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CFTC fines Tether US$41M for misleading claims about currency backing

Bloomberg | Jesse Westbrook | Oct 15, 2021

Tether fined 41M - CFTC fines Tether US$41M for misleading claims about currency backingTether will pay US$41 million to settle allegations it lied in claiming its digital tokens were fully backed by fiat currencies, putting a major compliance headache behind the world’s biggest issuer of stablecoins even as regulatory scrutiny intensifies.

For years, Tether told customers and the broader cryptocurrency market that it had US$1 in reserve to back every token, the Commodity Futures Trading Commission said in a Friday statement. That claim was wildly misleading, according to the agency. For instance, from June to September 2017, there was never more than US$61.5 million backing Tether, even as more 442 million coins were circulating at one point.

Read:  Tether banned on Canada’s first 2 licensed digital currency exchanges

“This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace,” said acting CFTC Chairman Rostin Behnam.

Tether is widely used to trade Bitcoin and other tokens, making it pivotal to the crypto market. That’s because the coin allows quick transactions and because it’s designed to be largely immune to volatile price swings -- a function of its one-to-one peg to fiat currencies.

But many traders have long been skeptical that Tether genuinely had the money backing the coins that it claimed. More recently, the Treasury Department and other federal agencies have been alarmed by the stablecoin’s dramatic growth. There are now Tethers worth about US$69 billion in circulation, prompting concerns among that crypto-market disruptions could trigger chaotic investor fire sales that threaten the financial system.

In its enforcement action, the CFTC said Tether failed to disclose that it held unsecured receivables and non-fiat assets as part of its reserves, and falsely told investors it would undergo routine, professional audits to demonstrate that it maintained “100 per cent reserves at all times.”

See:  Is Tether a Black Swan?

In fact, Tether reserves weren’t audited, the agency said. Until at least 2018, Tether manually kept tabs on its reserve levels, a process that wasn’t updated in real time, the CFTC said. Tether didn’t admit or deny the CFTC’s allegations.

“Tether agreed to resolve this matter in order to move forward and focus on the future,” the company said in a statement posted on its website.

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NCFA Jan 2018 resize - CFTC fines Tether US$41M for misleading claims about currency backing 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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Bitcoin’s mystery man turns up in the law courts

The Law Society Gazette | | Michael Cross | Oct 14, 2021

Bitcoins mystery man - Bitcoin’s mystery man turns up in the law courts

Source: iStock

As far as his acolytes are concerned, the ministry on earth of Satoshi Nakamoto lasted just over two years.

During that time, from the end of 2008, ‘he’ - Satoshi is a male given name - published a brilliantly written white paper setting out the principles of a currency that could operate without a central authority. He also released the computer code to turn Bitcoin in to practice (written in the programming language C++) and engaged in web conversations about its debugging and development. The last public comment appeared in December 2010. Email exchanges with developers continued for a few months, but then Satoshi Nakamoto disappeared without trace. 'I’ve moved on to other things,' he wrote in April 2011.

His, or their, identity remains a mystery.

See:  Privacy laws might prove to be a blessing in disguise for crypto

At least that is the widely accepted version of history among the mixture of geniuses, visionaries, hard-headed entrepreneurs, gullible punters and outright rogues who make up the global Bitcoin community. However a series of actions in the English courts could rewrite the authorised version. They are being brought by Dr Craig Wright, an Australian academic and Bitcoin entrepreneur resident in England, who says that the identity of Satoshi is no mystery, because it is he. Wright has registered the US copyright of Bitcoin's founding white paper and the original computer code. In June this year the High Court granted default judgment against the bitcoin.org website for infringement of his rights.

Wright is also taking vigorous action for defamation against those who dispute his claim. Judgment in a pre-trial review of one such action, against posts by a podcaster named Peter McCormack, resulted in a 256-paragraph ruling in the Queen's Bench Division earlier this month. Legal action is understood to be under way against another blogger.

