Monday, June 25, 2018

Cryptosphere: Regulatory Framework and Risk Management

Regulatory and risk issues related to cryptocurrency field can't be efficiently and with relatively high confidence resolved within the existing nation-state jurisdictions nor can the current international organizations' configuration handle such a new and highly complex fintech field. 
We can put together the best regulatory and risk management frameworks but without having any real possibility to enforce them, we are simply stuck. Any way out of this complicated cul de sac?
Here is the simple rule of thumb: When and where we can't deploy uniformed agents we have to create and put to work AI agents with the right toolset. In other words, the only reasonable possibility of solutions could be thought out and pursued through the advanced technology implementation and deployment. The two basic components of such a technical resolution are respectively 
(a) Smart Contracts 
(b) Swarm Intelligence. 
We still do not have companies focusing specifically on developing such solutions but that is only a matter of time before we witness a new line of startup activity trying to address the regulatory issues in the cryptosphere.

Friday, June 22, 2018

PERSONAL ICO: IPTO (Initial Personal Token Offering) as DIY Scholarship

This is an advice I am giving the young people who are willing to go to college, grad school and higher but they lack the resources for doing so. 
I simply suggest to tokenize their future expertise, that is, create tokens to presell their future consulting services. But this is indeed nothing new: Ask yourself why many smart companies pay the grad school tuition for their employees or why the US Army, for instance, offers scholarships to recruits, etc.. Personal ICO based on tokenization is just a digital abstraction of the same exact process managed on an individual level and as a self-organized professional advancement.  Here is the simple DIY recipe: 
Manage your future as a "startup" with a "personal business plan" then launch your IPTO (Initial Personal Token Offering). 

Contact me for further insights.

Sunday, June 17, 2018

Cryptocurrencies Correlation Coeficient: Bitcoin The King

In the financial markets, the correlation coefficient is used to measure the correlation between two securities. When two stocks, for example, move in the same direction, the correlation coefficient is positive. Conversely, when two stocks move in opposite directions, the correlation coefficient is negative. (Investopedia).
 If we extend the concept to cryptocurrencies and make the measurements for the last 30 days we obtain the table above. (Thank you, John Young!) Solid green represents the max linear correlation (+1) and the solid red for no linear correlation (0). 
It is not difficult to see a small group walking in lockstep while solidly headed (dragged?) by King Bitcoin. I do have my explanation but am damn curious to learn about yours. 
Please chime in.

Wednesday, June 13, 2018

Cryptocurrency Market Manipulation via Swarm Intelligence: A Crime or Cryptomonetary Policy Tool?

Is cryptomarket manipulation via Swarm Intelligence a financial crime? In all my previous analytical notes, I have always considered the cryptomarket manipulation from a negative point of view and as a potential financial misconduct.

What if we reverse the perspective and analyze the manipulation via Swarm Intelligence in terms of a de facto implementation of cryptomonetary policies similar in their effects to those policies traditionally exercised by the Central Banks?

In other words, the use of Swarm Intelligence allows managing both the inflation and the exchange rate for every single cryptocurrency offered across the world regardless of any given nation-state jurisdiction. It also allows creating a dynamic hierarchical structure among the cryptocurrencies based on a mathematically predefined and enforced correlation coefficient to Bitcoin as the (currently) leading cryptocurrency. Therefore, it would be enough to feed core cryptobots with the needed parameters just for Bitcoin on a relatively important exchange in order to trigger in realtime a spontaneous Swarm-powered price readjustment across the markets partially thanks to the tireless work of thousands of 3rd party cryptobots running an arbitrage strategy.

If we consider the cryptomarkets especially during the last few months, we should recognize that manipulation via Swarm Intelligence has been almost in full control by clearly setting the main variables of the "cryptomonetary policies." However, we still do not know how the interest rate would be set in such a context.

At this point, the main question that comes to mind is not anymore about "how" but about *who* sets the fundamental parameters of such a "cryptopolicies framework"?

We should know that "manipulation via Swarm Intelligence" is more about the technology rather than fiat or cryptocurrency holdings. Therefore, this seems like a policy game where a "virtual whale" (as distinct from a "physical whale") with a more sophisticated army of cryptobots has the upper hand. In other words, the cryptomonetary policies are dynamically set or at least strongly influenced by those entities that advance more rapidly in the application of Artificial Intelligence to the cryptomarkets. These entities are not necessarily anything similar to Central Banks as established by traditional nation-states across the world. Nor are they easily addressable through conventional political and legal instruments.

In such a context as briefly described, any demarcation line between legal and illegal, licit and illicit, authorized and unauthorized, is totally blurred. All that pushes the analysis into uncharted waters of an ocean we still need to explore. Hic Rhodus, hic salta!

Friday, June 8, 2018

Cryptomarket Manipulation, Swarm Intelligence, and Market Stagnation: Cui Bono?

