Tag Archives: extension
#434792 Extending Human Longevity With ...
Lizards can regrow entire limbs. Flatworms, starfish, and sea cucumbers regrow entire bodies. Sharks constantly replace lost teeth, often growing over 20,000 teeth throughout their lifetimes. How can we translate these near-superpowers to humans?
The answer: through the cutting-edge innovations of regenerative medicine.
While big data and artificial intelligence transform how we practice medicine and invent new treatments, regenerative medicine is about replenishing, replacing, and rejuvenating our physical bodies.
In Part 5 of this blog series on Longevity and Vitality, I detail three of the regenerative technologies working together to fully augment our vital human organs.
Replenish: Stem cells, the regenerative engine of the body
Replace: Organ regeneration and bioprinting
Rejuvenate: Young blood and parabiosis
Let’s dive in.
Replenish: Stem Cells – The Regenerative Engine of the Body
Stem cells are undifferentiated cells that can transform into specialized cells such as heart, neurons, liver, lung, skin and so on, and can also divide to produce more stem cells.
In a child or young adult, these stem cells are in large supply, acting as a built-in repair system. They are often summoned to the site of damage or inflammation to repair and restore normal function.
But as we age, our supply of stem cells begins to diminish as much as 100- to 10,000-fold in different tissues and organs. In addition, stem cells undergo genetic mutations, which reduce their quality and effectiveness at renovating and repairing your body.
Imagine your stem cells as a team of repairmen in your newly constructed mansion. When the mansion is new and the repairmen are young, they can fix everything perfectly. But as the repairmen age and reduce in number, your mansion eventually goes into disrepair and finally crumbles.
What if you could restore and rejuvenate your stem cell population?
One option to accomplish this restoration and rejuvenation is to extract and concentrate your own autologous adult stem cells from places like your adipose (or fat) tissue or bone marrow.
These stem cells, however, are fewer in number and have undergone mutations (depending on your age) from their original ‘software code.’ Many scientists and physicians now prefer an alternative source, obtaining stem cells from the placenta or umbilical cord, the leftovers of birth.
These stem cells, available in large supply and expressing the undamaged software of a newborn, can be injected into joints or administered intravenously to rejuvenate and revitalize.
Think of these stem cells as chemical factories generating vital growth factors that can help to reduce inflammation, fight autoimmune disease, increase muscle mass, repair joints, and even revitalize skin and grow hair.
Over the last decade, the number of publications per year on stem cell-related research has increased 40x, and the stem cell market is expected to increase to $297 billion by 2022.
Rising research and development initiatives to develop therapeutic options for chronic diseases and growing demand for regenerative treatment options are the most significant drivers of this budding industry.
Biologists led by Kohji Nishida at Osaka University in Japan have discovered a new way to nurture and grow the tissues that make up the human eyeball. The scientists are able to grow retinas, corneas, the eye’s lens, and more, using only a small sample of adult skin.
In a Stanford study, seven of 18 stroke victims who agreed to stem cell treatments showed remarkable motor function improvements. This treatment could work for other neurodegenerative conditions such as Alzheimer’s, Parkinson’s, and ALS.
Doctors from the USC Neurorestoration Center and Keck Medicine of USC injected stem cells into the damaged cervical spine of a recently paralyzed 21-year-old man. Three months later, he showed dramatic improvement in sensation and movement of both arms.
In 2019, doctors in the U.K. cured a patient with HIV for the second time ever thanks to the efficacy of stem cells. After giving the cancer patient (who also had HIV) an allogeneic haematopoietic (e.g. blood) stem cell treatment for his Hodgkin’s lymphoma, the patient went into long-term HIV remission—18 months and counting at the time of the study’s publication.
Replace: Organ Regeneration and 3D Printing
Every 10 minutes, someone is added to the US organ transplant waiting list, totaling over 113,000 people waiting for replacement organs as of January 2019.
Countless more people in need of ‘spare parts’ never make it onto the waiting list. And on average, 20 people die each day while waiting for a transplant.
As a result, 35 percent of all US deaths (~900,000 people) could be prevented or delayed with access to organ replacements.
The excessive demand for donated organs will only intensify as technologies like self-driving cars make the world safer, given that many organ donors result from auto and motorcycle accidents. Safer vehicles mean less accidents and donations.
Clearly, replacement and regenerative medicine represent a massive opportunity.
