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Predictive analytics is the process of taking data and predict what a person or group of people are likely to do in future. It is digital fortune telling, backed by solid data science.

Netflix has prediction algorithm. It is based on information on what you have watched, the ratings you have given and other behaviour metrics. Netflix recommends movies and shows that you may like. It is big business. Netflix encourages improvements of this algo by declaring a prize for anyone who can improve it by 10 percent. Amazon’s suggestions is another example. Amazon records what you click on, what you look at other sites and where your orders are delivered and more. It knows what you want before you order.

predictive analytics has the capability to go beyond what a user is likely to buy. Location data is likely to suggest where a user is likely to be. You may receive discount codes of restaurants right at the time when you are there.

Facebook is fearing resistance from the regulatory authorities ever since it has announced its intention to introduce Libra, its cryptocurrency. To induce credibility, Facebook has set up on independent foundation to manage the whole thing. The USP of cryptocurrency is its blockchain platform consisting of an electronic ledger which can be viewed and validated by many people. It is very difficult to hack it and it provides anonymity.

Bitcoin is a cryptocurrency, but Libra differs from it. Libra proposes to operate against a pool of assets including fiat currencies and precious metals. Libra will be issued against this asset pool at an agreed exchange rate. Libra can be redeemed against that pool.

Libra could be more efficient than fiat. It could facilitate cross-border transfers at lower cost. It could disrupt the global remittance market.

Yet, we have to be cautious. There was a crypto fraud of OneCoin floated by Dr. Ruja Ignatova in 2014. She later employed her brother Konstantin who later played a larger role. She worked for McKinsey in Bulgaria for sometime. OneCoin was more efficient than Bitcoin. It ran exchange and used blockchain. Its mining system was similar to bitcoin. As Bulgaria is EU nation, the exchange accepted many currencies and issued OneCoin but when OneCoin was exchanged, it offered only Euro.

OneCoins were marketed in investor meets where educational kits were sold. These explained how crypto and OneCoin worked. There were tokens in the kits which could be exchanged for OneCoin. Investors were offered commissions in terms of OneCoin tokens to sell these kits. This was a multi-level marketing scheme. The exchange rate was pushed up by such circular system (from 0.5 euros to 38 euros). In reality there was no private blockchain. The apex of the pyramid issued OneCoin at their whims and fancies. It was an amalgom of Ponzi and crypto scheme. It defrauded investors of several billion dollars. It attracted the attention of the regulators. The exchange stopped working, and still the scheme continued operating. Investors were reluctant to complain even after knowing they had been defrauded. They were playing a role in the Ponzi. Dr. Igantova disappeared in 2017. Her brother Konstantin took over. He was arrested in the US in March 2019. Several other founders too were arrested. Authorities recovered some amount in different countries, but only a fraction of $3.7 billion invested initially in it.

Thus unregulated crypto is fraught with risk.

Most widely used cryptocurrency is not Bitcoin, but Tether the trading volume of which is about $21 billion per day. It is 18 per cent higher than that of Bitcoin on a monthly basis.

Tether’s management is not known. It is issued by a Hong Kong-based private company. The same proprietors own the crypto exchange. How the supply of Tether is increased or decreased is not known. It is also not known how much of the supply is covered by fiat reserves. Tether is not audited independently.

In countries where crypto exchanges are banned, people can buy Tethers by paying cash on the counter. Tether is out of reach of the US Government. Most crypto exchanges still do not have bank accounts, and cannot hold dollars on behalf of the customers. They use Tether as substitute. People use Tether without realising they are using it. They may be under the impression that they have dollars in a bank account somewhere.

Facebook proposes to launch its own cryptocurrency in the first half 2020. It is called Libra. A subsidiary called Calibra is also set up by Facebook to offer digital wallet to save, send and spend Libra. Calibra will be connected to Facebook Messenger and WhatsApp. Facebook has tied up with 28 partners in the project which include household names such as MasterCard, Visa, Spotify, PayPal, eBay, Uber and Vodafone as well as venture capital firms such as Andreessen Horowitz.

There are going to be transactions between consumers and business around the globe. The unbanked consumers will access financial services for the first time.

It is not clear how the regulatory authorities will deal with the largely unregulated world of cryptocurrency. Facebook hopes that it can bring global regulators to the table by publicising Libra.