Can cryptomarkets survive the extensive manipulation based on bots running swarm intelligence? The global, massive and uninterrupted presence of 1000s of cryptobots manipulating their way throughout the globe, seems to wreak havoc across all the exchanges.
The main critical signs of this crescendo are low and stagnating prices accompanied by the weakening volume of transactions both the current and the projected ones for the upcoming quarters. The manipulation largely follows the same game plan of a couple of weekly short-breathed P&D succeeded by annoying spoofs and apparently foolish wash trades.
Some cryptobots are still profiting from yet possible arbitrage thanks to tiny but evanescent spread across the exchanges but the overall scene remains problematic.
  • A first relevant question is whether there is any actual endgame in sight for this apparent trade lullaby. 
  • The other question is whether bigger exchanges are doing some heavy lifting underneath to keep things going as they are, and why. 
  • Last but not least: Who is strategically benefiting from this enforced (temporary?) stagnation and bearish cryptomarket?

Sunday, May 27, 2018

Cryptomarkets Manipulation: The Rise of Virtual Whales

The average crytpotraders work around opportunities based on predictions. The statistics-based prediction and prediction-based market moves are the very foundation of the average trader's strategy. This is about the trading based on the anticipation of market dynamics. "Market shaping" or "market manipulation' strategies pursue a totally different goal: Their purpose is to impact traders behavior at any given moment. Market shaping strategy is arguably based on a binary methodology that proceeds along the double helix of "Self-Fulfilling Prophecy" and "Self-Defeating Prophecy" principles. By adopting such strategies a market whale acts to promote or to prevent certain beliefs and hence behaviors in and by the average traders who move along a prediction-based line. The manipulator's goal is to dynamically shape the market reality to achieve certain results. The major transformation we are witnessing is the gradual transition from 'whale' (needing large funds and/or particular facilitation to operate) to 'virtual whale' (need for large funds replaced by applied 'Swarm Intelligence'). The emergence of 'virtual whale' extremely complicates the market intelligence and surveillance, and tends to blur the line between legal versus illegal trading practices. Stay tuned for more analysis on this topics.

Friday, May 25, 2018

Crypto World: Eppur Si Muove!

Interesting events buried under the daily politainment (political entertainment) lava coming out of Washington D.C. volcano:
  • The Marshall Islands formally launched its sovereign cryptocurrency 'SOV'. Although a tiny republic, this country is the first one that, without being under any foreign sanctions, is launching a sovereign cryptocurrency as its legal tender in parallel to the U.S. dollars. Besides the Venezuelan 'Petro', the success (or failure) of this experience offers a real-world model and an alternative solution for many countries either having serious difficulty with their own disgraced legal tender or are forced to use US dollar. 
  • The Argentine Banco Masvestas abandons for good SWIFT for its international money transfer in favor of a new solution based on Bitcoin. This is the first official bank putting an actual nail in the coffin of U.S. dominated SWIFT. Santander might be the next one. 
  • Russia has developed its own system for financial transfers that would protect it from a potential shutout of the SWIFT global transfer system in the event of harsher U.S. sanctions. Sources close to the Russian central bank said the Financial Communications Transfer System (SPFS) would be converted to a blockchain system by 2019.

Thursday, May 24, 2018

Is Cryptocurrency Trading a Rigged Game?

Is cryptocurrency trading a rigged game? Can it survive the AI-powered *market shaping*? Can criminal probe and regulatory interventions make any difference? How does the rise of cryptobots impact the markets? and what is the relationship between cryptobots and P&D online groups?
During my most recent empirical studies, I realized that bots use two techniques to heavily impact the market according to a dynamically adjustable implementation plan:
a) HFT with a massive use of both fake buy and sell traffic as well as "wash trading" by single account holders, which inevitably require access to a very large fund and/or some significant "assistance" by the trading platform.
b) HFT with the same effects as above but implemented by using *swarm* approach that generates a gigantic *virtual cryptobot* or Virtual Whale without any large fund. The latter seems the result of a very close integration between P&D schemes and HFT. This integration is reinforced by a carefully elaborated media and social media tactics and strategies to *shape the markets*.
Here is the question:
Can a US Justice Department Criminal Probe into price manipulation or any regulatory intervention rein in this sophisticated "mechanism"? What do you think?

Friday, April 13, 2018

How to Understand Cryptomarket Turbolences

There are 3 important market forces whose actions and interactions seem largely determining the cryptomarket rises and falls. They are as follows:
A) The generalized actions of *Cryptobots* that run arguably 60% to 80% of the transactions and the overall Order Book activities across all the major exchange platforms;
 B) The *Pump or Dump Signals* generated by all size online P&D groups increasingly with 10s of 1000s of members recruited on a daily and/or permanent basis;
C) The manipulative maneuvering of media outlets, social media peddlers, celebrity influencers all working as *bounty hunters* for the so-called *team investors* aka P&D online groups.