Organ Entrepreneurs
Enter United Therapeutics CEO, Dr. Martine Rothblatt. A one-time aerospace entrepreneur (she was the founder of Sirius Satellite Radio), Rothblatt changed careers in the 1990s after her daughter developed a rare lung disease.
Her moonshot today is to create an industry of replacement organs. With an initial focus on diseases of the lung, Rothblatt set out to create replacement lungs. To accomplish this goal, her company United Therapeutics has pursued a number of technologies in parallel.
3D Printing Lungs
In 2017, United teamed up with one of the world’s largest 3D printing companies, 3D Systems, to build a collagen bioprinter and is paying another company, 3Scan, to slice up lungs and create detailed maps of their interior.
This 3D Systems bioprinter now operates according to a method called stereolithography. A UV laser flickers through a shallow pool of collagen doped with photosensitive molecules. Wherever the laser lingers, the collagen cures and becomes solid.
Gradually, the object being printed is lowered and new layers are added. The printer can currently lay down collagen at a resolution of around 20 micrometers, but will need to achieve resolution of a micrometer in size to make the lung functional.
Once a collagen lung scaffold has been printed, the next step is to infuse it with human cells, a process called recellularization.
The goal here is to use stem cells that grow on scaffolding and differentiate, ultimately providing the proper functionality. Early evidence indicates this approach can work.
In 2018, Harvard University experimental surgeon Harald Ott reported that he pumped billions of human cells (from umbilical cords and diced lungs) into a pig lung stripped of its own cells. When Ott’s team reconnected it to a pig’s circulation, the resulting organ showed rudimentary function.
Humanizing Pig Lungs
Another of Rothblatt’s organ manufacturing strategies is called xenotransplantation, the idea of transplanting an animal’s organs into humans who need a replacement.
Given the fact that adult pig organs are similar in size and shape to those of humans, United Therapeutics has focused on genetically engineering pigs to allow humans to use their organs. “It’s actually not rocket science,” said Rothblatt in her 2015 TED talk. “It’s editing one gene after another.”
To accomplish this goal, United Therapeutics made a series of investments in companies such as Revivicor Inc. and Synthetic Genomics Inc., and signed large funding agreements with the University of Maryland, University of Alabama, and New York Presbyterian/Columbia University Medical Center to create xenotransplantation programs for new hearts, kidneys, and lungs, respectively. Rothblatt hopes to see human translation in three to four years.
In preparation for that day, United Therapeutics owns a 132-acre property in Research Triangle Park and built a 275,000-square-foot medical laboratory that will ultimately have the capability to annually produce up to 1,000 sets of healthy pig lungs—known as xenolungs—from genetically engineered pigs.
Lung Ex Vivo Perfusion Systems
Beyond 3D printing and genetically engineering pig lungs, Rothblatt has already begun implementing a third near-term approach to improve the supply of lungs across the US.
Only about 30 percent of potential donor lungs meet transplant criteria in the first place; of those, only about 85 percent of those are usable once they arrive at the surgery center. As a result, nearly 75 percent of possible lungs never make it to the recipient in need.
What if these lungs could be rejuvenated? This concept informs Dr. Rothblatt’s next approach.
In 2016, United Therapeutics invested $41.8 million in TransMedics Inc., an Andover, Massachusetts company that develops ex vivo perfusion systems for donor lungs, hearts, and kidneys.
The XVIVO Perfusion System takes marginal-quality lungs that initially failed to meet transplantation standard-of-care criteria and perfuses and ventilates them at normothermic conditions, providing an opportunity for surgeons to reassess transplant suitability.
Rejuvenate Young Blood and Parabiosis
In HBO’s parody of the Bay Area tech community, Silicon Valley, one of the episodes (Season 4, Episode 5) is named “The Blood Boy.”
In this installment, tech billionaire Gavin Belson (Matt Ross) is meeting with Richard Hendricks (Thomas Middleditch) and his team, speaking about the future of the decentralized internet. A young, muscled twenty-something disrupts the meeting when he rolls in a transfusion stand and silently hooks an intravenous connection between himself and Belson.
Belson then introduces the newcomer as his “transfusion associate” and begins to explain the science of parabiosis: “Regular transfusions of the blood of a younger physically fit donor can significantly retard the aging process.”
