James Surowiecki, a finance journalist at The New Yorker, wrote the fascinating book The Wisdom of Crowds in 2004. Conventional wisdom suggests that you should listen to experts — titans on Wall Street, business executives, the rich and famous. Surowiecki’s unconventional insight was that regular people often have a better collective sense of what is right. As fans of Who Wants to Be a Millionaire know, “Ask the Audience” was by far the most valuable lifeline on the show. Even if you know a good set of experts, soliciting the advice of a few hundred strangers beat “Phone a Friend” by a whopping 91% versus 65% success rate.
There are limits to this policy, of course: it only works when the crowd providing the answer are truly acting independently without information provided by others. The game show was a perfect test environment — the crowd has just a few seconds to select an answer from four options, and only the final percentages are revealed. When people influence others, the technique fails. Look at stock market boom and busts, mass riots, and other irrational crowd acts that “can similarly be explained as the outcome of a series of mutually reinforcing decisions.” [ref. Skidelsky]
The recent roller coaster of cryptocurrency prices, especially Bitcoin’s explosive rise to $20,000, followed by a 40% drop in five days, is an example of crowd behavior gone awry. Public awareness of bitcoin has grown dramatically over 2017, from a brief mention in a Super Bowl commercial in February to weekly updates on regulatory policies in Spring and Summer to the launch of three bitcoin futures listings in December 2017 after they won approval from the US Commodity Futures Trading Commission regulatory agency. Each step has built awareness of cryptocurrencies, particularly bitcoin, among the general public.
So far, the vast majority of people are aware only of bitcoin, and the most frequently asked questions are “What is it?” and “How do I buy it?” More common awareness of other coins is only just emerging now; there is almost no awareness of coins with lower market capitalizations beyond the top 10. Nonetheless, the term “ICO” has entered mainstream conversation in much the same way that “IPO” became a mainstream term in the 1990s during the dot-com boom phase.
To be sure, there are plenty of “scam ICOs,” projects that exist solely to line the pockets of the founders. One project, called a “Useless Ethereum Token,” took this observation to a satirical level, raising more than $300,000 by telling investors that the funds would only be used to buy a big-screen TV. The Long Island Ice Tea company changed its name to Long Blockchain Corp, and saw its stock value climb by 500% for a while. As Yogi Berra famously said, “It’s déjà vu all over again.” Remember Pets.com?
But beyond the crass promotions and unrealistic promises of outsized investment returns, the blockchain truly is enabling a wholly new wave of entrepreneurs to address market inefficiencies and attack monopolies and cartels. Most of these experiments will fail, just as most venture-backed startups fail, but the winners will truly change our lives. Prepare for a wild ride, similar to the birth of the internet in the early 1990s. And hold on for dear life.
- Skidelsky, Edward. “Always ask the audience,” The Telegraph. http://www.telegraph.co.uk/culture/books/3620109/Always-ask-the-audience.html June 28, 2004. Accessed Jan 5, 2018.
Initial Coin Offerings have been in the news heavily throughout the past year. Also called Token Sales, ICOs are a method for blockchain projects to raise funds without diluting the equity held by the founding team. There are three kinds of tokens commonly encountered: security tokens, which are assets that represent convertible units of value, meant to be traded through exchanges or redeemed for fiat currency when exiting the service; equity tokens, which represent ownership shares in the project; and utility tokens, assets that have no inherent value but are required to implement the service.
The majority of token types sold over the past couple of years are security tokens, assets meant to be tradeable or redeemable. Some are explicitly stores of value, like Bitcoin, Ripple, or Tether, while others are assets that people buy to use the service, including a number of gambling blockchain sites. While customers may not explicitly seek profits from their investment in these tokens, they do expect that the tokens will at least hold value while they use the service. Gamblers using tokens are hoping for token paybacks that they can redeem for fiat; Tether buyers seek a dollar-equivalence to hold funds between cryptocurrency investment cycles.
From an accounting perspective, utility tokens represent an asset held by the entity, and token sales generate extraordinary income for the business, offsetting accumulated and future operating losses as the project evolves from a pure R&D entity to a business with revenues and expenses.