Why, you may ask, does this matter? Surely Dr Wright has every right to defend his reputation, which has been subject to unquestionably vicious attacks. To quote Mr Justice Julian Knowles, Wright 'avers by way of innuendo the said words meant and were understood to mean that the claimant had fraudulently claimed to be Satoshi Nakamoto'. Not that there appears to be much innuendo in complained-of phrases such as: 'Craig Wright is a fucking liar, and he's a fraud; and he's a moron'. (McCormack admits publication.)

See:  Bitcoin is an Unstoppable Force

The immediate answer is that anyone claiming, or admitting, to being Satoshi Nakamoto must accept responsibilities along with the kudos. A widely believed reason for 'Satoshi's' disappearance was the growing concern by law enforcement agencies in the use of Bitcoin to finance criminal and terrorist activity. These concerns have not gone away. The financial services authorities may also be interested: Satoshi's Bitcoin holding is in theory worth some $60bn. And HMRC is unlikely to ignore the sudden appearance of a multi-multi-billionaire apparently within its jurisdiction.

Wright is already contesting a lawsuit in the US over the ownership of a very large sum in Bitcoin; a trial opens in Miami next month.

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NCFA Jan 2018 resize - Bitcoin’s mystery man turns up in the law courts 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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Gen Z VCs are entrepreneurial, digitally native, values-focused

AngelList | Matthew Speiser | Oct 8, 2021

Gen Z are becoming VCs - Gen Z VCs are entrepreneurial, digitally native, values-focused

“The barriers to entrepreneurship and investing have never been lower, and our generation is very aware of the opportunity we have.”

See:  Why is venture capital still ignoring women? The case for investing is clear.

Gen Z has become the target market for many new businesses—and founders and venture firms want to work with them. Hence the rise of Gen Z VCs, an online community where young investors swap knowledge and deal flow. Gen Z VCs has grown to 10k members since launching in November 2020.

“Gen Z is unique in that we’re entrepreneurial, digitally native, values-focused, and we don’t accept the status quo,”

said Meagan Loyst, the 24-year-old founder of Gen Z VCs and an early-stage investor at Lerer Hippeau.

Leveraging Personal Brands

“More so than previous generations, Gen Zers are really great at building their brand, and that’s something that’s helped me a lot personally,” said Chang. “The whole pre-seed and seed space is about who you know, and if founders know you because of your brand, it can go a long way towards earning an allocation.”

“I think we owe some of our success to the fact that more founders are coming from Gen Z, and they don’t often get to speak to someone who’s their peer during the fundraising process,” said Doherty. “Founders want people their own age on the cap table because we share a similar worldview.”

Lowered Barriers to Entry

Young investors like Loyst, Chang, and Doherty have benefitted from new technologies and financial tools that make it easier to launch startups and funds, as well as a greater democratization of investing knowledge brought on by the internet.

See:  Value investing is struggling to remain relevant

Another big positive development for Gen Z VCs has been new SEC rules adopted last year that increase access to private investments. The rule changes allow more investors to participate in private offerings by adding new categories of individuals who may qualify as accredited investors based on their professional knowledge, experience, or certifications.

Gen Zers have utilized these rules to spin up their own funds and invest in their friends’ businesses and funds. Ryan Li, an angel investor and junior at Stanford University, said his classmates are taking the Series 63 exam to earn accredited investor status. Some have also used their crypto fortunes to meet the wealth requirements.

“We’re young in our careers and we have the opportunity to be bold and take some risks,” said Li.

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NCFA Jan 2018 resize - Gen Z VCs are entrepreneurial, digitally native, values-focused 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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Speech by Jon Cunliffe: ‘Is crypto a financial stability risk’?

Bank of England | Jon Cunliffe, Deputy Governor, Financial Stability | Oct 13, 2021

Sir Jon Cunliffe - Speech by Jon Cunliffe: ‘Is crypto a financial stability risk'?

Sir Jon Cunliffe, Deputy Governor, Financial Stability, BoE

Jon Cunliffe's Speech Overview delivered at Sibos:  Jon Cunliffe looks at the impact of ‘crypto’ on the stability of the UK’s financial system.  He says unbacked crypto-assets (eg Bitcoin) and backed crypto-assets for payments (stablecoins) have begun to connect to the financial system. And he talks about how regulators are responding to their rapid growth.

