Deepfakes in real time have become famous because they allow a person to impersonate a celebrity by making him say what he wants.

but it also allows a person to say anything hiding behind an ordinary person, a sort of “videoalias”.

to know who says what, it is no longer enough to simply watch a video while listening to the voice of the speaker. seeing is no longer believing.

like today we don’t trust a piece of news written in a twit but we look at who writes it, soon we won’t trust what we see anymore, the context will be relevant for the message; we will have to know who produced it and who proposes it to us. for videos, the publisher will increase in importance.

for applications where you need to know that a specific person is who they say they are, you will need to tie the content to the process that produced it.

this may lead to integration in browsers of a software component that allows a person to authenticate with a certified digital identity (like the eIDAS scheme), enriching video metadata in a way similar to digital signature.

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Today I participated in a breakfast meeting of the Bruno Leoni Institute on the subject of taxation of digital income . (Unfortunately, I arrived late).

But the speaker was my friend Massimiliano Trovato; we know each other’s theses very well (we know very well what is the microdetail that divides us and from which our different points of view derive) and I could make my own argument (as a contribution from the public) without leaving the theme.

IMHO, as you know, we are facing a new type of income and as such should be treated (explanation).

Then a man intervened from the public; I don’t know precisely his role but he introduced himself as a representative of one of the GAFA. He exposed the usual paraphernalia of justifications on why it is good to do nothing on the taxation front. Nothing new, really; we’ve heard this tune from them for many years.

He also made a statement about a very “old economy company” that I know well; I told him things were not as he was saying and he replied laughing in my face.

I did not fail to point out his rudeness. At first he said that it was not true (but the session is recorded) then he apologized. I said I received his apology.

But I cannot consider that a statement of apology for a gesture of serious rudeness and arrogance, can exhaust the thing.

I always tell my teenage daughter she can’t think (metaphorically) of breaking a vase, then apologize and it’s as if nothing happened. You can’t pretend that it didn’t happen. You bear a responsibility for what you do.

Especially if you are the representative of one of the most powerful companies in the world speaking on behalf of the company.

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by adding information to the classic economic categories work, production, capital, clearly the equation changes and capitalism as we know tends to disappear.

if information “eats the world” and it is not a private good, capitalism will be over.

if the only way to ensure excludability (like privacy needs imply) is through data/services access control, feudalism follows (like we have today, thanks to datalords who are info-plutocrats).

in a positive feedback loop, data concentration by datalords (who are gatekeepers to markets) erodes willingness to compete by new entrants (who don’t have access to the same information and thus can’t have effective competition in service and price personalization); competition traditionally is a driving force of capitalism; competition is now for the market and not in the market.

capitalism restoration can derive from cryptography by enabling rivalry and exclusion of immaterial goods (and thus reconstruct a new version of immaterial capitalism).

(in analogy to “landlords” I previously wrote “infolords”, but I think “Datalords” captures the idea better, so I corrected this post 9.11.19)

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some notes; contributions to the discussion are welcome.

With the advent of the Internet, the political parties have seen gradually liquefying the intermediate structures that were justified by the friction determined by geographic constraints.

these intermediate structures were essential for organising consensus, obtaining feedback and to select managing members. they allowed the number of people involved in the complexity of political decisions to be extended

by skipping geography and communicating directly, these functions have disappeared, ways and times of building consensus and mediation have vaporised leading to fragmentation; the political message has become trivialized becoming even more polarized and appealing to emotions; the electorate has become more mobile and the parties more likely to be election cartels for a leader.

at least a couple of problems arise:

the first is that the internal governance of parties becomes more critical, internal conflicts increase, instability is exacerbated and the resilience of compromises is reduced
the second is that voting systems that reward the relative majority (first-past-the-post systems or systems with majority prizes) favour the election of people with extreme positions, with a (fragmented) majority opposing them. (Post-truth is a consequence)

If it’s true that the internet is the enzyme that has catalyzed these processes, exacerbating these trends, it is also true that time cannot be reveresed and a no solution can avoid using technology, even in internal governance of the parties, which is probably the first point on which to intervene.

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The European Commission has just launched a survey targeted at developers of Free and Open Source Software (FOSS) to understand their needs and how the EU can contribute to a safer open source ecosystem.

Survey questions are primarily about the Security of free and open source software, and what the European Commission can do to help developers make more secure software.

The FOSS developer survey is part of the EU-FOSSA 2 project, an initiative from the EU to improve the security and integrity of the most critical open source software in use. Besides the survey, other project activities include bug bounties, hackathons, and engagement with developer communities.

