that is associated with fiat currencies. Although this term is amended by law, it is not compulsory that exchanges or the media follow suit.

Image via Shutterstock

Blockchain for Emails: What are the Benefits?

Since 2009, blockchain technology has been primarily used in the issuance and maintenance of cryptocurrency, but the power of the technology have applications far beyond the crypto space. Features such as immutability, decentralized storage, transparency, and security are making blockchain popular in other fields.

According to Safepost, the use of decentralized technology in emails has yet to be fully utilized and a blockchain-based solution will solve the majority of problems that traditional email providers face.

Privacy is enhanced

The privacy of the users is always an issue when it comes to email solutions. Companies like Google will tell you that they do not share your data with 3rd parties. However, there is no guarantee that it will not happen because they have a centralized server. Some of these email solution providers will use personal data on their platforms to send you personalized ads. A decentralized email solution means that messages will be stored in shared ledgers so that no single authority is able to dictate how your data is used.

Secure platform

In 2013, Yahoo, which was of the biggest email providers at the time, suffered a security breach. The company managed 3 billion user accounts at the time. The breach affected more than 1 billion of the accounts. It was not until 2017 that Yahoo admitted that this happened. The company advised its users to change their passwords. A blockchain-based solution is more secure against such attacks. Different nodes are distributed over a network, which makes it hard to control the system. A hacker must control more than 51% of the nodes to manipulate the system which is not impossible, but a blockchain network with 3 billion accounts serving as nodes would mean that attackers would have to hack more than 1.5 billion simultaneously.

According to a report compiled by the FBI, businesses lost about $26 billion from June 2016 to July 2019 through fraudulent emails. Confirming that an email comes from the said sender is always a challenge in the current set up. Someone can easily set up an email account with someone’s name and send messages. A blockchain-based solution is tamper-proof, which makes it easy to check the authenticity of the messages. One cannot edit timestamps or even the routing data, which makes it easy to know the sender. Tracking the sender of an email and when the email was sent through a decentralized ledger is thus possible.

Blockchain email seems to be lagging behind when compared to other applications such as banking and cryptocurrencies. The possibility to combat fraud in the business world is desirable. The assurance that there will no longer be spam emails, phishing threats, and that there will be data privacy are the strongest selling points of blockchain technology in this field.

Image via Shutterstock

Harvard Blockchain Lab Applauds Fight to Fame Model for True Realization of Decentralized Ecosystem

Fight to Fame, a blockchain-based entertainment platform has been praised by the Harvard Blockchain Lab for consistently presenting decentralized events, online malls, movies, and action star reality shows. According to the release shared with Blockchain.news, it uses a BMS business model in the production of action movies, and fans are empowered by the FF Token when voting and making purchases.

Notable strides in the crypto space

By granting the fans using the platform with FF tokens, they can bet on preferred players, exchange derivatives, and buy tickets, and this offers an ideal way of crypto application. As a result, these tokens are circulated across the globe enabling users to create a consensus among themselves.

Rain Huan, a renowned cryptocurrency expert, noted, “Fight to Fame BMS conducts decentralized events, action star reality shows, movies, online malls with blockchain technology in the countries that support cryptocurrencies around the world, with FF tokens to purchase tickets, exchange derivatives, and bet on players, which truly realizes the application scenario of cryptocurrency.”

The Harvard Blockchain Lab asserted that numerous blockchain ventures have not stood the test of time in the entertainment industry. It, therefore, saw it fit to compliment Fight to Fame for stabilizing its token across the board.

Innovative blockchain 4.0 technology

The BMS business model utilized by the platform exclusively employs blockchain 4.0 technology’s decentralized voting mechanism, and this prompts technical commands.

According to Harvard’s Blockchain Lab, “The scope for the potential impact of cryptocurrency on entertainment industries like gaming and television streaming services is nothing short of exciting (to say the least), and it is always thrilling to see companies coming to the call and realizing that there are companies who are willing and able to rise to the challenge.”

The use of FF tokens is proving to be a game-changer in the entertainment sector. Recently, the International Chamber of Commerce (ICC) established a blockchain-enabled app to provide individuals’ immutable COVID-19 compliance conditions.

Image via Fight to Fame

Telegram Abandons TON and Gram Tokens, Durov Critical of US Regulating Whole World

Telegram CEO Pavel Durov has announced that they are calling it quits on the Telegram Open Network (TON) and its Gram tokens after a long-drawn-out battle with the United States Securities and Exchange Commission(SEC).