I want to talk today about whether the world of ‘crypto finance’ poses risks to financial stability.

Cryptoassets have grown by roughly 200% in 2021, from just under $800 billion to $2.3 trillion today. They have grown from just $16 billion 5 years ago. $2.3 trillion of course needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at around $1.2 trillion in 2008.

See: 

When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice. They have to think very carefully about what could happen and whether they, or other regulatory authorities, need to act.

At the same time, they need to be careful not to over-react – particularly when faced with the unfamiliar. We should not classify new approaches as ‘dangerous’ simply because they are different. Innovation, technology and new players can tackle longstanding frictions and inefficiencies and reduce barriers to entry. Throughout history, they have been key to driving improvement and to increasing resilience in financial services.

I will give you my conclusions at the outset. Crypto technologies offer a prospect of radical improvements in financial services. However, while the financial stability risks are still limited, their current applications are now a financial stability concern for a number of reasons.

Cryptoassets are growing fast and there is rapid development of new applications for the technology. The bulk of these assets have no intrinsic value and are vulnerable to major price corrections. The crypto world is beginning to connect to the traditional financial system and we are seeing the emergence of leveraged players. And, crucially, this is happening in largely unregulated space.

Unbacked cryptoassets

Unbacked cryptoassets make up nearly 95% of the $2.3 trillion.

They are essentially non-replicable strings of computer code that can be owned and transferred without intermediaries. Bitcoin, of course, is the most prominent example, but there are now nearly eight thousand unbacked cryptoassets in existence. These have no intrinsic value – that is to say there are no assets or commodities behind them: the value of the cryptoasset is determined solely by the price a buyer is prepared to pay at any given moment.  As a result, their value is highly volatile.

See:  World Economic Forum (WEF) Warns of Cyberattack that will Collapse Existing Financial System

And while retail investment predominates in this market, there are signs of growing institutional investor interest, with these investors now thinking about whether to have crypto in their portfolio. More complex investment strategies are beginning to emerge, including crypto futures and other derivatives.

At the same time, core wholesale finance and financial market infrastructure firms are putting their toes in the water. Several global banks are offering, or are planning to offer, digital asset custody services. Some international banks have started to, or are looking at, trading cryptoasset futures and non-deliverable forwards; and offering wealth management clients cryptoasset investments, following client demand. Others have developed exchange platforms facilitating matched trades, or offer customers access to other crypto exchanges through their apps. Leading payment firms are also exploring ways of allowing people and businesses to use certain stablecoins for payments and for the settlement of transactions within their networks.

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NCFA Jan 2018 resize - Speech by Jon Cunliffe: ‘Is crypto a financial stability risk'? 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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‘Evolved Apes’ NFT creator Evil Ape disappears with $2.7M

PC Gamer | Andy Chalk | Oct 14, 2021

Evolved apes - 'Evolved Apes' NFT creator Evil Ape disappears with $2.7M

Image credit: Evolved apes

Buyers got their NFTs, but a promise of a fighting game built around them went up in smoke.

Evolved Apes is a collection of 10,000 unique NFTs available for purchase on the NFT marketplace OpenSea. Each of them was also meant to be a character in an Evolved Apes fighting game, in which NFT owners would pit their apes against one another in battles for Ethereum cryptocurrency rewards (just as ancient hominoids did thousands of years ago, as I understand).

See:  Kraken Report: Non-Fungible Tokens (NFTs): Redefining Digital Scarcity

But it's all gone disastrously off the rails:

According to a Vice report, one week after Evolved Apes went live, the head of the project vanished, taking 798 Ether—worth roughly $2.7 million—with them.

The money was raised through the sale of NFTs, and was expected to be used to support the development and marketing of the game. But the situation started to look sticky in September, according to the report, as project leaders began to fall off the radar and communications grew erratic. It also came to light that the artist on the project hadn't been fully paid, and winners of a social media contest hadn't been given their NFT prizes.

