Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Voices
Facebook-like metaverse potential disaster says Second Life creator Philip Rosedale
Nikkei Asia | | Mar 18, 2022
Philip Rosedale says technology is not yet ready for 3D immersive VR
TOKYO -- "Metaverse" has become a buzzword in tech, business and beyond since Mark Zuckerberg changed the name of his company from Facebook to Meta Platforms last October, signaling a new focus on creating a virtual world where people can "live" in the form of avatars.
But what is effectively a kind of metaverse has actually been available to consumers for nearly two decades -- ever since Linden Lab of San Francisco launched its Second Life platform in 2003.
Philip Rosedale, the inventor of Second Life and founder of Linden Lab, has a vision for the metaverse that contrasts sharply with Zuckerberg's plans. Now an adviser to Linden, he shared his views with Nikkei in a recent interview. Edited excerpts follow.
Q: How do you view Zuckerberg's version of the metaverse?
A: I have two observations. One is that we are not technologically ready yet for the 3D metaverse for virtual reality headsets. [The] technology does not yet exist. The second thing I would say, more specifically about Meta, is that the business model Facebook has historically used, based on a very sophisticated kind of advertising involving behavioral targeting with a lot of surveillance and personal data, is not a safe model to apply to the metaverse.
If you imagine putting people as avatars into a virtual world with that kind of surveillance and behavior modification going on, it would be extremely dangerous for everyone. In my opinion it simply cannot be allowed to happen.
See: 7 Ways the Metaverse is Changing Enterprises
Second Life is proof, at least for a certain size of audience, that you do not have to rely on that kind of business model and that you can create a virtual world where people have privacy.
Second Life's business model is based on fees. There are two kinds of fees. One is, if you choose to own a piece of land in Second Life, which is about the size of Los Angeles, you have to pay a monthly fee of about $20 per acre. The second type of fee is charged, when you sell some virtual merchandise to other people, on listing and transactions. It is like a single-digit percentage of the value traded. Not as large as Apple's App Store.
And you know what? Second Life is making more annual revenue per active user than Facebook or YouTube does. That shows a metaverse does not require the Facebook-like business model. But if Meta chooses to apply the Facebook model to its metaverses, that would be a terrible thing, even an existential threat.
Q: What do you mean when you say that technology is not ready yet?
A: One thing that sets a metaverse apart from the conventional internet is that it always has other people there. When you go to a conventional website to do shopping or to read news, there is nobody else there with you. You cannot look to your left or right and see other people. In a metaverse, experiences that we would like to realize there, like a college classroom or a live music event, require us to enable hundreds or even thousands of people to be there near each other with sight and sound of each other. And that is very difficult technology.
See: Meta reveals it’s built one of the world’s fastest supercomputers to power the metaverse
We at High Fidelity have worked on spatial audio for the last 10 years and today we can enable a couple of hundred people, or a little more than that, to share the same space with sound. But having a bunch of people visibly standing around at an event, looking interesting enough that you would want to walk up and talk to them, it is not technologically possible yet. There have to be advances in cloud computing, rendering and a number of other things to make that possible. I think it will happen in the next five years.
And VR headsets, they are more like 10 years away. Those are in a very early stage. Today they are very uncomfortable. Actually we do not have the scientific approach to fix the dizziness we feel when we wear the headsets. The problem is that any time you move in VR but your head or actual body is not moving, eventually it makes you sick. And it tends to make women somewhat sicker than men and that is a terrible problem if you are trying to create a social experience.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Alberta, The untold history of innovation from Canada’s badlands – Part 2
Tristram Waye | Words Unfold and NCFA ambassador | March 23, 2022
This is part 2 of 4. Click for Part 1 and Part 3 and Part 4 of this series.
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Swyping to an exit
I called Randy at Apple's spaceship, where he was the manager of Text Input Special Projects. He told me about his journey as an Alberta entrepreneur.
Randy's story began as an engineering student at the University of Alberta.
Randy and a classmate decided to solve a quadriplegic friend's problem for their electrical engineering project. This inspiration started a series of insights and innovations now used by hundreds of millions of people.
What started as Madenta in 1988 turned into several patents and groundbreaking products. These included Screendoors, Telepathic, Tracker Pro and WISP.
Screendoors 2 was the first autocorrect on screen keyboard, a groundbreaking innovation in the late 90s. It gave people with disabilities better access and independence.
Telepathic was Madenta’s predictive typing software implemented on the Screendoors 2 keyboard.
Tracker Pro helped people with disabilities use head motions to move the cursor in place of a mouse. This would help them type on the onscreen keyboard. WISP replaced clicking the mouse button letting users puff on a small straw instead.
Microsoft licensed Screendoor2 for Windows 98 to support people with disabilities. Elements of Madenta’s autocorrect onscreen keyboard have been included in Microsoft ever since.
Randy said the 25 years he spent developing solutions for people with disabilities were some of his finest.
