FinTech - Lecture 3 : Internet Technology and Governance (1)
These slides were used in the lecture 3 of FinTech - Financial Innovation and the Internet 2020 Fall at the Graduate School of Business and Finance, Waseda University, on October 9, 2020.
Lecture 3 : Internet Technology and Governance (1) Kenji Saito Professor, Graduate School of Business and Finance, Waseda University Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.1/40
required You do need to speak often (we are going to have a lot of dialogue) We will use breakout rooms a lot, but those won’t be recorded unless you do it yourselves (need to be allowed) Keep your Zoom client updated! We might use latest features The recordings could be used for research on online learning Transcribed for use and anonymized Will let you know when the necessity arises Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.2/40
and chat text will be posted at Moodle and Discord Trial automatic transcription of the lecturer’s part will be posted at Discord Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.3/40
Lecture 2 10/2 Overview of FinTech (2) • Lecture 3 10/9 Internet Technology and Governance (1) • Lecture 4 10/16 Internet Technology and Governance (2) Lecture 5 10/23 The World of Apps (1) Lecture 6 10/30 The World of Apps (2) Lecture 7 11/13 Blockchain (1) Lecture 8 11/20 Blockchain (2) Lecture 9 11/27 Other Ledger Technology and Applications (1) Lecture 10 12/4 Other Ledger Technology and Applications (2) Lecture 11 12/11 Cyber-Physical Society and Future of Finance (1) Lecture 12 12/18 Cyber-Physical Society and Future of Finance (2) Lecture 13 1/8 FinTech Ideathon (1) Lecture 14 1/15 FinTech Ideathon (2) Lecture 15 1/22 Presentations and Conclusions Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.4/40
How Society/Civilization Changes Tetrad — A Tool for Analyzing Media (Industrial Tools) Gutenberg Galaxy and Its Reverse Future of Monetary-Financial System? Discussion : Does FinTech Free People? — actually, didn’t ⇒ But we can talk about it a little Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.5/40
investment Specialization, agricultural/industrial society Inequality, exploitation and bankruptcy Digital currencies, FinTech and beyond Bullshit jobs and shit jobs — added ENH REV RET OBS Control and obedience, hierarchy Maximization of profits Moneyless credit system Gift economy Generailzation (of skills), hunter-gatherer society New medium “retrieves” what was previously made “obsolete” Will “gift economy”, “generalization (of skills)” and “hunter-gatherer society” really be retrieved? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.6/40
A Theory” (2018) “A bullshit job is a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case” Five types : flunkies, goons, duct tapers, box tickers, and taskmasters Different from jobs that are necessary, but merely bad (shit jobs) Graeber (deceased last month) pointed out that increase of bullshit jobs started when financial sector and corporate executive classes effectively fused (1970s) With the tetrad from the previous page, we know that rise of bullshit jobs is a reverse effect of financial capitalism fueled by its retrieval of control, obedience and hierarchy Since financial system is a cause, and automation may free those people working bullshit or shit jobs (though past automation was another cause of such jobs — why?), the questions raised by this book are not unrelated to this class Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.7/40
of the Internet Write a bulleted list of what the Internet “enhances”, makes “obsolete”, “retrieves” and what it “reverses” into (2) Based on the tetrad you drew, briefly describe how the Internet affects finance Please be concise Deadline and how to submit October 6, 2020 at 17:59 JST From Moodle (mandatory) Optionally, you can also post to #assignments channel at Discord So that your classmates can read your report, refer to it, and comment on it Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.10/40
Measures . . . how to improve the class 15 out of 21 students submitted (better later than never) Just text, please (I’d copy and paste from the report view) Descriptions of the effects on finance may be a little too conventional Although they are good, but . . . Normally, what everyone knows is 20 years behind (Drucker, 1990) If you agree with what general public say, think, “Yabai (Bad)” (as a researcher) RET and REV seemed difficult to think about (you did pretty good on RET, though) What was made “obsolete” by the old media (which supported the ideas before the new media) is “retrieved” by the new media In RET in this case, we see what was made “obsolete” primarily by TV or printing In REV in this case, we see the similar effects as those of TV or printing Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.11/40
(= any technology or artifact) ENHANCES . . . What does the medium enhance? OBSOLESCES . . . What does the medium make obsolete? RETRIEVES . . . What does the medium retrieve that had been made obsolete earlier? REVERSES . . . What does the medium reverse or flip into when pushed to extremes? – McLuhan, “Laws of Media” Questions that can be asked of any media What are the side effects of the media on people and society? Especially, when a new medium (M1) appears, it would obsolesces some existing medium (M2) that has obsolesced some other medium (M3), so that M3 would be retrieved by M1, as M2 is now becoming obsolete Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.12/40
