The Massachusetts Institute of Technology is a private research university in Cambridge, Massachusetts. Founded in 1861 in response to the increasing industrialization of the United States, MIT adopted a European polytechnic university model and stressed laboratory instruction in applied science and engineering. Researchers worked on computers, radar, and inertial guidance during World War II and the Cold War. Post-war defense research contributed to the rapid expansion of the faculty and campus under James Killian. The current 168-acre campus opened in 1916 and extends over 1 mile along the northern bank of the Charles River basin.MIT, with five schools and one college which contain a total of 32 departments, is traditionally known for research and education in the physical science and engineering, and more recently in biology, economics, linguistics, and management as well. The "Engineers" sponsor 31 sports, most teams of which compete in the NCAA Division III's New England Women's and Men's Athletic Conference; the Division I rowing programs compete as part of the EARC and EAWRC.MIT is often cited as among the world's top universities. As of 2014, 81 Nobel laureates, 52 National Medal of Science recipients, 45 Rhodes Scholars, 38 MacArthur Fellows, and 2 Fields Medalists have been affiliated with MIT. MIT has a strong entrepreneurial culture and the aggregated revenues of companies founded by MIT alumni would rank as the eleventh-largest economy in the world. Wikipedia.
News Article | May 1, 2017
Another week brings moves and shifts at the upper levels of the renewable energy industry. Before founding the just-unstealthed Voltus last year, CEO Gregg Dixon was a senior VP and a founding executive at EnerNOC. Voltus is a challenger to EnerNOC, as is long-standing competitor CPower. In March, EnerNOC CEO Tim Healy said the firm was exploring "potential alternatives to our current structure. This may include the sale or separation of one or more of our business units, a sale of the company, or other alternatives." Jeff St. John reports on Voltus here. Last week we reported that Jon Wellinghoff, the chief policy officer at SolarCity, had left the company now that it has merged with Tesla. The ex-FERC commissioner just told GTM: "My move in opening my own firm, Policy/DER Consulting, will allow me to better focus on my passions, energy policy and its intersection with distributed energy resources. I see a rapid movement now happening from the old way of siloing technologies like rooftop solar, efficiency, storage, and control technologies to an integration and optimization of systems behind the meter. In order to effectively enable this transition, significant policy initiatives will be necessary. Those initiatives include the creation of efficient transactional financial market platforms based on backend algorithms like blockchain. Having my own firm allows me to fully explore and engage these new paradigms." William Stanton, most recently with Belectric, is now VP of engineering for Blue Oak Energy , a solar engineering firm. Blue Oak has a portfolio of 1.5 gigawatts of operational solar generation across the Americas. Stanton also served as director of global project permitting at First Solar. Blue Oak Energy is a wholly owned affiliate of Coronal Energy and Panasonic. JLM Energy , a renewable energy technology firm, added Erin Clark as COO. Clark most recently served as president of nationwide roofing and solar contracting firm PetersenDean. Peter Olmsted is now Assistant Secretary of Energy at the New York State Office of the Governor. He was previously with the New York State Department of Public Service and Vote Solar. Tom Weirich, previously with ACORE, is now director of marketing and business development at investment bank CohnReznick Capital. Matthew Culligan, with SunPower since 2007, has joined solar tracker standout NEXTracker as director of sales operations. Christopher Sommerfeld was promoted to director of field efficiency and quality at Sunrun. Dawn Roiz recently left the now-bankrupt California solar installer HelioPower to join Associated Construction & Engineering as controller. PV-magazine reports that HelioPower filed for Chapter 11 bankruptcy protection on Wednesday and estimates it owes its employees approximately $124,000 in wages. Enertech Search Partners, an executive search firm with a dedicated cleantech practice, is the sponsor of the GTM jobs column. Among its many active searches, Enertech is looking for a VP of Sales -- Energy Efficiency This client empowers energy value chain participants by providing them the power to foresee -- leveraging advanced machine learning capabilities to deliver accurate, granular predictions, which are crucial for tackling the rising challenges of today's energy industry. The client is seeking a VP of Sales who will directly report to the CEO and become a member of the company's executive team. You should be a sales leader who has at 4 or more years of experience in hiring and managing a world class sales team that is aggressive, disciplined and results oriented. Frank Bergh, previously with Edison Energy , is now VP of grid engineering at Sigora International, a firm looking to develop a commercially viable microutility model "to provide underserved populations with first-rate electric utility service." FTC is a solar developer with SunEdison roots. Mitchel Bowman is now the director of engineering at the firm. What is the fastest-growing occupation in the U.S.? It's wind turbine technician, according to Bureau of Labor Statistics. The wind industry now employs more than 100,000 people, according to a new report from the American Wind Energy Association. Silver Lake, a private equity and venture debt firm that makes occasional forays into greentech, raised $15 billion for its latest fund. New Energy Capital Partners, an asset management firm, raised $325 million for its most recent fund. Obvious Ventures, an early-stage sustainable technology-focused VC firm, raised $178 million for its latest fund. We recently covered Congruent Ventures' recent fundraising activity as well. Jing Tian has been promoted to president of North American region at Trina Solar. Dr. Ernest J. Moniz, former U.S. Secretary of Energy and founding director of the MIT Energy Initiative, has been named as the first distinguished fellow of Emerson Collective, a social impact effort headed by Laurene Powell Jobs (net worth: $19 billion). Moniz will focus on "equitable access to technology, workforce development, and clean energy innovations in communities across America in support of a low carbon future." Andy Karsner is a managing partner of Emerson Collective. New York Governor Andrew Cuomo will nominate New York State Energy Research and Development Authority CEO John Rhodes to chair New York's Public Service Commission. Rhodes would fill the position left by Audrey Zibelman, who departed last month to lead a large Australian grid operator.