As he further explored how to help improve communication for quadriplegics, he came up with another insight. What if a quadriplegic person didn’t have to stop on every letter to select it? And what if they could pass the cursor through the desired letters without stopping instead?
This idea morphed into, what if you could text by tracing your finger on a virtual keyboard?
He contacted Cliff Kushner in Seattle, then founder of T-9. T-9 was the popular text entry system that used the numeric keys on a traditional cell phone to type letters.
He asked Cliff if he would like to help him create this new product.
Cliff agreed, and ForWord Input was founded, which later became known as Swype.
Randy told me about heading down to the World Series of Startups, TechCrunch Disrupt in 2008. The competition is an intensive multi-step process where startups pitch and get winnowed down to the best 3.
Swype placed 3rd out of 500 at Techcrunch Disrupt 2008 behind Yammer and Fitbit. Swype arrived just after the iPhone hit the market. The timing could not have been better.
It was acquired by Nuance Communications (Makers of Dragon Dictation) in 2011 for $102.5 million.
Marsden's second act
While he was working on Swype, a dentist ordered products he had developed for quadriplegics. It turned out that the dentist struggled to keep his keyboard clean. He was using the hands-free solutions designed for quadriplegics as a way to reduce patient infections.
The conversation evolved into a keyboard technology for safe microbe-free keyboards in hospital environments. The product was called Cleankeys. Cleankeys proved modestly successful as a product but more significant in eliminating keyboard germ transfer.
Cleankeys alumni Matt Bud and Tom Overgaard went on to found Circal Engineering. And Cleankeys continues its important work with microbe-free keyboards through a licence with GETT.
Randy wasn't done yet. He was contemplating the problem of setting your hands down to rest between typing on a glass-surfaced keyboard. The problem was typing letters when you didn't want it to. His engineers struggled with the contradiction: a touch-sensitive keyboard that doesn’t do anything when you touch it - sometimes.
While tapping on his desk and observing the resulting thumping noise, the solution to the problem came to Randy. He could use touch sensors and vibration sensors together, called sensor-fusion. It solved the problem.
Shortly after Cleankeys development, tablet computers emerged. Randy immediately recognized the value of what they had learned from Cleankeys. Only now, the keyboard is on a dynamic display, and the keys could move around. Instead of making the user move their fingers to the keys, the software could move the keys to their fingers.
Again his timing was pristine. He developed Dryft in 2013 with Rob Chaplinsky. Dryft was a dynamic, personalized keyboard that made typing fast and natural on tablets.
To validate the idea, in 2013, he headed back to the World Series of Startups. At TechCrunch Disrupt, Dryft placed 2nd and was acquired by Apple in 2014 for an undisclosed amount.
Randy became Apple's iOS Keyboard Manager and moved on to become the Text Input Special Projects manager. In late 2020 he became Apple’s Product Lead for the Exposure Notifications project. This is a joint venture between Apple and Google to fight the spread of the virus. A natural fit given his background and expertise.
He moved on to Nike in December 2021 where he is Senior Director, Technology Innovation Office.
Randy has received numerous accolades for his work, particularly for his insights into disabilities.
From the Valley, Randy told me he helps Alberta's entrepreneurs whenever he can. He was grateful for Alberta's contribution to his success. But he mentioned the twenty-five years of struggle to achieve what he had.
The challenges for Alberta's entrepreneurs are real and ongoing. And he wasn't the only entrepreneur I spoke to that had ideas about the solutions.
Shortly after talking to Randy, Gail connected me with Jonathan Schaeffer.
World-class AI in Alberta?
I was at a blockchain event hosted by RBC in Vancouver a couple of years ago. It's an event where you see some of the same people that make the rounds at various tech events. I bumped into a friend of mine who was a tech consultant at a large tax and consulting firm. He had just returned from Edmonton.
He told me how he had just discovered this incredible AI program at U of A in Edmonton. He said it was like number 2 in the world. I'd never heard of it. Neither had he or many others.
And so it was almost serendipitous that I got to speak to Jonathan. He was one of the people that helped develop the program at U of A. He was also the co-founder of the Alberta Machine Intelligence Institute (AMII).
Jonathan started by describing why the program was largely unheard of. He referred to a question a US colleague asked him: “How did you guys build a world-class AI group in the subarctic?" Edmonton is, after all, off the beaten track.
Then he said, “we're Canadian, so we don't like to brag.” I laugh a bit when I think of it. He's right, sort of. We do brag, just not enough about the world-class AI program in Alberta's subarctic region. Or many of our other innovation achievements.
I told him the story about talking to my friend at the blockchain event. He directed me to csrankings.org and explained that he could demonstrate with data that the program was world-class. So I followed his instructions, and the ranking was number 3 in the world. In spot one was Carnegie Mellon, followed by Tsinghua University in China. But most impressive was the small number of professors that produce Alberta's ranking versus spots one and two.