In a message on May 12, Durov said, “Today is a sad day for us here at Telegram. We are announcing the discontinuation of our blockchain project. Below is a summary of what it was and why we had to abandon it.”

America Believes it Regulates the World

The message by Durov linked to a long explanation by the CEO entitled, “What was TON and Why is it Over?” But in summary, Durov explained that the primary reason to abandon the project ultimately came down to the US regulators somehow being able to encroach on the sovereign rights of other nations and dictate where Grams could be distributed for the entire world.

Durov wrote, “Perhaps even more paradoxically, the US court declared that Grams couldn’t be distributed not only in the United States, but globally. Why? Because, it said, a US citizen might find some way of accessing the TON platform after it launched. So, to prevent this, Grams shouldn’t be allowed to be distributed anywhere in the world – even if every other country on the planet seemed to be perfectly fine with TON.”

The Telegram CEO further reiterated that the US courts are exceeding its own jurisdiction and deciding what is best for the rest of the world and believes that they are exploiting their control over the dollar.

Durov stated, “Sadly, the US judge is right about one thing: we, the people outside the US, can vote for our presidents and elect our parliaments, but we are still dependent on the United States when it comes to finance and technology (luckily not coffee). The US can use its control over the dollar and the global financial system to shut down any bank or bank account in the world.”

The Story till Now

The decision comes after several months of legal battles between Telegram and the SEC.

Telegram, the online messaging app, had ambitious plans for its Telegram Open Network (TON) blockchain ever since the announcement in 2017.

The company had one of the biggest token sales in 2018, which was the catalyst for the ensuing and long legal battle. The SEC filed a class-action lawsuit against Telegram to shut down the TON network, stating that the Gram tokens were unregistered securities.

While Telegram argued that Grams were a commodity, the US District Court for The Southern District Of New York issued a ruling earlier this year siding with the SEC, preventing Telegram from issuing tokens.

Telegram filed an order of consent on May 8, agreeing to hand over to the regulator information concerning tokens distributed to initial investors, including the funds it collected from the first buyers of its 2018 ICO.

TON Network Launched by Developers

As the picture began to look very grim for the launch of the Telegram Open Network (TON), those in the TON Community Foundation noted their ability to launch with or without the Telegram’s further participation and without regulatory approval.

Shortly before Durov’s announcement, the developers launched the Free TON network on May 7. Durov was clear that Telegram would no longer be involved but he applauds the action of the developers.

Durov said, “I want to conclude this post by wishing luck to all those striving for decentralization, balance, and equality in the world. You are fighting the right battle. This battle may well be the most important battle of our generation. We hope that you succeed where we have failed.”

Twitter’s Decentralized Workforce Can Work From Home Forever Following COVID Lockdown

Twitter employees have been given the autonomy to choose when they will return to work once the social media giant’s offices open following the COVID-19 pandemic lockdown.

Jack Dorsey, CEO of Twitter, told his employees on Tuesday 12 May, that many of them will be permitted to work from home for as long as desire, even after the coronavirus has subsided.

According to NBC, a spokesperson for Twitter said that the management will make the decision on when the offices reopen, however, “When and if our employees come back, will be theirs.”

Cooperation and Decentralization Makes it Happen

Dorsey said in an email that it was unlikely any of Twitter’s offices would open before the third quarter for this year. He also said that all events would be canceled for the remainder of 2020 to maintain social distancing efforts. In-person events will be reconsidered when Twitter designs its 2021 roadmap.

Twitter has maintained an emphasis on creating a highly capable and distributed workforce since its inception. The spokesperson reiterated this in the email, he said, “We were uniquely positioned to respond quickly and allow folks to work from home given our emphasis on decentralization and supporting a distributed workforce capable of working from anywhere.”

The evidence that Twitter can thrive and maintain its workflow in the pandemic lockdown condition has been proven over the last few months according to the spokesperson. She said, “So if our employees are in a role and situation that enables them to work from home and they want to continue to do forever, we will make that happen.”

BlueSky – Decentralized Social Media

Businesses across the nation are struggling to adapt to social distancing guidelines and Twitter’s new policy appears to be rethinking how businesses will operate in a post-pandemic world.

