TED talks became a bit like the ten biblical plagues crossbred with Genesis 1:28 (be fruitful, and multiply) and a strictly enforced scripted reality TV format: the plentitude of mandatory upbeat ideas worth spreading has even been infecting non-TED talks, some talked about ideas are strictly chemtrails for academics, many the presenters with their trained TED-stage personalities are almost as bad as the cloned startup pitchers churned out by the countless accelerators.

Still, I went to TEDx BerlinSalon on Democracy. And, really, it was worth it. Mostly because of one talk. Lawrence Lessig on HOW DIGITAL DESTROYED DEMOCRACY (not yet posted).

In a nutshell, his reasoning goes like this:

  • In the 19th century, elites governed, had (mostly) no idea what their subjects thought, and the people got their information from very fragmented local media.
  • In the 20th century, broadcasting mainstreamed cultures and opinions, George Gallup came up with statistically relevant polling methods, and governing included feeling the pulse of what’s happening in the minds of their people.
  • In the 21st century, we’re back to media fragmentation – but now combined with hyper-competition and a built-in feedback loop.

In the 19th century, the fragmentation of media was mostly defined by locality. Local competition, of it existed, may have been fierce – but, due to the immense CAPEX and OPEX was quite limited.

In the 21st century, media has morphed into opinion factories with potentially global reach. The limiting resources aren’t capital or allocable spectrum, but our limited attention span. Polarization not only shouts for attention, it does it by playing towards our tribal instincts. Us vs. them is the cheapest way to create a pretend-relationship – but comes at a price: it becomes a problem for democracy.


Lessig’s case is quite convincing. By locking tribes into micro-medial echo chambers, our societies loose their connecting tissue. We, the people, make sense about our surroundings, our lifes by story telling. That’s why media matters. Media is about helping us to connect the dots. And, compared to other ways, like a preaching every Sunday in a church, media scales very, very well – making it a core building block of societies comprised of millions and millions of people.  But if this building block is converted into trans-local tribalism, the effects are noticeably bad.

In true TED spirit, he had to attach a potential way out of the bleak conundrum we’re finding ourselves in. As there’s no way back to the broadly shared virtual fireplaces of 20th century broadcasting, he’s pointing towards a different democratic approach. His example: how Mongolia’s civil society is integrated into the political decision making process, thereby creating the missing “we” …

… but asking at the same time if a process like this might scale.

Lessig is brilliantly connecting the dots. But do I really subscribe to his diagnosis? Is it really the side-effects of digital, which are destroying democracy? Let’s not forget: the uniting factor of broadcast media is a quite double-sided sword. Nazi-Germany used their central control over broadcasting (and all other media) to destroy democracy quite effectively.

Granted: the ugly underbelly of the Internet is, yes, ugly. The bile of astroturfed tribes is poisoning all political conversations. Volume and frequency of the ugliness are deafening. But the tonality ain’t new.

Look at graffiti in Pompeji:

All the deadbeats and Macerius ask for Vatia as aedile.

Try the Lutheran Insulter, spouting out Martin Luther’s most over the top insults:

Even if the Antichrist appears, what greater evil can he do than what you have done and do daily?

For sure, the fake-media engines spouting partisan insults are not helping. Some of them are even directly based on Lessig’s diagnosis of same facts, different understanding. There are site operators catering to audiences to the right AND the left, reusing the same content, just changing a couple of words to change the bias.

But same facts, different understanding is the natural realm of the spinmeisters framing the story around the facts according to their paymaster’s needs, from climate change to tobacco smoke to gun control to however larger or small the issue may be.

Consequently, facts seem to have lost all meaning. If you can’t spin it, just use alternative facts.

But maybe the killer of the WE is not us living in our filter bubbles. Otherwise, the bile of Facebook comments and Twitter replies would not exist. In our modern technocracies, the WE is reduced to an incremental HOW.

Media, be it digital or printed or broadcasted, is always an echo chamber. Only resonating messages are amplified. By default, technocracy has no message to relay. Look at the EU. A war-torn continent uniting itself, a mind-boggling political project if there ever was one. A decade of populist onslaughts may well have ended in the demise of it. Was this driven by digital fragmentation? Most likely not.

Since ages, British print tabloids are masters of polarization. Pushing for BREXIT came as a natural to them (digital? well, not really.).

The most relevant effect as of so far for the EU: it’s finally finding a WE. For now, the populist successes of BREXIT and Trumpism is drawing Europe closer together, opening political talks way beyond the technocratic.

In the US, the situation is a bit different. The flag-waving WE was way to weak to cover the structural imbalances any longer.

