Technology

Suppose, just for a moment, just for argumentsake, that (some) cryptocurrencies are not a giant scam, and whatmore, they&re not just another kind of financial asset. Come on. Don&t look at me like that. Work with me here. Imagine, just for a moment, that there exist plausible futures in which they matter.

An interesting question to ask is: what exactly do those futures look like Because if we can&t come up with any compelling answers, then we may conclude, by reductio ad absurdum, that a cryptofuture is awfully unlikely. So letwalk through a few scenarios, shall we And then judge how likely each one is.

1. The Crypto Maximalist Future

Situation: Bitcoin is the global currency. Except for &System D,& of course, and transactions hidden for reasons of tax avoidance, which run on ZCash, which is (ineffectively) banned by governments who fear the loss of their tax revenue from earned income hidden by zk-SNARKs. All retail transactions run through Lightning hubs, constantly watched and verified by AIs.

People maintain their own private keys, without which all of their life savings effectively vanish. These keys also maintain all of their own personal data, which they approve for usage by dapps on the Ethereum &world computer,& which performs billions of transactions per second courtesy of Plasma and (again) AIs monitoring the system with fraud proofs at the ready.

Fiat currencies died of hyperinflation. Banks died with them. Nation-states are on life support., and the new generation prefers statelessness to any citizenship. The world is increasingly controlled by a weird combination of libertarian Bitcoin seasteaders and communal Ethereum hacker collectives, who name themselves &phyles& after Neal StephensonThe Diamond Age, but call this The Crypto Age.

Likelihood: essentially nil, for many, many reasons, such as: The overwhelming majority of people don&t want to maintain their own private keys, and if you don&t maintain your own private keys, cryptocurrencies are essentially no different from fiat money held in banks, except for the many ways (such as the irrevocability of transactions) in which they are wildly inferior. Credit and cryptocurrencies play poorly together. Most people want strong governments, and strong governments want to control their own currencies, meaning, with only one small logical remove, that most people want fiat currencies. Deflation is actually bad. Etcetera etcetera etcetera etcetera etcetera. I mean come on people.

2. The Wall Street Crypto Future

Situation: Ordinary people don&t use cryptocurrencies. Why would they But the financial world has gone full crypto; you always go full crypto. Stocks live only on the Ethereum blockchain. Bonds, too. Anyone who can qualify for a &security token& — a proof of your identity and valid investordom — can trade any stock, and any bond, in any market, from any country, anywhere in the world, in near real time, without asking for permission. Mostly via fully decentralized exchanges, though in certain markets centralized ones still have their advantages. Few people do it directly, though; their stock AIdvisors handle it for them.

Bitcoin is the global settlement and reserve currency; nobody cares about gold any more. Your credit card may be charged in dollars but that money is promptly converted to Bitcoin, and some satoshis are sent to the card issuer and the merchant bank (in a single transaction) before being converted back to dollars and sent to the vendor — the Lightning fees are so tiny, courtesy of the volume being so immense, that this is cheaper than the alternative. Ordinary people still don&t even know what Lightning is but the payment channels which connect banks, both within and between nations, pulse with hundreds of millions of dollars every single day.

Likelihood: slim to none. I personally see the irrevocability of crypto transactions, and the awkward &how do you provide cryptocurrency credit& issues as twin dealbreakers here — but I&m an engineer not a financier, so you could maybe persuade me that I&m wrong. We can at least see some of the advantages of cryptocurrencies here; why squander fortunes on running and maintaining hundreds to thousands of various financial databases and messaging buses around the world, when in theory we could have … well … one

3. The Dapper Dapp Future

Situation: Financially, cryptocurrencies are just an asset class and a counterculture, but tokenized &fat protocols& powering decentralized apps have conquered the Internet. Facebook, Twitter, and increasingly even Google have been replaced by vast peer-to-peer networks in which processing and data are coordinated and optimized in real time by token transfers orchestrated by AI proxies. The rules of these systems are determined by frequent votes, which, again, are tokenized.