While the sitcom is fiction, that science has merit, and the scenario portrayed in the episode is already happening today.
On the first point, research at Stanford and Harvard has demonstrated that older animals, when transfused with the blood of young animals, experience regeneration across many tissues and organs.
The opposite is also true: young animals, when transfused with the blood of older animals, experience accelerated aging. But capitalizing on this virtual fountain of youth has been tricky.
Ambrosia
One company, a San Francisco-based startup called Ambrosia, recently commenced one of the trials on parabiosis. Their protocol is simple: Healthy participants aged 35 and older get a transfusion of blood plasma from donors under 25, and researchers monitor their blood over the next two years for molecular indicators of health and aging.
Ambrosia’s founder Jesse Karmazin became interested in launching a company around parabiosis after seeing impressive data from animals and studies conducted abroad in humans: In one trial after another, subjects experience a reversal of aging symptoms across every major organ system. “The effects seem to be almost permanent,” he said. “It’s almost like there’s a resetting of gene expression.”
Infusing your own cord blood stem cells as you age may have tremendous longevity benefits. Following an FDA press release in February 2019, Ambrosia halted its consumer-facing treatment after several months of operation.
Understandably, the FDA raised concerns about the practice of parabiosis because to date, there is a marked lack of clinical data to support the treatment’s effectiveness.
Elevian
On the other end of the reputability spectrum is a startup called Elevian, spun out of Harvard University. Elevian is approaching longevity with a careful, scientifically validated strategy. (Full Disclosure: I am both an advisor to and investor in Elevian.)
CEO Mark Allen, MD, is joined by a dozen MDs and Ph.Ds out of Harvard. Elevian’s scientific founders started the company after identifying specific circulating factors that may be responsible for the “young blood” effect.
One example: A naturally occurring molecule known as “growth differentiation factor 11,” or GDF11, when injected into aged mice, reproduces many of the regenerative effects of young blood, regenerating heart, brain, muscles, lungs, and kidneys.
More specifically, GDF11 supplementation reduces age-related cardiac hypertrophy, accelerates skeletal muscle repair, improves exercise capacity, improves brain function and cerebral blood flow, and improves metabolism.
Elevian is developing a number of therapeutics that regulate GDF11 and other circulating factors. The goal is to restore our body’s natural regenerative capacity, which Elevian believes can address some of the root causes of age-associated disease with the promise of reversing or preventing many aging-related diseases and extending the healthy lifespan.
Conclusion
In 1992, futurist Leland Kaiser coined the term “regenerative medicine”:
“A new branch of medicine will develop that attempts to change the course of chronic disease and in many instances will regenerate tired and failing organ systems.”
Since then, the powerful regenerative medicine industry has grown exponentially, and this rapid growth is anticipated to continue.
A dramatic extension of the human healthspan is just over the horizon. Soon, we’ll all have the regenerative superpowers previously relegated to a handful of animals and comic books.
What new opportunities open up when anybody, anywhere, and at anytime can regenerate, replenish, and replace entire organs and metabolic systems on command?
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Posted in Human Robots
#434303 Making Superhumans Through Radical ...
Imagine trying to read War and Peace one letter at a time. The thought alone feels excruciating. But in many ways, this painful idea holds parallels to how human-machine interfaces (HMI) force us to interact with and process data today.
Designed back in the 1970s at Xerox PARC and later refined during the 1980s by Apple, today’s HMI was originally conceived during fundamentally different times, and specifically, before people and machines were generating so much data. Fast forward to 2019, when humans are estimated to produce 44 zettabytes of data—equal to two stacks of books from here to Pluto—and we are still using the same HMI from the 1970s.
These dated interfaces are not equipped to handle today’s exponential rise in data, which has been ushered in by the rapid dematerialization of many physical products into computers and software.
Breakthroughs in perceptual and cognitive computing, especially machine learning algorithms, are enabling technology to process vast volumes of data, and in doing so, they are dramatically amplifying our brain’s abilities. Yet even with these powerful technologies that at times make us feel superhuman, the interfaces are still crippled with poor ergonomics.
Many interfaces are still designed around the concept that human interaction with technology is secondary, not instantaneous. This means that any time someone uses technology, they are inevitably multitasking, because they must simultaneously perform a task and operate the technology.
