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Stablecoins vs. CBDCs

Posted on February 11, 2023February 11, 2023 by Jean Chalopin

Stablecoins are crypto assets whose values are pegged to fiat currencies, such as the US dollar. Stablecoin operators generally maintain a reserve of fiat currency which equals the token’s circulating supply.

With the rapid rise in stablecoin circulation over the past few years, central banks have increased their efforts to develop their stable digital currencies. These centralized fiat copies are called Central Bank Digital Currencies (CBDCs), or cryptos backed by a country’s central bank.

Rather than being pegged to a fiat currency, CBDCs are a digital form of the country’s legal tender. This article will explain some of the critical differences between Stablecoins and CBDCs, and why CBDCs add very little to the global economy.

The Past Decade

Cryptos have come a long way since the inception of Bitcoin in January 2009. While still a speculative asset, cryptos are evolving into an asset class that is a legitimate investment opportunity as respected investing apps continue to onboard crypto trading.

The technological foundation of cryptocurrencies, the blockchain, has been shown to have utility in several public and private applications. Blockchain is now being applied in fields from the supply chain to medicine, gaming, ticketing, art, and finance.

What has also changed is crypto, and blockchain’s favorability with governments. Different crypto projects have garnered different levels of openness to regulation, and different governments have different perceptions about the advantages or threats of cryptos.

With these recent advances, two unique kinds of digital currencies have resulted. Stablecoins and CBDCs have emerged as potential options that could be widely used for commerce and trade in the future. Being related to fiat, these digital currencies may, at first glance, be similar, but there are significant differences between them.

What Are Stablecoins?

Stablecoins represent a type of tokenized asset whose value is pegged to a real-world asset, generally a fiat currency like the USD, but there are stablecoins pegged to gold and other assets too. They’re vital for removing almost all transaction fees and enabling the liquid trading of those using advanced crypto brokers.

Stablecoin operators usually maintain a reserve of the fiat currency and other assets (including cryptocurrencies) equal to the token’s circulating supply.

If the project mints more stablecoins, an equal amount of the pegged fiat currency should be added to the project’s reserves, and if “burned” (the process of unminting the coin and removing it from circulation), the reserve is reduced by an equal amount. This method is how many stablecoins maintain their value with the pegged currency.

What Are CBDCs?

On the other end of the spectrum, Central Bank Digital Currencies (CBDCs) are digital assets (not specifically a cryptocurrency) backed by a country’s or region’s central bank. Rather than being pegged to the fiat currency, these digital assets would be a digital form of the legal tender of the region or country such as China, which is probably the furthest ahead in its CBDC rollout program.

Similarities Between CBDCs and Stablecoins

The most significant similarity between stablecoins and CBDCs is that they are both digital currencies that can be used for payment. In addition, the speed by which a digital currency can be transmitted and a transaction completed makes these useful for domestic and international trade.

Depending on the CBDC, if they are blockchain-based, they can be stored pseudonymously in a crypto wallet like any other crypto. The transactions are all stored on a publicly distributed ledger. However, CBDC programs are generally authorized as (private) blockchain-based.

A second similarity between the two concerns their volatility. Most cryptocurrencies are volatile; changing 5 to 10% or more in a month is not uncommon, even for Bitcoin and Ethereum, which have the highest market caps. However, while stablecoins and CBDCs are digital assets, most of them are much more stable.

The final similarity between the two reflects their regulation. Both stablecoins and CBDCs are regulated. Third-party auditing firms regulate stablecoins, and central banks regulate CBDCs. The chance of a rug pull occurring for both digital currencies is minimal.

Differences Between Stablecoins and CBDCs

The first significant difference between CDBCs and stablecoins is their governing authority. Stablecoins are usually governed by private companies such as Circle or Binance. Still, there are also stablecoins, such as DAI, that are governed by DAOs (decentralized autonomous organizations), or a group of governance token holders that have a vote in the management of the coin.

CBDCs, on the other hand, are created, controlled, and regulated by the central bank of a country or region that releases the CDBC. Any country can develop a CBDC of its fiat currency and manage its monetary policy just like physical fiat.

The second difference is that stablecoins are (generally) backed by an equivalent amount of fiat currency. You can exchange your stablecoins for an actual dollar stored in the stablecoin’s reserves. CBDCs don’t have any assets backing them; they only have the promise of the country and its central bank. Governments used to use a gold standard that backed the currency with a supply of gold, but this was given up with the change to fiat.

Stablecoins fall under the crypto blanket. This designation means that there is a potential for national governments to ban them, and they can be taxed as digital assets. Alternatively, CBDCs would be considered the same as a country’s currency and, therefore, would be neither taxed nor banned.

Stablecoin’s Issues

Stablecoins have become the standard for international transactions and investments in decentralized finance (DeFi). Stablecoins have chosen to peg with only the most traded currencies, such as the USD, Euro, and Yen, and generally have strict auditing to preserve their international trust. However, there are two primary issues with stablecoins.

First, there is a need for stablecoins to trust the organization that is managing the coin and the organization that is auditing the coin’s reserves. For example, Terra (now known as Terra classic UST) is a famous algorithm stablecoin that fell from grace because the system, which included a management token Luna, that it relied on to keep its peg with the USD faltered when a significant amount of the coin was traded out at one time. Its holders lost $60 billion.

Similar algo-based stablecoins could have similar issues yet to be tested or discovered. There must also be trust in the reserves held by the stablecoin to ensure that the peg is sufficiently being met and that the auditors are doing their job; any break in this system could cause the coin to falter.

Second, a stablecoin is only as good as the fiat currency to which it is pegged. If the country falters in its currency management, the coin’s value will fall, which is out of the control of the stablecoin management and its investors.

CBDC’s Issues

CBDCs will only be as strong as the fiat currency of the minting country. If a country’s currency is banned from commerce by a nation, government, or organization that does not accept that currency, then they would not accept the CBDC form of it either. A fiat, in cash or CBDC form, is not backed by anything and is at the mercy of its central bank’s control.

CBDCs are not cryptocurrencies. They don’t even have to be on a blockchain or other distributed ledger. They are controlled by a central authority and can be minted and burned at that authority’s whim. True cryptos are decentralized and controlled by rules that cannot be easily changed. The benefits of blockchain are what make cryptocurrencies unique. They are trustless and immutable.

CBDCs, if on private blockchains, cannot benefit from these. They don’t incorporate all crypto aspects.

Closing Thoughts

Central bank digital currencies have the potential to “partially” transform economies, making transactions safe, bringing greater transparency and inclusivity to those that have been unbanked.

However, this is where the benefits of CBDCs stop. CBDCs are not a replacement for cryptocurrencies and stablecoins, which are the basis for DeFi applications allowing them to have a set of uses that CBDCs cannot fathom.

Nearly all countries have turned over their financial controls to central banks. This is the reason that actual cryptocurrencies are of potential benefit. Cryptos are not under the control of any central authority. However, it is unlikely that a country would take back its monetary policy control from its central bank.

Every CDBC will likely be on its blockchain; that is the only way to guarantee control. This system would then require bridges between different countries’ blockchains, such as what Polkadot, Visa, and PayPal are trying to do. The best solution may be a single global cryptocurrency that is not controlled by any central authority and is fully decentralized.

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.

The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, www.deltecbank.com.

The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group, www.deltecbank.com.

What Is Haptic Technology?

Posted on January 10, 2023January 10, 2023 by Jean Chalopin

Haptic technology, or haptic touch, is going to be our engagement pathway for the future. Since the start of the Covid pandemic, we are working from home more often, and much of our lives are online. However, we do not have to worry about losing physical touch.

Haptic technology offers its users a more connected experience, and this budding industry is beginning to make its mark on companies that will likely embrace this evolving tech in the future.

Tactile feedback technologies have been around for decades. The original XBox controller would vibrate when you were taking damage from an adversary, and phones/pagers have had a vibrate function for decades. As haptic technologies advance, they’re fast becoming powerful tools for consumer engagement.

We will explore haptic technology’s types, advantages, and use cases, including 3D Touch, showing how it can impact a business’s objectives and growth.

Haptic Technology Explained

Haptic technology uses hardware and software to produce tactile sensations that stimulate the user’s sense of touch, to enhance their experience. For example, the most common applications are the haptic solutions found with phones and game controllers that vibrate. Yet vibrating devices are not the only type of haptic tactile feedback: they can also include things like heat and cold, air pressure, and sound waves.