If we carefully keep track of these 3 factors including their combined interactions then we simply discover that both the traditional *technical analysis* and the analysis based on some hypothetical "intrinsic value" of this or that coin or token become largely irrelevant.

What should be the guideline for the small trader in such a confusing context? I do not have any actual solution but I can recommend learning as much as possible about Buy and Sell Walls.

Here is a good starting point:

Friday, April 6, 2018

How to Get Rid of Eductional System Inefficiencies

Ways Blockchain can help:
1) Blockchain can help eliminate paper.
2) No more need for a central authority.
3) Educational institutions will save money.
4) Blockchain-based cryptocurrencies will simplify payment systems.

All that helps to progressively get rid of Brick & Mortar educational system blackhole and move towards cost-effective universal e-learning.

Crypto Bullshit: Cryptocurrencies Markets Nonesense Analysis

During the last few months, I have been empirically observing the daily charts across the major exchanges as well as reading through almost all the cryptocurrency market comments and analysis (including the so-called technical ones) for a paper that I am preparing for an ongoing contract research project of one of my firm's clients. I have focused particularly on the analysis related to the current ups and downs of Bitcoin, Ethereum, and Litecoin. And now I am just shocked: With the exception of a very few cases, I have never ever read such an amount of nonsense, clueless analysis, and utter BS. To make things worse, in many cases, the titles of the articles have basically nothing to do with the articles' content while the titles themselves appear as clearly been chosen to manipulate the distracted readers. 
Here is my question: 

Aren't we entitled to have decent cryptocurrency market-related comments and analysis? 

While I understand that this is a new field and it takes time for analysts to truly learn things, I do not tolerate the preplanned deception and freaking charlatanry!

Cryptocurrencies & Looming Trade War


China holds $1.17 trillion of U.S. government debt. If there is a trade war, China could swiftly reduce its U.S. debt holdings as a political weapon against the Trump administration tariffs proposal. If that happens, the dollar could fall and other countries could follow suit and sell their holdings. At that point, cryptoassets (Bitcoin, Litecoin, etc. ) will become the only realistic alternative.

Saturday, March 31, 2018

Welcome to The New World of CRYPTOBOTS!

Assessing the percentage of cryptocurrency transactions made by cryptobots instead of humans is not an easy task. Cryptocurrencies are largely unregulated and businesses don’t have to report always their trading volumes. According to some informal estimates supported by my personal empirical observations, we may already put the rate of automatically-made trades between 60% and 80%. Keep in mind that factors such as the arbitrage opportunities still present across platforms, cryptocurrency’s minimal transaction fees, the non-stop trading, the ability to drastically decrease network latency and, last but not least, the rising number of cryptobot startups and coders-- are all helping to promote a fast-growing adoption of Autonomous-AI-powered brokerage Here is the relevant question:

How does the rise of cryptobots impact the market? They would certainly help to flatten prices across the exchange platforms and promote stability. They may be instrumental to stop flash crashes in cryptomarkets— but they might also generate them both as a sort of "managed outcome" or as an unwanted combined result of the cryptobots interactions in a context plagued by 'structured pump & dump', ad hoc FUD and particularly hyped news events, etc.
What is your take?

Wednesday, March 21, 2018

Voice Assistant and Older Adults Lifestyle

I was recently interviewed via email by Laurie Orlov (Founder of Aging in Place Technology Watch) for a research project on voice assistants and more in general voice-first solutions for aging adults. The project’s goal wasn’t to publish the interview so I decided to publish it with the hope to directly contribute to the ongoing debate.