Canada’s AI prowess is in two areas. The area with most of the attention right now is called Deep Learning. This area is led by Geoffrey Hinton at the University of Toronto. Hinton's disciples are Yoshua Bengio, at the University de Montreal, and Yann LeCun, the Chief Scientific Officer of Facebook. Jonathan told me that these three shared the 2018 Turing Award. The Turing Award is the equivalent of the Nobel Prize for computing science.
The other area where Canada excels in AI is in Reinforcement Learning. This is where Alberta is king. Reinforcement Learning is quickly becoming the part of AI to watch. Based on its expected significance in AGI, Jonathan told me that Reinforcement Learning will turn out to be a much more important technology in the long run.
Gaming was where the AI program began
The U of A program is well known for its gaming prowess, and that's what brought Jonathan to U of A in the first place.
He arrived at the U of A in 1984 to work with Tony Marsland. Marsland was working on building programs to play strong chess. One of Tony Marsland’s students, Murray Campbell, became one of the three co-authors of Deep Blue.
Jonathan, himself a chess master, went on to work with teams that developed several significant gaming achievements.
One was called Chinook for checkers. This program became the first computer program to win a World Championship in any game in 1994. They went on to develop programs for poker with a world-class result in 2003.
Another group at U of A solved two-player poker in 2015.
But it was the arrival of Richard Sutton at U of A that solidified their international leadership status in Reinforcement Learning.
Sutton developed the foundational technology for Reinforcement Learning in the 1980s. His work allowed computer programs to learn from experience. Programs learn through positive and negative feedback over time. And it is his work that is coming to fruition now.
Reinforcement Learning is expected to be part of the future of Artificial General Intelligence (AGI). AGI is the holy grail of AI because it is believed to approximate a human being's natural problem-solving capability. The general nature of the AGI means it can be used to solve (almost) any problem instead of just one.
Jonathan told me Alberta’s program and its success over time demonstrated how important the commitment to investment is. Much of this research requires decades to develop and nurture. The Government of Alberta has committed to ongoing funding of the program. This commitment has been instrumental in bringing the program to where it is today.
The program has drawn a quiet cadre of companies looking to hive off the U of A's AI prowess. These companies soak up the high-quality graduates from the program. Google Deep Mind's first non-UK office is in Edmonton, as is Google Brain. Apple is there. Huawei is there, along with Mitsubishi. You may have heard the announcement about RBC's AI trading program called Aiden. That was developed by their Borealis division, headquartered in Edmonton.
Jonathan told me there were numerous other companies, the names of which I probably wouldn't recognize. Many up from the Valley. All of them in Edmonton to take advantage of this thirty year AI jewel.
The program wasn't without its challenges.
Not enough bragging was one of them. Canadian's should have more insight into their outstanding innovation achievements, of which this is one.
Another problem also mentioned by John and Randy, was getting great ideas commercialized out of universities. And while support for entrepreneurs exists, money, particularly private money, is always a challenge.
As I looked further, the depth of Alberta's innovation economy came into view. The rich spirit of entrepreneurship that had driven traditional Alberta industries seemed to come together. It reminded me of one of my favourite drives in Alberta, Highway 22 south of Calgary.
The drive that brings it all together
There's something magical about hopping in the car and leaving the city. In some places, it's a never-ending stream of cars from one place to the next—a blur of buildings and manmade structures. In Alberta, cities are features in a vast open landscape of contrasts.
Heading south from Calgary, you head out to 22X. You drive past the stables of Spruce Meadows, started by another great Alberta entrepreneur, the late Ron Southern of ATCO. Then you turn south on 22. This is the beginning of one of my favorite drives anywhere.
As you begin, the mountains are far off to the west—the plains to the east. And the road riding down the belly of the foothills in between. It's like a mini-tour of Alberta.
Heading down 22 at the start, you might see an oil rig or two between Black Diamond and Turner Valley. In Longview, a hint of natural gas is in the air, and oil pumps can be seen. In Longview, there's a famous brunch spot filled with country music memorabilia. There's also a rodeo there in the summer.
I've been to that rodeo once. It was a terrific experience. Great people. I had no idea boiled hamburgers tasted so good. And some great advice from locals to sit upwind in the stands. You don't want to leave the rodeo with a dirt tan and bouquet of manure for the drive home.
Longview is like the gateway. From here, you wind through the foothills south. Herds of cattle roam on vast acreages near the highway as the road winds. In the summer, the winding road and wide-open country is a fun drive. But this isn't the highway you want to be on in the winter at night, with snow and strong westerly winds.
After about an hour and a half, you arrive at the junction with Highway 3. It is here that you discover something remarkable.
It's like the mountains, the foothills, and the plains seem to meet there. To the east, Pincher Creek and the road down to one of Canada's crown jewels, Waterton Park. To the west, it takes you into the mountains and coal country.
Lundbreck, or at least my vision of it, reminds me of all the elements that come together to make innovation possible. It was like discovering Alberta's secret innovation economy as I went down one prairie dog hole after another.
Instruments, sound, and smartboards
With some direction from these interviews and the Wayback machine, I discovered some of Alberta's other secrets.