Successful populists leverage any kind of media. The Commander in Tweet is not the result of a development in communications technologies.

Bitcoin = Platform 9 3/4

You want to learn what this Bitcoin thing is really all about? Try this well written introduction: Bitcoin: It’s the platform, not the currency, stupid!

Bitcoin: the Nakamoto Express into the digital future is leaving now.
Bitcoin: the digital Hogwarts Express is leaving now.

A tl;dr might go like this: the crypto currency express is leaving now. Please take your seat and learn your magic – or stay a muggle.

No, really. As Arthur C. Clarke wrote in his third law of predictionAny sufficiently advanced technology is indistinguishable from magic. And if you follow the arguments of two authors of the study, you will probably want to board the train to a virtual Hogwarts ASAP.

The authors know pretty well what they are talking about: Sander Duivestein is a software engineer and works at VINT, the trendwatching think tank of Sogeti (which is a subsidiary of french IT giant Cap Gemini S.A.). His co-author Patrick Savalle is the founder and technical director of Mobbr, a brand new payment platform for network economics, based in the Netherlands.

They start with a nice intro why the current trend of economist debunking Bitcoin is not Hogwarts, but hogwash. Like Alan Greenspan asking for its intrinsic value, just seeing a bubble. As his contributions to the Great Recession are quite undisputed, the verdict of the co-creator of the largest financial bubble of the history of finance could have some weight.

But Duivestein and Savalle treat the aging economists quite nicely (There is a lot of confusion about bitcoin.) They could have quoted Clarke’s first law.  When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.

But they do explain to everybody, what the real, technological impact is.

Thanks to the Bitcoin protocol (crucially distinct from bitcoin, the currency it underlies), for the first time in history it is possible to transfer property rights (such as shares, certificates, digital money, etc.) in a fast and transparent way, which cannot be forged.

Moreover, these transactions can take place without the involvement of a trusted intermediary  such as a government, notary, or bank. Anyone who fully appreciates these attributes will immediately acknowledge the tremendous value of Bitcoin.

It’s the platform, stupid! And this platform can have some serious implications for anybody’s way of doing business. Just have a look at the all the oversized successes of the Internet economy. What do Twitter, Facebook, Google, Yahoo have in common? They are media businesses. Their business model is advertising, meaning: they have found no intrinsic way to make users want to pay for the services they render. More than one eight of the world population uses Facebook quite extensively. But they need to extract their value exclusively from third parties.

Or look at the posterboys of the sharing economy, like AirBnB, Uber, Lyft. They are all highly centralized businesses, which outsource the grunt work to some local drone (who might even get sued for making a couple of Dollars or Euros on the side). I love AirBnB. But as a company, they’re the 1% of the digital Uberclass.
Bitcoin pioneers a different model: everyone becomes a stake- and shareholder in this new networked economy.

Bitcoin is key to the success of the Collaborative Economy. Bitcoin enables a frictionless and transparent way of sharing ideas, media, products, services and technology between people without the interference of corporations and governments.

It’s ideas like the DAC (Digital Autonomous Corporation, or Community), the Decentralized Application (DA), which are driving the process. Sometimes a bit wild-eyed. But hey, Bitcoin shows a valid path: it’s a completely bootstrapped economy, still in beta and its infancy, with a market cap of 10 bn USD (not counting the capitalizations of the startups and businesses – just the money rolling around in the system).

In a system like this, ownership rights can flow through the Internet like ‘normal’ content (from e-mail to video streaming) already does. And no one can dispute or counterfeit who has ownership. It is safe, transparent, and mathematically secure.

What we see is an emerging commercial operating system, on top of the global communications layer the Internet already offers.

What we enter, is a totally unchartered area. At the Inside Bitcoins-conference in Berlin, even the crypto-savvy lawyers talking about “Emerging Issues in Regulatory Compliance and Law Enforcement Efforts” were a bit out-of-bounds, when asked about the legal ramifications of DACs and DAs. Think about an autonomous soda machine and …

… who exactly is legally and economically responsible (say, if someone were to get sick from a can of soda from one of these machines, for example).

So why touch crazy stuff like this anyway? Duivestein and Savalle have a historic answer:

In 1937 Ronald Coase published a groundbreaking article, The Nature of the Firm. In it he posed a very simple question: “Why do firms exist?”.

In his research he came up with the concept of transaction costs to explain the nature and limits of firms. Companies exist primarily because the underlying coordination mechanisms of the market aren’t perfect.