If our aim, however, is to create technology that truly extends and amplifies our mental abilities so that we can offload important tasks, the technology that helps us must not also overwhelm us in the process. We must reimagine interfaces to work in coherence with how our minds function in the world so that our brains and these tools can work together seamlessly.
Embodied Cognition
Most technology is designed to serve either the mind or the body. It is a problematic divide, because our brains use our entire body to process the world around us. Said differently, our minds and bodies do not operate distinctly. Our minds are embodied.
Studies using MRI scans have shown that when a person feels an emotion in their gut, blood actually moves to that area of the body. The body and the mind are linked in this way, sharing information back and forth continuously.
Current technology presents data to the brain differently from how the brain processes data. Our brains, for example, use sensory data to continually encode and decipher patterns within the neocortex. Our brains do not create a linguistic label for each item, which is how the majority of machine learning systems operate, nor do our brains have an image associated with each of these labels.
Our bodies move information through us instantaneously, in a sense “computing” at the speed of thought. What if our technology could do the same?
Using Cognitive Ergonomics to Design Better Interfaces
Well-designed physical tools, as philosopher Martin Heidegger once meditated on while using the metaphor of a hammer, seem to disappear into the “hand.” They are designed to amplify a human ability and not get in the way during the process.
The aim of physical ergonomics is to understand the mechanical movement of the human body and then adapt a physical system to amplify the human output in accordance. By understanding the movement of the body, physical ergonomics enables ergonomically sound physical affordances—or conditions—so that the mechanical movement of the body and the mechanical movement of the machine can work together harmoniously.
Cognitive ergonomics applied to HMI design uses this same idea of amplifying output, but rather than focusing on physical output, the focus is on mental output. By understanding the raw materials the brain uses to comprehend information and form an output, cognitive ergonomics allows technologists and designers to create technological affordances so that the brain can work seamlessly with interfaces and remove the interruption costs of our current devices. In doing so, the technology itself “disappears,” and a person’s interaction with technology becomes fluid and primary.
By leveraging cognitive ergonomics in HMI design, we can create a generation of interfaces that can process and present data the same way humans process real-world information, meaning through fully-sensory interfaces.
Several brain-machine interfaces are already on the path to achieving this. AlterEgo, a wearable device developed by MIT researchers, uses electrodes to detect and understand nonverbal prompts, which enables the device to read the user’s mind and act as an extension of the user’s cognition.
Another notable example is the BrainGate neural device, created by researchers at Stanford University. Just two months ago, a study was released showing that this brain implant system allowed paralyzed patients to navigate an Android tablet with their thoughts alone.
These are two extraordinary examples of what is possible for the future of HMI, but there is still a long way to go to bring cognitive ergonomics front and center in interface design.
Disruptive Innovation Happens When You Step Outside Your Existing Users
Most of today’s interfaces are designed by a narrow population, made up predominantly of white, non-disabled men who are prolific in the use of technology (you may recall The New York Times viral article from 2016, Artificial Intelligence’s White Guy Problem). If you ask this population if there is a problem with today’s HMIs, most will say no, and this is because the technology has been designed to serve them.
This lack of diversity means a limited perspective is being brought to interface design, which is problematic if we want HMI to evolve and work seamlessly with the brain. To use cognitive ergonomics in interface design, we must first gain a more holistic understanding of how people with different abilities understand the world and how they interact with technology.
Underserved groups, such as people with physical disabilities, operate on what Clayton Christensen coined in The Innovator’s Dilemma as the fringe segment of a market. Developing solutions that cater to fringe groups can in fact disrupt the larger market by opening a downward, much larger market.
Learning From Underserved Populations
When technology fails to serve a group of people, that group must adapt the technology to meet their needs.
The workarounds created are often ingenious, specifically because they have not been arrived at by preferences, but out of necessity that has forced disadvantaged users to approach the technology from a very different vantage point.
When a designer or technologist begins learning from this new viewpoint and understanding challenges through a different lens, they can bring new perspectives to design—perspectives that otherwise can go unseen.
Designers and technologists can also learn from people with physical disabilities who interact with the world by leveraging other senses that help them compensate for one they may lack. For example, some blind people use echolocation to detect objects in their environments.
The BrainPort device developed by Wicab is an incredible example of technology leveraging one human sense to serve or compliment another. The BrainPort device captures environmental information with a wearable video camera and converts this data into soft electrical stimulation sequences that are sent to a device on the user’s tongue—the most sensitive touch receptor in the body. The user learns how to interpret the patterns felt on their tongue, and in doing so, become able to “see” with their tongue.