Haptic tech can also be known as kinaesthetic communication or 3D Touch, and this technology creates new experiences with motion, vibration, and similar forces. There are two terms within haptic technology that are similar but should be distinguished: haptics and haptic feedback.

Haptics: the overarching term that is used to describe the science of haptic feedback and haptic technology, as well as the neuroscience and physiology of touch.
Haptic feedback: the method by which haptic technologies communicate tactile information to the users.

Haptic Applications and Modalities

Immersion is a haptic tech pioneer whose technology is in over 3 billion devices worldwide. They’re the ones that tell your steering wheel to vibrate when you get too close to a car in another lane. One study on haptics showed that 94% of participants could recall objects through touch alone.

As the global user base of haptic tech grows, it will continue to expand into novel applications, improving the user’s experience.

The Four Haptic Modalities

Let’s introduce the four main haptic modalities: vibration, button stimulation, thermal stimulation, and kinesthetic.

Vibration

The majority of haptic experiences possess a vibration-centric feedback focus. This includes technologies like eccentric rotating mass (ERM), or linear resonant actuators (LRA). Both work to create much of the vibration we experience with mobile or wearable devices.

*LRA and ERM from Precision Microdrives*

Button Stimulation

Until recently, few of our touch screens offered the tactile feedback and versatility of mechanical buttons. Therefore, we expect simulated controls to be ever more popular, such as the newer offerings from Apple (“Force Touch” and Apple’s “Haptic Touch”) and Samsung (“One UI 4”). These virtual buttons can use both haptic and audio feedback to replace the feeling of a mechanical pressure plate when fingers press the screen.

Thermal Stimulation

Thermoelectric generators create temperature-based haptic experiences for users. This effect is accomplished through the manipulation of electric current flow between alternating conductors on a device (one warm and one cold). The user can then experience different perceived temperatures.

Tegway is producing this technology for VR headsets and other applications to add to the experience.

Kinesthetic

Kinesthetic devices are worn on the user’s body and provide the wearer with haptic feedback sensations of mass, movement, and shape. The Dexmo force feedback haptic glove exemplifies the potential growth avenue available in the kinesthetic modality.

Types of Haptic Systems

Three primary haptic system types are now being used across several industries: graspable, touchable, and wearable.

Graspable

Graspable devices, such as joysticks, and steering wheels, can create kinesthetic feedback that informs our nerves, tendons, joints, and muscles. Other applications, such as human-controlled robotic operations, can utilize graspable haptic systems that will provide users with tactile movement, vibration, and resistance. This allows for more realistic operations of a remote robot or a system in a virtual environment.

The military is already using graspable haptic devices for their bomb disposal units, while NASA astronauts are using the same technology in robots that make external spacecraft repairs, preventing the need for a much more hazardous and costly spacewalk.

Touchable

Touchable haptic technology is being more widely used by consumers, whether or not they are aware of it. Most smartphone screens use haptic technology, replacing the home button with a virtual button and the fingerprint reader under the screen. Screens respond to user movements, like touches, taps or rotations.

A new field within touchable haptic technology is called haptography, the mimicry of object textures and movements. TanvasTouch is a pad with programmable textures that can be felt by users swiping their fingers across touchscreens, trackpads, and physical surfaces, mimicking clothing materials like wool and silk before buying the items.

Wearables

Wearable haptic systems create contact sensations, relying on tactile stimuli, such as pressure, vibration, or temperature, controlled by the nerves of the user’s skin.

Virtual Reality (VR) products are the most common application of wearable haptic technology available today. VR gloves are meant to mimic real-world impressions, and they receive input from the user who is controlling their virtual avatar. VR and AR can benefit greatly from the endless consumer engagement options that wearables and haptic tech can provide.

Haptic Technology Uses

Haptic technologies offer numerous potential advantages. Here are several current and potential use cases for touch-based solutions that tap into the benefits of haptics and can produce a better user experience.

Product Design Applications

Haptic technology can improve the user experience by working through touch optimization.

Automotive infotainment systems will begin to incorporate more haptics into their features list. Touch screens will become responsive to the user, providing multiple driver personalized settings. Additional applications for autos include pedal feedback and steering enhancements that are needed given that drive-by-wire systems are becoming more common. These help drives avoid accidents or save on gas.

Health and Wellness

The newest advances in wearable haptics provide great opportunities within the health-tech industry. Real-time haptic devices gather biometric data and can adjust the experience to suit the user.

Better data collection and feedback allow enhanced user experiences and, more importantly, improved health outcomes. TouchPoints has a wearable system which the TouchPoints CEO reports can reduce stress by 74% in 30 seconds. This is done with a vibrating pattern that interrupts anxiety and builds a restful state.

Other companies involved with posture correction, like ergonomic furniture makers, app creators, or chiropractors, can use haptic technology to improve their products and benefit their users.

Industrial Training

With haptic feedback, training environments can simulate natural work environments and labor conditions more closely, improving training and overall accuracy. Users can partake in virtual training scenarios in a safe, offline environment while using haptics to get a lifelike experience.

This virtual haptic process can allow for training in assembly line usage, maintenance, safety procedures, and machinery operation. A similar haptic feedback system can also be used with product testing and many other uses, allowing users to train without risk to themselves or company property.

Accessibility

Accessibility to products and services can be improved for the visually disabled. Haptic technologies allow users to create virtual objects, they can interact with products, and even approximate the appearance of an object through touch-based sensory input. A Stanford team has developed its 2.5D display for the visually impaired to accomplish visual tasks.

Not only will these new haptic solutions create novel markets and aid those with accessibility restrictions, but they can help ensure a company stays compliant with access regulations.

Rehabilitation

Haptics has the potential to boost the speed and effectiveness of rehabilitation programs. A Dutch startup, SenseGlove, has created a glove that uses VR simulations and haptic training to aid with virtual recovery programs.

Their product allows someone suffering from nerve damage due to an accident, illness, or stroke to practice daily actions. Things like pouring a cup of hot tea or cutting a steak for dinner can be done in a safe digital environment.

Remote Tasks

With an internet connection, haptic controller, and connected robot, remote tasks will become easier and far less prone to error.

Industries lacking highly skilled specialists can connect via a virtual haptic environment, allowing subject matter experts to manipulate a robot from anywhere in the world or beyond.

Closing Thoughts

Haptic technologies have been around for decades. However, the sector has seen tremendous growth in the past few years. The APAC expects the world’s haptic technology market to grow at a compounded rate of 12% through 2026.

Haptics is no longer a video game gimmick. New advancements and applications are becoming more widely available. Businesses should explore implementing these technologies into their operations, marketing, and consumer experiences.

By embracing this innovative technology, companies can offer their users an enhanced experience that makes them feel connected to products, services, and the brand. Haptics enables us to feel much more connected, no matter how far the distance between us may be.

Next Generation DNA Sequencing

Posted on January 3, 2023January 3, 2023 by Jean Chalopin

A sequence tells a scientist the genetic information carried on a particular DNA or RNA segment. For example, the sequence can be used to determine where genes are located on a DNA strand and where regulatory instructions turn those genes on or off.

In the mid-90s, colleges started teaching their undergraduates about DNA sequencing, with DNA sample amplification tech as the new kid on the block. The Human Genome project was ongoing, and the first human sequence had yet to be completed.

Twenty-five years later, DNA sequencing is done regularly for many and has helped dramatically with medical and forensic needs. We are now entering a whole new era of sequencing that is the “next generation.” Let’s look at this change and how this generation alters science and medicine.

What Is Next Generation DNA Sequencing?

Next generation DNA sequencing (NGS) started gaining notoriety in the early 2010s and is a term that describes DNA sequencing technologies that have revolutionized genomic research.

Original DNA Sequencing

To understand NGS, we need to understand the original type of DNA sequencing.

First, a DNA strand was copied to create enough material. Then one by one, the base pairs were determined using gels with capillaries that pulled them through using electricity, the chain-termination method, or as it is commonly known, Sanger sequencing.

The Human Genome Project used Sanger sequencing, which multiple international teams utilized to decipher the human genome, taking 13 years and $3 billion to produce the final draft released in 2003. By 2008, using several NGS techniques, the famous discoverer of DNA, James Watson’s genome sequence, was provided to him on a hard drive at an estimated cost of $1 million.

In 2011, Apple co-founder and billionaire Steve Jobs had his DNA sequence done to help in his cancer fight for $100,000. Using NGS, a lab can now sequence an entire human genome in only one day at the cost of $100 (Ultima Genomics).