Backers eventually asked Mike_Cryptobull, a member of the community who spent a little over $10,000 on 20 Evolved Ape NFTs, to investigate the situation and compile a report on what exactly had happened. In it, he said that Evil Ape, the aptly-named administrator of the project's blockchain wallet (whose real identity isn't publicly known), had disappeared, taking the money with him. The official Evolved Apes Twitter account and website are also gone.

There is no mention about the pursuit of criminal charges in either Mike_Cryptobull's report or the Vice story, in part because it's not completely clear that a crime has been committed. According to Jdmjem, an administrator of the Fight Back Apes Discord, police reports were filed in the UK, where the Evolved Apes crew is based, but while there is "definitely an aspect of a scam," there may not technically have been one.

See:  Ways NFTs Can Reinvent Your Small Business

"The thing is that everyone did get what they paid for, an NFT," they said in an email sent to PC Gamer. "At the end of the day any promises of a game or other development fall out of the scope of your purchase."

"People are trying to file police reports but [the] problem is this is unknown turf and while unethical not technically illegal. We all got what we paid for."

There are still questions about the unpaid artist and contest winners, but the matter is further complicated by jurisdictional issues—the NFT market is international, and Evolved Apes purchases come from all around the world—and the fact that individual reports are for much smaller amounts than the sum total, and thus aren't likely to garner much attention or traction from police agencies.

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NCFA Jan 2018 resize - 'Evolved Apes' NFT creator Evil Ape disappears with $2.7M 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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Miami mayor says the city is moving toward paying public employees in bitcoin

ComplianceX | Jack J. Kelly | Oct 13, 2021

Miami - Miami mayor says the city is moving toward paying public employees in bitcoin

Miami will advance a plan to pay city workers in bitcoin, Mayor Francis Suarez told Bloomberg on Tuesday, expanding on his push to make the Florida city a major hub for digital assets.

“We’re going for a request for proposal in October to allow our employees to get paid in bitcoin, to allow our residents to pay for fees in bitcoin and even taxes potentially in bitcoin if the county allows it,” Suarez said in an interview with the business channel.

A formal solicitation would come after the city commissioners in February backed his resolution to direct the city manager to procure a vendor to offer employees the ability to receive a percentage of their salary in bitcoin.

See:  Miami’s mayor says MiamiCoin generated over $5 million USD for the city in the last 30 days

At the time, bitcoin traded close to $48,000, then hit an all-time high of $64,804.72 in April, fell below $30,000 in July, and recently reclaimed the $55,000 mark.

Despite the price volatility, Suarez also wants the state of Florida to allow Miami to hold bitcoin on its balance sheet. Statutes at the state and federal levels currently don’t allow cryptocurrencies to be owned by municipalities.

“It’s a major priority for me because I want us to differentiate ourselves as the crypto capital of the United States or of the world,” Suarez told Bloomberg Tuesday.

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NCFA Jan 2018 resize - Miami mayor says the city is moving toward paying public employees in bitcoin 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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Bracing For Change In The Era Of The Augmented Workforce

Cathy Hackl | The Augmented Workforce Launch | Oct 13, 2021

Cathy Hackl Embracing for Change the Augmented Workforce - Bracing For Change In The Era Of The Augmented WorkforceWe are living through a period of rapid change, possibly beyond society’s capacity to keep up. The metaverse has taken over tech headlines.  There’s an unprecedented acceleration and convergence of technology. It’s rampant and widespread. Various emerging technologies, such as artificial intelligence (AI), augmented reality (AR), virtual reality (VR), and 5G, along with dozens of devices that work together (Internet of Things), have helped to create an environment in which new inventions, possibilities, and learning curves change weekly.

According to Peter Diamandis and Steven Kotler, authors of The Future Is Faster Than You Think, “Moore’s Law is the reason the smartphone in your pocket is a thousand times smaller, a thousand times cheaper, and a million times more powerful than a supercomputer from the 1970s. In 2023 the average thousand-dollar laptop will have the same computing power as a human brain (roughly 1016 cycles per second). Twenty-five years after that, that same average laptop will have the power of all the human brains currently on Earth.” That’s rampant, exponential acceleration.