REV Important but often overlooked effects Revived because of the obsolescence Acquiring knowledge, information, and data Sharing knowledge, information, and data Traditional media Traditional communication tools: telegram, telephone Disperse of trash information, misleading information No personal privacy No need of physical connection Obtaining Information Expressing and Sharing Opinions Connectivity Communication Books & Libraries Printed Newspapers Television/radio The Great Library of Alexandria (As a repository of most of the world knowledge) Redundancy of worthless/useless information (fake news and spam for example) Virtual Communication Decentralization Access to information Globalization Traditional media Face-to-face communication Retail stores Chaos Conflicts Lack of regulation Internet Addiction “Fake news” Loss of privacy Loss of private time Decentralization Information symmetry Virtual communication Globalization Face-to-face communication Distance restriction Language barrier Retail outlets Chaos Conflicts Individual activism Information authenticity Privacy Think independently The internet speed Collecting database and Cloud service Traditional communication Traditional office working Easy to access information search Human online shopping behavior Automatic manufacturing Live streaming service Imagination Education Information liquidity Human relationship Face-to-Face interaction Physical activities Privacy Creativity AI Virtual World Access to information E-commerce Decentralization Communication convenience Immediacy Globalization Higher work efficiency Overload information Secessionism Anti-realism Lack of physical exercise Nervous disorders Distance Retails Centralized management Company-based working Villages Writing and communication importance of the narrator instant and remote communication speed of information transfer connection of things (IOT) online transaction stream media dumb phone cash payment (to a certain degree) traditional cable television face-to-face communication traditional bank system (force banks to change) media (from paper-based to electronic media) delivery industry Communication(faster and more convenience) Self-publishing Online shopping Books publishing industry F2F interaction Retail Market Letters(by using email) Local network Losing real-life social skills Less privacy Too much information Convenience of life Connection with people Big and transparent information Globalization Car navigation system (GPS) Paper document(ex: magazine, newspaper, and book) Traditional phone and fax Mail and postcard International call Cultural product (museum) Second-hand clothing (vintage) Use of bicycle (sharing economy) New trading system(ex: Ecommerce, internet banking) New working style and job(ex: remote work, YouTuber, internet celebrity) New transportation(ex: Sharing economy) Communication Efficiency Private issue Internet addiction mail Book CD Freedom to talk Equality Social Network Information Spaming, Fraud Globalization Mobile Phone Video Media Letter, Telephone Newspaper Convenience in searching & saving information Easier to connect and communicate with people Information hotlines Handwritten document Saving cost Security Artificial intelligence Social isolation Blue . . . Suitable Gray . . . Not suitable (IMHO) Let’s discuss whether the classification is right or not later Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.13/40
effort Human network Commons, neutrality and diversity Cyber crimes, fake news Firewalls, network divisions Echo chambers, no privacy ENH REV RET OBS Hunter-gatherer society (generalization) Versatility of individuals, holacracy Credit systems and gift economy Agricultural or industrial society (specialization) Control and obedience, hierarchy Profits and monetary economy Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.14/40
is more accurate, real-time and high efficiency Financial agencies’ management is easier and flattening Financial tools are more customized and connivence Financial globalization ⇒ Good, but what would be their side effects? Let’s discuss in breakout rooms First, look at the tetrad you made collectively, see if blue and gray classification is right and if there are more effects of the Internet Then discuss side effects of the Internet to finance Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.15/40
“network”? What’s “TCP/IP”? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.16/40
number to a character (encoding) (65 (0x41)) (97 (0x61)) (‘0x’ stands for hexadecimal) ASCII (American Standard Code for Information Interchange) / UTF-8 If you want to convert uppercase to lowercase, add 32 (0x20) to the letter Ex2 : Audio CD (sampling and quantization) ← Do you know what CD is? ;) Stereo 44.1kHz sampling and 16bit quantization (which is far below studio quality today) Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.17/40