Source: National Human Genome Research Institute

How NGS Works

NGS involves a stepwise process (four total steps) that breaks up the sample (DNA or RNA) and sequences the parts simultaneously to get faster results.

The process is generally as follows:

1. Sample preparation involves fragmenting DNA/RNA into multiple pieces (millions for the human genome) and then adding “adapters” to the ends of the DNA fragments.

2. Cluster generation is where the separated strands are copied millions of times to produce a larger sample.

3. Sequencing the libraries: each of the strands is sequenced with unique fluorescent markers.

4. A genomic sequence is formed by reassembling the strands using data analysis techniques.

In principle, the NGS concept is similar to capillary electrophoresis (gels used to sequence DNA in Sanger sequencing). The critical difference is that with NGS, because the fragments are broken up, the sequences of millions of fragments are obtained in a massively parallel fashion, improving accuracy and speed while reducing the cost of sequencing.

NGS’ Impact

Compared to the conventional Sanger sequencing method’s capillary electrophoresis, NGS’ short-read massively parallel sequencing technique is a fundamentally different approach that revolutionizes our sequencing capabilities, launching the second generation of sequencing methods.

NGS allows for the sequencing of both DNA and RNA at a drastically cheaper cost than Sanger sequencing, and it, therefore, has revolutionized the studies of genomics and molecular biology.

NGS’ Advantages

Because NGS can analyze both DNA and RNA samples, it’s a popular tool for functional genomics. In addition, NGS has several advantages over microarray methods.

· A priori knowledge of the genome or of any genomic features is not a requirement.

· NGS offers single nucleotide resolution, which detects related genes and features, genetic variations, and even single base pair differences. In short, it can spot slight differences in code between two samples.

· NGS has a higher dynamic signal range, making it easier to read.

· NGS requires less DNA or RNA as an input (nanograms of material are sufficient).

· NGS has higher reproducibility. Because of its other advantages, the chance of an error between repeated tests is reduced.

Most Common NGS Technologies

Three sequencing methods are and were widely used that fall under the NGS umbrella:

· Roche 454 sequencing (discontinued in 2016). This method uses a pyrosequencing technique that detects a pyrophosphate release. It uses bioluminescence (a natural light signal). Broken-up DNA stands had unique markers attached.

· Illumina (Solexa) sequencing. The Illumina process simultaneously identifies DNA base pairs. This is done as each base emits a different and unique fluorescent signal, continuously added to the nucleic acid chain.

· Ion Torrent (Proton/PGM) sequencing. This kind of sequencing measures the direct release of positive Hydrogen protons when incorporating individual base pairs. They are released when added by a DNA polymerase. The Ion Torrent method differs from the previous two methods because it is not using a light measurement to do the sequencing.

How Is NGS Being Used?

The advent of NGS has changed the biotechnology industry. There are now new questions that scientists can ask and get the answers to that were either cost-prohibitive or the samples needed were more significant than the available material. The main applications possible with NGS include:

· Rapidly sequencing the whole genome of any life form, from prions and RNA viruses to individual humans and other mammals.

· Utilize RNA sequencing to discover novel RNA variants and splice sites.

· Quantify mRNAs for gene expression.

· Sequence cancer samples to study rare variants, specific tumor subtypes, and more.

· Identify novel pathogens (such as viruses in bats).

What Can NGS Do?

Notable organizations, such as Illumina, 454 Life Sciences, Pacific Biosciences, and Oxford Technologies Nanopore, are working on getting prices down so nearly anyone can get sequencing done. For example, Ultima Genomics has claimed a cost of $100 for its sequencing. Now, companies are marketing benchtop sequencing platforms that will bring these advances to as many labs as possible.

The Illumina NextSeq Sequencer (above) is a benchtop system that can do nearly any task except “Large Whole-Genome Sequencing.” However, there is a cost of $210,000-335,000.

We expect NGS to become more efficient and affordable over time, and these cost reductions will revolutionize several genomics-related fields. Currently, all NGS approaches demand “library preparation” after the DNA fragmentation step, where adapters are attached to the ends of the various fragments. That is generally followed by a DNA amplification step to create a library that can be sequenced with the NGS device.

As we know more about different DNA molecules, we can develop ways to fight disease through gene therapy or particular drugs. This knowledge will help change our way of thinking about medicine.

Third Generation Sequencing

A new class of sequencing tech, called third-generation sequencing or TGS, is being developed. These technologies can sequence single DNA molecules without the amplification step, producing longer reads than NGS.

Single-molecule sequencing was started in 2009 by Helicos Biosciences. Unfortunately, it was slow and expensive, and the company went out of business in 2012. Nonetheless, other companies saw the benefit and took over the third-gen space.

Pacific Bioscience has its “Single-Molecule Sequencing in Real Time (SMRT),” and Oxford Nanopore has nanopore sequencing. Each can produce long reads of 15,000 bases from a single DNA or RNA molecule. This evolution means smaller genomes can be produced without the biases or errors inherent to amplification.

Closing Thoughts

The DNA sequence is a simple format in which a broad range of biological marvels can be projected for high-value data collection. Over the past decade, NGS platforms have become widely available, with the costs of services lowering by orders of magnitude, much faster than Moore’s law, democratizing genomics, and putting the tech into the hands of more scientists.

Third generation sequencing will require robust protocols and practical data approaches. The coming expanse of DNA sequencing will require a complete rethinking of experimental design. Still, it will accelerate biological and biomedical research, enabling the analysis of complex systems inexpensively and at scale. We can then fight and prevent genetic diseases before they become realized issues.

Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. Using this, you agree that the information does not constitute investment or financial instructions. Do research and reach out to financial advisors before making any investment decisions.

The views, thoughts, and opinions expressed in this text are solely the authors’ views, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.

The Convergence of Technology and Healthcare

Posted on December 20, 2022December 20, 2022 by Jean Chalopin

We saw the changes to our lives with the Covid-19 pandemic playing the role of catalyst for changes in life sciences and healthcare. This article will discuss how new technologies, including blockchain, cybersecurity, and the needed talent behind these, are impacting the medical sector.

Recent Changes to Healthcare

We have seen how the past few years have been shaped by the Covid-19 pandemic, which disrupted and revolutionized nearly every sector of our economy.

When we look at monetary investment, it’s evident that technology spending is focused on healthcare. A report from Bain and Co found that even with economic uncertainty, healthcare is still planning to invest in tech, with software being a top five strategic priority for 80% of providers and a top three for 40%.

This spending is for several reasons: efficiency, cost reduction, and telemedicine, whether by phone or video. Heavy technology investment in the era of Covid-19 caused healthcare to leapfrog into patients’ homes.

These changes will be the driver of healthcare’s growth for the next few years. Yet we need to have a strong understanding of how the consumer fits into this system of delivering service, what their preferences are, and the new habits they are forming.

Once Before, in the 1920s

Periods of economic and geopolitical uncertainty have led to healthcare advancements.

In the 1920s, there were many geopolitical tensions that eventually led to wars, but throughout the decade and the rest of the 20^th century, there were remarkable advances in medicine.

The construction of hospitals that followed the passing of the Hill-Burton Act in 1946 made the foundation of our current health delivery system, the same way we saw our highway system and other infrastructure change the face of America and its economy. We’ll likely see a similar change around needed vaccines and other due innovations.

Rather than creating roads, bridges, and buildings, we’ll see digital infrastructure. Out of the discovery of the first mRNA Covid vaccines, we’ll find many ways to accelerate the process through biotechnology and innovation. Technology is an added dimension to healthcare innovation that has appeared out of the Covid turmoil. When technology is added to the mix, we’re going to see some fantastic opportunities.

The Covid Cause

It’s remarkable to think that a significant, globally impacting event is a catalyst that accelerates healthcare sector tech investment. If the necessary Covid closures were only for a single week, many of these changes would not have resulted.

Doctor visits would have been pushed back for that week instead of finding a remote solution that was needed to provide the required services and the resulting changed behaviors they have brought. The R&D plans that are now part of biotech and medical companies would likely not have manifested.

But we see that necessity is the mother of innovation, and because of Covid-19, these changes are incorporated and permanent. Many experts believe that the two years of Covid moved the industry ahead 5 to 10 years.

A Move Toward NFTs in Healthcare

Non-Fungible Tokens (NFTs) have been an investment darling in the art world but have yet to gain prominence much outside that and the collecting arenas. This lack of diversified uses is starting to change. Healthcare is up next.