According to Mitt Romney, corporations are people (which sounds nicer than saying corporations are oversized homunculi). But the basic idea is already nicely embodied (sic!) in the English term “incorporating”: you give a transactional structure a legal body (sic!). Coase gave the answer to the nowadays mostly unasked question why we are doing that. Yes, deflecting liabilities can play a role here. But at its core it’s all about transaction costs.

Young Harry entering Hogwarts.
Young Harry entering Hogwarts.

Of course, the crypto currency based democratization of money and finance can be a scary thing as well.

Like any powerful technology, Bitcoin can either be seen as a Pandora’s box, or as a step towards Utopia. Bitcoin just obeys the First Law of Technology:“Technology is neither good nor bad; nor is it neutral”.
Asking yourself whether Bitcoin will fail is like questioning yourself whether technology can be “un-invented”.

If you accept that there’s magic, you may ignore it at your own peril. Even if you hide all evidence in a tiny cabinet under your stair case, you might still end up as a pigtailed Muggle.

It is much better to experiment and innovate with this new platform. 

And not just that. Becoming an active participant means you can shape this really new economy. Because, to stay in the metaphor: The “You-Know-Who” and “He-Who-Must-Not-Be-Named” will there be present  as well, not just young Harry and his merry band of friends.

So, let’s end with Clarke, again, quoting his 2nd law of prediction. Please don’t forget: he was a prediction pro. In 1945, as a Sci Fi writer, he proposed the rather farfetched idea of putting communication satellites into a geostationary orbit, now sometimes nicknamed the Clarke Orbit. Farfetched, because it took another 12 years until the Russians launched Sputnik (first satellite ever) and another seven years for NASA to launch Syncom, the first geostationary communications satellite.
So, what is Clarke’s final advice:

The only way of discovering the limits of the possible is to venture a little way past them into the impossible.

Bitcoin raised this bar already to quite some extent.

To Alt or Not to Alt

Bitcoin sucks. No, seriously. Mining is so energy hungry, that the whole system has to have been conceived by a bunch of climate change deniers (which might even be true). The clients look like the wet dreams of calcified COBOL programmers. And even worse: voodoo chart analysts are already refocusing from NYSE data to MtGox exegesis.

"On the Internet, nobody knows you're Satoshi Nakamoto."
DogeCoin yerselp, me invented Bitcanine.

Bitcoin is great. No, seriously. If you don’t believe me, ask Marc Andreesen (he who did put a nice face on the webs, so that everybody can use it). Now he thinks, that Bitcoin matters and wrote everything up in a must read New York Times OpEd (which true Bitcoin enthusiast are already nitpickingly try to dissect).

It matters, because …

… Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.

This may sound a bit unwieldy. But, as he says: The consequences of this breakthrough are hard to overstate.
Let me repeat this one more time:
The consequences of this breakthrough are hard to overstate.

This may sound a bit strange, if you look at the most popular crypto currency use cases of today, currency and asset. But, as stated before: there are so many more things you can do with a distributed crypto ledger.

Bitcoin is a lot of things. But definitely not perfect (see above). So how about looking for competing technologies? Depending on the use case, Litecoin seems to have some advantages over Bitcoin – and already a quite sizeable followership. nxt claims eco-friendly mining, because of its 100% proof of stake (PoS) mechanism versus the proof of work (PoW) mechanism other coins are based on. The upcoming Ethereum plans to overtake Bitcoin as a platform by offering a sufficiently powerful Turing-complete scripting language on top of all things crypto. Says Ethereum:

Up until this point, most innovation in advanced applications such as domain and identity registration, user-issued currencies, smart property, smart contracts, and decentralized exchange has been highly fragmented, and implementing any of these technologies has required creating an entire meta-protocol layer or even a specialized blockchain. Theoretically, however, each and every one of these innovations and more can potentially be made hundreds of times easier to implement, and easier to scale, if only there was a stronger foundational layer with a powerful scripting language for all of these protocols to build upon. 

Of course, there are some strong arguments to build your application on top of the Bitcoin platform as well. The ColoredCoins guys explain:

An alternate cryptocurrency could be specifically designed to transport colored coin values.  However, Bitcoin has the largest hashing pools, which means Bitcoin is more secure and reliable.  An alternate cryptocurrency would have  very hard time providing the secure and stable distributed computational network that Bitcoin provides.

So many pros and cons. What would Andreesen do? I asked him a slightly leading question.
And that’s his clear and concise answer:

The power of Bitcoin lies in the network. Not just the physical network (which is already pretty impressive by itself). But the network of people involved. It’s not the tech specs of Bitcoin you have to beat. It’s the mindshare, the user base, the developers working on new stuff, the entrepreneurs finding new use cases.
And looking at some of the newly minted altcoins, all scepsis seems mostly valid. Pump and dump scams trying to attract altcoin-forex investments into cloned currencies of rather dubious value compete against more serious contenders with silly names like Dogecoin and potential gamechangers like the aforementioned Ethereum.