base Put everything in a USB flash drive, put everything on the web “Put anything on it” is the whole idea of USB (Universal Serial Bus) to begin with Do you know what bus is? Improvement of transmission quality → No degradation of information Degradation occurs during sampling and quantization, but does not occur after that Concealment or proof of communication → Encryption or digital signature Public key cryptography (we will have a chance to take a deeper look at it in later class) More efficient transmission → Packet communication, compression One single physical communication medium shared by multiple uses at the same time Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.18/40
conveyed Digitization determines the amount of information and conveys it efficiently But some things are always lost Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.19/40
exchanged Social / requirement aspect Network of networks Technological / functional aspect What’s communication? What’s network? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.20/40
think they can Those who think they cannot Why? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.21/40
as by speech, signals, writing, or behavior 2. Interpersonal rapport — “The American Heritage Dictionary” It’s undeniable that you feel that humans and dogs feel close to each other . . . Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.22/40
communicate with each other in any environment? We use signals under water The meaning is conveyed What can you change? What has to remain unchanged? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.25/40
governing affairs of state or diplomatic occasions 2. the original draft of a diplomatic document, especially of the terms of a treaty agreed to in conference and signed by the parties 3. a formal or official record of scientific experimental observations 4. Computing a set of rules governing the exchange or transmission of data between devices — “Oxford Dictionary of English” Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.27/40
or things a complex system of railways, roads, or other routes: the railway network a group of people who exchange information and contacts for professional or social purposes: a support network . . . a number of interconnected computers, machines, or operations: a computer network . . . — “Oxford Dictionary of English” Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.30/40
line” is a network (hopefully someday this map will look familiar for everyone) Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.31/40
performance or reliability requirements for lower layer networks No lower limit, and no upper limit ↑ Easy to enter, and does not hinder new development for improvements Does not guarantee packet delivery order Can cope with congestions and faults by changing the route TCP recovers from errors Resend packets and/or rearrange the order Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.35/40
Keio Univ. Two among the best private universities in Japan These two universities are known for their rivalry and matches in baseball and other sports known as “ ” (first characters of Waseda, Keio and match), although Keio students would often call it “ ” ;) For undergraduates, classes may have to be cancelled for students to go cheer on the baseball team Story The head of the Keio cheerleading squad sends a letter of challenge in the form of a traditional scroll to the head of Waseda’s cheerleading squad It is a very long scroll that has to be untied from Keio’s Mita campus, slipped into Mita Station on the Mita Line, and then slipped out from Waseda Station on the Tozai Line to reach the Waseda campus so that the head of Waseda’s cheerleading squad can read it This is a metaphor of stream communication over the Internet as we do it via Zoom at the class Two ways TCP (Transmission Control Protocol) . . . Don’t miss reading every word of it (e.g. browsing a web page) UDP (User Datagram Protocol) . . . Well, it’s a long scroll, and it’s okay if it’s missing parts (e.g. Zoom) Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.37/40
way, inside the entrance of Mita Station, there is a photocopier, which copies just part of the scroll at a time, and students pass through the ticket gate with one fragment each in their hand Each fragment is sequentially numbered from the top of the scroll Students are not familiar with the railway network, and when they ask the station staff how to get to Waseda, they are told to go to Otemachi, so they do Students ask again at Otemachi Station (router), and are told to change to the Tozai Line When they arrive at Waseda Station, a student operates a scanner/printer before the exit, scanning the fragments in numerical order and outputting a long scroll on the printer, and students pull it to the Waseda campus Now, some students may get lost on the way What would you do? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.38/40
TCP Students pick up their receipts (with fragment #) at Waseda Station and take them back to Mita Station At Mita Station, if a receipt is not returned, it is assumed that the fragment was not delivered, and another student is sent out with the fragment UDP Why do we care if some students are lost? (They are grown up, and we are certain that they will make it to their home) Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-09 – p.39/40
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