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A few years back, DeepMind’s Demis Hassabis famously prophesized that AI and neuroscience will positively feed into each other in a “virtuous circle.” If realized, this would fundamentally expand our insight into intelligence, both machine and human.
We’ve already seen some proofs of concept, at least in the brain-to-AI direction. For example, memory replay, a biological mechanism that fortifies our memories during sleep, also boosted AI learning when abstractly appropriated into deep learning models. Reinforcement learning, loosely based on our motivation circuits, is now behind some of AI’s most powerful tools.
Hassabis is about to be proven right again.
Last week, two studies independently tapped into the power of ANNs to solve a 70-year-old neuroscience mystery: how does our visual system perceive reality?
The first, published in Cell, used generative networks to evolve DeepDream-like images that hyper-activate complex visual neurons in monkeys. These machine artworks are pure nightmare fuel to the human eye; but together, they revealed a fundamental “visual hieroglyph” that may form a basic rule for how we piece together visual stimuli to process sight into perception.
In the second study, a team used a deep ANN model—one thought to mimic biological vision—to synthesize new patterns tailored to control certain networks of visual neurons in the monkey brain. When directly shown to monkeys, the team found that the machine-generated artworks could reliably activate predicted populations of neurons. Future improved ANN models could allow even better control, giving neuroscientists a powerful noninvasive tool to study the brain. The work was published in Science.
The individual results, though fascinating, aren’t necessarily the point. Rather, they illustrate how scientists are now striving to complete the virtuous circle: tapping AI to probe natural intelligence. Vision is only the beginning—the tools can potentially be expanded into other sensory domains. And the more we understand about natural brains, the better we can engineer artificial ones.
It’s a “great example of leveraging artificial intelligence to study organic intelligence,” commented Dr. Roman Sandler at Kernel.co on Twitter.
ANNs and biological vision have quite the history.
In the late 1950s, the legendary neuroscientist duo David Hubel and Torsten Wiesel became some of the first to use mathematical equations to understand how neurons in the brain work together.
In a series of experiments—many using cats—the team carefully dissected the structure and function of the visual cortex. Using myriads of images, they revealed that vision is processed in a hierarchy: neurons in “earlier” brain regions, those closer to the eyes, tend to activate when they “see” simple patterns such as lines. As we move deeper into the brain, from the early V1 to a nub located slightly behind our ears, the IT cortex, neurons increasingly respond to more complex or abstract patterns, including faces, animals, and objects. The discovery led some scientists to call certain IT neurons “Jennifer Aniston cells,” which fire in response to pictures of the actress regardless of lighting, angle, or haircut. That is, IT neurons somehow extract visual information into the “gist” of things.
That’s not trivial. The complex neural connections that lead to increasing abstraction of what we see into what we think we see—what we perceive—is a central question in machine vision: how can we teach machines to transform numbers encoding stimuli into dots, lines, and angles that eventually form “perceptions” and “gists”? The answer could transform self-driving cars, facial recognition, and other computer vision applications as they learn to better generalize.
Hubel and Wiesel’s Nobel-prize-winning studies heavily influenced the birth of ANNs and deep learning. Much of earlier ANN “feed-forward” model structures are based on our visual system; even today, the idea of increasing layers of abstraction—for perception or reasoning—guide computer scientists to build AI that can better generalize. The early romance between vision and deep learning is perhaps the bond that kicked off our current AI revolution.
It only seems fair that AI would feed back into vision neuroscience.
Hieroglyphs and Controllers
In the Cell study, a team led by Dr. Margaret Livingstone at Harvard Medical School tapped into generative networks to unravel IT neurons’ complex visual alphabet.
Scientists have long known that neurons in earlier visual regions (V1) tend to fire in response to “grating patches” oriented in certain ways. Using a limited set of these patches like letters, V1 neurons can “express a visual sentence” and represent any image, said Dr. Arash Afraz at the National Institute of Health, who was not involved in the study.
But how IT neurons operate remained a mystery. Here, the team used a combination of genetic algorithms and deep generative networks to “evolve” computer art for every studied neuron. In seven monkeys, the team implanted electrodes into various parts of the visual IT region so that they could monitor the activity of a single neuron.
The team showed each monkey an initial set of 40 images. They then picked the top 10 images that stimulated the highest neural activity, and married them to 30 new images to “evolve” the next generation of images. After 250 generations, the technique, XDREAM, generated a slew of images that mashed up contorted face-like shapes with lines, gratings, and abstract shapes.
