Tech picks of the week
EU Commission announces European Green Deal proposal – what’s in the package?
…Not exactly tech news, but as business people in tech, we should all be aware. There are three proposals (I’ve paraphrased)
- Make almost all physical goods sustainable – from the design phase to end-of-life
- Labels to let consumers know the environmental impact of the product [a bit like traffic light food labels?] – not just about energy efficiency but also environmental footprint as a whole
- Digital Product Passports to make it easier to repair and recycle products
- End destruction of unsold goods
- EU Strategy for Sustainable and Circular Textiles – Tackle fast fashion
- Educate consumers about sustainability and protect them from greenwashing.
My bet is that, eventually, the EU Commission will start taxing not very sustainable goods, especially if goods could be made sustainable but the company does not do its best – a bit like taxing fatty foods and fizzy drinks, or road tax which increases with polluting levels, perhaps.
UK Open for Crypto Business
…It aims to be a “global hub”
- New Regulations for Stablecoins, to be under the purview of Financial Conduct Authority – requirement to hold equal reserves of pounds sterling for the tokens issued
- Royal Mint NFT (as a digital collectible)
- Implementation of crypto regulation to cover off trading of crypto, taxation
- Consider legal status of Decentralised Autonomous Organisations (DAO)
What is a DAO?:
DAOs are, in short, a company/partnership on a blockchain.
It standards for
Decentralized – no one authority. No partners, CEO, no central management.
Autonomous – operates according to pre-set rules, like smart contracts
Organization – all forms of organizations (can be anonymous)
Once you go through KYC (know your customer) and other compliance checks, you can participate. Again as stated above, your profile can be a pseudonym. As I understand it, corporate structures and relevant law are programmed into the blockchain, so that a company can be automatically gain huge savings in legal costs), and rules can be programmed (ie: smart contracts) so that it can operate autonomously.
As a use case, suppose you meet a few like-minded individuals who are deep in a particular area at a conference. You can set up a fund with your new “friends” to invest in say, start ups that specialise in designs for a metaverse. You can set up rules (eg. % voting for execution), who does the due diligence and reports back, and once you fulfil the conditions set by the rules, the investment happens using the amount locked in an escrow – automatically, without a central administrator/general partner. You don’t need to necessarily trust the folks you are in the venture with because the capital (generally provided using crypto) is safeguarded as the rules on investing and spending are programmed into the structure.
Elon Musk becomes biggest shareholder in Twitter as he buys minority share (9.2%)
purchased by Musk (albeit minority shareholding) with similar beliefs. He has also started a poll asking users whether they wanted an edit button. His tweet says “Do you want an edit button?”. So simple. A great communicator himself, it reminds us all the effectiveness of simplicity in communciation. As a frequent and power user, Twitter could develop functions to make communications more user friendly and effective.
In another Tweet, Musk asked whether users thought whether Twitter algorithm should be open source (anyone can review the underlying source code). Dorsey replied that it should.
Most will know that Musk’s Twitter use has led him to sticky situations. The latest issue came when he asked users whether he should sell his 10 percent stake in Tesla. The SEC took issue and demanded that Musk’s tweeting activities should be under some governance. Musk’s filing in response said “The (SEC) won’t let me be or let me be me so let me see; They tried to shut me down . . . ” [borrowed from lyrics of Eminem track Without Me].
Ukraine/Russia conflict
Russia to allow imports of branded goods without brand owner’s consent
…Government Commission on the Sustainable Development of the Russian Economy Amid the Sanctions announced that it is planning to allow the imports of branded goods, even if it is outside the limits of trade mark law. It appears to only extend to grey goods, not counterfeit goods. As a result of the devalued Rouble, one wonders whether the impact might be limited (because parallel imports concern genuine goods that are being imported from a cheaper country). A list of products subject to the new rule is going to be published soon. In a different decree, Russia also allowed for the same with respect to patent rights.