News Article | May 22, 2017
Skuchain's products offer full communication with existing ERP and EDI systems without the need for costly integration, as well as full interoperability with all blockchain protocols. Skuchain has also been collaborating with cloud partners to build a full blockchain enterprise stack that can be deployed to further facilitate adoption across an enterprise and its supply chain. By joining DCG Connect, Skuchain hopes to contribute to the growth of the blockchain ecosystem and to work with its fellow members to help corporates leverage blockchain technology and digital currencies for a variety of use cases. "Although implementing a blockchain solution for an anchor buyer and their supply chain has a number of unique collaborative commerce specific aspects, there are also a number of commonalities with generic blockchain application needs," said Srinivasan Sriram, Founder and CEO of Skuchain. "We are happy to participate in the DCG Connect initiative to work closely with enterprises as they build out a broader blockchain footprint." "In the short span of a few years, blockchain has gone from being a nascent technology to a deployable production solution thanks to the innovative energy of technologists and a general eagerness to form partnerships. We are excited to work with DCG Connect and its membership to expand this project and hasten the growth of the blockchain ecosystem," said Rebecca Liao, VP of Business Development and Strategy at Skuchain. DCG's Director of Development, Meltem Demirors, who is leading this new subsidiary, noted "After two years working with bitcoin and blockchain companies and corporate leaders, we identified that a significant issue hindering the widespread, global adoption of blockchain is the inability to quickly connect with the right combination of partners for testing and deployment of the technology to address real-world business challenges." The blockchain industry is on the cusp of a breakout moment in the application of this technology. Skuchain looks forward to working with DCG Connect and its members to grow the set of tools, partnerships and knowledge necessary to accelerate the adoption of enterprise blockchain production solutions. Skuchain is a blockchain technology company that provides an end-to-end solution suite for the supply chain. With a strong team of serial entrepreneurs from Stanford, Harvard, MIT, Berkeley and University of Pennsylvania, Skuchain helps enterprises access uniquely reliable information through the blockchain and turn it into capital. Founded in 2014, its investors include the Digital Currency Group, Amino Capital and Fenbushi Capital. For more information, go to www.skuchain.com or email firstname.lastname@example.org. For more on DCG Connect, go to dcgconnect.co. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/skuchain-joins-dcg-connect-as-a-founding-member-to-accelerate-enterprise-blockchain-adoption-300461187.html
News Article | March 29, 2016
In April 2015, the MIT Media Lab launched the Digital Currency Initiative (DCI), the school’s first official foray into the bitcoin and blockchain world. Today, nearly a year later, it's announced a shiny new $900,000 Bitcoin Developer Fund, which aims to support bitcoin protocol development in an open and non-political environment. The fund is backed by no-strings-attached donations from a slew of bitcoin companies like miner BitFury and individuals like LinkedIn co-founder Reid Hoffman. While these donors all have their own reasons for funding continued open-source bitcoin development, it’s quite clear that the technology itself stands to benefit from improvements and experiments conducted in a more impartial academic setting. The DCI currently funds salaries and expenses for three developers, who are free to build anything they wish: lead maintainer of Bitcoin Core, Wladimir van der Laan; former lead maintainer of Bitcoin Core, Gavin Andresen; and Bitcoin core developer, Cory Fields. The initiative will also continue to sponsor consensus-building efforts like the Scaling Bitcoin workshops. “The developers are carrying on developing bitcoin, which is essentially their day job,” DCI head Brian Forde told me. But they also have informal access through the lab to consult with a range of economic, privacy, and distributed systems experts. The goal of the new fund is to let them develop the bitcoin protocol without agenda-setting. So why this is different than the raft of other venture capital and institutional investments we’ve seen in the bitcoin world lately? The answer lies in a problem: Bitcoin is an imperfect, but working technology, and a lot of different actors are ideologically and/or financially invested. To move forward, it may just need a place to grow without these real-world constraints. As the DCI’s establishing blog post argues, the internet was incubated in academia for over 20 years, gradually becoming ready for prime time. By comparison, almost since its invention in 2009, the bitcoin network has been reliably transferring value between an improbable blend of techies, darknet vendors and customers, ransomware hackers and victims, and remittance senders. It didn’t have as much time to get ready for the working world. As Forde wrote last year, “much work still needs to be done before this technology can become truly safe, secure, and significant.” To someone like me who tends to see the other, darker side of the coin, this is an understatement. Bitcoin has a number of problems to solve; some are by design, some have developed by accident. Briefly, here are a few of the big ones: The bitcoin network is often filled to the brim with transactions, spam or otherwise. This congestion has caused a civil war of sorts, putting developers, miners, users, and other interested parties at odds over how to fix the problem. Meanwhile, users are sometimes stuck paying unexpectedly large fees to prioritize their transactions, or waiting hours to confirm that their payment went through. The now MIT-based, former core developer Gavin Andresen had circulated a proposal to expand bitcoin’s block size (in lay terms, a measure of transaction capacity) 20-fold, but was rebuffed by proponents of a competing vision who see bitcoin’s future as an underlying settlement layer, with small consumer transactions taking place on secondary services. Encouragingly, the DCI’s new Developer Fund is supporting developers with different opinions on the block size debate. Hopefully, they’ll be freer to voice their thoughts and propose solutions than they would be if privately funded by a startup or a single donor. Bitcoin’s mysterious creator Satoshi Nakamoto probably didn’t expect bitcoin to grow as quickly as it did, and as such coded in some limits to keep things workable at the beginning, including this now-contentious block size limit. Since there’s no central authority to decide how to proceed, it’s up to the fractured community to decide. But who is the community, exactly? Ironically, as a decentralized currency, bitcoin has a big centralization problem: Less than a dozen people now lead mining pools that control the majority of the network’s mining power. This means that they provide an outsize amount of network security for other participants, but it also means they have an outsize influence in decisions about things like block size. Even though bitcoin users are all over the globe, most of the biggest miners are in China, where their bandwidth is limited by the great firewall. If the block size grows too much, Chinese miners could be functionally cut off from effective mining, sinking huge investments and