With the announcement of project BlueSky, in the works, it appears that they have also been rethinking how social media platforms should work and have emphasized that the new platform will be completely decentralized.

Dorsey has dedicated funds for this new project, which ultimately will put the social media platform onto a blockchain.

Equally, this will make way for censorship resistance and other intricate features that will grab the attention of today’s consumers. At present, the team working on the project, include independent architects and coders. Twitter is not claiming sole ownership of the project; instead, it will join the platform and assist it as an external protocol.

Decentralized Hackers 'Anonymous' Promise Retribution for George Floyd, Will Expose Minneapolis Police Record of Systemic Racism

Hacktivist group ‘Anonymous’ has promised retribution against the Minneapolis Police Department (MPD) for the death of George Floyd last week.

On Saturday night, May 30, it appears the group has begun to make good on their promise, as the MPD website was inaccessible for most of the night and appears to have been subjected to unauthorized access and tampering.

As reported by Bloomberg on June 1, the alleged Anonymous hack occurred on Saturday night as protests reached a fever pitch around the country. Thousands of Americans rose in protest against the unlawful and completely unnecessary killing of George Floyd and the rate of police violence aimed at black Americans.

Although police officials did not immediately wish to comment on the alleged attack, there were noticeable anti-hack additions to the website on Sunday morning. Pages on the website required captcha verification, a popular automated hack bot deterrent for access to the public pages.

Anonymous Promises to Reveal Depth of MPD’s Systemic Racial Profiling and Abuse

Anonymous posted the video below on their unconfirmed Facebook page on May 28. The video was aimed specifically at the Minneapolis police and promised to expose the department’s “horrific track record of violence and corruption”, of which they believe George Floyd is just the latest casualty.

As protestors clashed violently with US police and the National Guard over the weekend, the video gained nearly 2.5 million views on Facebook.

The video is presented by the Anonymous figure dressed in the usual dark hoodie and displaying the Guy Fawkes mask, a popular symbol of protest made famous by the movie V for Vendetta. The figure concludes the video, which details the unjustified death of George Floyd and as many as 193 others, stating that the MPD is not capable of carrying out true justice. The figure promised, “we will be exposing your many crimes to the world. We are legion, expect us.”

The power of the Anonymous group can be found in these final words, “We are legion” – a nod to their decentralized model of operation. The hacktivist operation claims to operate as a series of decentralized cells, making them difficult to track and meaning that there is no distinguishable leader with which to bargain or negotiate.

Given the depth of the information already exposed in the warning video, we can only imagine what has been uncovered in the recent alleged hack that appears to have occurred last Saturday.

Decentralized Finance (DeFi)

Decentralized Finance was one of the hottest emerging topics in the crypto world in 2019. But what is DeFi really?

What is DeFi in a nutshell?

DeFi stands for decentralized finance.

DeFi as a concept is to be able to offer almost all the financial services available with legacy and centralized institutions, typically banks, but on the blockchain. Whatever traditional services financial institutions provide can be expected to be offered through DeFi. In short, Defi is blockchain-based financial services that traditional financial services map into, creating new services or derivatives stemming from blockchain’s unique features.

Although we have had concepts like distributed computing and decentralized computing for decades, DeFi is in fact a new concept or an expansion of the application scope of blockchain as infrastructure.

Key features of DeFi

As mentioned above, decentralized finance aims to offer financial services while leveraging the key elements and functions of a blockchain, to create a more open and transparent financial system.

As such, the components of DeFi include smart contracts, protocols, decentralized applications, digital currencies, and more. A typical version of DeFi is bitcoin and stablecoins like USDT, Dai, and Paxos Standard.

The key advantages or new features of DeFi in the financial services space is the decentralized aspect of removing legacy “trusted third parties” and keeping a transparent and tamper-proof ledger.

(1) Transitioning Trust in Intermediaries to Machine Trust

Removing “trusted third parties” is one of the vital features in blockchain, as it creates a trustless system, one where we know both parties know that the other actually holds the assets to transact while not needing to know the other true identity. Relying on the blockchain’s features to create trust transitions the traditional trust placed in credit institutions like governments and banks into machine trust.