Libra is going to be decentralised currency. The origin of cryptocurrency goes back to Austrian economist of the 19th century Fredrich Hayek.

Hayek was of the opinion that just as planning and management should not be centralised, the same way currency also should not be centrally controlled. What is currency after after all? It is a means of exchange recognised by the government. Currency is backed by a large institute, e.g. government, central bank etc. It is legal tender when backed by the government. Hayek was opposed to the central authority controlling the currency. He wrote a book on Denationalisation of Money. This concept could be translated into reality in this Internet age. Satoshi Nakamoto and blockchain thus brought Bitcoin. This happened in the last 10 years.

There are two distinguishing features of cryptocurrency — technology and decentralisation. In an ideal situation, any cryptocurrency is totally decentralised. That means it is not backed by any central authority. It is a trustless system. There is no institutional backing, but the trust is reposed in the system. In case of Bitcoins, the trust is in the blockchain technology.

Facebook’s Libra is different in the sense that by replacing the central authority, there is Facebook which may play a similar role. This fear is not misplaced. Facebook’s privacy policy is under attack. Unknowingly, Libra may empower Facebook to exert social control. Facebook is taking the first step to exert social control by introducing Libra into the digital payment world.

What AOL has done for Internet, Facebook might do for cryptocurrency. It may facilitate the use of cryptocurrency on a massive scale.

Data is ubiquitous, but its overwhelming percentage is unfit for consumption. Data is rendered usable by analytics and still bad uses of data have dominated the good ones. But data can do a lot of good. There should be good data policy.

The quantum of data generation is breath taking. Massive amount of data produced is either voluntary or involuntary, and mostly involuntary. Involuntary data is generated because of the connectivity to internet of a wide variety of devices we use.

Life exists not in the edges at O or 1, but in the continuum in between. This is true for data also. Between voluntary and involuntary data generation, there is an entire host of in between data capturing practices. Online purchases generate voluminous data every second about consumer preferences. Portals on internet allow us access if we disclose personal information. Users are compelled to check boxes, without reading the fine print. Informed consent is thus an oxymoron.

The economist calls data the world’s most valuable resource, and it has replaced oil. Most of the data is created recently and is almost dark and untouched.

One zettabyte is approximately equal to a thousand exabytes, a billion terabytes or a trillion gigabytes. According to IDC, it is estimated 12 zettabytes of data were generated in 2015. Only O.05 percent of this was analysed. By 2020 we will produce 47 zettabytes of data. Storage was expensive a few years ago but will be unlimited and free in the next few years.

Combine this data overload with AI. It is both beneficial and ruinous. AI has been with us since 1956, but has become hottest now becoz of Big Data and our capacity to store it. AI can be applied to diverse fields. In combination, data and AI, produce a whole that is a greater than its individual parts.

Watershed moment for AI. IBM’s Deep Blue beat Garvy Kasparov, the Greatest of all time (GOAT).

The rise and fall of AI will depend on how the underlying integrity of data is maintained. CA example is a recent case.

ML and AI-based content guidance system are being created to target individuals based on their behaviour and psychographic profile.

Consumer groups are calling for greater online protection and right to privacy.

Technologies are likely to diffuse and mature. AI will be of help for new drugs, spawning new businesses, quickening deliveries and making industries efficient.

The whole edifice is to built upon trust. Innovation is unlikely to thrive in an atmosphere of doubt and suspicion.

A data scientist teases actionable insights out of gigabytes of data.

There is enormous value in data processing and analysis. Data scientists are modern day superheroes.

Data science is data-driven science. It interprets data for the purpose of decision making.

Blockchain essentially is in the form of spreadsheet that is accessible to all, but not editable for everyone. Each piece of information is protected by a code. Blockchain can be used to protect Internet-of-Things (IoT). In these days of hacking, there are concerns about IoT. The systems are so vulnerable that if a hacker is to get access to even one of the devices, the whole net-work could be brought down . Blockchain can eliminate this uncertainty about IoT devices. As each block is protected by a separate code, even if the hacker has access to one block, the other mechanisms remain secure. Thus the chain is protected. This is useful in healthcare industry too. Blockchain can limit the extent of hacking. It is useful in managing public utilities.

