If you are still wondering why so many investors are going ga-ga over bitcoin, we suggest you read the excerpt Fortune published yesterday from a new book called The Blockchain Revolution, by Don Tapscott and his son Alex. The elder Tapscott is a prolific book writer – his works include The Digital Economy (1994) and Wikinomics (2006) – and a popularizer of technology topics. The Tapscotts’ enthusiasm for the latest tech craze may strike some as over the top, but they make the bulls’ case in clear and compelling terms.
Tapscott sees the blockchain technology that underlies bitcoin as solving one of the most fundamental problems of the Internet age – that of trust. The Internet allowed for instant exchange of information, but the exchange of value has been hampered by the absence of trust, and a need for trusted intermediaries – banks, credit card companies, PayPal, etc. – to certify value transactions. The blockchain’s distributed ledger solves that problem, and could, in the Tapscotts’ view, be the biggest boost to capitalism since double entry bookkeeping.
The blockchain “will profoundly affect people in all walks of life,” the Tapscotts argue. “Maybe you’re a consumer who wants to know where that hamburger meat really came from. Perhaps you’re an immigrant who’s sick of paying big fees to send money home to loved ones. Maybe you’re an aid worker who needs to identify land titles of landowners so you can rebuild their homes after an earthquake. Or a citizen fed up with the lack of transparency and accountability of political leaders. Or a user of social media who values your privacy and thinks all the data you generate might be worth something—to you. Even as we write, innovators are building blockchain-based applications that serve these ends. “
We will be publishing two more excerpts from the book this week, so stay tuned. Meanwhile, more news below.
• Trump Swings Left on Tax
Donald Trump performed a major about-face on tax in a move that could shore up support among his core base and contest the middle ground with his likely opponent in November, Hillary Clinton. In two TV interviews over the weekend, Trump retreated from his previous rhetoric about lowering taxes for all Americans and said he was open to raising taxes on the wealthy. “The middle class has to be protected,” Trump told NBC. “The rich is (sic) probably going to end up paying more.” It’s not a message likely to appeal to the higher ranks of the GOP, but it’s an intriguing indication of how the populist Republican may try to outflank Clinton on the left in the run-up to November. by positioning her as the defender of a privileged elite. That would be consistent with the tactic he has used to such devastating effect against his Washington-based rivals in the primaries. Fortune
• A Landmark Defeat for Uber, Lyft
The country’s two biggest ride-hailing companies are getting the next cab out of Austin, after the Texan city voted against allowing them to use their own screening systems. The two companies had spent more than $8 million inundating locals with ads, phone calls, texts, and mail to pass the so-called “Proposition 1”. Their failure means they’ll be subject to the same fingerprint-based background check as other cab services. Lyft said the rule makes it impossible for its peer-to-peer, part-time driver model to work. The vote shows how badly the string of stories about poor passenger safety–and its frequently tin-eared response to public concern–has hurt the image of Uber in particular. It’s particularly remarkable for coming in tech-savvy Austin, where the forces of innovation might have expected more support. But a 56%-44% margin is no accident, and the two companies will have to work hard to stop the established cab industry replicating this tactic elsewhere. Fortune
• A Changing of the Guard in Riyadh
Saudi Arabia replaced Ali al-Naimi, its long-serving Oil Minister, over the weekend, and appointed Aramco chairman Khalid al-Falih as his successor. U.S. oil majors and shale oil producers hoping for a change in Saudi policy to something more supportive of higher crude prices are, however, likely to be disappointed. Al-Falih was a supporter of al-Naimi’s decision in 2014 to raise output, depress prices and squeeze higher-cost producers out of the market, and he hasn’t said or done anything in public to suggest he’s changed his mind in the meantime. It may be some time before he achieves the oracular status that al-Naimi had after two decades at the top. Still, He’s obviously viewed as the safest pair of hands around by the new generation of Saudi leaders, who are plotting a long-term shift away from oil dependency. As such, he’ll be the man tasked with the gradual sell-down of the kingdom’s stake in Saudi Aramco, the world’s biggest producer, starting with its downstream businesses. Bloomberg
• Twitter Blocks Intelligence Agencies