This image shows the evolution of an optimum image for stimulating a visual neuron in a monkey. Image Credit: Ponce, Xiao, and Schade et al. – Cell.
“The evolved images look quite counter-intuitive,” explained Afraz. Some clearly show detailed structures that resemble natural images, while others show complex structures that can’t be characterized by our puny human brains.
This figure shows natural images (right) and images evolved by neurons in the inferotemporal cortex of a monkey (left). Image Credit: Ponce, Xiao, and Schade et al. – Cell.
“What started to emerge during each experiment were pictures that were reminiscent of shapes in the world but were not actual objects in the world,” said study author Carlos Ponce. “We were seeing something that was more like the language cells use with each other.”
This image was evolved by a neuron in the inferotemporal cortex of a monkey using AI. Image Credit: Ponce, Xiao, and Schade et al. – Cell.
Although IT neurons don’t seem to use a simple letter alphabet, it does rely on a vast array of characters like hieroglyphs or Chinese characters, “each loaded with more information,” said Afraz.
The adaptive nature of XDREAM turns it into a powerful tool to probe the inner workings of our brains—particularly for revealing discrepancies between biology and models.
The Science study, led by Dr. James DiCarlo at MIT, takes a similar approach. Using ANNs to generate new patterns and images, the team was able to selectively predict and independently control neuron populations in a high-level visual region called V4.
“So far, what has been done with these models is predicting what the neural responses would be to other stimuli that they have not seen before,” said study author Dr. Pouya Bashivan. “The main difference here is that we are going one step further and using the models to drive the neurons into desired states.”
It suggests that our current ANN models for visual computation “implicitly capture a great deal of visual knowledge” which we can’t really describe, but which the brain uses to turn vision information into perception, the authors said. By testing AI-generated images on biological vision, however, the team concluded that today’s ANNs have a degree of understanding and generalization. The results could potentially help engineer even more accurate ANN models of biological vision, which in turn could feed back into machine vision.
“One thing is clear already: Improved ANN models … have led to control of a high-level neural population that was previously out of reach,” the authors said. “The results presented here have likely only scratched the surface of what is possible with such implemented characterizations of the brain’s neural networks.”
To Afraz, the power of AI here is to find cracks in human perception—both our computational models of sensory processes, as well as our evolved biological software itself. AI can be used “as a perfect adversarial tool to discover design cracks” of IT, said Afraz, such as finding computer art that “fools” a neuron into thinking the object is something else.
“As artificial intelligence researchers develop models that work as well as the brain does—or even better—we will still need to understand which networks are more likely to behave safely and further human goals,” said Ponce. “More efficient AI can be grounded by knowledge of how the brain works.”
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During the past 50 years, the frequency of recorded natural disasters has surged nearly five-fold.
In this blog, I’ll be exploring how converging exponential technologies (AI, robotics, drones, sensors, networks) are transforming the future of disaster relief—how we can prevent them in the first place and get help to victims during that first golden hour wherein immediate relief can save lives.
Here are the three areas of greatest impact:
AI, predictive mapping, and the power of the crowd
Next-gen robotics and swarm solutions
Aerial drones and immediate aid supply
Let’s dive in!
Artificial Intelligence and Predictive Mapping
When it comes to immediate and high-precision emergency response, data is gold.
Already, the meteoric rise of space-based networks, stratosphere-hovering balloons, and 5G telecommunications infrastructure is in the process of connecting every last individual on the planet.
Aside from democratizing the world’s information, however, this upsurge in connectivity will soon grant anyone the ability to broadcast detailed geo-tagged data, particularly those most vulnerable to natural disasters.
Armed with the power of data broadcasting and the force of the crowd, disaster victims now play a vital role in emergency response, turning a historically one-way blind rescue operation into a two-way dialogue between connected crowds and smart response systems.
With a skyrocketing abundance of data, however, comes a new paradigm: one in which we no longer face a scarcity of answers. Instead, it will be the quality of our questions that matters most.
This is where AI comes in: our mining mechanism.
In the case of emergency response, what if we could strategically map an almost endless amount of incoming data points? Or predict the dynamics of a flood and identify a tsunami’s most vulnerable targets before it even strikes? Or even amplify critical signals to trigger automatic aid by surveillance drones and immediately alert crowdsourced volunteers?