Collaboratively improving FOSS security

The survey welcomes suggestions and ideas from developers on improving security, and about what the European Commission can do to help. The survey is open until 30 November 2019, with the results published on the EU-FOSSA website soon after.

This is a great opportunity for open source developers to make their voices heard in the discussion on how to collaboratively improve the security of open source software.

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I read of artificial intelligence startups who propose themselves to law enforcers offering systems to detect the hidden emotions of people.

And law enforcers are listening to them.

The fitness of the horse is a metaphor of their income statement

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(english at the bottom)

—

c’e’ uno studio, di cui scriverò separatamente, che dimostra senza alcun dubbio che non si può pensare ad una autoregolamentazione o solo all’educazione. dimostra che l’obiettivo della società e l’obiettivo delle aziende diverge strutturalmente.

quindi servirà una regolamentazione

serve una regolamentazione semplice, rispettosa della libertà di espressione e che non alteri i modelli di business e non butti il bambino delle nuove possibilità con l’acqua sporca del loro uso distorto (*).

secondo  me, il nocciolo del problema sono le diverse proprieta’ tra la dimensione materiale e quella immateriale (autocit. di “Capitalismo Immateriale – Bollati e Boringhieri”): quando la comunicazione  si svolge (solo) nella dimensione immateriale, ne consegue una elevatissima scala di propagazione e velocità, proprio una cosa diversa, una categoria a sè rispetto a quanto era possibile prima e disciplinato dalle norme che abbiamo sviluppato e collaudato in decenni e secoli

ergo, la domanda è: (edit: oltre a tutto ciò che già è possibile fare e viene fatto, ad esempio per identificare i gruppi organizzati) “come introdurre delle frizioni per queste scale, nei casi ‘perniciosi’, rispettoso dei punti di cui sopra (*) ?”

io farei così (a grandi linee, da smussare nel corso del dibattito)

• fino ad un numero x di “amici” (tipo scala chiacchera da bar) possibilità di completo anonimato
• sopra tale soglia x, e fino a soglia y, un meccanismo di anonimato protetto che dia possibilità di identificabilità in caso di reati. (es. un bonifico da 1 euro, codice via SMS, anche mediante fiduciari (cfr mia Proposta di legge sull’anonimato protetto))
• oltre la soglia y, scatta equiparazione di chi gestisce la pagina a editoria

questo un primo meccanismo per introdurre una frizione.

secondo meccanismo:

• fino a soglia w di diffusione, propagazione in realtime
• sopra soglia w, propagazione con latenza (6 ore ?)

in questo modo, secondo me, si mima su un mezzo che ha proprietà dell’immateriale alcune frizioni tipiche della materialità, solo per chi ha interessi e comportamenti malintenzionati, senza imporre responsabilità editoriali agli intermediari, senza limitare  chiunque faccia un uso normale, senza alterare i modelli di business.

penso possa essere una linea di azione alternativa rispetto alle ipotesi attuali, su cui poossa valere la pena di riflettere…

—

there is a study, of which I will write separately, which shows without any doubt that one cannot think of self-regulation or just education. it shows that the objective function of society and the objective function of companies diverge structurally.

so regulation will be needed

Simple regulation is needed, respectful of freedom of expression and which does not alter business models and does not curb new possibilities while avoiding distorted uses (*).

In my opinion, the core of the problem are the different properties between the material and the immaterial dimension (autocit. of “Intangible Capitalism – Bollati and Boringhieri”): when the communication takes place (only) in the immaterial dimension, it is characterized by a very high scale of propagation and speed, something different than what we are used to, a category of its own compared to what was possible before and governed by the rules that we have developed and tested over decades and centuries in the material dimension.

therefore, the question is, in addition to everything that can already be done and is being done, “how to introduce frictions for these scales, in ‘pernicious’ cases, respectful of the points above (*) ?”

this is, in a nuthsell, what I would do  (in general terms, subject to refining during the debate)

• up to a number x of “friends” (an order of magnitude like the number of persons that can be reached in a party/pub chat) possibility of complete anonymity
• above this threshold x, and up to threshold y, a protected anonymity mechanism giving the possibility of identifiability in the case of offences. (e.g. a 1 euro transfer, SMS code, also via trustees (see my proposal for a law on protected anonymity))
• beyond this threshold y, the person who manages the account/page is treated under the same rules that govern press.

this is an initial mechanism for introducing a friction.

second mechanism:

• up to threshold w of diffusion, propagation in realtime
• above threshold w, propagation with some latency (6 hours?)

in this way, in my opinion, we mimic in a medium that has property of the immaterial some frictions that are typical of materiality (only for those persons who have malicious interests and behaviors) without imposing editorial responsibilities on intermediaries, without limiting anyone who makes normal use, without altering business models.