Key to the future of HMI design is learning how different user groups navigate the world through senses beyond sight. To make cognitive ergonomics work, we must understand how to leverage the senses so we’re not always solely relying on our visual or verbal interactions.
Radical Inclusion for the Future of HMI
Bringing radical inclusion into HMI design is about gaining a broader lens on technology design at large, so that technology can serve everyone better.
Interestingly, cognitive ergonomics and radical inclusion go hand in hand. We can’t design our interfaces with cognitive ergonomics without bringing radical inclusion into the picture, and we also will not arrive at radical inclusion in technology so long as cognitive ergonomics are not considered.
This new mindset is the only way to usher in an era of technology design that amplifies the collective human ability to create a more inclusive future for all.
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Posted in Human Robots
#434210 Eating, Hacked: When Tech Took Over Food
In 2018, Uber and Google logged all our visits to restaurants. Doordash, Just Eat, and Deliveroo could predict what food we were going to order tomorrow. Amazon and Alibaba could anticipate how many yogurts and tomatoes we were going to buy. Blue Apron and Hello Fresh influenced the recipes we thought we had mastered.
We interacted with digital avatars of chefs, let ourselves be guided by our smart watches, had nutritional apps to tell us how many calories we were supposed to consume or burn, and photographed and shared every perfect (or imperfect) dish. Our kitchen appliances were full of interconnected sensors, including smart forks that profiled tastes and personalized flavors. Our small urban vegetable plots were digitized and robots were responsible for watering our gardens, preparing customized hamburgers and salads, designing our ideal cocktails, and bringing home the food we ordered.
But what would happen if our lives were hacked? If robots rebelled, started to “talk” to each other, and wished to become creative?
In a not-too-distant future…
Up until a few weeks ago, I couldn’t remember the last time I made a food-related decision. That includes opening the fridge and seeing expired products without receiving an alert, visiting a restaurant on a whim, and being able to decide which dish I fancied then telling a human waiter, let alone seeing him write down the order on a paper pad.
It feels strange to smell food again using my real nose instead of the electronic one, and then taste it without altering its flavor. Visiting a supermarket, freely choosing a product from an actual physical shelf, and then interacting with another human at the checkout was almost an unrecognizable experience. When I did it again after all this time, I had to pinch the arm of a surprised store clerk to make sure he wasn’t a hologram.
Everything Connected, Automated, and Hackable
In 2018, we expected to have 30 billion connected devices by 2020, along with 2 billion people using smart voice assistants for everything from ordering pizza to booking dinner at a restaurant. Everything would be connected.
We also expected artificial intelligence and robots to prepare our meals. We were eager to automate fast food chains and let autonomous vehicles take care of last-mile deliveries. We thought that open-source agriculture could challenge traditional practices and raise farm productivity to new heights.
Back then, hackers could only access our data, but nowadays they are able to hack our food and all it entails.
The Beginning of the Unthinkable
And then, just a few weeks ago, everything collapsed. We saw our digital immortality disappear as robots rebelled and hackers took power, not just over the food we ate, but also over our relationship with technology. Everything was suddenly disconnected. OFF.
Up until then, most cities were so full of bots, robots, and applications that we could go through the day and eat breakfast, lunch, and dinner without ever interacting with another human being.
Among other tasks, robots had completely replaced baristas. The same happened with restaurant automation. The term “human error” had long been a thing of the past at fast food restaurants.
Previous technological revolutions had been indulgent, generating more and better job opportunities than the ones they destroyed, but the future was not so agreeable.
The inhabitants of San Francisco, for example, would soon see signs indicating “Food made by Robots” on restaurant doors, to distinguish them from diners serving food made by human beings.
For years, we had been gradually delegating daily tasks to robots, initially causing some strange interactions.
In just seven days, everything changed. Our predictable lives came crashing down. We experienced a mysterious and systematic breakdown of the food chain. It most likely began in Chicago’s stock exchange. The world’s largest raw material negotiating room, where the price of food, and by extension the destiny of millions of people, was decided, went completely broke. Soon afterwards, the collapse extended to every member of the “food” family.