exposing the network to insecurity and a potentially disruptive slowdown in mining new blocks. Bitcoin is also inefficient by design—each full participant stores a full ledger of all past and current transactions, and network security is essentially backed by massive, redundant energy expenditure that I believe would only grow with further adoption. To boot, its current network throughput maxes out at a theoretical 7 transactions per second, though this is closer to 3 per second in practical experience. That’s very slow for just about any use, from peer-to-peer payments to autonomous ‘internet of things’ value transfers. Features can be drawbacks, too. The same ‘anti-censorship’ properties that empower users to donate to Wikileaks are equally empowering to shady hackers holding hospitals’ data for ransom. And the same blockchain that hides darknet transactions in plain sight among countless others also helped the Feds bust darknet kingpin Ross Ulbricht. Transactions are also irreversible, which is a feature and a bug, depending on the situation (or your role in it). For what it’s worth, cash has many of the same problems, but you can’t use it to buy weasel dust online. Bitcoin is also threatened by sophisticated competition. Big banks have been funding blockchain-based startups like R3CEV, Chain, and more that claim to harness bitcoin’s technological building blocks, but without some of the reputational and technical issues. Some popular but as-yet unproven decentralized rivals, especially Ethereum, are now attracting a lot of attention thanks to claims about smart contracts and on-chain programming. As a decentralized, open-source currency, bitcoin faces unique governance challenges that are just as much about economics and politics as computer science. Some supporters want it to be a global payment system for the unbanked, others a libertarian foil to inflationary fiat currency, and others a disruptive FinTech money-maker. Some just want to pump the short-term price and get rich quick on their speculative investment. Some people want all of the above, or something else. In a world of imperfect solutions, coming to consensus to support all these uses will be an implicitly political process. Independently supporting three core developers isn’t going to be an automatic slam dunk, since users, startups, and miners will still need to more or less agree on what code to run. MIT Media Lab’s stated aim for the DCI has been to foster a “diversity of work and thought on cryptocurrencies among students, researchers and open-source developers.” While there’s no shortage of diverse work and thought in "the bitcoin space," I think it’s a helpful goal if that work can lead to free experimentation, and if that thought comes from a more financially disinterested position. Business as usual is working for now, but with billions of dollars of value tied up in various parts of its ecosystem, I’m skeptical that bitcoin can solve its major problems without hurting any of its diverse interest groups. There’s a lot on the line for a lot of people. But taking it off the line and into the academic realm could just be the shot in the arm that bitcoin needs to move forward with new ideas.
News Article | March 8, 2016
Hannes Grassegger of Das Magazin reports from the Blockchain Summit on Necker Island and discovers how the global economy is being overturned by men in flip flops. A young woman waved from a red pier. The breeze pressed her short jumpsuit against her body. She waved with her right hand, while her left held her sunhat in place. The captain brought the speedboat about, the motor sputtered, and I jumped off. “Welcome to Necker,” the woman breathed, “I’m Kezzia.” She turned, “Come with me.” The air was that perfect temperature, somewhere in the low 80s, where you stop sensing your body and feel as though you are melting into the world. The crystal clear water of the Caribbean was just a few refreshing degrees cooler. The invitation said “Smart Casual”—so I wore a white dress shirt with my swim trunks. After a 36-hour journey, I had finally reached my destination: an island that for ten years has been the permanent residence of British billionaire Sir Richard Branson. Kezzia led me to a golf cart parked in the sand. I couldn’t help thinking of a video I had seen in which one of Necker Island’s accountants cheerfully recounted serving as a human platter in a naked sushi dinner after finishing her office work. In one interview, Branson laughingly told of a new housekeeper on the island who wanted to institute a rule barring romantic relationships between employees and visitors. “It lasted exactly two days,” he said. On Necker, there is no line between business and private life, at least for employees. For moments when Branson himself does not wish to be disturbed, he purchased the neighboring Mosquito Island. Only Larry Page, Branson’s kite-surfing buddy and CEO of Google, was recently allowed to buy himself a piece of land there. The occasion of my trip was a gathering of two dozen of the entrepreneurs and radical anarcho-capitalists who make up the upper echelons of the bitcoin digital currency movement. The event took birth at a private evening on Necker Island, when the organizers of a kite surf event called MaiTai had asked Branson over a drink if he would be up for bringing together all the leading minds in bitcoin—on his island. “Sure,” he said. What exactly this was all about was unclear to me, but it seemed they were getting together to plan a coup. “We look forward to welcoming you to paradise,” the invitation to the Blockchain Summit proclaimed. Only a select few dozen people received an invitation to the Necker Island summit. Originally, the group included a single woman. Following some concerned remarks on the internet, the organizers invited some more female guests. All had to undertake a strenuous journey, as the island lies on the easternmost edge of the British Virgin Islands, two hours east of Jamaica by plane. The entry fee alone was several thousand dollars per day. I had already met a few of the participants on the way here. Standing at a kiosk on the beach waiting for a ferry, wearing jeans and a green t-shirt, was Michael Zeldin, 64, a prominent anti-money-laundering expert from the United States, familiar from his many appearances on CNN. Previously a US delegate to the G7, he is now “Special Counsel” to a law firm that represents 17 of the 20 largest US banks. On the way to paradise. Photo: Hannes Grassegger Next to him, dressed in swim trunks and holding a Carib beer, was Brock Pierce. Pierce, who claims to have invented the term “user-generated content,” rose from child star to millionaire tycoon of the old New Economy by age 17. While living in Spain, he built up an online-gaming empire by mining and selling virtual currencies and weapons in computer games, thereby becoming one of the most important early digital currency entrepreneurs. He told me over a drink that, as founder and managing partner of his own venture capital firm, he is currently an investor in 34 different companies. Pierce, Zeldin, and I had received invitations to the Blockchain Summit, which was meant to bring together “the world’s greatest minds in digital innovation” to “define the future.” Essentially, what seemed to be happening was that a great deal of money and power were being gathered in the middle of the Caribbean, on a billionaire’s private island, for the purpose of plotting. The meeting would culminate in the second night’s “ Blockchain Summit Final Dinner,” a networking event with a “cocktail reception and lemur feeding.” The golf cart trundled