Ukraine/Russian conflict leaves Huawei torn
…Western sanctions on Russia leading to the exit of Apple, Google, Nokia, Ericsson etc means that Chinese firms such as Huawei, Xiaomi and ZTE are enjoying rising sales in Russia. However, all is not that simple for Chinese companies as their products, particularly phones, but infrastructure too, are still heavily reliant on US technology to manufacture them, and high end semiconductors certainly contain US technology. Continued sales to Russia may violate sanctions, which could mean their access to US technology may be removed.
Ukraine uses chatbots on Telegram to identify whereabouts of Russian troops
…To minimise fake or spam sightings, only authorised users can upload.
Fiesta, Russia’s answer to Instagram becomes most downloaded app in Russia
…Unlike Insta, you can also find, join and create events.
Yandex, Russia’s answer to Google embeds code into apps to suck information about
users
…The code concerns Yandex’s software called AppMetrica, which enables developers to create apps to run on iOS/ Android (such software is called software development kits, of SDK). Many SDKs are provided for free in return for user data. The dangerous thing is that, SDKs can use permission the user has given the app, not knowing SDKs can also utilise it.
Yandex acknowledges it collects device, network and IP address information stored in Finland and Russia. It is though said to be difficult to track information back to the user. Yandex software is reportedly used on 52,000 apps. Some of these apps are specifically for the Ukrainian population, one of which is a free messaging app called Called Ukraine. Yandex may be able to see the user’s identification and access its contacts through this app.
Such fact damages Apple and Google’s claim that they need to run the App Stores on their operating systems in the interests of users’ safety and privacy.
Artificial Intelligence
Baxter’s medical pump patent infringement enabling automatic adjustment depending on the patient’s condition against Becton can go on says judge
…The seven year case trundles on as judge could understand that the expert report might support the plaintiff’s claim that the Defendant is using the same algorithm.
Northwestern University’s Collaboration Robot (Cobot) Patents survive patent ineligibility allegations in the US
…The Judge said “The claims appear to be directed to an improved intelligent system with a particular modular architecture, not an abstract result or effect that merely invokes generic processes or machinery”.
Northwestern had also sued robot leaders Fanuc, Kuka and Mitsubishi Electric. Only the Mitsubishi Electric case continues, with others having reached settlement.
BigTech
Third party litigation funded consumer class action attacks Apple in the Netherlands for abuse of dominant position by charging the excessive 30% commission on App Stores which are then passed onto consumers
…In its suit, the Consumer Competition Claims Foundation demands €5 billion. The consumers say that Apple are charging 6 times as much as it would charge if the market were more competitive.
Facebook looks able to settle its privacy claim for $90m for tracking browsing activity from logged off users
…The cause of action was the breach of federal Wiretap Act and California Invasion of Privacy Act.
Should US Copyright law give power to Copyright Office to force internet service providers to use technology to block copyright infringing materials?
…Yep, this is very similar to EU’s controversial Art 17 of the Copyright Directive in the Digital Single Market. Understandably there is lobbying going at both sides; Amazon, Google, Apple, Redbubble, Vimeo, Etsy and Pinterest are against, and content providers such as Netflix, Disney and Sony are for.
UK Consumer Group Which? seeks to sue Qualcomm for anticompetitively overcharging on chips for damages amounting to £480m in a 29million person class action in the UK
…Which? complains that Qualcomm refused to licence rival chipmakers standard essential patents that enable the chips to wireless communicate and refused to sell chipsets to device makers unless they paid the licence for the patents (No Licence No Chips policy), in an anticompetitive practice.
Digital Economy
Chinese Authority thinking about giving US regulators full access to audits of Chinese listed firms
…If so, it will mean Chinese companies may be able to keep their US listings.
US DOJ urges Judge not to block digital copyright law
…In the US, it is a crime to circumvent technical protection measures (eg. bypass passwords) to access copyright protected material, in accordance with s.1201 Digital Millenium Copyright Act (in UK, it is unlawful, but not a crime). Some researchers in the areas of electronic security and digital video technology complained because it impeded their research.