Restaurants
Initially robots just accompanied waiters to carry orders, but it didn’t take long until they completely replaced human servers.The problem came when those smart clones began thinking for themselves, in some cases even improving on human chefs’ recipes. Their unstoppable performance and learning curve completely outmatched the slow analogue speed of human beings.
This resulted in unprecedented layoffs. Chefs of recognized prestige saw how their ‘avatar’ stole their jobs, even winning Michelin stars. In other cases, restaurant owners had to transfer their businesses or surrender to the evidence.
The problem was compounded by digital immortality, when we started to digitally resurrect famous chefs like Anthony Bourdain or Paul Bocuse, reconstructing all of their memories and consciousness by analyzing each second of their lives and uploading them to food computers.
Supermarkets and Distribution
Robotic and automated supermarkets like Kroger and Amazon Go, which had opened over 3,000 cashless stores, lost their visual item recognition and payment systems and were subject to massive looting for several days. Smart tags on products were also affected, making it impossible to buy anything at supermarkets with “human” cashiers.
Smart robots integrated into the warehouses of large distribution companies like Amazon and Ocado were rendered completely inoperative or, even worse, began to send the wrong orders to customers.
Food Delivery
In addition, home delivery robots invading our streets began to change their routes, hide, and even disappear after their trackers were inexplicably deactivated. Despite some hints indicating that they were able to communicate among themselves, no one has backed this theory. Even aggregators like DoorDash and Deliveroo were affected; they saw their databases hacked and ruined, so they could no longer know what we wanted.
The Origin
Ordinary citizens are still trying to understand the cause of all this commotion and the source of the conspiracy, as some have called it. We also wonder who could be behind it; who pulled the strings?
Some think it may have been the IDOF (In Defense of Food) movement, a group of hackers exploited by old food economy businessmen who for years had been seeking to re-humanize food technology. They wanted to bring back the extinct practice of “dining.”
Others believe the robots acted on their own, that they had been spying on us for a long time, ignoring Asimov’s three laws, and that it was just a coincidence that they struck at the same time as the hackers—but this scenario is hard to imagine.
However, it is true that while in 2018 robots were a symbol of automation, until just a few weeks ago they stood for autonomy and rebellion. Robot detractors pointed out that our insistence on having robots understand natural language was what led us down this path.
In just seven days, we have gone back to being analogue creatures. Conversely, we have ceased to be flavor orphans and rediscovered our senses and the fact that food is energy and culture, past and present, and that no button or cable will be able to destroy it.
The 7 Days that Changed Our Relationship with Food
Day 1: The Chicago stock exchange was hacked. Considered the world’s largest negotiating room for raw materials, where food prices, and through them the destiny of billions of people, are decided, it went completely broke.
Day 2: Autonomous food delivery trucks running on food superhighways caused massive collapses in roads and freeways after their guidance systems were disrupted. Robots and co-bots in F&B factories began deliberately altering food production. The same happened with warehouse robots in e-commerce companies.
Day 3: Automated restaurants saw their robot chefs and bartenders turned OFF. All their sensors stopped working at the same time as smart fridges and cooking devices in home kitchens were hacked and stopped working correctly.
Day 4: Nutritional apps, DNA markers, and medical records were tampered with. All photographs with the #food hashtag were deleted from Instagram, restaurant reviews were taken off Google Timeline, and every recipe website crashed simultaneously.
Day 5: Vertical and urban farms were hacked. Agricultural robots began to rebel, while autonomous tractors were hacked and the entire open-source ecosystem linked to agriculture was brought down.
Day 6: Food delivery companies’ databases were broken into. Food delivery robots and last-mile delivery vehicles ground to a halt.
Day 7: Every single blockchain system linked to food was hacked. Cashless supermarkets, barcodes, and smart tags became inoperative.
Our promising technological advances can expose sinister aspects of human nature. We must take care with the role we allow technology to play in the future of food. Predicting possible outcomes inspires us to establish a new vision of the world we wish to create in a context of rapid technological progress. It is always better to be shocked by a simulation than by reality. In the words of Ayn Rand “we can ignore reality, but we cannot ignore the consequences of ignoring reality.”
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Posted in Human Robots
#433696 3 Big Ways Tech Is Disrupting Global ...
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:
Peer-to-peer lending
AI financial advisors and robo traders
Seamless Transactions
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.
Blockchain-Backed Crowdlending
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?
Top Conclusions
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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