All of your personal data is packetized in many redundant tranches scattered across the Internet, protected by your private key(s) and various aspects of it are made available to services that wish to use it only as and when you or your proxies approve that access. You are rewarded with tokens for this access, which can then spend on other services. You maintain a portfolio of hundreds, sometimes thousands, of different kinds of tokens, and your AI proxy frequently trades between them so as to optimize this portfolio for your behavior.

Similar tokenized protocol infrastructures are beginning to creep offline and to organize meatspace projects, too, ranging from hardware development to massive-scale art collectives to urban planning and the transformation of entire cities. Token economics increasingly govern all of human behavior.

Likelihood: Yeah I don&t think so. I concede that in its way itan inspiring notion, but: most people want and like centralized solutions, which give them an authority to complain to, and to introduce and enforce rules, without having to vote on every single administrative detail of every network they connect to. (California ballot propositions are bad enough; imagine having to deal with their equivalent every day.) Dapps are by their very nature more complex, more fragile, and harder/slower to evolve than capps. (Imagine having to fork every time a feature changes. Now imagine some of those being hard forks.) Rewards to decentralized users are trivial — Facebook makes maybe $10/user/quarter, which is, to understate, not enough reward for the hassle of decentralization. Centralized solutions also have the advantages of things like &economies of scale& and &data centers which are more efficient than personal computers& and &databases which are vastly more efficient than blockchains.& And nobody wants to have to keep track of a portfolio of hundreds of different kinds of tokens no matter how useful their AI assistant may become.

4. The Global Crypto South Future

Situation: North America and Europe still use dollars and euros. Wall Street still uses its own systems, though it dabbles some in crypto assets. Facebook still rules the social media of the wealthy world. Cryptocurrencies are an afterthought, a curiosity, a fringe investment.

But the global South is different. Venezuela and Zimbabwe were the first to replace their currencies with cryptocurrencies that literally cannot hyperinflate. (I.e. a real cryptocurrency, not Venezualawhat-even-is-that recent grotesquerie) Others soon followed; it was an easy and natural evolution from M-Pesa, Orange Money, and the like. There were some catastrophic failures in the early days, eg the BGP attack that took out most of the miners / validators of the Ethiopian cryptobirr and enabled a successful 51% attack that made a few hackers very wealthy at the expense of Addis Ababatreasury, but a few hard forks and version 2.0s later, stable prosperity was achieved.

The local stock and bond markets followed. As did the local Internet, where bandwidth costs far greater than those of the USA, plus the relatively greater size of potential dapp rewards, led to efficient local dapps, mostly using national cryptocurrencies (which can be traded for one another in real time on a vast decentralized exchange of atomic cross-chain payment channels), which have all but replaced centralized Western local services. Nowadays when Zimbabweans visit London and New York they&re taken aback by how backward those legacy financial systems seem.

Likelihood: I&m going to go out on a limb here and suggest that this is actually plausible. Not likely, necessarily, but plausible. In New York and London and Toronto and Paris, deflationary cryptocurrencies and real-time cross-country payment channels are basically solutions looking for a problem; I&d rather just use any one of my several no-international-usage-fees credit cards in Paris, and get the bonus miles / points, the ability to contest and reverse charges, the credit float, the extended warranty and other card bonuses, etc., rather than transact with the &global currency& Bitcoin over a Lightning payment channel, as cool as that sounds. But when you don&t have the mature, rewards-laden international payment system to hand, when you&re treated as suspicious and denied credit just because you&re from the most populous country in Africa, when your national currencyinflation rate crosses double digits heading for triple … then, suddenly, the calculation looks very different indeed.

5. The Crypto Counterculture Future

Situation: Bitcoin did not conquer. Ethereum did not conquer. Tezos did not, EOS did not, Hashgraph did not. People around the world use credit cards, US dollars, euros, reals, yuan, etc., just as they always did. Wall Street might use some private / permissioned blockchains, as may some supply-chain enterprises, but their effect consists of an uptick in enterprise efficiency and a decrease in some costs, not the global revolution we were promised.

…That is, for 98% of the population. 2% however, are different. Maybe because they&re libertarians who mistrust the government, or hackers fascinated by the technology, or because they believe in the prospect of a better world. They&re willing to go through the struggle of dealing with private keys, funding payment channels, acquiring tokens to set up and pay for dapps and federate their data, and so forth. Only 2% of the population. But worldwide, that means 140 million people.