Rampant Acceleration

In the past, there was a slow evolution of technology, which gave people time to adapt. In the decade to come, it will feel more like the Cambrian Explosion—an event over 500 million years ago when most living things burst into being. For instance, radio preceded the advent of the television by decades, which trained people to go to a device for news and entertainment. Mainstream cell phones predated the smartphone’s popularity by thirty years and slowly changed how we interact and work. The Internet was prevalent for ten years before mobile apps were popularized and changed how we consumed and processed information. These gradual changes, one on top of the other, made for a smooth transition from a typical household living in the 1950s to a family living in the 2000s. How many people today use a smartphone, laptop, ebook, and tablet multiple times a day? This would’ve been unthinkable in 1950. But the change was gradual and maneuverable.

Make no mistake—technology is evolving, as is our relationship with it. In the first phase of the Internet, we connected information. A person could search the web using a search engine, send a document via email, and use all this new information in novel ways. The second phase of the Internet-connected people. Facebook and Twitter created a social media revolution, conceivably connecting one person with millions of other people in ways that were unthinkable in the past (e.g., think of a president’s or movie star’s Twitter feed). And in the third phase (which we’re entering), the Internet is connecting people, places, and things in a more dynamic and amplified way.

See:  Three Big Things: The Most Important Forces Shaping the World

The Internet of Things is amplifying the concept of location and the concept of merging our digital and physical lives. It’s gradually impacting more of how we live, work, and play. A union of digital and physical realities, already seamlessly affecting many areas of our lives. From an acceleration technology standpoint, we’re seeing an even greater change than what we’ve seen in the past—and at a faster pace. The combined rate and scale of change is causing exponential acceleration.

Diamandis and Kotler, again in The Future Is Faster than You Think, wrote, “In the next decade, we’ll experience more progress than in the past 100 years.”

They explain: “We’ve been living through a time of constantly accelerating technological capabilities. We’re living in a world of increasing, exponentially growing computational power. Technology is always on, always available, and we’re now moving into the quantum computing era—these exponential technologies are enabling artificial intelligence, robotics, 3D printing, synthetic biology, augmented reality, blockchain and allowing these technologies to converge, creating new business models. It’s the convergence of these technologies that creates waves on top of waves of capability, which will change our world—every industry—our economy, our government, our health, our families. Everything is beginning to change.”

If you think that is a great deal to consider, Diamandis and Kotler also predict that meta-intelligence (i.e., when humans merge with technology), will take place in less than twenty years. We will be able to connect our brains with the Cloud. The accumulation of AI, AR, 5G, and IoT, plus related technologies such as crypto/blockchain and extended reality (XR) may have snuck up on us, but we can adapt and catch up.

Business Disruption

Businesses are constantly on the lookout for things that decrease time, cost, and increase value. That’s why businesses are one of the main drivers of technology. Manufacturers equip operators with augmented reality devices. Instead of reading a paper manual or asking another person for help, AR glasses teach operators where to go for parts or how to fix equipment. Connected sensors on hardhats monitor workers’ location and notify them of dangers or other equipment.

In the restaurant industry, line cooks work alongside robot arms equipped with different appendages like hamburger flippers or deep fry baskets. Even marketing teams have to evolve as they work with digital influencers (CGI people who pose with sponsored clothing or gear).

See:  Synthetic Media and Deepfakes: An insurance industry threat

We’re used to working side-by-side with devices that we believe are safe, and doing that saves us time. For instance, many families have a robotic vacuum cleaner, and they don’t think twice about it. Warehouses use robots to fetch and store packages. Tye Brady, Amazon Robotics’ chief technologist, said, “The efficiencies we gain from our associates and robotics working together harmoniously—what I like to call a symphony of humans and machines working together—allows us to pass along a lower cost to our customer.” As these “cobots” (robot co-workers or collaborative robots) become prevalent, it’s likely that our interaction in the home with Alexa, Siri, or Roomba, will have conditioned us to be accepting of our new digital co-workers.

Conferences are disrupted by virtual reality. In 2018, Cathy spoke at Lethbridge College’s Merging Realities, the first conference hosted in virtual reality. Over three hundred people registered for the event. People outfitted their avatars in business attire.