Of course Andreesen knows just too well, that sheer dumb numbers can easily kill any more aptly contender: the browser wars were decided by Internet Explorer’s preinstalled Windows masses, not Netscape’s superior technology. So he goes now by George Santayana Those who cannot remember the past are condemned to repeat it (and surfs the Bitcoin wave).

Not all metaphors are created Turing-complete. IE may have killed Netscape. But the three browser musketeers Firefox, Chrome, and Safari finally pruned the mighty Richelieu of HTML. And only if you’re a teensy weens altcoin, the mighty incumbent is BIG Bitcoin. For everything else, there’s VISA and MasterCard.

Jurassic Print

Vor vielen, vielen hundert Jahren, als das Internet sich grade selbst erfunden hatte, plante ein sehr grosses, sehr gelbes Unternehmen unsere damals noch sehr getrennt-deutsche elektronische Medienzukunft. Dicke Fernsehkabel würden Datenströme in Bildtelefonfernsehgeräte pumpen, unter Aufsicht wackerer Beamter. Dann kam alles ein wenig anders. Die elektronische Hälfte des grossen Gelbes bekam ein magentafarbenes Börsenmäntelchen, dem die EU dann die dicken Fernsehkabel wegnehmen wollte. Das komische Interdings rock’n’rollte über die putzige Bildtelefonfernsehgerätiedee und von der DDR blieben nur noch Rotkäppchensekt, ein paar schlecht konservierte Mauerreste und entindustrialisierte Unkulturlandschaften übrig (von schwäbisch besetzten Zonen wie dem Prenzlauerberg natürlich mal abgesehen).

Um den Übergang von “so stellen wir uns das vor” zu “so war das aber nicht geplant” gut zu kaschieren, gab es damals eine Handvoll begleitender Massnahmen. Als Solidarprojekt für notleidende Baukonzerne (West) wurden die entvölkerten Innenstädte des Ostens in Referenzprojekte für die innerstädtische Sanierung entvölkerter ostdeutscher Mittelstädte verwandelt. In Sachen Gelb war gestern, die Zukunft ist Magenta, raste der ehemals volks- ähm staatseigenen Betrieb an die Börse, um zukünftiglich Eigentum von Volksaktionären und dem Staat zu sein.
Um die Werthaltigkeit dieses neugefärbten Riesen nachhaltig zu befördern, wurde er vorübergehend vor der bösen EU-Regel geschützt, als ehemaliger Staatsmonopolist entweder die TV- oder die Telefondrähte abgeben zu müssen.

Lange Rede, kurz gefasst: gut zehn Jahre lang lassen die Magenta-Manager ihr ungeliebtes Kabel am ausgestreckten Arm verhungern (wer investiert schon in die künftige Konkurrenz?). Die Aktienkursentwicklung seit Start ist trotzdem nachhaltig magentafarben.
Als Kollateralschaden bleibt uns eine Breitbandinfrastruktur mit dem Status “quasi-albanisch, ausbaufähig”.

Acta est fabula, wie der Asterix-Humanist weiss. Vorbei ist vorbei. Kann uns so heute nicht mehr passieren. Oder? Fast Forward 2013. Die deutsche Medienindustrie singt der Politik ihr Retro-Requiem. Das verwurstelte Urheberrecht, dass sich ein wenig um die Rechte der Urheber und ganz viel um die Rechte von Lizenzauswertern dreht, hat einen kleinen Bruder bekommen. Das Leistungswurstrecht (oder so ähnlich) dient als Arbeitsbeschaffungsmassnahme für Medienrechtler und Existenzberechtigungsbescheinigung für die Wirksamkeit von koordinierter Lobbyarbeit und der Wirksamkeit klassischer PR in klassischen Medien. Kann sein, dass nebenbei ein wenig Porzellan zerbrochen wird. Aber das sehen wir dann in 20 Jahren.

Tatsächlich mag es sich bei diesem Kuriosgesetz um eine Art Testballon halten. Denn weil die grosse, böse Welt auch nicht vor deutschen Medienmillio- und -milliardären halt macht, muss nun der Regulator ran. Auf dem DLM Symposium, einer höchst ehrbaren Veranstaltung, überkommt den Beobachter das Zittern. Wird der Plan von Pro Sieben-Sat.1 in ihren linearen Programmen regionalisierte Werbung schalten zu wollen wirklich das deutsche lokale Mediengefüge wie ein Kartenhaus zum Einsturz bringen? Gottseidank wurde die Technologie schon zwei Dekaden lang in US-Kabelnetzen geprüft, bevor man sie hier wegregulieren kann.
Noch mitreissender allerdings die Idee, notleidende Druckwerkserzeuger in eine Art Hartz-Print-Hospiz zu überführen. Freilich nicht mit der Gieskanne soll die Staatsknete staatsfern verteilt werden, sondern zielgerichtet. So anderthalb Milliarden per Anno, nach Beispiel Frankreich, wären schon ganz ordentlich.