Indian start-ups, BFSI and public sector have adopted blockchain technology. Blockchain has been used for maintaining citizen health record and land registry. Blockchain technology is at its nascent stage in India. It is expected to grow in coming years. ICICI has used it in trade finance process. It could be used in insurance claims and settlement. Health care sector uses it to monitor patient records and drug supply chain to fight counterfeits. AP, Telangana and Karnataka have been the three leading states in implementing blockchain for maintaining land registry, farm insurance and digital certificates through partnerships with leading service providers, start ups and academic institutions.

IBM has entered the world of blockchain, with World Wire — a new global payments network to support payments and foreign exchange for banks and NBFCs. It revolutionizes the way money moves. It is re-invention of the payment systems. The current payment systems do not communicate with each other and are not inter-operable. The new blockchain based IBM network is open and does not differentiate between the currencies. It provides real time settlements. It integrates payments messaging, clearing and settlement on a single unified network. It is a blockchain network. Participants can choose dynamically from a variety of digital assets.

World Wire optimises and accelerates —

o foreign exchange

o cross-border payments and

o remittances

It enables payments locations in 72 countries with 47 currencies and 44 banking endpoints.

The global financial infrastructure is status quo for the last 50 years. There is fear of change. Change is slowly creeping in. IBM is working with regulators.

Some banks have signed letters of intent to issue their own stable coins on World Wire. The network supports settlements using Stellar Lumens and a US dollar stable coin. Several banks and World Wire itself use Stellar protocol that makes money transfer point-to-point. As against this, there are complexities in the conventional correspondent banking.

World Wire reduces intermediaries. It reduces settlement time. It is in seconds since monetary value is transmitted in the form of digital assets (commonly known as cryptocurrencies or stable coins). Efficiency is improved. There is better liquidity management. It steamlines payment reconciliation. Overall transactional costs are reduced.

In pharma, a license to manufacture can be given to one or two firms but this is exclusionary, in the sense they alone can manufacture.

In telecom, licenses are given to any manufacturer, as long as it agrees to pay a reasonable royalty. A handset uses hundreds of patents at the same time, and this model suits. An industry standards body examines all patent applications for innovation etc. It declares some of them to be Standard Essential Patents (SEPs). These SEPs are available to anyone on a Fair Reasonable And Non-Discriminatory (FRAND) basis.

The issue is whether royalty should be based on the value of the component being sold or the whole handset’s price. The patent does not always reside at the chipset level. It can be anywhere in the network. Who should pay the royalty? Whether a chipset maker, or the telco or the handset maker? If charged to the device, the system becomes simpler.

It is also to be considered whether an absolute value is to be charged instead of pegging the royalty to the handset price.

With FRAND terms, technology suppliers are offering more and more capabilities to more and more device manufacturers. Consequently, the customer benefits. Device prices continue to crash even while these are becoming more powerful.

Previously, computing was confined to data organisation and processing. In this age of digitisation, data can be converted into vision, hearing, text, speech, movement, patterns and decisions. Computers have acquired cognition, thus leading to autonomous learning and action by machines. Thus AI is fast evolving.

AI has worked wonders in e-commerce, digital promotion, transport, ticketing and social media. AI has to be tailored to business strategy and organisational competence. While using AI, organisations must have a comprehensive measurement system. There should be manpower to curate, label and rank data for algorithms to make correlations and predictions.

AI has its limitations and risk. The biggest limiting factor is data availability and quality. There are issues of privacy in data collection. It is challenging to attribute decisions to specific criteria. Partial facts and biases are the limitations.

It is proposed to have data protection law. In India we generate immense quantities of data. If we secure this data and use it beneficially, it will lead to the well-being of Indians.

Second, powerful algorithms are used to mine the data. Personal data no longer remain individualised. Consumers give data in return of free services. In combination with other data, it becomes a source of strategic insight into the nation’s vulnerabilities and strengths. Thus data use must be appreciated in the overall holistic contact.

Data are stored in context. There is no guarantee against its misuse. The state must have the power to supervise and regulate the contexts and uses to which data are deployed. Abuse and misuse must be penalised.

Data residency is important. Data of Indians must be compliant with Indian law and regulation. Authorities must have access to Indian data. Such data must be stored within India’s territorial jurisdiction.

Finally, in the economy there is asymmetry. There are well-established firms abroad. India’s ordinary citizens cannot stand up to them. The sovereignty is fragmented. Digital giants operate seamlessly . Indian laws must have extra-territorial reach to ensure full compliance of digital players.