A historical look at the blockchain industry shows that the industry is rapidly moving away from Bitcoin to embrace a multitude of tokens. A year ago, bitcoin was nearly the only cryptocurrency of note: Bitcoin controlled 85% of the total market capitalization for all cryptocurrencies and was the only currency worth more than $1 billion. Six months later in July, the total industry value had grown by a factor of 4x, and there were six tokens worth more than $1 billion in market capitalization, with Bitcoin holding just under 50% of the total capitalization value.
Most of the business reviews of the film industry in 2017 have concluded that this has been a down year — US box office attendance continues to fall, this year even faster than prices climbed. Total box office revenues declined 1–3% compared to 2016, and the number of tickets sold fell by 4–6% from the previous year. The total theater ticket volume was about the same level as 1995, when there were 60 million fewer people living in the country.
The DVD segment of the industry continues to shrink rapidly; three of the DVDs launched in 2016 — Zootopia, Deadpool, and Star Wars VII: The Force Awakens — outsold the top DVD for 2017, Moana, and total consumer spending on DVDs fell by 39% compared to 2016.
The film industry is in the midst of one of its greatest upheavals with Netflix and Amazon aggressively investing in both new productions as well as the infrastructure to support streaming distribution service growth in more and more countries. Disney is acquiring Fox Searchlight and planning its own streaming service, currently scheduled to launch in 2019.
And, according to IMDB, more than 12,600 films were created and shown in theaters, plus tens of thousands more that went straight to streaming video without a theatrical release.
Few of these films achieve perfect ratings from the major review aggregator, Rotten Tomatoes. Here are the ones that achieved the top scores in 2017:
Rotten Tomatoes Wide Release Top Films
- Get Out (99% Tomatometer)
- Lady Bird (99%)
- The Big Sick (98%)
- Coco (97%)
- Logan (93%)
- Baby Driver (93%)
- War for the Planet of the Apes (93%)
- Hidden Figures (93%)
- The Shape of Water (93%)
- Three Billboards Outside Ebbing, Missouri (93%)
- Dunkirk (92%)
- Wonder Woman (92%)
- Thor: Ragnarok (92%)
- Spider-Man: Homecoming (92%)
- Star Wars: The Last Jedi (90%)
Rotten Tomatoes Limited Release Top Films
- Faces Places (Visages, Villages) (100% tomatometer)
- God’s Own Country (99%)
- City of Ghosts (99%)
- I Am Not Your Negro (98%)
- My Life As a Zucchini (Ma Vie de Courgette) (98%)
- Truman (98%)
- Call Me By Your Name (97%)
- Mudbound (97%)
- The Salesman (Forushande) (96%)
- The Florida Project (95%)
Many of these films can be viewed through one of the top streaming services today. Support quality film and reward yourself at the same time.
This post is actually going to teach you how to avoid getting scammed or phished during ANY ICO token sale, but as the StreamSpace launch gains traction and we receive more and more attention, there are inevitably going to be some scammers trying to con you out of your money.
We cannot repeat our advice enough times: the only place you will ever see a contribution address is at the StreamSpace ICO web page, https://www.stream.space/ICO . Even if others say they found the address on our website and post it on Telegram or elsewhere, do not send funds to it.
The address will be displayed here once we open our presale, between January 8 and January 15.
Still, we have a modest hard cap and a lot of growing demand, so it’s possible that people will panic and make mistakes. This post is here to make you aware of the kind of tricks we’ve seen scammers play in other ICOs, so you can be that much more prepared when the Fear of Missing Out (FOMO) kicks in.
Here are some steps you can take to avoid getting scammed.
Step 1: Bookmark https://www.stream.space
By adding it as a bookmark and only visiting us through that bookmark, you’re always going to end up on the correct site. You don’t want to type it in manually, make a typo, and end up on a fake site with a fake contribution address. You’re currently reading this post on our Medium blog page, which is a different URL than the StreamSpace ICO page. Here is the correct link to the ICO offer page: https://www.stream.space/ICO . The link will open in a new tab, so visit it now, add it to your bookmarks, and come back.
Also, if you google “StreamSpace” you may see a scammer with a fake site as well. It could be something like StreamSpace.co or StreanSpace spelled with a lower case n instead of a m or some other minor change.