Zwangsernährung nur für bleischwere Medienriesen? Das geht natürlich nicht. Man vergesse bitte nicht den lokalen Rundfunk. Auch Guten-Morgen-Ronny will subventioniert sein, und erst recht der brave Lokal-TV-Mann. Der ist gerade in Deutschland ganz besonders internetmedienhausaffin: auch ihm fehlt das funktionierende Geschäftsmodell, und das schon mindestens so lange, wie manch ein selbstausbeutender Blogger alt ist, was fatalerweise dazu führt, das zur Selbstausbeutung neigende Nachwuchsmedienmenschen heute lieber cool bloggen, als uncool in unbezahlten Überstunden Sende- oder Seitenstrecken zu füllen.

Was fehlt bei der Diskussion um das Notopfer Print, diesen demokratienotwendigen Erhalt von Formatradio und Zeitungsausträgern? Nichts. In Perfektion braucht das hier angelegte System weder Urheber (Kostenfaktor) noch Publikum (es sei denn zur Rechtfertigung). Das Ziel ist Jurassic Print: ältliche Mediendinos vor der grossen, bösen Welt der digitalen Säugetiere beschützen.

Publishing is Social Media

After having had a talk with one of our German homegrown publishing tycoons, my friend Ibo posted a comment on his Facebook, which lead to a lively discussion: the publisher did complain a bit about Google, sounding quite awestruck at the same time. How they delievered all those world-changing innovations, and how the publishers lost their grip.

Then, Ibo asked the guy about his Social Media budget for 2013. The publisher says: north of 300k€.
Which would be a lot of money to spend on, let’s say a toddler’s birthday bash. But maybe not as the Social Media budget for a publishing powerhouse. Or maybe it’s just fine. Or maybe Social Media is overrated anyway. So the online discussion goes back and forth.

But seriously, the scary thing is: as a news and magazine publisher, he should be already heavily invested in Social Media. His core business is to enable social communications. Only his technology stack seems a bit outdated: it scales nicely up, but not really down to the individual level.

See, publishers are not an editorial office with a print shop attached. Mostly, they feel other way round: a printing business, with extra value added by employing some pricey editors.
For both perspectives, the outlook is rather grim. If all you can contribute to society is either a pile of printed matter (the latter) or a dedicated staff of n producing a pile of paper on a regular basis (the former), you are already off track.

Publishing is the business of sounding off and shaping a public’s opinion. Sounds an awful lot like what you can accomplish with the online tools of the trade.
And the sad truth is: publishing houses are technologically challenged Social Media providers with an identity problem.

O Sony, where art thou?

Remember Sony, inventor of mobile music (the Walkman, if you’re generation iPod), makers of shiny gizmos and all things transistorized? Yesterday, I spent one hour at Sony’s press conference T IFA Berlin, where all manufacturers and lovers of home electronics gather since the days when television was the next big thing and very much black and white.

What’s the big deal? Sir Howard Stringer smoothely presented the vision of the wholly integrated media and entertainment empire. Hardware, content, and distribution, all under one roof. Now, what’s missing here? Right: Software. Entertainment hardware is almost a commodity. The differentiator is software and the User Interface. Why? Look at your smartphone, your tablet, your smart tv: big shiny screens, with slightly different form factors.

The new Sony tablet has a nice new form factor. But turn it on, and it’s an Android device. The new smart TVs look definitely nice. Turn it on, and it’s an Android device. Boot a Sony PC: hello Microsoft Windows. Start the Playstation: it’s a Sony.

Sure, you still could find a way to combine all those different worlds. Integrating all battling units into one large consumer unit sounds like a smart and ambitous move.
But the press conference mostly proved, that running a vertically and horizontally and however else integrated empire is not a silver bullet. One hour with three talking heads, from smoothely presented CEO vision to well rehearsed droning on features of products with gripping names like XYZ-123 is definitely nothing I would expect from a media empire with a gazillion tv, movie, and music superstars in their employ. Text to speech in front of a smurfish-blue background does not substitute for an entertaining event. And I won’t start to compare this hour with the product presentations of a certain Man in Black.