Already, a number of key players are leveraging AI, crowdsourced intelligence, and cutting-edge visualizations to optimize crisis response and multiply relief speeds.
Take One Concern, for instance. Born out of Stanford under the mentorship of leading AI expert Andrew Ng, One Concern leverages AI through analytical disaster assessment and calculated damage estimates.
Partnering with the cities of Los Angeles, San Francisco, and numerous cities in San Mateo County, the platform assigns verified, unique ‘digital fingerprints’ to every element in a city. Building robust models of each system, One Concern’s AI platform can then monitor site-specific impacts of not only climate change but each individual natural disaster, from sweeping thermal shifts to seismic movement.
This data, combined with that of city infrastructure and former disasters, are then used to predict future damage under a range of disaster scenarios, informing prevention methods and structures in need of reinforcement.
Within just four years, One Concern can now make precise predictions with an 85 percent accuracy rate in under 15 minutes.
And as IoT-connected devices and intelligent hardware continue to boom, a blooming trillion-sensor economy will only serve to amplify AI’s predictive capacity, offering us immediate, preventive strategies long before disaster strikes.
Beyond natural disasters, however, crowdsourced intelligence, predictive crisis mapping, and AI-powered responses are just as formidable a triage in humanitarian disasters.
One extraordinary story is that of Ushahidi. When violence broke out after the 2007 Kenyan elections, one local blogger proposed a simple yet powerful question to the web: “Any techies out there willing to do a mashup of where the violence and destruction is occurring and put it on a map?”
Within days, four ‘techies’ heeded the call, building a platform that crowdsourced first-hand reports via SMS, mined the web for answers, and—with over 40,000 verified reports—sent alerts back to locals on the ground and viewers across the world.
Today, Ushahidi has been used in over 150 countries, reaching a total of 20 million people across 100,000+ deployments. Now an open-source crisis-mapping software, its V3 (or “Ushahidi in the Cloud”) is accessible to anyone, mining millions of Tweets, hundreds of thousands of news articles, and geo-tagged, time-stamped data from countless sources.
Aggregating one of the longest-running crisis maps to date, Ushahidi’s Syria Tracker has proved invaluable in the crowdsourcing of witness reports. Providing real-time geographic visualizations of all verified data, Syria Tracker has enabled civilians to report everything from missing people and relief supply needs to civilian casualties and disease outbreaks— all while evading the government’s cell network, keeping identities private, and verifying reports prior to publication.
As mobile connectivity and abundant sensors converge with AI-mined crowd intelligence, real-time awareness will only multiply in speed and scale.
Imagining the Future….
Within the next 10 years, spatial web technology might even allow us to tap into mesh networks.
As I’ve explored in a previous blog on the implications of the spatial web, while traditional networks rely on a limited set of wired access points (or wireless hotspots), a wireless mesh network can connect entire cities via hundreds of dispersed nodes that communicate with each other and share a network connection non-hierarchically.
In short, this means that individual mobile users can together establish a local mesh network using nothing but the computing power in their own devices.
Take this a step further, and a local population of strangers could collectively broadcast countless 360-degree feeds across a local mesh network.
Imagine a scenario in which armed attacks break out across disjointed urban districts, each cluster of eye witnesses and at-risk civilians broadcasting an aggregate of 360-degree videos, all fed through photogrammetry AIs that build out a live hologram in real time, giving family members and first responders complete information.
Or take a coastal community in the throes of torrential rainfall and failing infrastructure. Now empowered by a collective live feed, verification of data reports takes a matter of seconds, and richly-layered data informs first responders and AI platforms with unbelievable accuracy and specificity of relief needs.
By linking all the right technological pieces, we might even see the rise of automated drone deliveries. Imagine: crowdsourced intelligence is first cross-referenced with sensor data and verified algorithmically. AI is then leveraged to determine the specific needs and degree of urgency at ultra-precise coordinates. Within minutes, once approved by personnel, swarm robots rush to collect the requisite supplies, equipping size-appropriate drones with the right aid for rapid-fire delivery.
This brings us to a second critical convergence: robots and drones.
While cutting-edge drone technology revolutionizes the way we deliver aid, new breakthroughs in AI-geared robotics are paving the way for superhuman emergency responses in some of today’s most dangerous environments.
Let’s explore a few of the most disruptive examples to reach the testing phase.