Only 140 million people use uncensorable, independent, decentralized social media. But thata big enough number that it means censorship doesn&t really fly on centralized media, either, because it can be transposed to the decentralized alternative. Only 140 million use cryptocurrencies for their day-to-day expenses and long-term savings. But thata big enough alternative to keep national currencies honest, because they know that if they start to degrade, a viable alternative already exists, and if the pain of centralized fiat money grows great enough, people can and will move to that alternative. Only 140 million people use permissionless systems; but thatenough that if you get locked out of or kicked out of your nationpermissioned infrastructure, therean alternative that you can adopt without your life being entirely ruined.

In short, only 2% of the population use cryptocurrencies … but that 2% performs an enormous service for the other 98%, by keeping censors, and governments, and central banks, honest. Providing a viable decentralized alternative, in and of itself, mitigates many of the flaws of centralized systems. It could be, actually, the best of both worlds.

Likelihood: Call me an optimist, but I think this is the most likely outcome of all.

Every once in a while, a college student or recent graduate dares to launch a robotics startup and . . . everything goes as well as could be expected. Such is the case, for example, with Alex Rodrigues and Brandon Moak, two former University of Waterloo students who worked on self-driving technologies together in college and formed their now venture-backed, self-driving truck company, Embark, instead of graduating. (Originally called Varden Labs, the startup’s trip through Y Combinator undoubtedly helped.)

Still, to capture the sustained interest of robotics investors, it helps to either have experience in a particular industry or to pull in someone, quickly, who does. That much was established yesterday at UC Berkeley, when three veteran investors — Renata Quintini of Lux Capital, Rob Coneybeer of Shasta Ventures, and Chris Evdemon of Sinovation Ventures — took the stage of a packed Zellerbach Hall to talk about where they’ve invested previously, and where they are shopping now.

Though the three expressed interest in a wide range of technologies and plenty of optimism about what’s to come, each lingered a bit on one point in particular, which was the difficulty robotics founders face who are completely unfamiliar with the particular industry they may hope to reshape with their innovation.

Quintini on how comfortable she and her colleagues at Lux are when it comes to backing recent college graduates:

What we care the most about what is your unique insight and what do you know about tackling a certain market or problem that’s not obvious or easy to replicate. In some cases, it’s very fair for someone right out of university who finds a technological breakthrough and . . . that breakthrough alone is understandable and comprehensible to the market and it’s a very backable company, and we’ve done that in the past.

But in some cases, and you’ve heard today, [CEO] Patrick [Sobalvarro] from Veo Robotics speak — and [Veo is] actually giving robotic arms perception sensors to allow people and robots to work together — all his insights came because he came from industry. He was at Rethink Robotics; he’s been in the robotics industry, selling to people who use robots as part of the manufacturing process. And so he actually understands the importance of safety and the selling of those systems to customers. Because he knew that, it made a big difference in how he approaches his go-to-market strategy and how he approaches building a product. And somebody who’s just thinking about, ‘Oh, let me figure out the technology and how to understand when a human is close or not’ and who didn’t think about the other angle wouldn’t be so successful or differentiated in our opinion.

Coneybeer sounded a similar tone. In fact, when asked if he felt there were other overlooked opportunities like that identified by Veo — which is refitting existing robotic arms, rather than trying to remake them from scratch — Coneybeer said the most attractive thing of all to him are startups in search of a problem that actually exists: 

What we’re very cognizant of is people who love robots and are trying to invent a market or invent a need and kind of force fit it, as opposed to people who understand a need and are using robotics as a tool to truly solve that need. That’s a really key differentiator.

We directed an entirely different question to Evdemon, about how Sinovation thinks about domestic versus industrial robots and whether it expects to commit more capital to one or the other. But Evdemon first took the time to note that the problem of founders who don’t know their industries is a very big one, and deserved more discussion:

Chiming in to what Renata and Rob were saying, you understated [the issue]. The majority of the teams that we are looking on both the consumer and industrial robot [worlds] at the moment are more of a technology trying to find a fit in the market, and that’s obviously a very big problem from a venture point of view.