One is iTRES Research Limited. The company was founded in 1979 by Clifford Anger, a University of Calgary Physics professor. This company developed airborne electro-optical instruments for scientific research and remote sensing. They develop proprietary imaging systems. These systems operate in visible light, ultraviolet, near-infrared, shortwave infrared, and thermal spectral ranges.
They have a strong history of product development using their technology. And they are part of the U of C’s New Earth Sciences Technology program.
Then I heard (no pun intended) about QSound and Smartboards. QSound Labs was founded by Dan Lowe and John Lees and financed by the infamous Larry Ryckman in 1986. QSound provided 3D sound enhancement and numerous audio and sound enhancements for the entertainment industry.
By the '90s, QSound tech was used widely across every sound-related element of the entertainment industry. Even Madonna and Sting used it for recording.
Then came Smartboards. Smart Boards were the very first web-conference software for Windows that preceded Microsoft’s NetMeeting. David Martin and Nancy Knowlton founded Smart Technologies in 1987. They had a customer roster including Ford, Proctor and Gamble, NASA, and our own Bell Canada.
Smart technologies was sold to Foxconn for $200 million in 2016. In the meantime, the couple went on to cofound their next venture, Nureva, in 2014
Then there was Yotta Yotta.
Yotta Yotta, Java and Flash
Having worked at Willowglen, Gail recommended I look into Wayne Karpoff, one of Alberta's well-known entrepreneurs.
Wayne, a U of A grad, had developed a supercomputer company in 1990. He had taken a company out of receivership and rebuilt it into Myrias Computer Technologies. By 1999, Myrias was merged with Seattle's Seek (Storage) Systems to form YottaYotta Inc.
Yotta Yotta developed the Net Storage Cube. Their clients included the US Department of Defence. They were acquired by EMC Corp, which was subsequently acquired by DELL.
Wayne has gone on to found Technology Alberta and Chair TEC Edmonton. He is a member of the A100 and founded Capital Road Foundation. And he is also active in numerous tech organizations and boards across the province.
Wayne is currently the CEO of Willowglen Systems. Willowglen is focused on industrial automation systems for the international market.
Then I read about James Gosling and Grant Skinner.
James Gosling, is referred to as the father of Java. He was born and raised outside of Calgary and attended the University of Calgary. He joined Sun Microsystems in 1995 and led the team that created Java.
NAIT graduate, Grant Skinner a renowned flash developer and innovator. He is also a founder of Treefortress.
Up next Part 3 of 4
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Authored by: Tristram Waye
tristram@wordsunfold.com
| LinkedIn
Special thanks for the time and contributions from Gail Powley, John Murphy, Jonathan Schaeffer, Randy Marsden, Susan Anderson, Darcy Tuer, Mike Riou, Hussein Hallak and Wayne Karpoff.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Investment Industry Association and Law firm Davis give “thumbs down” to new capital markets act
Investment Executive | James Langton | Mar 21, 2022
In January 2021, the province’s Capital Markets Modernization Taskforce released a sweeping set of recommendations designed to help rejuvenate the markets, facilitate capital formation and enhance industry competition while also bolstering investor protection. The centrepiece of that vision — replacing traditional securities (and derivatives) legislation with platform legislation — is getting a “thumbs down” from the investment industry.
As Investment Executive went to press, the government had not published all feedback received during the consultation, but responses from industry groups and others showed strong resistance to both specific elements of the proposed new legislation and to its overall vision.
The government’s bill would alter the balance between the securities law, which is overseen by the legislature, and the detailed rules that are under the direction of the Ontario Securities Commission (OSC). Modelled on a similar approach taken in British Columbia, the proposed CMA aims to take a “platform-based” approach, setting out broad regulatory principles in the legislation and giving the OSC more authority to create detailed requirements.
See:
CSA Responds to Ontario Capital Markets Modernization Taskforce Report: NCFA – The present system is simply not good enough
OSCs Investor Advisor Panel calls for dramatic shift in approach to regulatory oversight
New Ontario securities law to reset regulatory balance
C.D. Howe says Ontario should pause the new Capital Markets Act to first modernize the existing Securities Act for current times
Sources Say: Federal and provincial governments shutting down Cooperative Capital Markets Regulatory project
The Investment Industry Association of Canada (IIAC) said in its submission that it supports the idea of flexible regulation but questions “the tangible benefits” of adopting entirely new legislation to achieve that goal. Instead, the IIAC suggested revisions to existing legislation and rules could be accomplished “without the market disruption that may be caused by new legislation.”
There could be unintended consequences to the new regime, the trade group noted, as the industry will have to assess its compliance and firms will have to revise their policies and procedures — and possibly client documentation — to conform.