Virtual reality reduces costs to participants since hosts do not have to rent out large convention centers. It also opens the doors to even more participants since people aren’t held back by physical constraints. Vendors create 3D booths to upload into the lobby. “Instead of handing out pens and candy, they can give away free credits to their product or services, something that would actually be more beneficial since it brings potential customers right to their website instead of a pen they’ll forget in a desk drawer,” said Lily Snyder, digital technologist. “Vendors who pay a premium can have a whole virtual experience of their product or service in action for participants to take part in.”

Since then virtual reality conferences like Enablers of Tomorrow, Women in XR Venture Fund Pitch Showcase, and Educators in VR Summit are all examples of VR disrupting business. Public speakers better engage with audiences in “nonlinear conversations.” Talking points, instead of planned slides, allow the audience to more easily move from topic to topic based on their interest. VR provides subject material on an as-needed basis instead of going from slide to slide. Immersive environments like virtual and augmented reality and holographic telepresence make more sense than ever. Virtual reality is data-rich, providing a whole new level to the conference experience.

At the time of this writing, companies are getting rid of their corporate headquarters, opting to stay remote even after the pandemic subsides. Kara Swisher stated that Zoom’s shares rose 60 percent in the month of February 2020 as employees embarked on a litany of Zoom meetings from home. One managing director at Accenture asked her team to buy Oculus Quests headsets so they could meet virtually for daily tasks. In the past she had only used VR for specific training modules or client needs but after a few weeks using VR with her team she noticed “group energy and sense of camaraderie are better than with any other mode of communication.”

A training manager at Nestle Purina thinks using VR will “help the company recruit a more technically fluent workforce in the future.” Nestle Purina uses virtual reality to build out shelf ideas and category concepts. VR lowers the risk for employees who build live tests. It also accelerates time to market because of the shared vision customers and employees virtually walk through together. “Instead of showing them PowerPoint after PowerPoint or showing them a demo that might not be to scale, we’re able to use the virtual reality technology in ways that offer customized solutions and allow us to make changes over and over and over again,” said Kenny Endermuhle, Senior Manager of Retail Innovation Strategy at Nestlé Purina.

See:  AI Will Transform 500 Million White-Collar Jobs In 5 Years; Silicon Valley Must Help

Months into the 2020 coronavirus pandemic, a local chapter of the Construction Financial Management Association conducted their monthly meeting in virtual reality. The virtual reality boardroom was what the chapter needed after burnout from “zoom fatigue.” Experiencing the immersion of virtual reality once inspired construction firms in the meeting to investigate other opportunities for augmented and mixed reality.

The companies that can provide tools to work from home are the ones experiencing growth and profits. Yet, even with this data, some companies decided not to hold virtual conferences. In early and mid-2020, they canceled or postponed previously scheduled (physical) conferences, even across tech-forward industries like telecommunications, entertainment, and social networking. Their failure to adapt cost them business.

From a financial standpoint, younger generations prefer mobile banking, and 5G will provide financial services like machine learning-powered chatbots, direct-to-consumer banking, and no-fee trading more secure and robust. Through virtual and augmented reality, everyday people can understand their portfolios because data is represented in a way that naturally makes sense to them. They can make decisions based on 3D representations of numbers and accounts.

Fidelity Labs introduced a financial agent called Cora. She operates with voice commands to answer questions and presents relevant information to the client. Capital One created Eno, a natural-language SMS text-based assistant that generates awareness about customer needs and works as a browser extension by generating virtual card numbers. Customers can generate secure card numbers while keeping their actual card numbers safe from potential fraud.

Some opportunities can optimize the financial industry, which I can mention, for example, Artificial Intelligence chatbots that can answer investor questions. Also,  Artificial Intelligence simulations can help investors with decision support. Banks can build Virtual Reality branches. Cryptocurrency buyers feel empowered by having actual ownership of digital media, and Mixed Reality can help investors visualize complex data and concepts.