Trust and credit are perhaps the most important elements in financial transactions and industry. Trust and credit are key to the modern monetary and financial systems, and trust traditionally comes by verifying all transactions through a Central Bank or financial institution who are the intermediaries or “trusted third parties”. Blockchain removes the necessity for “trust third parties” and for this reason is extremely disruptive for traditional financial institutions as lots of their revenue simply comes from their roles as an intermediary agency. Central banks and credit agencies have enjoyed a monopoly in this role and will continue to fight vigorously to protect this monopoly

(2) Smart Contracts

A smart contract is a general method of removing third parties as it relies on undeniable code logic on the blockchain network to trigger its execution instead of human intervention. DeFi typically benefits from smart contracts.

Contracts and agreements involved in DeFi services are governed by smart contracts. A smart contract is a self-executing contract where the terms and conditions are defined and enforced through automation and enacted autonomously and efficiently on the blockchain.

Automation: Contractual agreements are pretty complicated; this is what creates the need for lawyers, brokers, and escrows. All these entities do a lot of good, but in the long term, they cost a lot more and are sometimes not necessary. The use of smart contracts simplifies the process, clearing out all the many people needed to enforce a contract. This brings many benefits like speed, clarity, and precision with each contract.

Cost-efficient: On a rough estimate, it costs between $150 – $1000 per hour to hire a lawyer to look at your contract and work with you. (source?) This is quite expensive and might not be cost-efficient in the case of a business setting. Smart contracts are free as opposed to regular deals, and they also execute immediately once the terms that bind the contract has been fulfilled.

Autonomy: Smart contracts are self-sufficient; once they are entered into, the parties involved are not subject to external authority, only to the terms they agreed on. This feature also makes them free of manipulation, from either party, increasing the safety and security of contractual agreements.

Ever since the introduction of blockchain technology, smart contracts have been the highest form of its application. Added with its autonomous power, speed, and transparency, the potential for smart contracts to redefine the industry and the financial sector is limitless.

Smart contracts ultimately streamline traditional business logic by mapping traditional financial services and business conditions into the composition of smart contracts, as well as adding in external data or services, and (or) interoperation of other blockchains like identity and other verifications.

(3) Security, Privacy and transparency

These advantages also stem from the essential advantages of blockchain. For the unfamiliar, blockchain is a nascent technology that was originally created to support Bitcoin and cryptocurrency. In the simplest terms, a blockchain can be described as a data structure that holds transactional records while ensuring security, transparency, and decentralization. As its name suggests it is a chain of blocks—records of information that cannot be altered or controlled by any single authority.As DeFi protocols run on a blockchain they are protected, by the above features.

Typical DeFi projects

Although the majority of DeFi applications run on the Ethereum blockchain, the pioneer for DeFi is no doubt Bitcoin.

In bitcoin‘s white paper, one of the main goals expressed is “removing trusted third parties” stating that “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”. Bitcoin is essentially a way to a new monetary and financial system. In the post “Blockchain Brings Monetary and Financial Freedom”, it has introduced three internal factors of money: money form, money issuance, and the flow of money. Bitcoin is a cryptographic form of money, a PoW based money issuance standard, and a completely new money movement system. As money issuance is at the core of the monetary system beyond the financial system, so it is not part of DeFi. But money movement is an essential part of the financial system, and thus bitcoin is the original DeFi. Bitcoin opened the door to effectively challenge the monopoly of the central banks over monetary and financial systems.

Likewise, Ethereum is a platform for DeFi project, as well as some other public blockchains like Algorand, EOS.

In its narrow sense, DeFi refers to financial applications on blockchains. Below are some typical DeFi projects in summary:

(1) MakerDao

The MakerDao project is the contemporary success story for decentralized finance (DeFi). The project went live in December 2017, with DAI as the USD stablecoin and MKR functioning as the governance token. In the world of decentralized finance, MakerDAO is by far the most popular application running on Ethereum and has been steadily increasing traction since its launch.

(2) Compound

Compound is a typical blockchain-based borrowing and lending DeFi project.

Profound impact of DeFi

DeFi is essentially financial services mapped on blockchains. In other words, DeFi is the service set that would potential and gradually replace traditional financial institutions like banks. The war between traditional financial institutions and DeFi is inevitable. It will break the monopoly of traditional financial institutions and lower the cost of traditional financial service in some sense, relieve us from “financial salves”, leading to more financial inclusion, especially for the unbanked, and to more fairness and equality.

Authors:

Kun Hu, CEO of Blockchain.News

Editor: Lucas Cacioli