“Given the government’s focus on burden reduction, we would encourage the ministry to pursue many of the laudable goals of the taskforce through alternative means, including any necessary amendments to existing legislation, before replacing the [Securities Act] altogether,” the IIAC stated.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Liquid Avatar Technologies Inc. Launches First-Ever Payment Card and Loyalty Program for the Metaverse
Liquid Avatar Technologies | Cara Buckspan | Mar 21, 2022
Users Have the Opportunity to Earn Points and Cash Back while Participating in Quests and Games by Shopping in the Aftermath Islands Metaverse
TORONTO, ON / ACCESSWIRE / March 21, 2022 / Liquid Avatar Technologies Inc. (CSE:LQID)(OTCQB:LQAVF)(FRA:4T51) Liquid Avatar Technologies, a global blockchain and fintech solutions company, focused on digital identity, integrated avatars and the Metaverse, is excited to announce the launch of the first-ever payment card and loyalty program created specifically for the Metaverse. The LQID card is a physical prepaid debit card powered by OptimizeFT's Engage360 payment card and digital banking solutions platform, available in the United States. The card can earn the holder cashback by shopping at Liquidshopz and earn points by participating in Aftermath Islands Metaverse activities.
See: Liquid Avatar Technologies and Dynamics Inc. Tap Payment Infrastructure for Verification of Digital Credentials
To activate an increased and widespread adoption of and participation in Metaverse experiences, Liquid Avatar Technologies is proud to be the first to attach loyalty and a loyalty earning payment card to purchasing land, products, games etc., in the Metaverse, in a manner people are already familiar and engaged with in the real world.
"We're excited to offer the very first payment card for the Metaverse, supporting individuals and entities as they engage in virtual activities," said Michael Konikoff, Chief Revenue Officer, Liquid Avatar Technologies Inc. "In addition to retail and online payment opportunities, users of the LQID card will be able to experience exciting Virtual Land and NFT opportunities at Aftermath Islands and other immersive experiences."
The loyalty program is aimed at driving incremental spend on the card and initially, within Aftermath Islands, increasing customer engagement, retention, and lifetime value. The ability to accept traditional forms of payment especially with a loyalty schema attached to it, lowers the barriers to entry and will set Aftermath Islands apart from other Metaverse experiences that only accept Cryptocurrency. Cardholders will be able to earn loyalty points whenever they use the card, both online and offline. When they transact in Aftermath Islands using their LQID card, they will not only earn loyalty points on the value of the transaction, but also get the double dip effect of earning loyalty points on the card as well. Accrued points can be redeemed for Aftermath Islands virtual gift cards that can be used when purchasing Virtual Land and other goods in the Aftermath Islands Metaverse.
See: Lethbridge College heading into metaverse with online campus
Liquid Avatar Technologies is a leader in the Metaverse through its development of Aftermath Islands, associated themed islands and utilitarian NFTs, customizable 3D Meta Avatars as part of the Meta Hero Project™, verifiable credential-backed digital identity, and partnering with Game Credits for the first-ever Multiverse Collective, a collaborative effort that will allow interoperability between two or more Metaverses. Liquid Avatar recently announced FAB and Vegas Islands, along with hover bikes and submarines as part of the Aftermath Islands experience, as well as its first mobile play-to-earn game - The Lost Kingdom of T'Sara - that will allow players to earn rewards by completing time and skill activities.
View the original release --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Terra is transitioning from a dollar-pegged stablecoin to a bitcoin-backed stablecoin
Anthony Pompliano | March 21, 2022
Algorithmic stablecoins elicit intellectual curiosity from people across disciplines. Whether you are coming from the technology industry, finance, or academia, creating a digital currency that holds stable value without being pegged to another asset is a fascinating problem. The value of this type of asset is obvious, but no one has been able to figure it out.
In November, Ryan Clements published a paper tilted Built to Fail: The Inherent Fragility of Algorithmic Stablecoins, where he argued:
“Algorithmic stablecoins are inherently fragile. These uncollateralized digital assets, which attempt to peg the price of a reference asset using financial engineering, algorithms, and market incentives, are not stable at all but exist in a state of perpetual vulnerability. Iterations to date have struggled to maintain a stable peg, and some have failed catastrophically. This Article argues that algorithmic stablecoins are fundamentally flawed because they rely on three factors which history has shown to be impossible to control.
See: Responsible Development of Digital Assets (Crypto): Decoding Biden’s Executive Order
First, they require a support level of demand for operational stability. Second, they rely on independent actors with market incentives to perform price-stabilizing arbitrage. Finally, they require reliable price information at all times. None of these factors are certain, and all of them have proven to be historically tenuous in the context of financial crises or periods of extreme volatility.”
This is important context because there is an experiment underway in crypto that is worth paying attention to.
Terra is undergoing a transition from a dollar-pegged stablecoin to a bitcoin-backed stablecoin. There is a lot to unpack here, so let’s start from the top. Terra is described as a public blockchain protocol deploying a suite of algorithmic decentralized stablecoins which underpin a thriving ecosystem that brings DeFi to the masses. The stablecoin at the heart of this ecosystem, TerraUSD (known as UST), sits at more than $15 billion in market cap.
So what is Terra going to do differently with UST moving forward? They are going to back UST with bitcoin.
See: How Stable is your Stablecoin?