Always, always double-check any URL you visit, and use the bookmarks, preferably based on emails you receive from us after registering for our ICO sale. See step 2.
Step 2: Check the sender address for any emails you receive
Another common scam is an email where the scammer has said the “From” name is StreamSpace, but in fact it is not us. Any email you receive, make sure it comes from firstname.lastname@example.org, email@example.com or firstname.lastname@example.org (and again, check for spelling errors), and not simply “StreamSpace” with a different sender address. The exception here is if you contact us and a member of our team replies, in which case make sure it comes from an @stream.space address. Even then, we’ll never share a contribution address over email.
It’s also possible, though unlikely, that someone could spoof the email address so it looks like it’s from us when it’s not. This is why we need to mention for the billionth time that we will not share the contribution address over email.
Step 3: Don’t believe anyone who shares an Ethereum or Bitcoin contribution address to you in Telegram, Reddit, Facebook, Twitter, Email, or any other media site.
Even if it looks like it’s coming from a member of the StreamSpace team. Even if it’s in the announcements channel or the public group, and especially if it’s sent via a PM.
See the introduction above; the only place we’ll ever share the contribution address through the StreamSpace ICO web page, https://www.stream.space/ICO .
Step 4: If you’re unsure about anything, ask us!
You can ask us in Telegram or through our BitcoinTalk forum thread, but it’s better to email us at email@example.com .
As long as you use your head, reference this article, and make sure to verify you are on the right site, everything will be all right. This article is here to make sure silly mistakes don’t happen.
Thank you for joining StreamSpace’s ICO! We look forward to sharing our future blockchain streaming video service with you and the world!
Marco Iansiti and Karim R. Lahkani published an article in the Jan-Feb 2017 issue of Harvard Business Review called “The Truth About Blockchain,” offering their opinion on this emerging technology and the huge amount of hype that has surrounded it.
Their thesis is that new technologies find homes across a range of applications, from simple “Single Use” functions where the technology makes an existing process more efficient to complex “Transformation” functions that dramatically change industry structures.
Single Use applications are the most straightforward ways for new technologies to become adopted. Users, familiar with existing processes, see the new technology as an enhancement that provides a clear benefit at low or no cost. Often, they will turn to an existing supplier or internal department and expect that they will simply see a reduction in cost, greater efficiency, or higher performance or capacity that comes from adopting the new technology. Examples abound in many industries and consumer applications — acetaminophen cured the same headaches as aspirin with a similar dose and frequency but without stomach upset complications. Bitcoin futures trading launched on December 1, 2017 through two Chicago-based exchanges, CME Group and CBOE. As far as these two exchanges are concerned, bitcoin spot pricing, established by Gemini, is not much different from spot pricing for West Texas Intermediate crude oil or soybeans. Similarly, we are seeing a handful of luxury goods dealers accepting bitcoin alongside fiat currencies. There have been many publicized examples of people exchanging their rapidly appreciating bitcoins and Bitcoin Cash, worth about 20x the level of just one year ago, for condos, exotic cars, and art. Burger King in Russia created a cryptocurrency they call WhopperCoin, which acts as a promotion incentive in their fast food restaurants. Every ruble spent on a Whopper earns one WhopperCoin. After accumulating 1700 WhopperCoins, consumers can exchange their tokens for a free Whopper sandwich.
The second stage of adoption involves technical substitution. In this mode, the core process functions do not change, but new firms and offerings displace older ones. According to CoinATMRadar, 61 countries now support almost 2000 bitcoin ATMs, in which cryptocurrency holders can buy and sometimes sell bitcoins or other cryptocurrencies. The US leads this industry, with 64% of the installed base of these devices. Bitcoin gift cards (essentially hardware wallets) are available from Amazon and other web retailers. There are dozens of blockchain-based gambling sites such as True Flip that have emerged in the past 18 months. Some geographies like Malta are friendly to gambling sites, and blockchain gambling adds anonymity as well as performance transparency to this large, established industry.