 

Social Disruption

The Internet and mobile technology changed how we communicate as human beings. Generation Z (a.k.a., the iGeneration) make and break friendships on social media, never confronting each other in real life. Families are divided online by algorithms that feed them one-sided articles, making Thanksgiving dinner a battle of “Fake News.” The Internet, with its promise of opening world views, now seems to close them. From a social standpoint, the convergence of technologies will continue to change how we interact with family members, friends, and co-workers. In under ten years, people will be able to experience a volumetric or holographic (3D visual) representation of a friend or family member in front of them. They’ll be able to have a conversation with someone as if they were sitting in the same room, though thousands of miles apart.

At Magic Leap, Cathy worked with an amazing  corporate team, including some of the most advanced software developers specialized on spatial computing, which Simon Greenwold defines as “human interaction with a machine in which the machine retains and manipulates referents to real objects and spaces.” The dev team created a mixed reality chessboard and the ability to play against a live 3D opponent. One chess player was on the first floor, and the other was on the second floor. They saw each other as holographic images and could see each other’s moves as they played on the virtual chessboard. Companies like Spatial, Rec Room, AlcoveVR, VR chat, and Galaxity are among the spatial computing companies altering the way we work and play from a social standpoint. These social VR apps change the way we share experiences, how we share photos of our vacations, and how we relate to people because we’re interacting in a 3D space and experiencing the same presence as in real life.

If given a choice, most students would likely rather have a volumetric display of Abraham Lincoln giving a speech than read about it or watch a video representation of it. Holograms have something 2D videos don’t: presence. When people interact with a volumetric video, they have the experience that they are there with that person, and they experience emotion and memory that comes from physical interaction.

Internet dating will change dramatically when people do not have to guess whether a flat picture represents the person accurately since they will have a holographic display of the person right in front of them that may be harder to manipulate. Instead of having quarantine-safe first dates on Skype, potential couples can date via volumetric video. Someone who may come across as boring or distant on video can be themselves by moving around as a hologram. And if the date isn’t working out? Simply shut off the stream.

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Maybe someone tested positive for an asymptomatic version of a virus. They want to go dancing but don’t want to get anyone sick. Dance clubs will enable people to join the dance floor where they’ll be a holographic presence for others to see and to experience the club themselves using VR. The possibilities are endless.

Golf and country clubs are already being reimagined with virtual reality. Ready Player Golf re-envisions a golf outing in virtual reality. Friends join in VR to play a few holes. Colleagues or business partners can join in for a virtual game and talk business. Charities like Doctors Without Borders have taken advantage of the social aspect of VR in Ready Player Golf. RPG generated $12,300 from 78 donors and sponsors.

We may be physical creatures, but we now have digital personas as well. These existences—online and offline, physical and digital—are slowly merging. That doesn’t mean that future generations will always represent themselves as their physical persona in the digital world. They can choose to be the color purple, a dinosaur, or a superhero—or all three! In the future, people will choose to be whatever they want to be because they’re a lot more fluid in their concept of identity. And that will transcend even further in the future.

For instance, Facebook has created a social VR world called Facebook Horizon, which it describes as a “social experience where you can explore, play, and create with others in VR.” Cathy was an early beta tester of Facebook Horizon. She was one of the first people to livestream from inside Horizon and show the world what it looks like. In Horizon people are represented by avatars that look like themselves as their Horizon avatar is linked to their Facebook profile. People can play games, but more interestingly create worlds that their friends can explore. Here lies the possibility for monetizing digital goods within Facebook, making virtual living a profitable one. Facebook Horizon is monitored by real Facebook employees (represented as avatars) to avoid some of the social pitfalls that can effect people in VR.

While Facebook essentially requires you to be “you” in VR, other virtual realities allow more freedom where a boy might appear as the wizard Gandalf, or an older woman may appear as Iron Man. These virtual realities are interesting because they allow people to experience a completely different life. But, anonymity is not without consequences. Social VR is like the early days of the Internet. People met in chat rooms and talked to strangers; there were no online rules of etiquette. In some social VR platforms, people “sensory bomb” others who are new to VR, causing them confusion without a chance to escape or set boundaries. In the workforce, etiquette and social harassment guidelines will need to be put in place before deploying VR. People will find significance and purpose in the virtual world, which will change how they relate to each other in the physical world.