So what are the ramifications of this decision by Terra? First, Terra is becoming a persistent buyer of bitcoin. Second, Terra is highlighting the opportunity for bitcoin-backed assets. Third, bitcoin gets a credible layer two in Terra, one of the largest smart contract platforms in the world.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Alberta, The untold history of innovation from Canada’s badlands – Part 1
Tristram Waye | Words Unfold and NCFA ambassador | March 16, 2022
Part 1 of 4. Click for Part 2 and Part 3 and Part 4 of this series.
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Imagine a postcard, a tiny piece of coal, a mesmerizing drive, and a vast natural playground.
Then a trading floor, a tower, a fossil, and a crown jewel in the mountains.
These are a few of the images that come to mind when I think of Alberta. And these memories came as I began exploring Alberta's innovation economy.
My first introduction to Alberta was a postcard from my dad. It was of a bronc rider on a white horse. The camera was catching the bronc in full extension as its hind legs extended to the upper left of the image. The rider looked like he was hanging on for dear life. Although, I now know it was prize money and bragging rights.
As a kid, I had no idea that my vast playground would be home to the Institute for Space Research. Or the center of one of the world's most significant geomatics programs. To me, the University of Calgary was a place for childhood exploration, adventure, and getting into some trouble.
I am reminded of looking for the Calgary Tower as we returned from our long road trips east. The tiny shell I found in a rock by the side of the road near Drumheller. And the piece of coal I was given in class at elementary school to show us a natural resource.
Then there's that drive up Icefields Parkway, where you leave the manicured roads around Banff and head to Jasper. Or the winding path down the belly of the foothills to one of Canada's crown jewels, Waterton Park.
Years later, I stepped onto the trading floor on 5th Ave. I had no idea then that I would be participating in Alberta's innovation economy. Nor would I realize the significance of what Alberta has created and built. Like so many other Canadian achievements, the important ones are typically quiet. Unknown to many. Hiding in plain sight.
And when I started looking for Alberta's innovation achievements, it was hard to stop.
A room of innovation
I was standing in a small gallery watching the action. The bell rang, there was a cheer, then pink, blue, and white papers flew into the air.
At the time, I didn't know the traders used to refer to the people like me as gallery rats. I was there deciding whether to be a trader. The other option was taping a phone to my hand for eight hours a day, so an easy call.
My introduction to innovation in Alberta was from this modest-sized room off of 5th Avenue. The Alberta Stock Exchange would be the place where some of Alberta's innovation achievements would be listed. Other innovations went straight to "the big board" in Toronto.
Some innovations would die here because the idea was weak or poorly executed. Others were simply too early for the problem they were designed to solve.
Eventually, I would be trading other Alberta-based companies as I moved from the ASE to Howe Street and then onto Bay Street. Names like WiLan, Cell Loc, CSI, and Solium.
But back then, in the middle of a recession, I was trying to figure out how to get on the trading floor. Through a friend and some introductions, I got myself to the top of the pile.
The job was to type quotes as fast as possible into a computer. These were changes in bids and offers and canceled orders used to make trading decisions. And you had to do this while understanding the names, symbols, and nicknames of every company. You had to know every trader by voice and the number that represented their firm. And you also had to understand what each trader's unique instructions were.
As I began, I recall the news panning the Alberta government for a big investment failure. The government had taken a half-billion-dollar hit on a play called NovAtel. Unlike today when we talk in trillions, this was back when a half billion was real money.
Now, with the benefit of hindsight, we can see how this company was the start of Alberta's innovation journey. And we can also recognize that this so-called failure had several side benefits.
Alberta's innovation story and the old NovAtel
Like lots of failures, the people observing them can't conceive the big picture. The original NovAtel had fallen apart, sort of. But the story of Alberta's first tech foray was a bit more nuanced than that.
NovAtel was a public-private partnership between the Government of Alberta and an energy company. The joint venture was between Nova Corp and Alberta Government Telephone (AGT) back in 1978.
The Calgary based company began as a global navigation satellite technology firm. It’s partnership with Westech Systems resulted in the commercialization of the Aurora cellular telephone systems. One claim to fame was its creation of the first commercial cellular network in North America back in 1983. The firm went on to encompass a suite of technologies. These included, switching technology, wireless, handsets, geomatics manufacturing and expertise.
The story goes that competition in wireless and mobile increased around the world. The result put pressure on NovAtel which was showing signs of weakness. The government wanted to privatize AGT, but NovAtel's performance created a problem for the upcoming IPO.
So in 1990, AGT bought Nova's stake in NovAtel and subsequently sold the entire NovAtel stake to the Alberta Government. That allowed AGT to be converted from a crown corporation to a private entity. It IPO'd the same year as AGT. The IPO was the largest in Canadian history to that date.
The privatized telecom asset became Telus.
Telus built out of the telecommunications elements of AGT and consolidated the industry province-wide. They bought EdTEl in 1995, rebranded as Telus in 1996, and went on to merge with BCTEL in 1999.