 1. Your role and the mission of your organization.

My name is Max Mansoubi. I am a former research fellow and lecturer of Methodology of Field Research and General Informatics for Communication Sciences. I have also a solid advanced humanistic studies foundation besides almost three decades of hands-on technology design and development experience. I am the founder and principal consultant at Mansoubi & Associates, a tech startup advisory firm based in the Silicon Valley area. Our business is specialized in assisting startup entrepreneurs, mainly in the AI field, to define, design and implement their products and/or services with a more efficient approach.
2. What is the role (or potential role) of a ‘Voice Assistant’ for the older adult segment?
The answer to the question could vary according to what aspects of the elderly lifestyle are predefined as most relevant and targeted for an AI-powered approach.
As a general rule of thumb, I believe that cognitive aspects of the aging population are at once the most critical and, paradoxically, not sufficiently considered ones by technology designers. Consequently, I see the voice-based Virtual Assistant as a significant step in the right direction of supplementing against the gradual cognitive decline that inevitably accompanies the late years of one’s life.
There are specifically two aspects that could and should be addressed by a well designed Virtual Assistant:
a) ‘Doing more with less’: that is, allowing the aging individual to keep an acceptable level of daily practical viability through a more efficient use of declining cognitive capabilities and knowledge resources: e.g. trigger a pre-planned chain of actions with a single intuitive command,
b) ‘Proactivity’ : that is, offering proactive advisory and, when needed, direct leadership to assist the aging adult to better structure daily life’s time-space framework and related tasks: e.g. prescribed medications administration; daily physical activity; physical space safety and scene management, etc.
3. What is the role of natural language processing and AI in voice-first technologies?
I do believe we should clearly distinguish between NLP/NLU and AI in the context of voice-first technologies. Natural Language Understanding (NLU) is itself based on a sophisticated but narrow AI, and as such it represents a significant step forward in terms of UX flexibility and overall ease of interaction. However, NLU alone does not make smarter a voice-first device. The AI operating behind the surface and its capabilities are the real deal.
4. For the older adult market, why — or why not — could or would voice be ‘First’ as a way to engage with a technology?
Basic voicegesture, and motion are arguably the very last capabilities that an older adult loses over time. That makes them the three long-lasting communication channels that any good targeted technology design has to keep in mind. While voice-first devices are making very interesting advancements, the gesture-control and motion detection solutions are still in their infancy. In the case of aging adults, the voice interactivity alone could turn to be inadequate in a number of cases, particularly as the individual advances in age. That is why a clever integration of voice with other capabilities such as gesture-control and motion detection and identification, is of particular relevance to engage with technology.
5. What older adult settings might leverage this technology — independent homes, family caregiving, senior living communities, or check-in to senior centers?
I strongly maintain that voice-first technologies are serviceable across all the above-mentioned adult settings. Having said that, based on direct observations, I believe the deployment, while implementing the common requirements (aDoing more with less; and bProactivity), should also follow the specific needs of each setting. Here a few examples of customization according to the context:
- Independent home: both ‘a’ and ‘b’ are equally important;
- Family caregiving: ‘b’ would assume higher relevance offering also a sort of coordinating communication channel among family caregivers and aging adults;
  • Senior living community: both ‘a’ and ‘b’ are evenly important but with the added function of intensification and coordination of the relationship with the community.
6. How can this technology serve those with vision, motor skill, or hearing limitations?
I think we need to consider voice-first technologies as part of a larger context that would include multiple cooperating components such as motion detection and interpretation, gesture control, etc., which we can more appropriately characterize as “Ambient Intelligence” (AmI). In such a sentient, self-adapting, inter- and pro-active context, voice user interface (VUI) offers an important reinforcing channel in assisting vision, motor and hearing impaired aging individuals.
7. What are the opportunities for vendors of goods and services and their market of older adults– for example, auto manufacturers, healthcare providers, hotels, travel, other?
All vendors who can offer goods and services directly or indirectly aligned with the above-mentioned aspects of ‘Doing more with less’ and ‘Proactivity’ will have many and increasing — both in number and volume — market opportunities with the older adults.
8. What do you see as the potential for services and products that are (or should) be Voice First (including wearables, in-car technology, common areas and public spaces?
Both wearables and in-car technologies offer excellent use cases for the adoption of voice-first approach. Having said that, I think there is another area that can greatly benefit from the voice innovation. The extensive adoption of the basic “talking traffic lights” across many U.S. cities represent a tangible and significant innovation for the safety of the blind in the public places. We can build upon such a successful experience and start to introduce full-blown AI-powered conversational solutions as part of the overall Smart City implementation. We can think of conversational street boothconversational building directories, and other similar solutions that can help the aging population to live a safer and more participative life in the urban context.
9. What are the limitations of this category and how might they be addressed?
The current main limitation of voice-first technologies is the roughness of the back-end AI. The introduction of Natural Language Understanding (NLU) has indeed significantly increased the flexibility and viability of voice-first approaches. However, the level of intelligence of the overall solution doesn’t yet offer any meaningful disruption in the Interactive Voice Response (IVR) solutions developed back in the 1970s. There is still a huge margin for innovation that will definitely benefit from the overall advancement in AI, particularly of what is known as Artificial General Intelligence (AGI). New initiatives such as SingularityNET could bring authentic disruption that could have a significant impact on the AI-powered voice-first technologies.
10. If you could request that innovators focus on a particular need or opportunity, what would it be?
There are definitely areas where the smart and innovative entrepreneurs can successfully engage. Here are only a few:
a) The overall back-end AI with a particular attention to the creative opportunities offered by currently expanding Open Source Artificial Intelligence initiatives;
b) The integration of voice with other user interaction channels such as gesture control and motion detection and interpretation.
c) The increase of privacy protection levels by focusing on device-based processing and autonomous AI.
d) The improvement of safety levels by adding emotion detection capabilities to the voice-first solutions (“Compassionate AI”).