The third stage in the adoption of blockchain technologies involve new local services, often previously not available except to or through a few parties. Bitcoin has become a useful tool for low cost cross-border money transfer. Until a year ago, almost all person-to-person foreign exchange payments went through a handful of high cost services such as Western Union or Moneygram. Bitcoin transfers take place in the time it takes to send and receive an email, and the currency conversion fees are approximately half of the level charged by the major incumbents. IBM recently introduced its AI-based Watson IoT and Hyperledger initiatives to connect business partners to share and analyze IoT sensor data. The IBM Blockchain smart contract acts as an independent third party to certify the authenticity of the content. Interbank clearing and settlement is an unsexy back office function that costs the investment banking community billions of dollars to run and audit. Depository Trust and Clearing Corporation (DTCC) is working with IBM, R3, and Axoni to shift post-trade clearing of single-name credit default swaps to a blockchain system.
These three stages are sustaining innovations with increasing impact on industry costs, but do not necessarily disrupt the overall industry value chain. The fourth stage, however, involves a total overhaul of the core industry structure with blockchain systems tearing apart the normal centralized command and control structures. In this final stage, smart contracts replace the expected role of a trusted master owner for the marketplace; buyers and sellers agree independently on terms for their own transactions, and they publish their decisions and certify that each has held up their end of the bargain. There are hundreds of blockchain projects aimed at one or another specialized marketplace, from sensors (IOTA) to energy (SolarCoin, WePower), healthcare records (Patientory, MedRec), identity management and security (ABT, CUBE), and media content rights management (StreamSpace, SingularDTV, Mycelia/UjoMusic, Revelator).
These disruptors are most successful when they target unserved or underserved segments of users that do not place a high value on the conventional services provided by the centralized incumbents and their preferred value chain partners. Netflix is busy becoming a major content developer studio, partnering with the dominant broadband service providers, AT&T, Verizon, Comcast, and Charter Spectrum to ensure superior viewing experiences through its CDN. Google’s YouTube TV is looking to become a cable replacement service, offering live TV streaming to smartphones and smart televisions. Alternative service providers will succeed when they bring unique content that appeals to people who want something different — independent media content, foreign news and entertainment, specialized educational content or online classes, and interactive virtual/augmented reality services, among others.
Today, December 14, 2017, is being treated by many people as the last day for a “free internet,” since it is pretty clear that the FCC chairmen will rule 3:2 and overturn the Open Internet Ruling established in 2015 with its new “Restore Internet Freedom” Order.
The opinions of each of the five chairmen has been clear for months, if not years. The current Chairman, Ajit Pai, and Commissioner Michael O’Reilly each published lengthy dissenting statements as attachments to the 2015 Ruling, outlining their arguments as to why the FCC should not have enlarged its definition of basic (Title II) carrier services to include broadband internet access services.
The third Republican Commissioner, Brendan Carr, has been quite vocal that “the FCC vote is a win for consumers & innovation. Americans will regain online privacy protections they lost two years ago, & we return to the robust legal protections under which the Internet thrived in 2015 & prior 20 years.”
What’s happening, and why have millions of people submitted comments to the FCC?
Back in the dark ages circa 2000, the major local phone companies and the major cable service providers began deploying broadband services as optional enhancements to their basic offerings. The Telecommunications Act of 1996 established a federal priority to enable broadband services to reach all Americans, with special emphasis on the provision of broadband service to elementary and secondary schools and classrooms (Section 706).
For the past 15 years, the FC has published semiannual updates showing the progress in deployment of broadband services on a county-by-county basis. At the same time, the FCC has explored the definition of “broadband,” periodically updating its definition as new services are introduced that test the limits of high speed service access. Today, “broadband” internet means local service with a 25 Mbps downlink and 3 Mbps uplink speed, or multiuser service with 100 Mbps to cover a 1000 user population (common in public secondary schools). About 83% of US households currently have access to at least one qualifying broadband service, but there are thousands of rural counties across the nation where that standard is not possible, and where less than 10% of residents can obtain high speed services.