Twitter has cut off U.S. intelligence agencies from access to Dataminr, a service they use to hunt for developing security threats, The Wall Street Journal reports, citing people familiar with the matter. The move adds to the tension between Silicon Valley and law enforcement, a tension that exploded in Apple’s dispute with the FBI over access to the iPhone of one of the San Bernardino shooters.Twitter owns about a 5% stake in Dataminr, the only company it authorizes both to access its entire real-time stream of public tweets and sell it to clients. Apparently, Dataminr had been providing its service to law enforcement for the last two years, despite a long-standing Twitter policy of not allowing third parties to sell its data to government agencies for surveillance purposes. WSJ, subscription required
Around the Water Cooler
• Temperatures Rise in Greece, Again
After months of foot-dragging and amid strikes and street protests, Greece’s left-wing government passed yet another raft of reforms to its tax and pension systems in an effort to unlock the next disbursement of funds from its 86 billion euro ($98 billion) bailout. The Eurozone’s finance ministers will meet today in Brussels to give the measures their blessing (or not) and talk about how, possibly, at some unspecified date in the future, pending the acceptance of further counterproductive austerity, they might offer debt relief to Athens in return for its swallowing the latest bitter pill. The reforms passed cover most of a fresh $6.2 billion austerity package demanded by the creditors. It’s worth noting that some of the measures included in the bill (or something close to them), were advocated by more than one government commission as far back as the 1990s, but were invariably shouted down by vested interests. Of all the pain that Greeks have had to endure, not the least is the knowledge that they had the chance to make the reforms themselves that are now being forced on them, at far greater cost, by outsiders. WSJ, subscription required
• The Drone Army of the Bean Counters
Another day, another sector under attack from drones. This time it’s the market for land surveys. Consultants PwC (better known as accountants) is set to launch commercial surveyor drones this week in Poland, according to the Financial Times. They’ll use high-res cameras, sensors and geo-locational devices to spot any defects in construction and assess external factors such as a building’s immediate environment. Why Poland? Because it’s the only country apart from South Africa to have fully developed regulations allowing both unrestricted commercial drone flights, and flights that go beyond their operator’s line of sight (the last being a key stumbling block in many other countries’ regulations). PwC estimates that the global market for drone use in construction and infrastructure alone could be worth $45 billion a year. Financial Times, metered access
• Takata’s Balance Sheet Puncture
Takata said it will post a net loss for the year (ending March 31) of around $120 million, due to the never-ending doom-loop of news about its airbag inflators. It had previously expected a profit of over $40 million. More than 50 million air bag inflators have already been recalled around the world due to the risk that they can inflate violently, spreading metal shrapnel into vehicle compartments. Such incidents have been blamed for 11 deaths and more than 100 injuries, mainly in the U.S.. The latest downward revisioin comes after an additional charge of 16.6 billion yen announced last week due to costs for recalls and to settle product liability claims. Takata has begun looking for a financial backer to help pay for the recall costs, sources have said. So far, most of those costs have been borne by automakers including Honda Motor Co, Toyota Motor Corp, and Ford whose cars are fitted with Takata airbag modules. Fortune
• Patriotism is the Last Refuge of David Cameron
British Prime Minister David Cameron is certainly not letting understatement come between him and his desired result in the U.K. referendum on leaving the E.U.. In a shift away from his usual Jeremiads on the economic risks of ‘Brexit’, he said in a keynote speech Monday that leaving the E.U. would raise the risk of war, by undermining the stability created by the bloc since its founding in 1957. Pushing ‘Remain’ as the patriotic option is a tough sell, unlikely to convince the elderly imperial nostalgists that are the most solidly pro-Brexit demographic. It also adds to a dubious list of claims that the PM’s team has used to scare voters into choosing to stay with the Devil they know, creating an air of desperation about a campaign that ought to be doing a lot better than it is, given the incoherence of the opposing camp. Recent polls show the ‘Remain’ camp struggling to push its lead out beyond the usual margin of error. The Guardian