Telus has changed from a telecom to a technology business. They have numerous assets, including telecom, mobile, cable, and a strong health and innovation presence. While its HQ is now located in Vancouver, its longstanding presence in the Alberta innovation landscape remains.
Failure or long term investment?
As AGT was going private, NovAtel's fortunes were in trouble.
NovAtel was saddled with a series of losses and financial mismanagement. The government was eventually forced to acknowledge the problem and take steps to mitigate it.
The handset division went to Telexel Holdings. The wireless division ended up with Northern Telecom (Nortel). The GPS assets continued to develop, and those assets were sold to Hexagon AB in 2007.
The $600 million black eye was painful. But in retrospect, the loss turned out to be more of a long term investment in Alberta's innovation landscape. In trading, we used to call mistakes or losses, tuition. This is a lot of tuition, but the long term benefits of that tuition are undeniable.
The geomatics area remains a powerful force at the University of Calgary today. Alberta's geomatics expertise started in 1980 and was advanced by Elizabeth Cannon and Gerard Lachapelle. The expertise is world recognized and deployed in numerous companies.
Wireless skill and expertise was developed at NovAtel and carried on by Nortel. Even when Nortel eventually failed, the talent and expertise from their various operations remained.
Alumni of NovAtel went on to start numerous companies.
As I began to dig a bit deeper, I started to feel like J.B. Tyrell. Tyrell made one of the greatest finds in Canadian history. A museum maintains his namesake in a quiet spot in Alberta's Badlands.
The secret in badlands
In 1884 a young J.B. Tyrell was sent by the Geological Survey of Canada to map and explore Alberta's Red River Valley. He liked to explore the landscape by river, which gave him a perfect view of the land's stratification.
One day he sees a strange looking bone. Then a tooth. Looking up into the hillside, he sees an unusual looking skull. Then another.
Tyrell had just made the most significant dinosaur discovery In Canada's history.
The name of the dinosaur was Albertosaurus, after the province to be. The selection of the provinces' name was a tribute to Queen Victoria's fourth daughter.
Today, the former coal region, known as the Badlands, houses a museum with his namesake. Drumheller is a place to discover the past and a place rich in adventure. If you've never been there, add it to your list.
As a child, I remember pulling off the road in Drumheller and looking out to a giant canyon. All around, there were layers of black, brown, grey, and orange. And then I saw a stone. I picked it up and discovered a fossil of a shell.
Looking back, it was like a metaphor for my exploration of innovation in Alberta today.
Layers of stories and relationships. Hidden gems in proverbial stones.
But I needed some help on where to look. So I got in touch with Mike Riou of Alberta Innovates. He introduced me to Gail Powley.
Do you know about Matrikon?
Gail spoke to me from her laptop in a cafe. She is the President of Technology Alberta. And has been involved in Alberta's technology sector for over 20 years.
She began her story with a company called Matrikon, where she had worked. Then she told me about Apple's sort of secret development lab in Edmonton. Then she asked me if I knew about Bioware. Which I didn't.
So I went down a couple of rabbit holes, the first of which was Matrikon.
Nizar Somji, a U of A graduate with experience at Dow and Nova Chemicals, started Matrikon in 1988. The firm had begun as a service and pivoted to an industrial information system company. Matrikon's product is a series of sophisticated dashboards that collected and displayed key company information. The dashboards helped management teams understand how their company was operating.
The local operation expanded from 100 employees to 600 strong around the world.
Matrikon was well known for its entrepreneurial approach. They hired and developed talent almost exclusively from the U of A, NAIT, and SAIT. I would see this theme over and over again. Alberta's research and technical institutions have been a significant source of raw talent and entrepreneurs.
Nizar's friend, U of A computer science grad Amin Rawji, joined the company in 1995. After becoming CEO, he led the company to a successful RTO on the TSX in 2001. The company was sold to Honeywell for $142 million in 2010.
Nizar moved on to Consentia in 2016, an info services business, and has been a mainstay on numerous boards.
Matrikon alumnus Frank Vanderham went on to found On Tracks Consulting, and Dave Shook founded Shook IoT.
Then it was time to look into Bioware.
Doctors like to play games
In 1995 some medical students at U of A decided they liked games more than being doctors. Ray Muzyka, Greg Zeschuk, and Augustine Yip were joined by Brent and Trent Oster, James Ohlen, and Marcel Zeschuk to form Bioware.
Bioware caught the attention of gaming giant EA and was purchased in 2007 for $860 million.
After Bioware, Muzyka founded his investing and mentorship firm, Threshold Impact, in 2012. Since 2013, he has been the Founding Chair of the U of A Mentoring Service. He is a member of the A100 and a Fellow at Creative Destruction Labs. He is also on several boards and advisory groups. His awards and recognition are numerous.
Zeschuk started a restaurant called Blind Enthusiasm and cofounded Codebaby. Brent Oster started Studio Check Six in 1999 and Orbai in 2018.
Trent Oster and Cameron Tofer founded Beamdog in 2009.