NFTs are an exciting area for healthcare services. It’s easy to imagine a world where an NFT can become a patient’s profile in healthcare. An NFT profile has the capability to carry personal information such as the entire genome and all medical history and payment information as a unique footprint.

An NFT can also provide the owner with a pathway to get them into the healthcare system and provide them with services. This information can be combined with the banking system making their help more viable. Imagine a health saving account tied directly to the NFT through an oracle (a third-party gateway).

This will be able to allow someone to fund their health savings account through their W2-qualifying job. Charges that fit under the account can be automatically withdrawn.

This kind of payment system is just starting to happen on the municipal level. Cities like New York and Miami have begun to move toward such a system, with Philadelphia and Dearborn, Michigan, signaling similar moves. It’s not far-fetched to imagine a similar action to healthcare payments.

Cybersecurity in Healthcare

When there is human involvement, there is the potential for security vulnerabilities. The second issue that all companies are dealing with is finding the right talent that is capable of building systems and products able to protect company and personal data. There is an ongoing global shortage of nearly 3.5 million cybersecurity professionals across all industries, with 700,000 unfilled cybersecurity jobs in the US.

Cybersecurity for healthcare also requires the development of technicians that can play defense, quickly responding to cyberattacks in real-time. Hacking is accelerating and is a top risk profile for many companies, not just in tech.

Interestingly, one of hacking’s growing tools, AI, may also be its best solution as more information and services are digitized. Significant investment is happening in software projects that help protect and defend all data. In November 2022, Crunchbase showed 258 privacy startups that have raised over $4.3 billion, with $800 million of this total raised in the last year.

Life sciences and healthcare are industries that drive policies and security. Many boards and audit committees in the healthcare and life science sectors are attempting to identify various cyber risks and vulnerabilities. It’s fully expected that the demand for cyber-fluent personnel will increase dramatically.

Permanent Changes Coming to Healthcare

Tech is now taking over in several areas, including consumer electronics. Wearables and connected devices are becoming a more common source of medical information. Alivecor’s KardiaMobile device is a 6-lead EKG that can send information via smartphone directly to the patient’s cardiologist for review.

The Las Vegas consumer electronics show is filled with sensors, apps, and embedded personalization. This expansion of devices for our health will only increase as the 5G networks expand their reach across the United States. The impacts will be wide-ranging, but ultimately focus on enhancing our lives through tech.

One crucial, long-term benefit is that we are now seeing the healthcare economy moving from a sickness focus to a wellness mindset. This change is easier to accomplish with technology as we can monitor our health and see when things change.

Upcoming Healthcare Trends

The healthcare sector will first see a move toward modernization in human resources, finance, and procurement through cloud services. Moving all legacy enterprise systems to the cloud will take nearly ten years.

Next, innovation must tackle the back office to front office connection, including consumer-level devices. We have been discussing healthcare costs for decades, and the tech is now available to make it more efficient. This change can drive out costs and potentially deliver care to all.

Closing Thoughts

Technology in healthcare has been accelerated by Covid-19, pushing digital health access, and drug and vaccine innovation. These trends are altering research and development pathways for healthcare.

NFTs have begun to enter the healthcare space and, in the future, will likely be a secure way to provide needed information to providers, including genome and medical history. Cybersecurity issues will come to the forefront in healthcare tech with more need for talent and solutions to keep users’ data secure.

This need for talent will include the opportunity for tech to provide equitable solutions that lower costs and bring healthcare to all. A process of modernization that puts enterprise services on the cloud will be the biggest change we will see. Further, it will promote a focus of wellness over sickness as consumer devices become ubiquitous.

Autonomous Ride-Hailing

Posted on December 16, 2022December 16, 2022 by Jean Chalopin

Uber and Lyft have changed the short-distance ride-hailing market once belonging to the local and usual handful of taxi companies. As they took over these new markets, they also changed the way we thought about travel.

Further, asking friends for a ride to the airport is beginning to disappear with the onset of autonomous vehicles. Several new companies are testing this out, and some are in full operation in limited areas with complete, autonomous ride-share services. We take a deep dive into the current state of the autonomous ride-hailing market.

The Rise of Autonomous Vehicles

Autonomous technology is the next stage for the travel industry. The growing success of the electric vehicle set the tone, even if battery costs have a long way down to go. But it’s better to call this one door leading to many.

For example, artificial intelligence will play a crucial role in the use of autonomous ride-hailing. We have: route optimization, accident prevention, and maximized utilization (keeping all vehicles active). Not only does this lower costs for companies entering this space, it dramatically improves urban efficiency.

ARK Investment Research has predicted that the price of autonomous electric vehicle transportation will fall to $0.25 per mile by 2030.

These three factors will drive the cost of ride-hailing services. However, industrialized countries will also see a massive reduction in the cost per mile as labor makes up over 70% of the cost, which is followed by the vehicle itself, and its fuel and maintenance. ARK Research has estimated that the price per mile could be reduced by up to 88% for an autonomous ride-hail.

The autonomous ride-share total addressable market (TAM) is estimated to reach between $11 and $12 trillion for two key reasons.

1. High utilization rates. Electric autonomous vehicles can provide rides to clients 24 hours a day, only offline during charging and maintenance times.

2. Low operation costs. The cost of a ride-hail will drop to $0.25 due to several factors. Accidents per mile driven by autonomous vehicles are already lower than by human drivers, and with more autonomous vehicles on the roads, this will drop further. Autonomous vehicles drive in a more efficient way, also reducing fuel costs up to 44% for passenger vehicles and 18% for trucks.

Autonomous Ride-Share Programs

Cruise

Cruise is a subsidiary of General Motors and became the first company to begin an autonomous ride-hailing service in a major city. In June 2022, Cruise received approval from the California Public Utilities Commission and started its public, driverless, fared, autonomous ride-hailing.

Cruise launched with a fleet of 30 autonomous all-electric Chevy Bolts. These small cars ferry passengers around many parts of the city, and the service is currently available daily from 10 p.m. to 6 a.m. (provided “normal” weather conditions).

Cruise vehicles are limited to a maximum of 30 mph and cannot operate if there is heavy rain, fog, smoke, hail, sleet, or snow. Cruise is looking to add more Chevrolet Bolts to its fleet and increase the time it’s allowed to operate.

Since 2020 Cruise has delivered a total of 2.2 million meals to San Francisco’s needy through a partnership with local food banks. Cruise has also begun the groundwork for autonomous ride-hailing services to launch in Dubai in 2023 and later in Japan.

Baidu

Chinese Technology giant Baidu began its Autonomous Driving Unit (ADU) in 2014 to design vehicles that could move passengers without the need for a driver. Baidu launched its “Apollo Go” self-driving robo-taxi business in 2017, and they recently upped the ante with their Baidu Apollo RT6 Autonomous Driving Vehicle in July 2022.

In that same month, they received approval from the Beijing authorities to launch a robo-taxi service within a Beijing suburb. The new Apollo RT6 has a detachable steering wheel because the car no longer needs a driver.

In August 2022, Baidu also obtained the permits to operate a fully autonomous taxi service in two Chinese megacities, Wuhan (11 million residents) and Chongqing (30 million residents). Baidu’s 100% autonomous robo-taxi services will begin on a small scale with a fleet of only five vehicles in each city and provide their service in designated areas from 9:30 a.m. to 4:30 p.m..

Pony.ai

Pony has also received permits from Beijing authorities to provide their fair-charging, driverless robo-taxi service in July 2022. With this new permit, they are now able to charge fares for rides within a 60 square kilometer area (23.1 sq miles) in Beijing’s Yizhuang suburb.

The service area includes public facilities like underground stations, parks, and sporting centers, as well as key residential and business districts. The new permit builds upon two other recent Beijing autonomous vehicle milestones. Pony.ai was allowed to launch a robo-taxi service with safety drivers in November 2021.

Since November 2021, Pony.ai has provided over 80,000 rides from 200 pickup or drop-off locations. And by July 2022, their robo-taxi service called “PonyPilot+” completed a total of 900,000 orders with nearly 80% from repeat customers. Further, 99% of the passengers provided positive reviews once the trip was complete, with an average 4.9-star rating on a 5-point scale.

Hyundai Motors

Korean automaker Hyundai launched is RoboRIde autonomous ride-hail service in Gangnam Seoul. The South Korean Land, Infrastructure, and Tourism Ministry issued Hyundai with permits to operate their autonomous vehicles in Seoul.

The Seoul Metro Government established a system that connects traffic signals with autonomous vehicles. This system also supports autonomous vehicles with remote functions, such as lane changing under circumstances where fully autonomous driving is not feasible.