Three forecasts for the future of broadband services
The top four broadband providers — Verizon, AT&T, Comcast, and Charter Communications — form an oligopoly for residential broadband services, with the two cable companies holding near monopoly positions for fiber-cable service in their respective geographic locations, and AT&T and Verizon sharing over 60% of their respective core telecom markets. Together, the four top companies share 74% of the US broadband industry. The four top companies have each spent most of the pat 20 years buying and integrating competitors and adjacent businesses, cementing their roles as integrated broadband services providers. For each of the past five years, AT&T and Verizon have been the #1 and #2 investors in capital infrastructure among US companies, surpassing ExxonMobil and the other major oil and gas companies as well as the entire population of major internet and tech companies. The only significant acquisition that has been halted during the current administration was the proposed merger of AT&T and Time Warner, which would have combined a huge content owner with one of the major broadband ISPs. It seems very likely that the four top broadband competitors will continue to increase their aggregate market share by acquiring more secondary or regional firms and by continuing to raise the bar on investment in infrastructure in their major service areas.
One of the claims of the pro Net Neutrality forces is that changing the FCC regulatory environment will allow ISPs to either block or charge separately for access to specific popular services, such as Facebook or Netflix. That is not and has never been part of the core strategy for any of the top firms, but it is highly likely that the firms will streamline the deployment of some of these specific high bandwidth services, especially the two named above, and enable preferential treatment for users who choose to pay for premium plans. Instead of just seeing rates that promote 25 Mbps or 50 Mbps, you will see rates for streamlined 4K video service, potentially naming specific content channels. One of the side effects of this policy would be that the top content service providers — Netflix, Disney, Time Warner — would take even more share of the total service market, while specialty stream services (including StreamSpace’s own blockchain film streaming service) might face an uphill battle to be treated as an equal application service.
Lastly, the next generation of commonly-used broadband services will likely be wireless 5G services, more than fiber-based. AT&T and Verizon recognize that the next wave of capital investment will be for 50–100 Mbps wireless broadband infrastructure, aimed to both stationary users (residential wireless) and mobile consumers, including both automobiles and smartphones. The sheer cost of keeping up with AT&T and Verizon will make it more likely that smaller service providers drop out. Sprint and T-Mobile are losing capital support from their major investors, Softbank and Deutsche Telekom, now that the proposed merger between the two Tier 2 competitors failed in late October. No smaller wireless provider has anywhere the level of capital reach necessary to be competitive in 5G outside of highly focused metro service experiments.
But all of these trends have been apparent for the past two decades, from the early days of hybrid fiber-coax and DSL and LTE 3G wireless service. What is changing is the nature of the content that people are expecting to see from their broadband service — more video, much more complex internet websites with continually updated feed content. The most popular websites in the US today are Google, Facebook, YouTube, Amazon, and Verizon’s Yahoo, all companies that date back only 25 years or less. All of these sites have been increasing their share of traffic, enhancing their services with more complex video content and increasing the amount of time and money their users spend on each of their sites.
The future is already here. Innovation still matters, but the major buyers for innovation are becoming more centralized. We see this in the shrinking of the public stock markets even as the value of those markets continues to rise. More and more industries are becoming more concentrated, resulting in higher prices and profits. Moving regulation of the broadband industry from the FCC to the Federal Trade Commission, alongside most other industries, does not bode well for the long term health of the internet, one of the few segments where young innovators have been successful in the past 20 years.
Jose Tormo did some lobbying to the FCC and Congress in 1995–6 as an employee of Motorola, one of the inventors of both ADSL silicon and cable modems and the largest provider of wireless communications equipment in the United States.
- FCC Report and Order on Remand, Declaratory Ruling, and Order, GN Docket №14–28, Adopted February 26, 2015, Released March 12, 2015. https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.pdf
- Carr, Brendan. https://twitter.com/BrendanCarrFCC/status/940991727648804864 Twitter post, December 13, 2017.
- Taglang, Kevin, Benton Foundation. “What Section 706 Means for Net Neutrality, Municipal Networks, and Universal Broadband. https://www.benton.org/blog/what-section-706-means-net-neutrality-municipal-networks-and-universal-broadband , 2015.
- Kimmelman, Gene and Cooper, Mark, Washington Center for Equitable Growth. “A communications oligopoly on steroids,” http://equitablegrowth.org/report/a-communications-oligopoly-on-steroids/ , July 18, 2017.
- Di Ionni, Michelle and Mandel, Michael, Progressive Policy Institute. “Investment Heroes 2016: Fighting Short-termism. http://www.progressivepolicy.org/wp-content/uploads/2016/10/InvestHeroes_2016.pdf , October 2016.
- Photo by Luca Colapinto on Unsplash