“The statute is focused on conduct rather than speech, restricting the use of technological means to obtain unauthorized access to digital content. Just as there is no First Amendment right to break into a bookstore to read a book, there is no First Amendment right to breach a paywall to access online content without paying for it” said the DOJ.
Medical Device Group applies to invalidate a rule which exempts individuals that bypass technical protection measures for the purposes of repairing the medical devices
…In October, the US Copyright Office published a final rule which exempts individuals who circumvent the technical protection measures for the purposes of repairing medical devices. The Medical imagining & Technology Alliance says that this is arbitrary and capricious. Advanced Medical Technology Association also agrees, stating in its Complaint “by issuing a rule that enables unregulated, for-profit service providers to piggyback off the creative efforts and intellectual property of medical device manufacturers, it not only thwarts the purpose of the Copyright Act, but also puts patient safety, device integrity, and device cybersecurity at risk”.
Intel buys cloud optimisation company Granulate (Israel)
…Big company acquisitions can often reveal how they picture the future.
Granulate is a start up company but appears to have a number of impressive partners, such as Google, Microsoft, IBM. What Granulate is able to do, is to understand the customer’s application and autonomously and in real-time improve compute workload performance by deploying software on smaller computing clusters. The description is so abstract it is difficult to understand, but I imagine that data centers will be efficiently able to deploy computing power which means it can handle more commands more efficiently.
Granualate will end up in Intel’s Datacenter and AI unit.
Drones
Texas was wrong to ban drone photography says Texas federal Judge, handing a win to plaintiff journalists
…Texas argued that the right to gather and disseminate news was nowhere in the First Amendment (freedom of expression etc) contrary to plaintiff journalist position, which was that the prohibition of drone photography violated the First Amendment. The Judge sided with the plaintiffs.
EV
Biden to invoke Defense Production Act aimed to supporting extraction for minerals required to make EV batteries
…This is in part response to lack of oil supplying owing to the Ukraine/Russian conflict. Batteries are thought to provide long term energy storage. Minerals include Cobalt, Nickel, Lithium, Graphite and Manganese. The Act has been around since the days of President Truman, giving powers to the president the authority to prioritise critical materials for domestic production in case of emergency.
AutoX, Chinese autonomous driving company unleashes fully autonomous car in Vegas without safety features
…Although there was a person in the driving seat, allegedly it had no ability to allow the driver to take over, according to nameless insiders and employees. The company has the backing of Alibaba and Softbank. Although the company states safety is of highest priority, it has been said that AutoX deliberately gets the cars to carry out near collision operations to get more critical data and allowed cars to drive the streets of San Jose without the ability to engage any safety features.
In 2021 AutoX became the first company in China to be allowed to self-drive (ie: no driver) ahead of better funded rivals such as Baidu’s Apollo or Didi.
Nio, Chinese EV company in discussions in Europe about adoption of battery swapping
…One of the issues with EVs is the time to re-charge. Even Tesla’s superchargers can take up to one hour to re-charge. Nio’s idea (which has already been implemented in China) is to swap batteries at battery swap stations:
- Takes 5 minutes instead of an hour
- Carried out by robots which unscrews the bottom of the car and replacing the battery through a hatch in the floor of the station
- Knocks off £££ from the price of the car (battery accounts for about one third of the price of the car at the moment) [critically though what would be the life-time cost of the car?]
- Battery station requires dedicated grid connection of 650MW, size of a small power station.
Nio is currently in talks with several auto manufacturers about licensing out this battery swapping technology. It was attempted by Tesla, but was abandoned.
Nio has already launched in Norway, because of available subsidies. 80% of cars sold in Norway are EVs.
Gaming
Famed choreographer sues Fortnite for infringing copyright by permitting characters to do his protected dance movements
…These programmed moves on games are called “emotes”. Plaintiff Hanagami claims that one of the emotes is identical to one of his dance sequences. This not the only dance move complaints Fortnite publisher Epic has ever had.