I think it could be an alternative line of action to the current hypotheses, which may be worth considering…

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Mi è stato segnalato di recente, mi sembra molto ben fatto.

Aggiungo questi dati su saldi ingresso/uscita.

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Anni fa qualcuno diceva che entro quest’anno avrebbe costruito un modello funzionante del cervello che ci avrebbe consentito di capire sostanzialmente tutto. Beh, non c’è. Anzi, ogni passettino avanti che si fa si capisce che si è lontanissimi  dall’obiettivo, ed è sempre meno chiaro che sia possibile raggiungerlo.

Una sorta di effetto Dunning-Kruger.

Meno sai e più pensi di sapere. Più sai e più capisci di non sapere.

Già nel 2014 centinaia di scienziati avevano scritto una lettera aperta alla commissione europea per criticare la destinazione di fondi (1 Bn) a un progetto per simulare la mente con un approccio bottom-up, che poi ha portato ad una revisione del procedimento (un comitato di superesperti ha stabilito che le critiche erano fondate  15-03-19hbp-recommendations – PDF).

Non sappiamo bene cosa sia la coscienza, non abbiamo un modello preciso di come i neuroni comunichino, di come i neurotrasmettitori riconfigurino le reti neuronali, in che misura il connettoma determini il comportamento, di come funzionino i meccanismi della memoria, delle predizioni e del ruolo delle emozioni. Non sono chiari quali siano i meccanismi con cui intervengono i gangli della base e l’amigdala. Ecc. ecc.

Per cercare di capirne qualcosa tramite una simulazione bisogna decidere: cosa dovremmo simulare ?

Simuliamo ogni cellula ? sarà sufficiente ? o dobbiamo simulare ogni molecola ? il DNA ? (i geni contenuti nel DNA influenzano la struttura ed il funzionamento della mente), le proteine ?  i neurotrasmettitori ? gli ormoni ? (che influenzano il funzionamento dei neurotrasmettitori). Oppure ogni atomo o particella subatomica ? beh, è ovviamente impossibile. E se il nocciolo del pensiero fosse lì ?

Il cervello non è un computer. E’ un organo biologico, analogico, forse con effetti quantistici.

Con il progetto genoma umano sapevamo dove stavamo andando. Si trattava solo di accelerare e fare più velocemente cose che già facevamo e in questo caso la legge di Moore ci ha dato una mano.

Qui non siamo ancora arrivati a “caro amico”…

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Come se una persona che guadagnasse 30mila euro all’anno ricevesse una multa di 2540 euro

Direi che si sente.

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we know that

POW (proof of work) is a consensus algorithm that hardly scales and centralizes on few actors for economic incentives.

POS (proof of stake) is not “democratic”. The richest rules.

other mechanisms have been proposed [e.g. algorand, avalanche] based on random selection of validating nodes.

but as all these entities are immaterial, validators can be created and the more the resources I can invest, the larger my probability of being among the randomly defined validating pool.

so, it becomes a kind-of probabilistic proof of stake.

POW and POS try to solve the well known sybil attack using scarce resources:

• POW -> energy,
• POS -> capital

and by doing so, they are not democratic nor human-centered.

that is, unless we can tether one node to one physical person (a concept known as strong identity, based on some kind of procedure akin to KYC), thereby limiting the possibility of corruption of the pool of possible validators.

as today, in Italy we have in excess of 4.2M strong digital identities, you can use on your smartphone (that is, without smartcards), guaranteed by the state, with authentication performed by a federation of identity providers (private and public entities).

the system is called SPID (Sistema Pubblico di Identità Digitale) and provides two authentication levels: username/password and OTP.

AFAIK, is the largest federated network of legally recognized digital identities. It is a part of the eIDAS european digital trust services framework and we have already in place an interoperability systems so that one can use italian credentials to be legally recognized when accessing participated online services (public or private) in other states like Germany or Estonia.

perhaps SPID could be the basis to tether identities (eventually through a network of fiduciary intermediaries) to test random based validation algorithms.

in the end, in the immaterial dimension, identity is the root of all services and attention is the scarce resource.

Disclosure: I am an advisor to Fulgur lab.

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.