We also see a lot of teams that are fresh out of school, usually a supervising professor with a couple of his or her PhD students having come across some kind of technological breakthrough in university and trying to commercialize that. But robotics are all about what sectors they are being applied to. An ag tech team that knows nothing about agriculture, or a security robot that has a team that’s come up with a great computer vision breakthrough around security issues but that has no idea how the security industry in the U.S. or other parts of the world is structured, is obviously not a good starting point — at least not from a business-minded point of view.

And all of these companies run across tremendous difficulty when it comes to sales. Complementary of teams and market fit [both, are] important for [students] who are thinking about such a move straight out of school.

There isn&t a software company out there worth its salt that doesn&t have some kind of artificial intelligence initiative in progress right now. These organizations understand that AI is going to be a game-changer, even if they might not have a full understanding of how thatgoing to work just yet.

In March at the Adobe Summit, I sat down with Adobeexecutive vice president and CTO Abhay Parasnis, and talked about a range of subjects with him including the companygoal to build a cloud platform for the next decade — and how AI is a big part of that.

Parasnis told me that he has a broad set of responsibilities starting with the typical CTO role of setting the tone for the companytechnology strategy, but it doesn&t stop there by any means. He also is in charge of operational execution for the core cloud platform and all the engineering building out the platform — including AI and Sensei. That includes managing a multi-thousand person engineering team. Finally, hein charge of all the digital infrastructure and the IT organization — just a bit on his plate.

Ten years down the road

The companytransition from selling boxed software to a subscription-based cloud companybegan in 2013, long before Parasnis came on board. It has been a highly successful one, but Adobe knew it would take more than simply shedding boxed software to survive long-term. When Parasnis arrived, the next step was to rearchitect the base platform in a way that was flexible enough to last for at least a decade — yes, a decade.

&When we first started thinking about the next generation platform, we had to think about what do we want to build for. Ita massive lift and we have to architect to last a decade,& he said. Therea huge challenge because so much can change over time, especially right now when technology is shifting so rapidly.

That meant that they had to build in flexibility to allow for these kinds of changes over time, maybe even ones they can&t anticipate just yet. The company certainly sees immersive technology like AR and VR, as well as voice as something they need to start thinking about as a future bet — and their base platform had to be adaptable enough to support that.

Making Sensei of it all

But Adobe also needed to get its ducks in a row around AI. Thatwhy around 18 months ago, the company made another strategic decision to develop AI as a core part of the new platform. They saw a lot of companies looking at a more general AI for developers, but they had a different vision, one tightly focussed on Adobecore functionality. Parasnis sees this as the key part of the companycloud platform strategy. &AI will be the single most transformational force in technology,& he said, adding that Sensei is by far the thing he is spending the most time on.&

Photo: Ron Miller

The company began thinking about the new cloud platform with the larger artificial intelligence goal in mind, building AI-fueled algorithms to handle core platform functionality. Once they refined them for use in-house, the next step was to open up these algorithms to third-party developers to build their own applications using AdobeAI tools.

Itactually a classic software platform play, whether the service involves AI or not. Every cloud company from Box to Salesforce has been exposing their services for years, letting developers take advantage of their expertise so they can concentrate on their core knowledge. They don&t have to worry about building something like storage or security from scratch because they can grab those features from a platform that has built-in expertise and provides a way to easily incorporate it into applications.

The difference here is that it involves Adobecore functions, so it may be intelligent auto cropping and smart tagging in Adobe Experience Manager or AI-fueled visual stock search in Creative Cloud. These are features that are essential to the Adobe software experience, which the company is packaging as an API and delivering to developers to use in their own software.

Whether or not Sensei can be the technology that drives the Adobe cloud platform for the next 10 years, Parasnis and the company at large are very much committed to that vision. We should see more announcements from Adobe in the coming months and years as they build more AI-powered algorithms into the platform and expose them to developers for use in their own software.

Parasnis certainly recognizes this as an ongoing process. &We still have a lot of work to do, but we are off in an extremely good architectural direction, and AI will be a crucial part,& he said.