Autonomous Robots and Swarm Solutions
As hardware advancements converge with exploding AI capabilities, disaster relief robots are graduating from assistance roles to fully autonomous responders at a breakneck pace.
Born out of MIT’s Biomimetic Robotics Lab, the Cheetah III is but one of many robots that may form our first line of defense in everything from earthquake search-and-rescue missions to high-risk ops in dangerous radiation zones.
Now capable of running at 6.4 meters per second, Cheetah III can even leap up to a height of 60 centimeters, autonomously determining how to avoid obstacles and jump over hurdles as they arise.
Initially designed to perform spectral inspection tasks in hazardous settings (think: nuclear plants or chemical factories), the Cheetah’s various iterations have focused on increasing its payload capacity, range of motion, and even a gripping function with enhanced dexterity.
Cheetah III and future versions are aimed at saving lives in almost any environment.
And the Cheetah III is not alone. Just this February, Tokyo’s Electric Power Company (TEPCO) has put one of its own robots to the test. For the first time since Japan’s devastating 2011 tsunami, which led to three nuclear meltdowns in the nation’s Fukushima nuclear power plant, a robot has successfully examined the reactor’s fuel.
Broadcasting the process with its built-in camera, the robot was able to retrieve small chunks of radioactive fuel at five of the six test sites, offering tremendous promise for long-term plans to clean up the still-deadly interior.
Also out of Japan, Mitsubishi Heavy Industries (MHi) is even using robots to fight fires with full autonomy. In a remarkable new feat, MHi’s Water Cannon Bot can now put out blazes in difficult-to-access or highly dangerous fire sites.
Delivering foam or water at 4,000 liters per minute and 1 megapascal (MPa) of pressure, the Cannon Bot and its accompanying Hose Extension Bot even form part of a greater AI-geared system to conduct reconnaissance and surveillance on larger transport vehicles.
As wildfires grow ever more untameable, high-volume production of such bots could prove a true lifesaver. Paired with predictive AI forest fire mapping and autonomous hauling vehicles, not only will solutions like MHi’s Cannon Bot save numerous lives, but avoid population displacement and paralyzing damage to our natural environment before disaster has the chance to spread.
But even in cases where emergency shelter is needed, groundbreaking (literally) robotics solutions are fast to the rescue.
After multiple iterations by Fastbrick Robotics, the Hadrian X end-to-end bricklaying robot can now autonomously build a fully livable, 180-square-meter home in under three days. Using a laser-guided robotic attachment, the all-in-one brick-loaded truck simply drives to a construction site and directs blocks through its robotic arm in accordance with a 3D model.
Meeting verified building standards, Hadrian and similar solutions hold massive promise in the long-term, deployable across post-conflict refugee sites and regions recovering from natural catastrophes.
But what if we need to build emergency shelters from local soil at hand? Marking an extraordinary convergence between robotics and 3D printing, the Institute for Advanced Architecture of Catalonia (IAAC) is already working on a solution.
In a major feat for low-cost construction in remote zones, IAAC has found a way to convert almost any soil into a building material with three times the tensile strength of industrial clay. Offering myriad benefits, including natural insulation, low GHG emissions, fire protection, air circulation, and thermal mediation, IAAC’s new 3D printed native soil can build houses on-site for as little as $1,000.
But while cutting-edge robotics unlock extraordinary new frontiers for low-cost, large-scale emergency construction, novel hardware and computing breakthroughs are also enabling robotic scale at the other extreme of the spectrum.
Again, inspired by biological phenomena, robotics specialists across the US have begun to pilot tiny robotic prototypes for locating trapped individuals and assessing infrastructural damage.
Take RoboBees, tiny Harvard-developed bots that use electrostatic adhesion to ‘perch’ on walls and even ceilings, evaluating structural damage in the aftermath of an earthquake.
Or Carnegie Mellon’s prototyped Snakebot, capable of navigating through entry points that would otherwise be completely inaccessible to human responders. Driven by AI, the Snakebot can maneuver through even the most densely-packed rubble to locate survivors, using cameras and microphones for communication.
But when it comes to fast-paced reconnaissance in inaccessible regions, miniature robot swarms have good company.
Next-Generation Drones for Instantaneous Relief Supplies
Particularly in the case of wildfires and conflict zones, autonomous drone technology is fundamentally revolutionizing the way we identify survivors in need and automate relief supply.