Hyundai has been testing autonomous driving in Gangnam since 2019. The program so far includes only two self-driving IONIQ-5 vehicles, operating from Monday to Friday from 10 a.m. to 4 p.m. with up to three passengers. The program is slated to expand to the general public after successful tests.

Waymo One

The autonomous ride-hailing service from Alphabet (Google) started as the Google Car and has been running autonomous rides in the Phoenix metro area. It has recently expanded its program from the east valley suburbs, where it’s charging fares, to a new pilot program in central Phoenix.

Both services run 24 hours a day, seven days a week. In their 2021 safety report, Waymo states that they have driven millions of miles on public roads in their ten years of service and, with simulations, have completed billions of driving miles.

Closing Thoughts

As the number of autonomous vehicle ride-hailing projects increases, we will become increasingly used to the idea. The number of miles driven (both actual and virtual) will continue to grow, and as this happens, the insurance industry will begin to push toward autonomous driving.

For the U.S.A. and other industrialized countries, the driving costs are high for human-driven vehicles. Economics alone will push for autonomy. The benefits of optimized fuel use and reduced traffic will continuously argue in favor of autonomous driving. We will soon all be passengers.

Disclaimer: The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, www.deltecbank.com.

How Digital Wallets Transform Banking

Posted on December 13, 2022December 13, 2022 by Jean Chalopin

We have an economy that is switching to 5G, and in a few more years, we may see 6G speeds. However, the global economy’s digital transformation is far from complete. After our struggles with Covid-19 affecting both health and commerce, we have moved our world toward global, digital connectivity. For example, digital wallets will forever transform the way that we bank, shop and pay.

Most of the world, including developed economies, is still only in the early stages of a true digital transformation. We will look at the future of digital wallets and see how they are going to be an integral part of the comprehensive digital potential that is coming to all of us. The new connected economy will be defined by several pillars, all affecting our daily lives.

Digital Wallets

Digital wallets allow their owners to store and spend funds digitally in the form of “real” money linked to a debit, credit, gift card, coupons, or loyalty points. Digital wallets differ from other online payments because they allow the user to save payment information by adding their card or account information to the app. When payment is required, the buyer can do it straight from the app, only needing to hold the smartphone close to the reader, and not having to remember or enter payment credentials.

This is only the start of digital wallet capabilities. Digital wallets can do much more, from adding loyalty cards, airline boarding passes, movie tickets, hotel door keys, and more. The recent growth of this technology has allowed many to leave bulky wallets behind and has pushed our economy toward cashless payments.

Apple, Samsung, and Google have all integrated these wallets into their devices and have become the biggest players in the space. Retailers like Walmart and Alibaba have added digital wallet capabilities to their checkouts, and PayPal, Cash App, and Venmo, which offer digital wallet services, have grown into financial powerhouses.

Banking’s Future

Beyond the convenience digital wallets provide at checkout, they can potentially solve the cross-border banking problem, a difficult-to-navigate and disjointed process. Opening an international bank account is often long and painful, and international transfers can add more roadblocks and delays lasting days or more.

New Fintech firms allow businesses to open their own international accounts with multicurrency IBAN in the organization’s name. Virtual wallets then make the process easier with same-day payments, while the company can keep funds in multiple currencies allowing for prompt payments and currency exchange.

The Technology of Digital Wallets

Digital wallets start with a digital core. This is obviously the foundation behind the digital transformation of banking. And this digital core refers to the applications and platforms a financial institution utilizes in its transition to a digital business.

It then uses open APIs (application programming interfaces) to integrate payment platforms and digital wallets, which bring front-end benefits to its consumers. With these fundamentals, institutions can build services that effectively and directly communicate to clients, driving transformational change. There are already many popular crypto wallets in Europe, Asia, and the Americas–nearly the whole world.

Beyond the open APIs, we will see more smart ledgers and wallet management programs come forward. These blockchain-based smart ledgers will transform the handling of digital wallets. Offering a way to record, transfer, and store alternative assets in token form, adding to digital wallet capabilities. When combined with API-accessible wallet management, users will experience a fully integrated digital payment model within a single platform.

Crypto’s Potential

The rise of cryptocurrencies is still considered an untapped frontier of digital wallets. Trading these non-tangible digital currencies has increased, and the price of a bitcoin has risen from $1 in 2011 to tens of thousands today. Remaining speculative means that crypto is ripe for continued growth, and the push for CBDCs means that the banking sector is concerned. It’s even possible to use APIs for algorithmic trading.

Visa is hedging its bet, building the structures for CBDC integration and for its own crypto digital wallet. This institutional interest and strong demand across wealth management are apparent, and there is a significant blockchain product offering that has the potential to transform the way markets behave. The blockchain value proposition has shifted to what else a blockchain can do beyond store value.

Digital Wallets Connect Economies

In a report about the connected economy by Stripe and PYMNTS, which surveyed over 15,000 participants from 11 countries, the ongoing digital transformation has only reached about a quarter of its full potential across those studied. These 11 countries represent about 500 million adults, a small portion of our now 8 billion global population.

Source: PAYMENTS

Brazil and other developing countries have massive potential to grow their connected stature. But even in highly connected places such as Spain, the UK, and Singapore, only about one-third of their digital connectedness has been achieved. The untapped potential hints that there are roadblocks to be overcome and transformation to be had.

Streaming and Social Media

On average, the survey found that 87% of respondents were connected to the internet. However, fewer than 20% were highly engaged with digital activities, especially shopping. This is an interesting, ironic result of the slowing but persistent pandemic. However, streaming services are the exception.

The research found that seven times as many consumers are engaged in watching streaming videos daily on YouTube, HBO or Netflix as are shopping on a marketplace like Amazon, Etsy, or eBay. Social media is the other plus point, with five times as many consumers checking their social media as compared to ordering food.

Digital Wallet Use Is Here to Stay

Digital wallets are the key to this connected future. Covid-19 brought a growing embrace of touchless or contactless payments, speeding up digital wallet adoption. There is no clear digital wallet leader, and use patterns differ based on geography.

PayPal is commonly used in the most digital wallet-centric nation, Germany, accounting for 37% of all online transactions. More than 40% of all domestic online transactions in Germany are using digital wallets, with 84% of these using PayPal.

Sources: Stripe and PYMNTS

In 2019, mobile wallets surpassed credit card use globally, becoming the most widely used payment type.

Juniper Research predicts that the number of unique digital wallet users will grow from the current 2.6 billion to 4.4 billion by 2025. China and India will lead the way, accounting for nearly 70% of all digital wallet transactions, with the US and UK lagging in digital wallet adoption.

Digital wallets have been successful in areas with low card penetration but high phone use. Southeast Asian consumers skipped cards, going from cash to mobile wallets, and digital wallet providers have done exceptionally well.

With this adoption of digital wallets and newer forms of digital currency, cryptocurrencies or CBDCs will be in demand. Future digital wallets will seamlessly store and pay in several currencies, particularly as many retail online brokerages offer crypto and checking accounts.

Closing Thoughts

As we become digitally connected, digital wallets play an obvious, necessary role. Their reach will spread, and governments and companies will push for their continued use. The increase in services they will supply, solving cross-border transaction issues, and improving the ease of banking will ensure that we use our digital wallets when we bank, shop, and pay.

Other services should look to digital streaming and social media to see how we can better integrate digital payments and digital connectedness into our lives. China and India will continue to lead this march, but that doesn’t mean the West shouldn’t catch up quickly.

AI in Agriculture

Posted on December 9, 2022December 9, 2022 by Jean Chalopin

Artificial intelligence, drones, and robots are already being deployed on large farms to assist with several farm management tasks for crops and livestock. However, there are some risks that must be accounted for when turning over our food production to AI-driven machines.

We will discuss the benefits that AI can bring to the world of agriculture, including some applications that are already in place to help our farmers produce more and better-quality food. We will then discuss some potential pitfalls we must be aware of if we turn over our food supply to machines.

AI’s Potential

AI has brought to the world countless tools for personal and industrial use. With agriculture, it has delivered the potential to increase yields, keep pests away, and reduce costs in nearly all parts of farm management.

Our farmers need to know how best to use these tools, and we need to understand how their application can be a benefit. There are already AI applications that are worthwhile and are providing users with successful results. Let us see how the grass is greener on the AI side.

The Smart Farm

AI is leading to smart farms with farming models that have high cognitive ability. This technology is focused on a few specific areas.

