Tag: fintech

Let’s give some @VRM help to the @CFPB

cfpbThe Consumer Financial Protection Bureau (@CFPB) is looking to help you help them—plus everybody else who uses financial services.

They explain:

Many new financial innovations rely on people choosing to give a company access to their digital financial records held by another company. If you’re using these kinds of services, we’d love to hear from you…

Make your voice heard. Share your comments on Facebook or Twitter . If you want to give us more details, you can share your story with us through our website. To see and respond to the full range of questions we’re interested in learning about, visit our formal Request for Information

For example,

Services that rely on consumers granting access to their financial records include:

  • Budgeting analysis and advice:  Some tools let people set budgets and analyze their spending activity.  The tools organize your purchases across multiple accounts into categories like food, health care, and entertainment so you can see trends. Some services send a text or email notification when a spending category is close to being over-budget.

  • Product recommendations: Some tools may make recommendations for new financial products based on your financial history. For example, if your records show that you have a lot of ATM fees, a tool might recommend other checking accounts with lower or no ATM fees.

  • Account verification: Many companies need you to verify your identity and bank account information. Access to your financial records can speed that process.

  • Loan applications: Some lenders may access your financial records to confirm your income and other information on your loan application.

  • Automatic or motivational savings: Some companies analyze your records to provide you with automatic savings programs and messages to keep you motivated to save.

  • Bill payment: Some services may collect your bills and help you organize your payments in a timely manner.

  • Fraud and identity theft protection: Some services analyze your records across various accounts to alert you about potentially fraudulent transactions.

  • Investment management: Some services use your account records to help you manage your investments.

A little more about the CFPB:

Our job is to put consumers first and help them take more control over their financial lives. We’re the one federal agency with the sole mission of protecting consumers in the financial marketplace. We want to make sure that consumer financial products and services are helping people rather than harming them.

A hat tip to @GeneKoo (an old Berkman Klein colleague) at the CFPB,  who sees our work with ProjectVRM as especially relevant to what they’re doing.  Of course, we agree. So let’s help them help us, and everybody else in the process.

Some additional links:

On #Bitcoin, #Blockchain, #Linux and Minimum Viable Centralization

BrokenBitcoinBitcoin and the block chain have been getting  bad PR lately.

Bad PR is when even your friends turn on you.

Bitcoin ex-friend #1 is Mike Hearn, writing in Medium. He opens with his credentials…

I’ve spent more than 5 years being a Bitcoin developer. The software I’ve written has been used by millions of users, hundreds of developers, and the talks I’ve given have led directly to the creation of several startups. I’ve talked about Bitcoin on Sky TV and BBC News. I have been repeatedly cited by the Economist as a Bitcoin expert and prominent developer. I have explained Bitcoin to the SEC, to bankers and to ordinary people I met at cafes.

… and then, after a short digression, brings out the knife:

But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins.

Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.

Think about it. If you had never heard about Bitcoin before, would you care about a payments network that:

  • Couldn’t move your existing money
  • Had wildly unpredictable fees that were high and rising fast
  • Allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)
  • Is suffering large backlogs and flaky payments
  • … which is controlled by China
  • … and in which the companies and people building it were in open civil war?

I’m going to hazard a guess that the answer is no.

Then comes Bitcoin friend #2: Fred Wilson, with Bitcoin is Dead, Long Live Bitcoin. Fred hedges the headline in the text below, which he should since his firm has investments in the category. He also offers some hope, and a call to action:

I personally believe we will see a fork accepted by the mining community at some point this year. And that will come with a new set of core developers and some governance about how decisions are made among that core developer team. But it could well take a massive collapse in the price of Bitcoin, breakdowns in the Bitcoin network, or worse to get there. And all of that could cause the whole house of cards to come crashing down. Anything is possible. Even the return of Satoshi to fix things as an AVC regular suggested to me in an email this morning.

The Bitcoin experiment is six years old. There has been a significant amount of venture capital investment in the Bitcoin ecosystem. There are a number of well funded companies competing to build valuable businesses on top of this technology. We are invested in at least one of them. And the competition between these various companies and their visions has played a part in the stalemate. These companies have a lot to gain or lose if Bitcoin survives or fails. So I expect that there will be some rationality, brought on by capitalist behavior, that will emerge or maybe is already emerging.

Sometimes it takes a crisis to get everyone in a room. That’s how the federal budget has been settled for many years now. And that may be how the blocksize debate gets settled to. So if we are going to have a crisis, let’s get on with it. No better time than the present.

Much tweetage is going on. The best of it, to me at least, involves Vinay Gupta (@Leashless), who does an amazing job of unpacking Bitcoin politics, which seems to be most at issue here. (As Craig Burton (@craigburton) says, “All technical problems are technical and political. And you can always solve the technical stuff.”)

So take a look at this 12-minute video of Vinay holding forth on Bitcoin last August, when at least some of today’s problems were already surfaced. In it he talks about Bitcoin having “anarchist infrastructure producing a libertarian trading environment,” among other wise one- (and few-) liners. Great make-ya-think stuff there.

Bitcoin and the blockchain matter for VRM, because they can both help liberate individual customers (and groups) from the highly centralized systems that have reduced the free market to “your choice of captor.” And, though flawed, they are already in the world. If we are to prove that free customers are better than captive ones, we need systems that break us out of captivity. Bitcoin and the blockchain can do that.

I also want to pause here to express my love for Chris EllisProtip (@ProtipHQ), which allows anybody to pay whatever they want for anything on the Web, facilitated by a bit of open source code added to a site or service. One click and the cash moves. No intermediators required. No governments. No settlement systems. No credit card cruft. Consider the implications of that.

To solve Bitcoin’s problems (if they can be solved), I believe we need what Brian Behlendorf calls minimum viable centralization. That’s what Fred proposes in his post, and what — in some way or other — we will have at the end of the day. (Or the week, year or decade.)

The best example I know of mimimum viable centralization is Linux, which has a cluster of kernel maintainers at the top. All are benevolent dictators who earned their roles by proven merit. At the top sits Linus Torvalds, who started the whole thing and remains no less involved than he was in the first place. Linux isn’t in everything, but it’s close enough. Consider the implications for Bitcoin/Blockchain and other things like it.

Makes me think  maybe it’s time for Satoshi Nakamoto (whoever he or she really is) to step up.

Bonus links:

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