Not only are drones enabling high-resolution imagery for real-time mapping and damage assessment, but preliminary research shows that UAVs far outpace ground-based rescue teams in locating isolated survivors.
As presented by a team of electrical engineers from the University of Science and Technology of China, drones could even build out a mobile wireless broadband network in record time using a “drone-assisted multi-hop device-to-device” program.
And as shown during Houston’s Hurricane Harvey, drones can provide scores of predictive intel on everything from future flooding to damage estimates.
Among multiple others, a team led by Texas A&M computer science professor and director of the university’s Center for Robot-Assisted Search and Rescue Dr. Robin Murphy flew a total of 119 drone missions over the city, from small-scale quadcopters to military-grade unmanned planes. Not only were these critical for monitoring levee infrastructure, but also for identifying those left behind by human rescue teams.
But beyond surveillance, UAVs have begun to provide lifesaving supplies across some of the most remote regions of the globe. One of the most inspiring examples to date is Zipline.
Created in 2014, Zipline has completed 12,352 life-saving drone deliveries to date. While drones are designed, tested, and assembled in California, Zipline primarily operates in Rwanda and Tanzania, hiring local operators and providing over 11 million people with instant access to medical supplies.
Providing everything from vaccines and HIV medications to blood and IV tubes, Zipline’s drones far outpace ground-based supply transport, in many instances providing life-critical blood cells, plasma, and platelets in under an hour.
But drone technology is even beginning to transcend the limited scale of medical supplies and food.
Now developing its drones under contracts with DARPA and the US Marine Corps, Logistic Gliders, Inc. has built autonomously-navigating drones capable of carrying 1,800 pounds of cargo over unprecedented long distances.
Built from plywood, Logistic’s gliders are projected to cost as little as a few hundred dollars each, making them perfect candidates for high-volume remote aid deliveries, whether navigated by a pilot or self-flown in accordance with real-time disaster zone mapping.
As hardware continues to advance, autonomous drone technology coupled with real-time mapping algorithms pose no end of abundant opportunities for aid supply, disaster monitoring, and richly layered intel previously unimaginable for humanitarian relief.
Perhaps one of the most consequential and impactful applications of converging technologies is their transformation of disaster relief methods.
While AI-driven intel platforms crowdsource firsthand experiential data from those on the ground, mobile connectivity and drone-supplied networks are granting newfound narrative power to those most in need.
And as a wave of new hardware advancements gives rise to robotic responders, swarm technology, and aerial drones, we are fast approaching an age of instantaneous and efficiently-distributed responses in the midst of conflict and natural catastrophes alike.
Empowered by these new tools, what might we create when everyone on the planet has the same access to relief supplies and immediate resources? In a new age of prevention and fast recovery, what futures can you envision?
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Disruptive business models are often powered by alternative financing. In Part 1 of this series, I discussed how mobile is redefining money and banking and shared some of the dramatic transformations in the global remittance infrastructure.
In this article, we’ll discuss:
AI financial advisors and robo traders
Let’s dive right back in…
Decentralized Lending = Democratized Access to Finances
Peer-to-peer (P2P) lending is an age-old practice, traditionally with high risk and extreme locality. Now, the P2P funding model is being digitized and delocalized, bringing lending online and across borders.
Zopa, the first official crowdlending platform, arrived in the United Kingdom in 2004. Since then, the consumer crowdlending platform has facilitated lending of over 3 billion euros ($3.5 billion USD) of loans.
Person-to-business crowdlending took off, again in the U.K., in 2005 with Funding Circle, now with over 5 billion euros (~5.8 billion USD) of capital loaned to small businesses around the world.
Crowdlending next took off in the US in 2006, with platforms like Prosper and Lending Club. The US crowdlending industry has boomed to $21 billion in loans, across 515,000 loans.
Let’s take a step back… to a time before banks, when lending took place between trusted neighbors in small villages across the globe. Lending started as peer-to-peer transactions.
As villages turned into towns, towns turned into cities, and cities turned into sprawling metropolises, neighborly trust and the ability to communicate across urban landscapes broke down. That’s where banks and other financial institutions came into play—to add trust back into the lending equation.
With crowdlending, we are evidently returning to this pre-centralized-banking model of loans, and moving away from cumbersome intermediaries (e.g. high fees, regulations, and extra complexity).