Data and Analysis

With new equipment, farms can be set up to track and analyze multiple data points. For example, a farmer can use a drone to review a large tract of land and identify the exact location of a pest infestation or plant disease in real-time. This mass of data has boosted information accuracy and can help farmers make informed decisions when analyzed with AI models.

Robotics and Automation

Robots are used for farm activities such as picking, thinning, and sorting to speed up manual labor work and deal with any labor shortages. The goal is to increase productivity, consistency, and quality while minimizing errors.

Predictions

AI models have been designed to predict changes to weather patterns, soil erosion, and pest infestations to improve farm management and planning. These tools allow farmers to see into the future, assisting them with informed decision-making.

Like other industries, agriculture faces similar constraints related to its use of AI, such as compatibility with current technology, resource availability, security, and potential regulatory issues. Even with these constraints, the future farms will be highly dependent on AI, making them more precise and creating a new “cognitive farm.”

Digital Farmers

AI is revolutionizing one of our oldest industries and giving farmers multiple ways to produce more abundant harvests in all parts of the world. With this transformation, farms will now require digital farmers, men and women, which can push forward these technological changes, managing future farms in new ways.

Tools and People

New farm managers must understand and use the correct tools to their farm’s benefit. While extensive technical knowledge is not needed, understanding the basic principles behind the technology and, more importantly, the technology’s operational implications are necessary. Through AI, farm managers can better understand the inner workings of their farms.

The changing technology means that farm talent must be updated. Beyond the typical farming roles, farms will require employees with technological skills. The entire organization will need defined education to stay on top of the AI farming future.

New Ways of Farming

Farmers will need to leave their comfort zones and explore new collaborative opportunities. This change will involve collaboration with new companies to obtain cutting-edge technologies that will allow a farm to acquire a competitive advantage and boost productivity. These partnerships provide inimitable technologies, giving farmers the upper hand, but these technologies work best for large farms.

Cost advantages are most significant with economies of scale. So, managers will benefit by finding strength in numbers. AI tools can be expensive, beyond the reach of the small farm. When collaborating with other farms, cooperatives, suppliers, universities, local communities, and the government, these costs can be driven down.

AI’s Current Applications

AI currently monitors soil, detects pests, determines diseases, and applies intelligent spraying. Here are a few of the current applications farmers are already using today.

Crop Monitoring

Crop health relies on micro and macronutrients in the soil to produce yields but with quantity and quality. Once the crops are planted, monitoring their growth to optimize production is also needed. Understanding the interaction between growth and the environment is vital to adjust for healthy crops. Traditionally this was done through human observation and experience, but this method is neither accurate nor speedy.

Now drones capture aerial data, then train computer models to intelligently monitor crops and soil. This AI system can use the collected data to:

Track the health of the crops
Accurately predict yields
Identify crop malnutrition

This can all be done faster than a human could, in real-time, providing farmers with specific problem areas so they can take immediate actions to prevent problems before they grow.

Determining Crop Maturity

Wheat head growth is a labor-intensive process that can be aided with AI. Over a three-year period, researchers collected wheat head images at different stages with different lighting, building a two-step wheat ear detection system. The AI model was able to outperform human observation, allowing farmers not to have to make daily visits to fields to check on the crops.

Similarly, tomato ripeness has been determined with AI.

A different study examined how well AI can detect maturity in tomatoes. The researchers built a model looking at the color of five different parts of a tomato, then made maturity estimates. The algorithm could correctly classify tomatoes with a 99.31% accuracy.

Generally, evaluating soil involves digging up samples and sending them to the lab for analysis. AI researchers have used image data from a cheap microscope to train their model to do the same task. The model was able to make sand content and soil organic matter estimates with accuracy similar to costly and slower lab analyses.

Disease and Insect Detection

Using deep learning, farmers are now automating the detection of plant diseases and pests. This is done through image classification and segmentation.

A study looked at the apple black rot and used a deep neural network AI model to identify the four stages of disease severity. Like with the other models above, the disease identification process is labor-intensive. This project was able to identify the disease severity at an accuracy of 90.4%.

Similarly, a different study was able to use the YOLO v3 algorithm and was able to identify multiple pests and diseases on tomato plants. Using only a digital camera and smartphone, researchers identified twelve different cases of disease or pests. Once trained, it was able to detect problems with an accuracy of 92.39%, taking only 20.39 milliseconds.

Source: Frontiers In

Another study used sticky traps to collect six flying insects and collect images. They then based the course counting on object detection and fine-counting results. The model identified bees, mosquitoes, moths, flies, chafers, and fruit flies with a 90.18% accuracy and a 92.5% counting accuracy.

Livestock Monitoring

Animals are a major component of our food system and need even more tracking than plants. Companies are now offering tools to track cattle and chickens. CattleEye tracks and annotates key points for individual cows.

Source: CattleEye

The system uses overhead cameras to monitor animal health and behavior, allowing a rancher to spot a problem and be notified without being next to the cow.

By collecting data with cameras and drones, this kind of software is being used to count animals, detect disease, monitor birthing, and identify unusual behavior. It also confirms access to food and water.

Smart Spraying

AI also prevents problems in the first place. Drones help with the spraying of fertilizer and pesticides uniformly across a field. They operate with high precision in real-time, spraying correctly and reducing contamination risk to animals, humans, and water resources.

This is a growing field and is best performed by multiple drones, but intelligent spraying is getting better. Virginia Tech researchers developed a smart spray system that can detect weeds.

A camera mounted on a sprayer records the geolocation of the weeds, analyzing their size, shape, and color, and then delivers a precise amount of herbicide.

The device’s accuracy prevents collateral damage to other crops in the environment.

Risks of AI in Agriculture

All these different AI applications will help us monitor and improve our food systems, helping feed the 2.4 billion people suffering from food insecurity. AI can reduce labor inefficiency and increase reliability. However, there are some cautionary tales.

According to a release by Asaf Tzachor of Cambridge University, there could be flaws in the agricultural data, emphasizing productivity over environmental concern. This focus could lead to errors that cause over-fertilization and pesticide use, improper irrigation, and soil erosion. These factors must also be considered when designing AI systems. Inadvertent changes resulting in crop failures could result in massive food insecurity.

Cybersecurity is a second issue. Cyberattacks could disrupt entire food systems, especially for farms that rely heavily on AI.

Finally, those without access to the new technology could be cut out of markets. Big farmers will profit, and small farms will be locked out of the gains entirely if they cannot afford the AI infrastructure.

Planning Ahead

As in all enterprises, diligence and conscientious planning contribute to farming success. Farmers must plan their AI strategy by optimizing their operations and yield requires thoughtful assessment. This planning involves a thorough review of priorities and a clear implementation plan.

AI provides tools that can boost a farm’s yields, and transform the industry. Increases in agricultural production on a large scale will impact a country’s GDP, increase food security, and positively impact the environment. The US had just over two million farms in 2021, averaging 445 acres each, totaling 89.5 million across the country.

Analytics and robotics boosts production on almost any farm. AI-related productivity gains can reshape the farming business and improve our global food supply. This is a way we can counteract the climate factors that could affect corn, rice, soy, and wheat production by 20-49%.

Closing Thoughts

Since the advent of agriculture, technology has improved its efficiency. From plows and irrigation to tractors and AI, we have moved forward to feed our growing population. With the ongoing changes to our climate, AI has arrived just in time to save us all from potential food insecurity. We must use AI to increase efficiency and reduce food production costs while also improving environmental sustainability. Doing so can make our farmers “smarter” and give us more and healthier foods.

If small farmers can work together and take full advantage of these new AI tools, they can compete with large industrial farms. We also have to ensure that the systems that are put into place are safe and have an all-encompassing view that does not only focus on yields but the potential environmental effects. Sustainability remains crucial, and AI is the missing piece.

IoT Devices Enhance Proactive Risk Management

Posted on November 2, 2022November 2, 2022 by Jean Chalopin

IoT (Internet of Things) is a buzzword that has been around for a few years and is growing in popularity as we slowly connect everything to the net. An enormous amount of data is being collected already, and this is going to the next level through IoT sensors.

While there are many problems with IoT sensor security that still need to be solved, the data that is being supplied by these devices, if useful and used correctly, has the power to disrupt traditional risk management. This article will discuss some proactive uses of IoT for risk management and why IoT will be invaluable in the finance and insurance fields.