NFT
Nike doesn’t understand NFTs says StockX in its Answer
…StockX is originally an online global marketplace for physical products (typically valuable goods) which are validated for authenticity (sometimes using AI). StockX now offers Vault NFTs which are NFTs tied to physical authenticated products. The Vault NFT has no value as such (unlike the digital image NFTs that are fetching handsome prices) – it is simply just a key to the item, embodying proof of ownership. Because it’s a hassle and costs money and there is a risk to shipping authenticated, expensive physical products to the owner, those investors who only seek to own these physical products for investment purposes can choose to have the physical item securely stored by StockX, and have an NFT certifying that it is the owner. Incidentally, it’s also much easier (no need for further shipping, re-authentication etc) for the owner if it wants to re-sell onto to the next buyer in this way.
StockX displays a picture of goods (eg. rare Nike sneakers) together with the description to show that it is available for purchase. Nike has sued StockX for trade mark infringement. StockX says Nike misunderstands the various functions of NFTs, and what it is trying to do by the suit is to prohibit StockX from lawfully describing what it is selling.
The key question in the case is whether NFT is the actual underlying image or just a code the purchaser obtains (a bit like a receipt). If it is the underlying image, then it is possible for StockX’s use to infringe.
What made NFT Game Axie Infinity so hackable? – second largest ever cryptohack amounting to theft of about $600m
What is Axie Inifinity?
According to Wikipedia, Axie Infinity is an non-fungible token-based online video game (some people might call it blockchain games) developed by Vietnamese studio Sky Mavis, known for its in-game economy which uses Ethereum-based cryptocurrencies. It is one of the most popular in the world. Players fight monsters called Axies to earn cryptocurrency.
Axie Inifinity owes its popularity due to the opportunity to play to earn cryptocurrencies (it used to be Eths), and the increase in the value of Eth further fuelled its growth. There are some controversies around this because in order to play, you need to buy said monsters first (several hundred $ as I understand it) – what appears to be happening is that wealthier players are loaning these monsters to poorer players (notably in the Philippines) via a “scholarship scheme” who are earning to play, with the lender of the monster earning commission off the loan (about 30-50% of earnings apparently). Players can earn tokens when they beat the monsters and complete quests. You can then change your earnings to fiat.
What made Axie Inifinity vulnerable to attack?
Axie Inifinity however faced the issue of high “gas fees” (amount of Eths required to do something on the Ethereum blockchain – to pay the miners to verify transactions, maintain network security). The gas fees of Ethereum, which is one of the more securer blockchains, is very high (the calculation of this is quite complicated, and depends on how congested the Ethereum blockchain is at any time).
What Axie Infinity decided to do, was to lower the transaction fees, by going off-chain by building its own blockchain, the Ronin network (“Layer 2 blockchain”) on the Ethereum blockchain and making its own token (called SLP, or Smooth Love Potion). The Ronin network has a “Bridge” which allows it to interact with the Ethereum blockchain, but it does so only when a transaction has to be completed. In this way, you can then earn to play and not get too much commission taken away on the Ronin network. In order to utilise this Bridge to authenticate the transfer of cryptocurrencies between different blockchains, you need to execute a smart contract. That required 5 keys to effect it, and 5 out of the 9 signatures (or keys) appear to have been compromised and used to carry out the hack. Ronin said that the validator threshold will be increased from 5 to 8 from now on.
The great majority of the stolen cryptocurrencies remain on Binance, a cryptocurrency exchange, but unless you know the private key to the wallets that store the stolen assets, you cannot recover them. There is nothing one can do until the culprit transfers the assets along to eventually, exchange them into fiat. So much for a decentralised system, cryptocurrencies users still rely on a central authority.
Visa launches NFT program for small businesses – here is why
…What Visa observes is that it has digitally enabled small businesses to participate in eCommerce, but the world is moving – there are gig workers and creators that are using the NFT ecosystem to propel themselves, a form of eCommerce 2.0. And Visa is aiming to continue being relevant in this sphere. The new program aims to establish relationships with individual creators to help them with commerce using NFTs.