Fueled by the permeation of the internet, P2P lending took on a new form as ‘crowdlending’ in the early 2000s. Now, as blockchain and artificial intelligence arrive on the digital scene, P2P lending platforms are being overhauled with transparency, accountability, reliability, and immutability.
Artificial Intelligence Micro Lending & Credit Scores
We are beginning to augment our quantitative decision-making with neural networks processing borrowers’ financial data to determine their financial ‘fate’ (or, as some call it, your credit score). Companies like Smart Finance Group (backed by Kai Fu Lee and Sinovation Ventures) are using artificial intelligence to minimize default rates for tens of millions of microloans.
Smart Finance is fueled by users’ personal data, particularly smartphone data and usage behavior. Users are required to give Smart Finance access to their smartphone data, so that Smart Finance’s artificial intelligence engine can generate a credit score from the personal information.
The benefits of this AI-powered lending platform do not stop at increased loan payback rates; there’s a massive speed increase as well. Smart Finance loans are frequently approved in under eight seconds. As we’ve seen with other artificial intelligence disruptions, data is the new gold.
Digitizing access to P2P loans paves the way for billions of people currently without access to banking to leapfrog the centralized banking system, just as Africa bypassed landline phones and went straight to mobile. Leapfrogging centralized banking and the credit system is exactly what Smart Finance has done for hundreds of millions of people in China.
As artificial intelligence accesses even the most mundane mobile browsing data to assign credit scores, blockchain technologies, particularly immutable ledgers and smart contracts, are massive disruptors to the archaic banking system, building additional trust and transparency on top of current P2P lending models.
Immutable ledgers provide the necessary transparency for accurate credit and loan defaulting history. Smart contracts executed on these immutable ledgers bring the critical ability to digitally replace cumbersome, expensive third parties (like banks), allowing individual borrowers or businesses to directly connect with willing lenders.
Two of the leading blockchain platforms for P2P lending are ETHLend and SALT Lending.
ETHLend is an Ethereum-based decentralized application aiming to bring transparency and trust to P2P lending through Ethereum network smart contracts.
Secure Automated Lending Technology (SALT) allows cryptocurrency asset holders to use their digital assets as collateral for cash loans, without the need to liquidate their holdings, giving rise to a digital-asset-backed lending market.
While blockchain poses a threat to many of the large, centralized banking institutions, some are taking advantage of the new technology to optimize their internal lending, credit scoring, and collateral operations.
In March 2018, ING and Credit Suisse successfully exchanged 25 million euros using HQLA-X, a blockchain-based collateral lending platform.
HQLA-X runs on the R3 Corda blockchain, a platform designed specifically to help heritage financial and commerce institutions migrate away from their inefficient legacy financial infrastructure.
Blockchain and tokenization are going through their own fintech and regulation shakeup right now. In a future blog, I’ll discuss the various efforts to more readily assure smart contracts, and the disruptive business model of security tokens and the US Securities and Exchange Commission.
Parallels to the Global Abundance of Capital
The abundance of capital being created by the advent of P2P loans closely relates to the unprecedented global abundance of capital.
Initial coin offerings (ICOs) and crowdfunding are taking a strong stand in disrupting the $164 billion venture capital market. The total amount invested in ICOs has risen from $6.6 billion in 2017 to $7.15 billion USD in the first half of 2018. Crowdfunding helped projects raise more than $34 billion in 2017, with experts projecting that global crowdfunding investments will reach $300 billion by 2025.
In the last year alone, using ICOs, over a dozen projects have raised hundreds of millions of dollars in mere hours. Take Filecoin, for example, which raised $257 million in only 30 days; its first $135 million was raised in the first hour. Similarly, the Dragon Coin project (which itself is revolutionizing remittance in high-stakes casinos around the world) raised $320 million in its 30-day public ICO.
Some Important Takeaways…
Technology-backed fundraising and financial services are disrupting the world’s largest financial institutions. Anyone, anywhere, at anytime will be able to access the capital they need to pursue their idea.
The speed at which we can go from “I’ve got an idea” to “I run a billion-dollar company” is moving faster than ever.
Following Ray Kurzweil’s Law of Accelerating Returns, the rapid decrease in time to access capital is intimately linked (and greatly dependent on) a financial infrastructure (technology, institutions, platforms, and policies) that can adapt and evolve just as rapidly.