just a few meters over a narrow, stone-lined sand track and stopped in front of a two-story wooden house. “The others are already up at lunch,” Kezzia said. “I suggest you get a drink, look around a bit, and then come join us.” She shook her head, laughing, and flitted away. From the second story I heard the murmur of guests at lunch. The ground floor was a kind of tropical pub, open on all sides. A large flatscreen played a tennis match. Reggae bubbled out from hidden speakers. On the central bar, a brown creature with a dog-like face and the body of a monkey suckled someone’s left-behind drink. Presumably this was one of the lemurs that Branson had brought over from Madagascar to save from extinction. He has introduced hundreds of species to the island in order to protect them: a “Greatest Hits” of nature. The lemur stared at me for a moment, then turned back to its drink. Branson evidently had two things on his mind when establishing his island: sex and drinks. His villa was built in Bali, then disassembled, shipped, and erected on Necker’s highest point. A wooden hot tub is enthroned on the roof, behind which waves the flag of the British Virgin Islands, the Union Jack on a blue background with the motto, Vigilate: “Be vigilant.” From here one can see the entire island: the beach house, the tennis court, the two ponds, a handful of scattered love nests, and, in the distance, a few other islands. Next to the house is a shimmering green infinity pool that looks out on an endless Caribbean horizon. Necker was also once the occasional refuge of Princess Diana. A handwritten letter to Branson testifies to her love of the place. Branson has occasionally used the island to stage ambitious meetings, such as when he brought together politicians and entrepreneurs, like Tony Blair and Larry Page, to save the world from climate change. As part of a proviso by the local government, Branson was required to build a resort here shortly after he bought it, in 1979 at the age of 28. For $65,000 a day, you can rent out the island for yourself and up to 29 of your friends. Below, I saw the solar panels that provide the island’s electricity. On a hidden pier, workers are unloading one of the boats that run constantly, supplying the island with everything it needs, including sunscreen and an energy drink called “Pussy.” We live in an age obsessed with progress, comparable to the end of the 19th century, when new technologies such as the railroad and the telephone were changing everything and generating previously undreamt-of riches. Our age, like that one, has seen an explosion in the number of the super-rich. Today, the Rockefellers are Zuckerberg, Page, Gates, and, well, Branson. There are currently around 1,800 billionaires, as measured in dollars. In the past few years, their fortunes have increased so massively that they have begun wondering what to do with all the money. At the same time, there is a valley near San Francisco full of technology entrepreneurs who need money—lots of money—for their business ventures. The goal of these entrepreneurs is to rebuild existing industries with new technology, monopolize the market, and watch the profits roll in. They call this “disruption”—as Airbnb has done in the hotel industry, or Uber in the realm of taxis. The larger the target industry, the better. Google has built a whole “vertical,” X, for testing so-called “moonshots,” ideas so megalomaniacal that anyone would consider them impossible—anyone who did not have a few billion to spare on their realization, that is. Winter is coming to the Valley soon, and it might be the first since the bubble burst first in 2001. This bubble bursting might not be as tough as the last one, most people in the tech industry hope, but who could say for sure. Nevertheless, when people congregated on the island, there was a feeling that new territories were needed for chasing unicorns—the startups that remake entire industries with multi-billion valuations and big payoffs for venture capitalists. It is just such a project that Richard Branson has in mind. With a net worth of $4.9 billion, he’s invested millions each in over a dozen startups around the globe, including $30 million in Blockchain , a popular bitcoin wallet and blockchain explorer service. In his opening speech, Branson invited the guests to rate their business plans in terms of “Scale of Effect on Society.” This was accompanied by a musical interlude by star cellist Zoë Keating, who spent the rest of her stay on Necker Island excitedly posting snapshots of Branson’s giant tortoises on Instagram. From the rooftop hot tub, I walked past a few terraces to reach a hall with a ceiling high enough to accommodate full-size palm trees. A disco ball hung from the ceiling. A few books with titles like An Optimist’s Tour of the Future or An Experiment in Industrial Democracy lay strewn across the landscape of cozy couches. On the other side of the bar, several rows of wicker chairs were set up facing a flatscreen emblazoned with the words: “ Blockchain Summit – The Vision.” It was clear to me that this was a gathering of people whose time is short and expensive. Such people do not meet just for fun, but perhaps also for fun. Nor does Branson’s choice of residence seem accidental. Branson officially relocated to Necker in 2006 for health reasons, he has said. But the British Virgin Islands—or BVI, for short—of which Necker is one, are the most popular offshore tax haven in the world. By developing a complicated network of BVI companies, Branson pays few taxes in his native land. Many English children have heard of Necker Island. It is a dream island that represents the idea that an individual can beat the state. To moderate the summit, the organizers booked one of the most renowned writers on finance technology, Wall Street Journal columnist Michael J. Casey, who last year published The Age of Crypto-Currency, a book on digital currencies like bitcoin and its underlying programming principle, the “blockchain.” The blockchain, Casey explains in the book, is a register, a vast bank-book, a digital ledger, that lists every individual transfer of bitcoin. In contrast to our current money system, in which every bank maintains its own centralized register to verify whether the correct quantities of money are being moved, the blockchain decentralizes the verification, thereby creating a “shared common ledger” stored on every connected computer. Thus, the blockchain allows every bitcoin user to take on the functions of a bank. But this is just incidental. The blockchain not only makes digital currency impossible to duplicate: In principle, Casey prophesied, the technology could even replace companies, law firms, and agencies whose main job is to manage assets. Lately, the Bitcoin community has been torn asunder by a debate over the future of the blockchain, and whether it can continue to grow as quickly and cheaply under its current design. But this was not a topic of discussion at the conference: the weather was more blue-sky. Under a sun canopy on the beach, I encountered a bunch of men in their 30s. All are in shorts, rather pasty, with the beginnings of a paunch. A bearded giant by the name of Oliver Luckett played rap on the kind of small, tube-shaped boombox often used by teenagers in parks. He told how he recently bought a $10,000 Rolls Royce on Craigslist, only to torch it with flamethrowers for the rapper’s video. It went viral, since all the video’s participants already had so many followers on the web. “A bargain, right?” he asked. The others nodded. (Luckett’s company, the Audience, also ran Obama’s social media