IoT’s Growth

The growth of IoT as a technology is unbelievable. IoT use cases are being seen in nearly every business sector, from connected technologies to cloud computing and digital data. Pharma is using IoT for material tracking and machine monitoring. Oil producers are using IoT for safe extraction and delivery. The travel industry is connecting aircraft to regulate seat temperatures and other IoT devices to make travel seamless.

Cannabis producers are using IoT devices for monitoring their plants from seed to store to stay compliant with their local regulations. Any industry can find benefits from IoT devices. And for finance and insurance, this spread of devices can be used for our own needs.

IoT for Risk Management

The embedding of IoT sensors into physical objects can complement risk mitigation and risk management services. The finance and insurance industries can either piggyback, extracting data from devices that are already installed, or can require the use of our own device’s native sensors. Our goal is to predict and identify risks with reliable accuracy.

During the COVID-19 pandemic, the use of IoT sensors surged in popularity. The shutdowns of the pandemic forced many businesses to rely on IoT sensors to be their eyes and ears.

These new sensors had the ability to watch over vacant buildings. If a building’s system fails, the IoT sensor would identify the failure and notify someone to deal with the problem. The ubiquity of these sensors means that there is a continuous supply of tracking data, like with the data inherent to finance and insurance.

At this year’s Risk Management Society (RIMS) conference, several industry leaders from Waymo, Chubb and Prologis Inc. spoke about how IoT is being used for their risk mitigation practices.

The team members from Chubb, including their chief risk officer, spoke about how IoT is helping Chubb take risk mitigation and management to the next level, allowing them to predict and even prevent potential damage before it happens. A Chubb team member stated that IoT is having a particularly noteworthy impact on their commercial insurance industry. This change is evolving the way that they are now pricing, underwriting, and servicing commercial insurance.

IoT in Insurance

The adoption of IoT in the commercial insurance segment has accelerated significantly since the beginning of the pandemic, and they expect it to expand further. Chubb’s senior vice president and IoT lead, Hemant Sharma, said that Chubb sees IoT as a valuable opportunity to offer their clients bespoke risk prevention services that will ultimately reduce or, in some cases, avoid losses.

Prologis Inc’s senior vice president of global risk management, Jeffery Bray, spoke about how critical IoT was to their business. Prologis has a billion-dollar portfolio of warehouses, and they are using IoT to find better ways to manage and predict risk. IoT tech provides the perfect fit as Prologis’s main risk is driven by property exposure.

The IoT sensors help Prologis get ahead of their operating risks, collect more data in real-time and be more predictive. According to Bray, Prologis is now working on valuing leading indicators as opposed to reacting to lagging counterparts. This switch involves the ideation and development of “autonomous” buildings, those which effectively use IoT devices.

One new area advancing IoT: drones. After a natural disaster, drones can be utilized to gather in-field data quickly for any resulting claims. Drones gather data for building inspections, providing underwriters with more information and people with faster payouts.

Potential Uses for IoT in Risk Management

For future uses of IoT, there are two crucial questions to ask:

1. Will this new technology help drive differentiation in the marketplace?

2. Will it stand the scrutiny required of a solid and profitable business case?

The risk management space has many candidates that can potentially fulfill these requirements.

Oil and Gas

The oil and gas industry has consistently invested in its sensor and early warning infrastructure to ensure safety. Some of the most common risks in the energy industry are injuries, fires, hazardous gas leaks, and vehicle accidents.

A collaboration between the energy industry and insurers can be formed through IoT data to look for the early signs of potential accidents. This can prevent costly accidents, environmental spills, and insurance claims.

Despite preventive measures, risk is always present with oil and gas, and the costs of adverse events are often devastating. Research from 1974 to 2015 shows the total accumulated value of the 100 largest oil and gas disasters exceeds $33 billion. Another report shows that only Russian refinery damage from 2011 to 2015 exceeds $1.5 billion.

Infrastructure

The variety of sensors for commercial infrastructure OEMs has seen a substantial increase. These sensors can monitor safety breaches, ranging from water leakage, smoke, overloading of weight-bearing structures, and the presence of mold and mildew, among others. There will be an ongoing integration of infrastructure management systems with IoT data to aid loss prevention programs and provide preventative actions.

A 2018 study compared a classical (non-telematics, IoT-based) risk model against a telematics-based version and a hybrid (telematics and traditional factors) version, measuring their predictiveness levels. The result: the classic model ranked least predictive.

Grocery and Other Retail

With the millions of routine visits to these stores and the potential hazardous locations within grocery and convenience store aisles, seafood facilities, salad bars, and liquid storage areas, opportunities for proactive risk management are abundant.

IoT devices can be used in accident-prone areas to monitor human traffic patterns, debris, and cleaning. Beyond the logging of activity for compliance reasons, IoT can help prepare injury reports and the necessary remedial actions for reducing claims-based losses.

Smart Homes

We now see the addition of new connected devices entering our homes. Ring doorbells, smart thermostats, baby monitors, IoT-enabled refrigerators, other appliances, pipe leakage sensors, lighting, and entertainment controls are becoming more commonplace. If utilized correctly, the resulting increase in data can allow for new innovative insurance products and engagement with the insured and mortgage borrowers.

Wearables

Connected health wearables such as watches, patches, shoes, socks, and a new supply of industrial safety wearables are entering the market.

These different items of clothing monitor biometric data, as well as odd joint angles (improper lifting technique, carpal tunnel syndrome), bad posture, and more. They help prevent injuries and costly medical insurance claims.

Proactive Risk Management in IoT Programs

IoT technologies continue to evolve, and the real test is whether the technology can benefit the finance or insurance carrier and the borrower or insured respectively. Until the industry can get a high engagement index with the user, be they personnel or commercial, the chance of the user opting out remains high. Thus, the technology’s potential is limited.

Progressive Insurance and other pioneers in the IoT space have moved in the right direction, initially focusing on the automotive sector. Their Snapshot program rewards the insured with monetary benefits when they can drive safely and avoid high-risk driving behaviors such as late-night driving or excessive acceleration and breaking.

The result is a “high stickiness” describing their insured population, who will keep lower rates for passing the six-month “Snapshot” test. It also allows Progressive to identify more risky drivers that will not receive the lower rates while still notifying those drivers with “beeps” that their actions are hazardous. Additionally, Snapshot has withstood the scrutiny of actuaries, reshaping how insurers assess, limit, and price the risk of their product offerings.

*Image courtesy of* *Progressive Insurance*

So, what can we do to fulfill the two questions of market differentiation and profit?

Develop an ecosystem with technology partners. This means to explore the IoT marketplace thoroughly by studying product roadmaps, vendors, and system integrators.
Continuously experiment. This means to include businesses and markets adjacent to your usual targets through expanded coverage or product rehauls.
Integrate IoT into operations early. In other words, developers must marry underlying systems to IoT-capable devices starting from the ideation stage.
Plan for the long-term. As IoT evolves, business leaders should increasingly take on an “investor mindset,” seeking out opportunities to improve income or reduce costs?

Closing Thoughts

The internet of things (IoT) is flourishing globally as the number of connected devices continues to expand, projected to grow beyond $50 billion in 2025, with more than two devices for every human (19.1 billion). This massive expansion, coupled with ongoing device computing power improvements, is giving rise to new possibilities for the finance and insurance industries..

Possible incentives include better pricing on mortgages and loans, rebates on policies, and discounts for companies that use them. IoTs also come with added conveniences, such as reduced employee absence, less downtime, and faster repairs. The key is to remain proactive and consistently seek out methods by which IoT reshapes the global risk management industry.

The Ethereum Merge Succeeded, What’s Next?

Posted on September 19, 2022September 19, 2022 by Jean Chalopin

The hotly anticipated “Ethereum Merge” finally happened, and it was a smooth, almost shocking, success. Proof of work vacated the Ethereum protocol in favor of the energy efficient, possibly world-saving alternative of proof of stake.

However, the most current five-day price action for ETH (Ether) shows a sharp decline of approximately -21%. The same chart shows a -9% drop for BTC (Bitcoin). So how can we call the Ethereum Merge a success?

Given the current bear markets and the globally declining macroeconomic environment, speculative assets such as cryptocurrencies slid as investors looked to preserve capital. Called the “crypto winter,” this harsh environment for growth-style investing particularly hurts new asset classes which have not been tested by the global financial crisis, for example.

Yet in the run-up to the Ethereum Merge, ETH’s price surged from roughly 1,430 USD at the end of August to almost 1,800 by September 10. Meaning, enthusiasts, investors, and other ETH stakeholders traded the sentiment building around Ethereum. This is normal, but the Merge’s ethos remains one of safety, security, democracy, and environmental protection–not short-term profit taking.