Then I managed to connect with one of Alberta's early tech pioneers.
Shana to D-Tex
John Murphy was gracious with his time and insights about technology and some of the challenges in Alberta. John has a unique vantage point on Alberta's innovation economy. As Shana Corp's co-founder in 1985, he is one of the early pioneers in Alberta's forty-year tech history.
John and Don Murphy began developing software for electronic forms at Shana Corp. Over the 18 years they ran the business, it grew from a couple of people to around 100. Their customer base included notable names. Shana served NASA, Liberty Mutual, Washington State Department of Social and Health Services. General Electric, The Government of British Columbia, and The Boeing Company were also clients.
They sold the business to FileNet in 2003, which was later acquired by IBM.
After their exit to FileNet, they went on to found D-Tex Inc. D-tex was a multispectral camera that could reveal elements otherwise invisible to the naked eye. These might be proteins in a plant, or it could be infestations of pine beetles. Agriculture businesses could use the technology to evaluate the quality of their crops.
But they required another step to make it viable, modeling and machine learning.
In 2012, they transformed their business into Stream Technologies Inc and, more recently, to Stream.ML. Here they applied their Spectral Imaging Prism and hyperspectral camera application using AI and machine learning. This new initiative is designed to transform the use of data science and machine learning.
Machine learning requires reams of data and the ability to compute it. And not just crunch the data but do it quickly and cost-effectively. These latter two points are where John and his team are focusing their attention with Stream ML.
John wants something so fast and easy his mom could use it. This idea has informed one of his other initiatives, a supercomputer for small and medium Alberta businesses.
John has worked closely with Sayed Mehadi from Clinisys to bring a supercomputer to Alberta for small and medium businesses. Working with the governments of Alberta, Canada, and the U of A, the computer was secured. It creates a unique opportunity for Alberta's SMEs to participate in using AI technology.
John is deeply involved in the Nanotech association where Alberta is heavily invested. He is also a member of Alberta's A100 and CEO of Bio-Stream Diagnostics. And he’s also good friends with Alberta's keyboard wizard, Randy Marsden.
Continue to Part 2 of 4
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Authored by: Tristram Waye
tristram@wordsunfold.com | LinkedIn
Special thanks for the time and contributions from Gail Powley, John Murphy, Jonathan Schaeffer, Randy Marsden, Susan Anderson, Darcy Tuer, Mike Riou, Hussein Hallak and Wayne Karpoff.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Why Blockchain analytics are catching Washington’s attention
Protocol | Benjamin Pimentel | Mar 16, 2022
In warning against the use of crypto by Russian oligarchs to evade war sanctions, Senate Democrats led by Elizabeth Warren cited data tools familiar to Wall Street and Silicon Valley but still obscure in Washington circles.
The senators, in a letter to the Treasury Department, pointed to the work of Elliptic and Chainalysis, whose programs scour billions of blockchain accounts and transactions in a global hunt for illicit transactions and hidden assets.
See: SEC Inks Deal With Blockchain Analytics Firm AnChain.AI to Monitor DeFi Transactions
The Ukraine war is giving new urgency to the already brewing battle over crypto regulations. And it has turned the spotlight on blockchain analytics as a key way to unmask the inner workings of crypto, particularly the way funds and assets are moved and stored in blockchain networks designed to be transparent but quasi-anonymous.
Chris DePow, a senior adviser for financial institution regulation and compliance at Elliptic:
“There has been a steady uptick in the demand for blockchain analytics services, with a particular spike in interest over the past month or so. The potential for the use of crypto for sanctions evasion … underscored the need for the implementation of adequate crypto transaction monitoring, wallet screening, forensics and crypto service provider due diligence.”
Blockchain analytics sprang from a need to crack down on bad actors when Mt. Gox, the crypto exchange, was hacked in 2014, the year Chainalysis launched. Eventually, the field began to attract the interest of law enforcement agencies as crypto increasingly became associated with money laundering and other crimes.
See: Department of Justice Publishes Cryptocurrency Enforcement Framework: “We see criminals using cryptocurrency to try to prevent us from following the money”
The Department of Homeland Security was the first major customer of Blockchain Intelligence Group, said Lance Morginn:
“Criminals are in the business of running and law enforcement is in the business of waiting — and waiting for them to slip up. Crypto may be “a pseudo-anonymous space,” he added. “But mistakes happen and then they can reveal who that person is by going to a choke point.”
The arrest of Ilya Lichtenstein and Heather Morgan on charges of laundering billions of dollars, for example, was unraveled in part by tracing a transaction on the blockchain from a wallet to a service used to buy a prepaid Walmart gift card.
Crypto’s rapid growth over the past few years led to more interest from other entities. These included big banks which, Morginn said, realized
“that if [banks] don't start today, they're going to be left behind and the Coinbases are going to become the new digital banks and threaten their existing business model.”
Blockchain analytics also drew more attention with the heightened focus on regulation and the need to comply with anti-money-laundering and KYC rules.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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