Says Visa, they observe that businesses needed assistance in eCommerce, providing the infrastructure which allowed them to sell physical goods to users via the internet, and then in the recent times, the concept of digital services evolved (ie: any service you get from an App). This form of commerce is a little different because purchasers can’t resell them, being a service. The NFT, it says, is a bit of a hybrid of the two, it is like digital service in that it gives you access to experiences such as being a member of something by virtue of having an NFT (see example below), but it has similar characteristics like a physical thing in that you can sell them, or build on top of them.
Flyfish Club – the world’s first NFT private dining club
…Buy this NFT and you can get access to exquisite dining in NY. You can re-sell it, lease it, (and yes, the restauranteur will have a slice of those transactions) or just enjoy the exclusive dining experience (when it opens in 2023) or perhaps rub shoulders with undisclosed number of celebrities who are members. Cheapest membership costs 2.5Eth, or about $10k at the time of writing. The premium Omakase class costs 4.25Eth. All sold out though – you’ll have to go to the secondary market at this time, such as OpenSea.
The “How it works” section on the website is worth taking a look, giving you step by step guidance on how an NFT is purchased. You have to show your NFT to show you are a member to get access to the restaurant.
Inside the workings of money making by Musicians through NFTs
…A record company gives a musician $1m deal. Do you actually know what it means? The musician gets $1m for signing up to the record label, right? No. That’s not the case I was surprised to learn this week.
That $1m is merely an advance on future royalties. So suppose a musician has 20% share of the royalties of its music. That gets paid to the record label to payback the advance it has been given. So if you have a $1m deal, and you are entitled to 20% royalty, then the musician has to earn $5m in royalty to pay the record label back. All copyrights, including master recording are also owned by the record label with the deal. That $1m will have quickly gone with costs of setting yourself up – marketing, studio rentals, hiring managers, hiring venues, travel, branding, living expenses etc. You can now see why Prince, George Michael, Taylor Swift have fought the unfairness of the deals in the past. But record labels say most bets don’t make it, so the successful ones need to in part, provide the revenue to plug the losses.
But this is 2022. Artists don’t need so much money to produce music any more. So you don’t need that $1m advance. Musicians can loan a small amount, and produce, distribute and market music on a streaming platform at a lower cost.
What musicians are trying to do now, is to offer a portion of their royalty with an NFT [you could do it without an NFT but I am imagining that because a smart contract can be embedded, it is much easier to make your distributions]. For example, DJ Diplo offers the following NFTs to his fans for his track Don’t Forget My Love:
$99 for 0.004% of streaming royalty rights
$999 for 0.05% of streaming royalty rights plus more music
$9999 for 0.7% of streaming royalty rights plus a meeting with Diplo.
In most cases, you are most likely not to be able to recoup your investment (you get about $0.0027 per stream on Spotify, rates differ on the platform), but if you are a fan, that might not matter too much. Either that or you might end up feeling a bit exploited by the artist you supposedly admire…
Decentraland hosts Metaverse Fashion Week
…Not a lot of surprising features if you ask me. Here are what was available if you had attended
- Avatars wearing clothes which would be impractical in the physical world
- Physical brands opting to display on digital runways
- Limited communication with other avatars
- Selfridges launches shop
- Possibility to attend talks about future of digital fashion
- Links to “web2” (that’s the internet sites that we are all used to) sites such as Instagram, marketplaces and homepages
Software
Microsoft UK tries to exit from competition case concerning practices relating to second hand software
…The plaintiff is ValueLicensing which buys and re-sells perpetual second hand software licences. ValueLicensing says that Microsoft’s practice of giving discounts to companies that sign up to subscriptions to their software if they agree not to sell the perpetual licences, is anticompetitive.
In its application to strike out the claim against Microsoft UK, Microsoft accepts that there is a serious issue to be tried, but that the complained of practice was carried out by Microsoft Ireland, not Microsoft UK. If Microsoft UK is out of the picture, then it can argue that the case should be heard in Ireland and not the UK.