campaign for a time. Before that, he worked for Disney. In the digital empire, he is a Minister of Propaganda.) Over on a sandbar, I saw a catamaran with a dozen people next to it. Perhaps Branson is there. “Do you want to try something?” one of the beach beaus asked. He led me over to a shack filled with surfboards, sails, and snorkels. On the wall hung a photo of Branson, grinning broadly for the camera, flying over the water as the wind blows his hair. He is on a surfboard, holding a kite-sail in front of him while a nude model hangs on him like a backpack. A Dutchman in his 50s, who introduces himself as Marc, wanted to try paddleboarding, so I decided to join him. Marc invests in startups. He flew in from Vancouver. “Why did you come?” I asked him. The trainer positions the board on some calm water for us. “Bitcoin is gradually turning into a serious thing,” Marc said as he tried to stand on the wobbly board. “Look at who’s here—a president of Samsung, a chief strategy officer of Ernst & Young. Did you hear that Obama’s favorite economist, Larry Summers, has gotten involved with a bitcoin bank? And the founder of Visa?” In the tropical pub, I ran into Michael J. Casey. He looked like one of those classic American war reporters on TV with their oversize microphones, only that he is Australian. We ordered Painkillers, an excellent coconut-based cocktail, and started chatting. “Since the crisis in 2008,” Casey said, “the financial system has been completely broken. They’ve tried to camouflage the fact by printing more dollars, but money is just a product, and now there’s a surplus of it. Look what’s happening in Switzerland. Negative interest rates. You’re actually paying to give someone money. Of course, people are looking to other assets, houses or whatever. But what are they supposed to use for currency?” Casey shook his head. “The fundamental problem of the financial crisis was that everything was too interconnected,”he continued. “Centralization. Insanely enough, it’s gotten even worse. Meanwhile, the entire international economy depends on two central banks. Do you call that stable? Bitcoin is the alternative to this broken money system.” As the evening cocktail reception approached, I walked back from the tropical pub to Branson’s villa with Luckett and an Australian man. The Australian took us to his room, which costs just over $2,000 per night. It’s a good price—typically, one must rent the entire island. For this budget rate, the Australian had to share the room with the elderly futurist Marshall Thurber. Out on the balcony, Casey filmed the sunset. “It’s such a thrilling time,” he said. “Imagine experiencing the birth of the internet. That’s about how big this is.” The first guests had arrived the day before, but no one was really clear on the specifics of the program. Back at the big hall, Casey plopped onto a sofa next to a plump bald man in a wine-red polo shirt. He was telling the story of how he wrote the constitution of Peru. This was Hernando de Soto. An advisor to governments, de Soto may be Latin America’s most renowned stronghold of market capitalism, which he sees as a tool against any evil available, most recently terrorism. When de Soto has a question about Russia, as Casey explains it, “Hernando” just calls Putin—and he picks up. Bill Clinton once called de Soto the “greatest living economist.” To ensure that Hernando could get to the meeting on time, the premier of the Virgin Islands personally faxed him a visa. De Soto has frighteningly strong, hairy arms, which he moves like a crab’s pincers. That morning, the Peruvian had primed the participants for their mission: to bring capitalism to life. For true capitalism does not yet exist. Poverty, according to the theory that brought de Soto international fame, is not exploitation, but exclusion. In other words, people are unable to participate in capitalism because they have nothing to bargain with. Slum residents, for example, build huts but cannot own them, as there is no place and no law that will register them. If they had some kind of official paper, a certified claim to the property, a title, the hut would be worth something. They could sell it, or take on debt to start a business. To raise people out of poverty, therefore, their valuables must somehow be linked to them as individuals. They must have property rights. In most countries, this is next to impossible. De Soto opened a folder of papers: the three dozen applications necessary to register a company in Peru. A “physical blockchain, ” he said, that takes hundreds of days to process. If such situations were remedied, world poverty would end, and true capitalism would blossom. The participants were rapt. Next to de Soto sat Brian Forde, a quiet man who until recently was Obama’s technology advisor. Now he is leading the Digital Currency Initiative at the Media Lab of the Massachusetts Institute of Technology, as well as traveling around the world convincing governments and companies to give the blockchain a try. We were greeted at the dinner party by hundreds of screeching flamingos. A fire was burning, chefs stood at the buffet, and a long, white table was waiting. Other than the employees, almost no one followed the dress code, “Evening in White.” Most wore shorts. Suits are the mantel of civilization, too confining. Suddenly, a shark fin appeared in the sea behind the buffet. One of the guests giggled and tossed a chicken drumstick into the water. “Save Water, Drink Champagne,” his shirt read. I sat across from Paul Brody, a slim executive from San Francisco with short, greying hair. Cheerfully, he spoke in a nasal voice of being wiped off the tennis court by Branson at seven in the morning. “Impressive for 65!” he said. Brody had been trying out all of the island’s personal trainers. A little morning weightlifting, “all-inclusive.” I asked how much he paid to come here. “Hmm,” he calculated, “the company paid. My rate, which would be $36,000 for three days, plus the flight, plus accommodation here on the island, 8,000 … the participation fee. About $50,000.” Brody is a minor star in Silicon Valley. His husband negotiated Facebook’s purchase of Instagram. Brody himself had 6,000 people working under him at IBM, where his focus was the Internet of Things. Now he is the American “Strategy Leader” for Ernst & Young. Somehow we get onto the subject of cycling. “I love it!” he said. “I used to ride a lot until I was hit by a car. I swore to myself that I wouldn’t get on a bike again until there are only self-driving cars.” Our tablemate nodded enthusiastically: “People are too fallible. We have to take them out of the equation.” Next to Brody sat Jeff Garzik, one of bitcoin’s longtime developers. At the moment, he is looking for investors to help him put mini-satellites into orbit for a special bitcoin network. “No government in the world would be able to control bitcoin anymore,” he said. Later, I ran into a group of people lounging on a sofa, passing around an e-cigarette filled with liquid marijuana. One of them, part of Branson’s service team, told me that it takes 120 people to keep the island running every day, or about three staff members per guest. He said he earned $1,200 a month—Brody’s hourly rate. Around nine o’clock the next morning, there was a breakfast buffet: bacon, eggs, tomatoes, croissants, and kale juice to detox; fair-trade granola bars and champagne bottles with a golden label that read, “Sir Richard Branson’s Private Island.” Over at the muesli bowl, I found myself suddenly face-to-face with Branson himself. “Hi!” he said, with a friendly smile. Tan and wearing a grey t-shirt