We anticipate seeing job ads in the future for people who can work seamlessly between digital and physical realities. We think this way because job titles like “hologram stylist” exist today. Hologram stylists work with people to prepare them for volumetric video capture. They pick clothes to wear and how a person’s hair should best be worn so that it is fully captured in 3D. Fashion brands like Gucci are already turning to digital only clothing and accessories. Virtual couture designers make digital fashion first, in the form of filters or 3D assets. As we depend on AI robots, like Amazon Alexa or Siri, they will become gatekeepers. Business-to-Robot-Consumer (B2R2C) marketing managers will reach customers through robots. No matter how we communicate, we expect AR, VR, AI, and 5G to have an impact.

Entertainment Disruption

Hollywood is shifting to more immersive content—not just for viewers but also during production. In 2016, director Jon Favreau started experimenting with VR through a film called Gnomes & Goblins. He took what he learned and applied them to his remakes of The Jungle Book and The Lion King.

Traditionally, for a blend of live-action and animated films, the actors speak into a microphone while standing up, remaining stationary when recording their lines. Instead of utilizing the traditional route, Favreau had the performers act together in a live space so that he could capture their movements and their facial expressions. He then incorporated that into the animation. Favreau also had people act using VR so that they could see themselves as a lion, hyena, or a warthog. The crew joined them in VR too. This changed how people performed because they were able to see themselves as the animated character and were able to interact in a digital space. If you had to play a lion, would you rather stand still at a microphone or see yourself as a lion in VR? Peter Rubin from Wired wrote:

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The Lion King was filmed entirely in virtual reality (well, save a single photographed shot). All the locations you know from the original—Pride Rock, the elephant graveyard, Rafiki’s Ancient Tree—exist, but not as practical sets or files confined to an animator’s computer. They live inside a kind of filmmaking video­game as 360-degree virtual environments, full of digitized animals, around which Favreau and his crew could roam. Headsets on, filmmakers had access to all the tools of the trade, just in virtual form.

We believe this will lead to a transition from storytelling, where we’re passive recipients of information to “story-living,” where we’re active participants in the story with agency—a capacity to act independently. The ultimate way to experience this will be in an artificial reality like VR. Of course, this isn’t completely new. There have been branching narrative concepts in the past, blending “choose your own adventure,” with certain digital technologies. In approximately five years from now, there will be another shift from “story living” to “story doing” (similar to AR) where the person is part of the story. Think of a supercharged version of Pokémon GO. The previously passive audience will now be active, leading to improvements in engagement and entertainment. The increased use of interactive storytelling techniques will blur the lines between mediums. Watching a pitched medieval battle on TV? Pick up the controller (or your VR headset!) and help turn the tide. This transformative experience is coming soon to a screen near you.

To get access to new content from my second book,  HYPERLINK "https://www.theaugmentedworkforce.com/launch"The Augmented Workforce: How AR, AI, and 5G Will Impact Every Dollar You Make with my co-author,  HYPERLINK "https://www.linkedin.com/in/jbuzzell/"John Buzzell, visit https://www.theaugmentedworkforce.com/launch

Cathy Hackl is a globally recognized tech futurist and top business executive with deep experience working in metaverse-related fields with companies like HTC VIVE, Magic Leap, and Amazon Web Services. She’s the founder of the Futures Intelligence Group where she advises Fortune 1000 and top luxury fashion brands on metaverse growth strategies, NFTs, and how to extend their brands into virtual worlds. She’s a sought-after consultant, speaker, and media personality. Hackl was recently featured in 60 Minutes+, Bloomberg and Cheddar’s coverage of the metaverse and is a contributor to Forbes. She has written two books and is writing an anticipated book on the business opportunities of the metaverse that will be published by Bloomsbury Publishing. Hackl has been dubbed the Godmother of the Metaverse and is one of the top tech voices on LinkedIn.


NCFA Fintech Confidential Issue 4 250 - Bracing For Change In The Era Of The Augmented Workforce

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