This new abundance of capital requires financial decision-making with ever-higher market prediction precision. That’s exactly where artificial intelligence is already playing a massive role.
Artificial Intelligence, Robo Traders, and Financial Advisors
On May 6, 2010, the Dow Jones Industrial Average suddenly collapsed by 998.5 points (equal to 8 percent, or $1 trillion). The crash lasted over 35 minutes and is now known as the ‘Flash Crash’. While no one knows the specific reason for this 2010 stock market anomaly, experts widely agree that the Flash Crash had to do with algorithmic trading.
With the ability to have instant, trillion-dollar market impacts, algorithmic trading and artificial intelligence are undoubtedly ingrained in how financial markets operate.
In 2017, CNBC.com estimated that 90 percent of daily trading volume in stock trading is done by machine algorithms, and only 10 percent is carried out directly by humans.
Artificial intelligence and financial management algorithms are not only available to top Wall Street players.
Robo-advisor financial management apps, like Wealthfront and Betterment, are rapidly permeating the global market. Wealthfront currently has $9.5 billion in assets under management, and Betterment has $10 billion.
Artificial intelligent financial agents are already helping financial institutions protect your money and fight fraud. A prime application for machine learning is in detecting anomalies in your spending and transaction habits, and flagging potentially fraudulent transactions.
As artificial intelligence continues to exponentially increase in power and capabilities, increasingly powerful trading and financial management bots will come online, finding massive new and previously lost streams of wealth.
How else are artificial intelligence and automation transforming finance?
Disruptive Remittance and Seamless Transactions
When was the last time you paid in cash at a toll booth? How about for a taxi ride?
EZ-Pass, the electronic tolling company implemented extensively on the East Coast, has done wonders to reduce traffic congestion and increase traffic flow.
Driving down I-95 on the East Coast of the United States, drivers rarely notice their financial transaction with the state’s tolling agencies. The transactions are seamless.
The Uber app enables me to travel without my wallet. I can forget about payment on my trip, free up my mental bandwidth and time for higher-priority tasks. The entire process is digitized and, by extension, automated and integrated into Uber’s platform (Note: This incredible convenience many times causes me to accidentally walk out of taxi cabs without paying!).
In January 2018, we saw the success of the first cutting-edge, AI-powered Amazon Go store open in Seattle, Washington. The store marked a new era in remittance and transactions. Gone are the days of carrying credit cards and cash, and gone are the cash registers. And now, on the heals of these early ‘beta-tests’, Amazon is considering opening as many as 3,000 of these cashierless stores by 2023.
Amazon Go stores use AI algorithms that watch various video feeds (from advanced cameras) throughout the store to identify who picks up groceries, exactly what products they select, and how much to charge that person when they walk out of the store. It’s a grab and go experience.
Let’s extrapolate the notion of seamless, integrated payment systems from Amazon Go and Uber’s removal of post-ride payment to the rest of our day-to-day experience.
Imagine this near future:
As you near the front door of your home, your AI assistant summons a self-driving Uber that takes you to the Hyperloop station (after all, you work in L.A. but live in San Francisco).
At the station, you board your pod, without noticing that your ticket purchase was settled via a wireless payment checkpoint.
After work, you stop at the Amazon Go and pick up dinner. Your virtual AI assistant passes your Amazon account information to the store’s payment checkpoint, as the store’s cameras and sensors track you, your cart and charge you auto-magically.
At home, unbeknownst to you, your AI has already restocked your fridge and pantry with whatever items you failed to pick up at the Amazon Go.
Once we remove the actively transacting aspect of finance, what else becomes possible?
Extraordinary transformations are happening in the finance world. We’ve only scratched the surface of the fintech revolution. All of these transformative financial technologies require high-fidelity assurance, robust insurance, and a mechanism for storing value.
I’ll dive into each of these other facets of financial services in future articles.
For now, thanks to coming global communication networks being deployed on 5G, Alphabet’s LUNE, SpaceX’s Starlink and OneWeb, by 2024, nearly all 8 billion people on Earth will be online.
Once connected, these new minds, entrepreneurs, and customers need access to money and financial services to meaningfully participate in the world economy.
By connecting lenders and borrowers around the globe, decentralized lending drives down global interest rates, increases global financial market participation, and enables economic opportunity to the billions of people who are about to come online.
We’re living in the most abundant time in human history, and fintech is just getting started.
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