There are three broad classes of income :

• Earned Income: is generated by working, such as salary or money made from time-based employment which can include consulting, working a job, running a small business, gambling, etc. Income is linear with the activity: once you stop working, you stop earning.
• Portfolio Income: is generated by selling an investment at a higher price than the original cost (capital gain). As life is, these investments  include a high level of risk as one can generate gains (generally) proportional to the capital invested (that can be reinvested increasing returns) or losses Having a crystal ball could make it grow exponentially. Income is not linear with the activity.
• Passive Income: generated from assets purchased or created. Examples can be income from rental of real estate or other form of invested capital, business income (not based on amount of time and effort spent), income from intellectual property sale. May be (and generally is) recurring, generally linear with the assets employed.

All of these incomes historically could be statically attributed to a specific limited number of contracting states (a good or service being produced in one state and sold in another). The OECD has defined a convention on income and taxation which further details classes of income and the way they should be treated when operating across borders. These are:

• Income from immovable property
• Business profits
• International shipping and air transport
• Associated enterprises
• Dividends
• Interest
• Royalties
• Capital gains
• Income from employment
• Directors’ fees
• Entertainers and sportspersons
• Pensions
• Government service
• Students
• Capital

all of these classes nail down to the three broad classes described at the beginning.

if we think to the income generated by SAAS (software as a service),

• it is non linear with the activity, time or effort;
• it is not proportional to the capital invested,
• it is recurring.

furthermore,

• it may involve several, dinamically changing, contracting states (transactions online may be conducted in milliseconds between parties resident in a number of different states, under the umbrella of framework agreements)
• it can grow exponentially (not employing labour, variable capital and not incurring in losses), and
• it has (almost) zero marginal costs, returns which can be disproportionally higher than investments so these may be considered sunk investments

these last considerations make it a very different type of income compared with  types of income we have known so far. it’s income generated by a machine (like it would be for capital investments with variable costs and a production location), but (substantially) without the capital investment, without the variable cost, and without the production location.

it is not simply “automation” as this term is already used to describe situations where variable costs exist, where capital investments are important, where the income cannot grow exponentially, where contracting states are stable.

we could rather call it an Digital agent income

(it may, but doesn’t need to be “intelligent” like we mean for artificial intelligence / machine learning applications)

we could agree on specific taxation criteria, like for example a rate similar to capital gain, opt-in conditions, exemptions for startups, exemptions for investments, etc.

This is the basis of the bill proposal I made while I was in the italian parliament, a couple of years ago.

Now, let’s make a step forward:

as I argue in my latest books, the immaterial dimension has become the major user interface of the material dimension for socioeconomic relationship: “dimensions” and not “worlds” because they are not alternative to each other but rather they supplement each other; material/immaterial rather than real/virtual because they are both real and because the world “virtual” (which comes from medieval latin ‘virthualis’) has a root meaning of “potential, not real”.

we tend to think at digital technologies as enablers. and it certainly was so, when we bought hardware and software for specific applications. the move to SAAS ‘platform’ business models (multi-sided markets) has given birth to intermediaries that capture value monetizing the relationships between the intermediated. often leading to mono/oligo-polistic/psonistic powers exploiting network effects and lock-ins given the absence of pro-competitive regulation imposing portability, interconnection and interoperability.

they are among the few being able to capture a portion of the monetary value that is destroyed by digitalization, as the value-carrying portion of goods and services moves from material to immaterial and hence to zero variable costs. (which implies also that their prices are not determined by costs but by perceived value).

I believe this has a deflationary effect and induces a pressure on earned  income (and, less significantly and in a longer term, on some forms of passive income), at least expressed in monetary terms, increasing polarization. It does not necessarily imply that persons’ well-being reduces, as many goods and services benefit form a reduction of prices due to the same reasons: prices of goods and services being increasingly impacted by migration of value-carrying parts to zero variable costs.

with the waves of industrial revolutions, generated surpluses first moved peasants to industry and the same happened for the secondary sector. The second industrial revolution gave birth to the tertiary sector and the third industrial revolution to the quaternary sector (or advanced tertiary).

I am inclined to think that the surplus generated by artificial agents is both, having the effect of a reduction of the wealth expressed in monetary terms and a significant portion of it being captured by digital intermediaries in the process of progressive de-materialization of significant parts of the economy, contributing to the increase in polarization.

Someday, maybe we will be able to store energy generated by renewable sources, further increasing the portion of the value of the economy that is linked to the dynamics of zero variable costs. There may be interesting times ahead.

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