This article delves into the fate of the ETH’s historical miners, the great appeal Ethereum now has to mainstream investors, and the further upgrades slated for the future.

The Ethereum Merge: Epilogue

Earning an income with Ethereum means to stake what you own, not mine new coins. The current staking reward for ETH stands at 5.02%. With miners no more, the post-merge yield could reach up to 7.5, with 6.9% likely.

For the sake of example, the current 1-year US treasury rate shows 3.96%. But when central bank tightening slows and the rampant inflation comes to a halt, can we count on the 1-year yield to maintain this height?

Ethereum understood that while proof of work is “battle tested” and perceived as secure, the hash puzzle method provided an ironic side effect of centralization. As protocols mature, only the most intense computing rigs can solve these puzzles in time and expect to earn an income, such as with Bitcoin.

In other words, computers from only three mining pools dominated the network hashrate and contributed to an increasing possibility–even if disbelieved–of a 51% attack. This describes the event of when a central, malicious actor effectively takes over the blockchain and purports their own false tale of financial events in a virtual Shakespearean play.

Thus, it’s not energy use (in solving hash puzzles) that provides security, but returning to the original ethos of cryptocurrency–democracy. By encouraging regular investors with modest to large ETH holdings to deposit (stake) their funds, they become part of an ever-growing ecosystem.

Where Did the Miners Go?

Sophisticated ETH miners likely would not have simply sold their computing gear, but join other protocols still using proof of work. After all, they can in theory stake ETH and mine other coins in tandem–alongside the global population of retail investors using American or European crypto exchanges.

A select few cryptocurrencies surged in the leadup to Ethereum’s Merge, but two in particular stand out: Ravencoin and Flux.

Source: 2miners.com

The hashrate provides an indication of a coin’s popularity with miners. A greater hashrate equates to faster processing power and more miners.

However, following the Merge, the prices of both against the USD plummeted by roughly 35-40% each. This reminds us of the speculative nature inherent to lesser-known and less-tested cryptocurrencies. And, it further points to the overdone sell-off affecting ETH’s price.

Surge, Verge, Purge, and Splurge

Ethereum’s co-founder Vitalik Buterin would have us know that Ethereum itself is about halfway complete. The rhyming is intentional.

Source: Grand Amphi Theatre

Part of Buterin’s success lies in his quest for decentralization–not apparent fame, glory, nor riches. Yet to achieve this end of ultimate decentralization, Ethereum’s Merge is the beginning point which seems to have always required proof of stake. The goal remains to take a processing capacity of “15-20” transactions per second to a staggering figure gyrating around 100,000.

You read that right. Surge refers to “sharding,” or the process of adding additional layer-2 blockchain “lanes” to bundle transactions. Verge refers to the mathematical proof of “Verkle trees,” in effect eliminating much of the current need of validators hoarding data. In other words, moving data to the cloud. Purge refers to the ability to delete old history data, while splurge represents a catch-all term for all the extras.

Closing Thoughts

In the current climate of a crypto winter also corresponding to a global economic downturn, growth investing gives way to hard financial analysis. ETH’s price remains relatively subdued despite the historic success of Ethereum’s Merge as the lasting impact of history continues to be not so well understood.

Yet contrarian investing–buying when others are fearful–consistently finds its way to the top of bear market trading strategies. In that entails the daring art and science of discovering opportunities before others. If Ethereum maintains the momentum of its success and builds a protocol capable of processing 100,000 thousand transactions a second at a minimal energy cost while propagating decentralization, then idealism gives way to a living and breathing new world.

The co-author of this text, Conor Scott, CFA, has been active in the wealth management industry since 2012, continuously researching the latest developments affecting portfolio management and cryptocurrency. Mr. Scott is a Freelance Writer for Deltec International Group, www.deltecbank.com.

The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees. This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service, or offering. It is not a recommendation to trade.

Mining After Ethereum 2.0

Posted on September 12, 2022September 12, 2022 by Jean Chalopin

In our last article we introduced the Ethereum Merge and its potentially profound impact upon the world of investing–whether for traditional or digital assets. Bellatrix on September 6th paved the way for the final merge to likely happen around September 15th through the second stage–Paris. With this comes the transition from proof of work (PoW) to proof of stake (PoS). What will mining after Ethereum 2.0 look like?

The proof of work protocol entails two components for its blockchain: “miners” and work. Validators, dubbed miners, work to solve hash puzzles before adding a subsequent block to a blockchain. Each block contains a set of transaction data to be added to the immutable public ledger than is any one blockchain.

Mining after Ethereum 2.0 actually refers to “staking,” or the practice of validators staking (read: depositing) their assets for the benefit of a blockchain’s protocol. Proof of stake uses a modified form of random selection favoring integrous stakers with larger deposits while not disenfranchising those holding smaller deposits.

This article delves into proof of stake, Ethereum 2.0, and the larger impact of staking. Let’s get into it.

Proof of Stake

A younger invention than the proof of work arriving over a decade ago with Satoshi Nakamoto’s Bitcoin, it shifts the onus from energy-intensive work and computation to at-risk deposits and integrity.

Ethereum’s PoS introduces a complex system focusing on the character of its validators (stakers). To participate, each validator must first deposit 32 ETH (ether) into a smart contract and operate using three different pieces of software: an execution client, a consensus client, and validator.

Once their validation account is active, validating users receive new blocks from peers operating on the Ethereum network. The blocks’ transactions are “re-executed,” and the validator checks the block signatures to ensure they’re valid. The validator finally sends a vote–referred to as an attestation–in favor of each new block across the network.

PoS also introduces a unique feature carrying potential benefits for scaling: The timing of adding blocks remains fixed. Simply put, one slot occurs every 12 seconds and an epoch refers to 32 slots.

The protocol randomly selects one validator per slot, to function as a block proposer. The validator therefore remains responsible for sending out new blocks to the network. And with every slot, a committee of validators–randomly chosen–votes on the validity of the new block.

Source: Finematics

Mining After Ethereum 2.0

In short, mining ceases to exist in favor of staking. PoW ensures validator integrity through the work they must complete in solving the next hash puzzle required for adding the next block. PoS ensures integrity through the extraordinary financial cost in engaging in dishonest behavior.

PoS validators lose out on ETH rewards if they fail to validate when selected. In addition, their existing stake is up for removal if they behave dishonestly: namely proposing multiple blocks for a single slot or sending contradictory attestations. The penalties increase gradually the longer a validator fails to provide honest attestations–leading to outright ejection from the Ethereum network after 36 days.

Any attack–even coordinated–would therefore be extremely costly for the criminal party given that the minimum staking amount is 32 ETH.

A 51% attack to propose an entirely separate blockchain of transaction data, feared in the PoW domain, requires billions upon billions in dollar equivalent of staked ETH. However, the Ethereum community would recognize a single bad actor or group of actors trying to propagate this false chain. They could then mount a counterattack by raising alarms, at which point the network would likely destroy all the staked ETH of the false chain.

Integrity is ensured through the heavy economic cost and the collective voice of honest validators.

The Benefits of Staking

Previously, we’ve touched upon the environmental benefits of switching to staking in a world ravaged by climate change. Ethereum’s energy usage would decrease by approximately 99.95%.

However, there are number of additional benefits:

Passive income. Staking enables retail individuals in securing the Ethereum network, even from a laptop. Staking pools collate ETH and allow individuals to stake without having the required 32 ETH.
Increased decentralization. Economies of scale happen with PoW as institutions have the cash balances necessary to purchase dedicated, intensive “rigs.”
Economic security. PoS expressly uses staked (locked) deposits, which are held liable for destructing provided dishonest behavior.

There are some notes to consider, however, before entering into staking:

PoS is younger and lesser-known than PoW.
PoS is complex as it locks the addition time of new blocks and consistently monitors the actions of validators.
A validator needs to use three pieces of software.

Closing Thoughts

PoS opens the door to the crypto universe for all individuals or entities, large or small, while removing the economic incentives of bad actors. PoW works from a security perspective while ironically encouraging some centralization and excluding the vast majority of potential validators as it matures.

Retail investors now enjoy several solid, regulated crypto exchanges for entering into crypto without jeopardizing their security. In tandem, yields from traditional bond investing pales alongside staking’s potential return. This spells opportunity for forward-looking banks embracing tomorrow.

Democracy and opportunity remain the heart of cryptocurrency. Ethereum’s PoS represents an invention furthering that ideal to anyone with an internet connection.