and swim trunks, he has a surfer’s lion-gold, almost neon-ish mane, which goes well with his large mouth and huge teeth bordered by a darker goatee. He grabbed a glass of fruit juice and walked away with his muesli. I followed him to a veranda with a long wooden table, plenty big enough for the thirty people who are staying in Branson’s villa. The life of a billionaire, I had begun to understand, is like a reality TV competition. De Soto, Forde, Casey, and Luckett sat around Branson, all of them trying to sell him on their projects and plans in as few sentences as possible. This is an “elevator pitch”: the 90 seconds one has to try to convince the investor of a lifetime to join in a business venture. Branson, with an estimated worth of five billion dollars and a reputation for wild business ideas, is an amazing opportunity. An elevator manufacturer once suggested to Branson that he install one here on the island expressly for elevator pitches. Branson listened calmly, eating his muesli and sipping coffee. Now and then, he asked a question in his gentle voice. His pronounced stutter is well under control. When he tried to go back to the buffet, he couldn’t make it more than a few meters without being detained, to listen to a new idea or to pose for a photo that will immediately be posted online, thereby increasing the market value of the person posing with him. At around ten, we arrived at the main event. The 35 attendees, who include seven women, gather around the flatscreen in the big hall. Some of them have prepared short presentations. Brody, the star executive, explains that in the near future practically everything will be online. “Every toaster will have a chip like this one here,” he said, holding up his iPhone. “This chip has more processing power than the first iPhone,” he added enthusiastically. “This device could connect to the net. And what happens to things when they go online? We record their usage, start measuring their capacity, and try to increase it. Like fitness, thanks to Fitbit wristbands that count our steps. Like apartments, that we sublet on Airbnb when we’re away. Like cars, that you can rent when they’re not being used.” “Unused potential is everywhere,” Brody continued. If there were a method for indexing this potential and trading with it, the market would be “tremendous, unbelievable.” The blockchain, he said, is precisely the tool to manage an “internet of value,” in which “everything” would be tradeable. De Soto beamed. The blockchain would, in essence, allow capitalism to more fully move into the realm of the internet. This has always failed in the past, because in digital environments, everything is so easy to copy. Therefore nothing is scarce, which is why digital content, like music, images, and text, is almost always free, or extremely protected. The blockchain’s comprehensive ability to allocate each piece of code within its system could completely eliminate the possibility of copying a song, for example, because who has which digital copy when would be traceable. A digital magazine based on the blockchain system would have unique copies, just like a printed magazine. It could be bought and sold like a physical object. Next, a long-haired computer scientist named Patrick Deegan demonstrated one of the idea’s applications. He’s used blockchain to create digital passports that allow people to register their possessions. Deegan talks about “smart contracts”: digital agreements that execute themselves automatically, like leased cars that will not start if the installment has not been paid. Administrative staff would be unnecessary. Deegan is optimistic. The blockchain, it seems, could automate bureaucracy. It could replace millions of employees. A moonshot. Most recently, he said, the world’s most powerful banks have formed a consortium named R3 to employ such ideas. All of this dramatically serves the common good, most of the speakers say during their presentations. One speaker invoked the visionary architect Buckminster Fuller, a kind of Abraham in the epic of Silicon Valley. He handed out Fuller’s bible, Spaceship Earth, and told how “Bucky” passed on his mission in his last days: “On personal integrity hangs humanity’s fate.” He then presented a rating system for humans in which people are continually evaluated. Like the taxi service Uber, where customers rate drivers and drivers rate customers, but for all of life, visible to everyone. The problem for the guests, it seems, is that the business case for Buckys vision is not obvious. The reactions in the audience were mixed. Friendly applause. To conclude, Luckett—the Rolls Royce burner—demonstrated that the development of the internet and the blockchain are not only spiritually correct, but deeply natural. Nature too is organized in networks. As proof, he showed pictures of networks of mushrooms next to visualizations of social media networks. The applause was frenetic. During a short pause, the participants gathered on the giant chess terrace for a 3D group picture. As the picture-snapping drone approached from the blue skies, everyone raised their arms in a group cheer. At lunch, served in the lower pool, the mood was euphoric. As I sank into the water, a girl launched a little boat laden with drinks in my direction. “Sake cocktail?” Next came a flower-bedecked kayak filled with sushi. A French star-chef served cuisine in his swim trunks. From the palm-leaf-covered pool bar I hear electro-pop duo Ratatat's “Cream on Chrome.” Over coconut water at the bar, I talked to an investment banker with gelled blond hair. He was high. “Fantastic, man!” he said. “My business is number one at getting money out of China. It’s complicated as hell, nothing but regulations, transparency, and limits. Huge monitoring costs … I think efficiency is going to increase tremendously.” “When everything goes through the blockchain … I could fire half my team,” he beams. “Lawyers, notaries, bankers—they just do what the blockchain does automatically.” Then a woman in a tight black dress with a huge floppy hat stole his attention. The party guests have arrived. The fresh fish was excellent, and must have been flown in from far away, as a strange virus had made the local fish inedible. A dark-haired man in his mid-thirties paddled near me. He trades in bitcoin and commutes between London and France. His eyes gleamed. “Huge sectors of government do nothing but manage assets and execute contracts,” the man said. “Not just the central banks, but the passport agencies, registration offices, land registries for real estate. All of that will be unnecessary.” As a senior venture capitalist sunk into the water next to us, still holding his Blackberry, the man whispered conspiratorially, “C’est une revolution.” We climbed out of the pool, and a thin young Arab man stood before me. “Salaam,” he said with a smile. “He’s from the Emirates,” my new friend explained as we walk toward the beach. “He could be the first big blockchain investor from there. He might be richer than Branson. In any case, Branson forbid him from bringing his bodyguards to the island.” On the beach, I grabbed a snorkel. I swam along the ocean floor, passing a ball-shaped creature. It was half a meter wide and pulsing. Strange, large fish were everywhere. Around seven, I met Tina Hui, who runs a social media site about bitcoin. She posts updates constantly, even while doing her makeup. “I can’t ever look bad,” she said, “I’m always online.” Tina was one of the few women added to the guest list after the organizers were criticized for inviting only men. The others included an aerospace engineer who works for Branson’s spaceship company, a famous attorney, and Elizabeth Rossiello, the CEO of Nairobi-based BitPesa, which provides transfer between bitcoin and local currencies in Africa. This is great for the currency’s reputation, the thinking goes, as bitcoin will never be adopted by the masses as long as it is seen as money for internet gangsters. To the same end, that morning an inconspicuous gentleman with an extreme comb-over and an apricot linen shirt—previously employed by the Department of Justice—had suggested cooperation with “state agencies.” A strategic cease-fire, so to speak. We made it to the tropical pub just in time. The chef had prepared a Moroccan-style meal, perhaps in honor of the event's special Middle Eastern guest. The table is U-shaped. There were now some seventy guests on the island. I spotted Brock Pierce, Michael Zeldin, and several ladies in dresses. Torches were stuck in the sand. Rosé from New Zealand was poured. Across from me sat Ted Rogers, who looks like the captain of a rowing team. Rogers is president of the bitcoin vault Xapo, which Larry Summers joined after ending his candidacy for president of the Federal Reserve. Bitcoin entrepreneurs have to get out of the pirates’ islands, Rogers said, and into "clean" countries. Xapo has one of its legal headquarters in Argentina, another one in Switzerland. “Switzerland could become the home of bitcoin,” he suggested. He finds the culture of privacy and the hands-off government optimal. “And the legislators are reasonable, too. You can talk to them.” He had just explained that there is an important community of bitcoin supporters in the Swiss town of Zug when Branson appeared. Zug, a small town of 30,000 inhabitants, was once Switzerland’s capital of offshore banking. Thanks to its free-market reputation, it has recently become one of the world’s leading hubs for the cryptocurrency folks. Nevertheless it’s so boring that Xapo actually resettled half an hour north, in Zürich, Switzerland’s busiest town. In January Xapo’s CEO Wences Casares joined Paypal’s board. Cello music wafted over the tennis court and the guests reclined on pillows arranged in a semi-circle, while Branson sat enthroned on a sofa with the sheikh to his left. The cellist Zoë Keating left the stage. De Soto stands. His act is next. And for a brief moment, Branson was alone. “Sir,” I said. He bows. “You signed the Sex Pistols.” He nodded, baring his teeth to smile. At the Queen’s Silver Jubilee in 1977, Branson chartered a boat on the Thames, on which the punk band famously mocked the monarch. The police got involved, of course, and the media was there, filming everything. The scandal put the Sex Pistols’ single on the charts and made Branson a lot of money. There are two kinds of billionaire. One makes money off the system. Branson makes money off its destruction. “Is it still all about the same thing as back then?” I asked. “Against the state, against banks?” “Sure, man. You got it,” Sir Richard grinned. He raised his hand for a high five. “Capital!” cried de Soto. He made a fist, scanning the crowd. “The word comes from Caesar’s head on Roman coins. From caput—head.” His voice was strong, and even the cellist was listening. “This head is the power.” De Soto raised his fist. “And this head is you.” Branson looked like a boy seeing his model airplane lift off the ground for the first time. De Soto pointed to his audience, and said: “You’re part of the creation of a new capital.” “Yes!” Branson said from his divan. “Yes!” and he began to clap. The others joined him and the applause nearly filled the island. Hannes Grassegger is an economist based in the financial capital of Zürich, Switzerland, who skipped investment banking to become the leading German reporter on digital life (Digitales Leben, as they call it). He is the author of Das Kapital bin Ich (I am Capital), a pamphlet on how to screw the NSA plus all other secret services and make a dime from it, too. Follow him on Twitter @HNSGR. This article first appeared in German in Das Magazin.
News Article | March 4, 2016
There's a new buzzword emerging in the energy industry: blockchain. Blockchain is commonly known as the public database created to track the cryptocurrency Bitcoin. It chronologically records and links every transaction made across the network, making Bitcoin more secure and keeping authentications decentralized. Blockchain is the reason Bitcoin can exist and transactions using it can be trusted. But the blockchain concept isn't limited to Bitcoin. Experts are now asking if it can be used to track the flow of electrons on a distributed grid. If the future two-way electric system is made up of billions of endpoints interacting with each other -- microgrids, solar systems, smart appliances, in-field distributed computing and energy management software -- how do you create a secure system that can verify instantaneous, autonomous transactions across these nodes as market conditions change? Many people believe that the blockchain can serve as the foundation of this system. "Bitcoin is largely changing finance. But moving into blockchain energy could be much bigger than Bitcoin," said Lawrence Orsini, the founder of LO3 Energy , a company building an "open-source, cryptographically secure" blockchain to manage transactions across a microgrid. Orsini joined a group of other blockchain enthusiasts and energy professionals at the Massachusetts Institute of Technology (MIT) this week to discuss how the concept could be applied to the energy system -- primarily the fast-changing electric grid. The conversation was moderated by GTM CEO Scott Clavenna. Aside from some early demonstrations, the applicability of blockchain on the electric grid is largely theoretical. At this stage, a few early participants are designing authentication systems specifically for energy and appliances. But mostly, people are trying to wrap their heads around where the blockchain could be applied -- and how to get it started. "It's quite early. But I've been looking at the blockchain for about four years, and I've realized its potential implications across many industries, including energy," said Chris Taylor, a senior dispatcher at NRG, setting up the night's conversation. "We are on the ground floor of one of the most significant transitions in human history." In a December piece published by the Deloitte University Press on how blockchain is moving into other industries, David Schatsky and Craig Muraskin offered a clear explanation for why it's such an attractive concept: " Blockchain technology offers a way of recording transactions or any digital interaction in a way that is designed to be secure, transparent, highly resistant to outages, auditable, and efficient; as such, it carries the possibility of disrupting industries such as financial services, remaking business practices such as accounting and auditing, and enabling new business models." Energy is one of those industries that could be transformed by blockchain, argues a growing group of believers. (Although Schatsky and Muraskin point out that "there is little concrete happening" in energy at the moment.) That hasn't stopped experts from dreaming and experimenting. "We can turn Bitcoin into almost anything," said Joi Ito, the director of MIT's media lab, speaking on a panel of energy and blockchain experts. LO3 Energy has already built out two nodes that are collecting consumption and generation data across the microgrid and "feeding it into a blockchain, " said Orsini. "They're not quite ready for prime time, but [the nodes] are up and running," he said. In January, IBM and Samsung unveiled an early platform for controlling connected devices based on the blockchain concept, called ADEPT. The platform uses software developed by Ethereum that authenticates "smart contracts." Those "contracts" could be micro-transactions between appliances within a home as they react instantaneously and autonomously to changing conditions on the grid, for example. Paul Brody, the leader of Ernst & Young's technology strategy arm, called this "device democracy." “We demonstrate how, using ADEPT, a humble washer can become a semi-autonomous device capable of managing its own consumables supply, performing self-service and maintenance, and even negotiating with other peer devices both in the home and outside to optimize its environment," wrote IBM in a draft white paper on device democracy. (The final white paper can be found here.) Brody formerly worked at IBM and helped build the ADEPT platform. "We needed a completely new way to manage connected devices for the internet of things," he said. Blockchain was the place to start. In the future, all smart devices across a network -- perhaps connected by ADEPT -- will be able to securely send and receive data while autonomously reacting to market signals. And this will all be hidden to the average consumer, said Brody. "Most consumers will not know or care if their appliances run on blockchain. If I have to think about every trillionth of a kilowatt-hour I've saved, it's never going to happen," he said. Along with LO3 Energy and IBM, a Vienna-based startup called Grid Singularity is also experimenting with blockchain to authenticate energy transactions. The company is targeting developing countries, where it wants to make pay-as-you-go solar more secure. Its eventual goal is to build a blockchain platform for energy systems that can be applied to any type of transaction on the grid. Ed Hesse, the co-founder and CEO of Grid Singularity, doesn't see other platforms as full-on competitors yet. "I don’t see one universal blockchain. I see many different blockchains that overlap," said Hesse. Bitcoin proved blockchain can work. Now investors, startups and behemoths like IBM are investing real money to test how it could be applied to energy and the broader internet of things. So how would blockchain be adopted in those sectors? No one had a precise answer. Perhaps in smart meters first, then in appliances, and then across a microgrid. There are currently far more theories and proposals than real-world examples. And while regulators might like the idea of using blockchain to help monitor the grid of the future, they haven't even begun to grapple with how to support it. "You’re going to see a lot of fumbling in the dark until someone finds a light switch," concluded Brody. It's still early days conceptually for the energy blockchain. Finding early-adoption cases is important. But all the experts agreed that big thinking is just as crucial at this stage. "It would be a waste to just use the blockchain to just do meter billing," said Ito. Expect blockchain to become an increasingly popular term in energy. But don't expect much more than small pilots and conceptual frameworks for many years to come.
News Article | December 22, 2016
A U.K. startup called Electron is proposing a blockchain-based electricity and gas meter registration system to help consumers switch between utilities more easily. “Blockchain technology enables reliable coordination between multiple parties without the need for a central coordinating entity,” said Electron in a press release. “The company sees this platform as a first step in harnessing blockchain technology to transform the virtual infrastructure of the energy industry.” Registering meter details on a blockchain could help U.K. utilities comply with upcoming regulation that is expected to allow consumers to change from one energy provider to another in a single day, said Electron chief operating officer Joanna Hubbard. Currently, because there is no central register of all electricity and gas meters, it can take between 17 and 20 days to change utilities in the U.K. A blockchain could cut this time to “mere minutes,” Electron believes. The U.K. energy regulator, Ofgem, launched the next-day switching proposal in February 2015. The consultation period for the proposal has now closed and utilities are awaiting a final decision. “We propose to lead a program of work to deliver these policy proposals for consumers by 2019,” Ofgem says on its website. Ofgem believes the measure can be achieved “by replacing the existing network-run gas and electricity switching services with a new centralized switching service.” If created in a traditional manner, though, the switching service would need to build and maintain a massive database of meter information, which Hubbard says would be costly and unwieldy. Using a blockchain would be “millions cheaper,” she said. With the advent of blockchain technology, “a central database sounds very inefficient now,” she commented. Furthermore, she said, the blockchain approach would make it easier to integrate the meter data into applications such as demand response or peer-to-peer energy trading. This is where the real interest lies as far as Electron is concerned. The company intends to offer the meter registration blockchain as a free platform to utilities, and then create value-added services around it. “We’re not looking to commercialize this,” Hubbard said. “We’re looking to deliver it to the industry; then we are well placed to build on it.” For now, however, Electron still has a long way to go before making this plan a reality. The company has shown its concept could work in theory, by creating an Ethereum blockchain and filling it with simulated data from 53 million metering points and 60 energy suppliers. However, the company needs to get the U.K. electricity sector on board, starting with utilities, and “we’d have to get buy-in from Ofgem,” said Hubbard. She said Electron was already in talks with potential utility partners and “the reception has been very warm,” although none had yet signed up for the concept. Smaller energy providers were interested because faster switching might allow them to pick up new customers more quickly, she noted. For larger energy companies, the interest was more around the development of blockchain-based applications such as demand response. With the right partnerships in place, Hubbard said Electron, which is backed by £500,000 ($617,000) from private investors and £150,000 ($185,000) from two Innovate U.K. grants, could roll out the blockchain registry within 18 to 24 months. Electron’s proposal comes amid growing interest in the use of blockchains across the energy sector. Siemens recently announced it would be collaborating with a U.S. company called LO3 Energy on a peer-to-peer energy trading blockchain project in New York. And in a February 2016 forum moderated by GTM CEO Scott Clavenna, Joi Ito, the director of Massachusetts Institute of Technology's media lab, declared: "It would be a waste to use the blockchain to just do meter billing." Hubbard acknowledges that blockchain’s potential goes far beyond meter data, but said someone needs to provide the infrastructure to aggregate metering information in the first place. “We’re the only people doing this top-down approach,” she said. The idea is that other blockchains (for example for tokens or peer-to-peer trading) will be interoperable with Electron’s platform, and that all told this could have a transformational effect. For now, in the U.K, “This industry still takes 14 months to settle financial transactions,” said Hubbard. “There’s a lot that has to change.”