FinTech Lecture 3 : Internet Technology and Governance (1)
Slides I used for FinTech - Financial Innovation and the Internet 2022 Fall at Graduate School of Business and Finance, Waseda University on October 14, 2022.
Innovation and the Internet 2022 Fall Lecture 3 : Internet Technology and Governance (1) Kenji Saito, Graduate School of Business and Finance, Waseda University Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.1/46
be online only. When online, Camera ON is recommended, but not required You do need to speak often anyway (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 2022 Fall — 2022-10-14 – p.2/46
and chat text will be posted at Moodle and Discord Trial automatic transcription for online lectures will be posted at Discord I’ve found that Zoom’s transcription feature is helpful, so I’ll try . . . Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.3/46
Economy and Labor — How? Tetrad — A Tool for Analyzing Media (Industrial Tools) Gutenberg Galaxy and Its Reversal Future of Monetary-Financial System? Discussion : Does FinTech Free People? — maybe at later class Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.5/46
equal industrial tools What haven’t you noticed lately? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.7/46
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 2022 Fall — 2022-10-14 – p.8/46
investment Specialization, agricultural/industrial society Inequality, exploitation and bankruptcy Bullshit jobs Digital currencies, FinTech and beyond enhancement ENH- -REV reversal retrieval RET- -OBS obsolescence 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 2022 Fall — 2022-10-14 – p.9/46
“reversal” items as “new bad things” and “new technology” that could counter that bad things Thanks for the conversation I had with a student after class last week But the phenomenon itself is neutral It would be the interaction with people with a particular value system that would determine whether it is good or bad For example, is equality good or bad? Let’s take a look at Academy Camp Child Safeguarding Charter https://academy-camp.org/child-safeguarding-charter/ Even in egalitarian hunter-gatherer societies, there can be fierce resistance to treating people equally (or standardizing people) Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.10/46
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 11, 2022 at 17:59 JST From Moodle (mandatory) Optionally, you can also post to #assignments channel at Discord So that people can comment on your reports and start discussions more easily Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.12/46
Measures . . . how to improve the class 23 out of 30 students submitted (as of Wednesday morning; better late than never) If you don’t see your listed items in the big aggregated tetrad we will see shortly, did you by any chance submit only at Discord, or at Moodle but using image (or PDF/PPT) instead of text so that they cannot be copied and pasted easily? (Just text, please) At Discord, too, please consider sharing by plain-text, as sharing by PDF/PPT means that we have to download your reports and manage files Effects on finance may be a little too conventional (albeit they are good) Normally, what everyone knows is 20 years behind (Drucker, 1990) RET and REV seemed difficult to think about (you did pretty good on RET, though) RET in this case : what was made “obsolete” primarily by TV, printing or physical space REV in this case : similar effects as those of TV, printing or physical space Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.13/46
REV Important but often overlooked effects Revived because of the obsolescence Accessibility of information Communication Shopping, Money Transfer Direction finding Pandemics… Casual communication by courrier Catalogs, newspaper and every papers things Data algorithms designed to capture user attention targeted ads Always more at hand with smartphone, smartwatches, home services security protocols computing power information gathering Anonymity Mechanical machines repetitive work human labor Information Better anonymity means less publicity and possibly less security Exchange of infomation Response time Landline telephones Postal Banking Tribes (Cultures group) Ponzi schemes (asymmetry information) Personal boundaries (Threat to) Privacy and Securities information transfer speed, make small device very powerful mail many intermediaries or wholesalers business Traditional financial models (such as cash) human relationship less and less face-to-face communication interpersonal communication thought-less acts rumor cybercrime letters forum industrial society presswork publication Decentralization and globalization Travel and physical presence Freedom of expression Anarchy and chaos Overload and redundancy concentration tribalism knowledge dissemination fake copy right fraud equality freedom hierarchy Mobility IoT People are governed by recommendation algorithms Bias General and horizontal/widespread knowledge Libraries Gossip Monopolization of access to knowledge by designated authorities Meaningless waiting time Written signature or seal Blogging, journalism Productivity SMS/MMS (i.e., cellular network device-to-device communication) FAX television radio Democratic content creation Closed, niche sub-cultures Cultural Homogeneity Political polarization Instant gratification society Inequality / exclusion Teachers / Instructors Services/ sales at your door remoteness storage competition libraries storage of information dark web money laundering deepfakes Creation/diffusion of new services Virtual reality world innovation of daily life business tools sharing FinTech Virtual reality Country border/physical limits Obsession with the internet Materialism Activists Censorship international community consumer experience cyberbullying uniformisation of the population Transparency Chores Physical stores/branches Business travel Censorship Communities No incentive to go out Trade Unemployment rate decreases (because of online work) Modern “smart” technologies, like smart homes Freedom of movement Illegal online employment Your money might be “blocked” Cyberstalking More publicity creation of an online persona Echo chamber parasocial relationship Propaganda Influencers Physical maps Blue . . . interesting Black . . . suitable Gray . . . controversial (IMHO) Let’s see whether the classi- fication is right or not later Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.14/46
effort Human network Commons, neutrality and diversity Cyber crimes, fake news Firewalls, network divisions Echo chambers, no privacy enhancement ENH- -REV reversal retrieval RET- -OBS obsolescence 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 2022 Fall — 2022-10-14 – p.15/46
⇒ You’ve turned your attention to people working Great perspective At the same time, banks are already trying to hire informatics graduates (not just for support), so perhaps a bigger change is on its way Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.16/46
to be an expert to carry out financial transactions and invest, but there are numerous tools (apps, trainings . . . ) that make the world of finance within reach . . . the possibility of ‘self-training’ leads one to think of the return of ‘self taught’ men/women, who are independent and do not necessarily need financial institutions to carry out their transactions directly ⇒ In a broad sense, maybe a change from instructionism to constructionism Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.17/46
of 37 per cent of the world’s population (ITU Hub, 2021) who have still never used the internet Will this population be excluded from the future of financial services? If so, will this further perpetuate the inequality that exists within underserved communities? ⇒ An important issue How much of the population can actually be covered by technological trends such as ubiquitous and pervasive That do not require adaptation to technology on the part of those who interact with it Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.18/46
the United States matches people who want to lend money and people who want to borrow money Since the interest rate varies depending on the creditworthiness of the borrower, it is possible for individuals with good financial conditions to borrow at low interest rates This can be considered to be an example of the impact that the Internet made against finance through the creation of alternative lending destinations to banks ⇒ Good to describe the changes with examples Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.19/46
censorship, and privacy issues, since all transactions are online and recorded ⇒ We’ll take a closer look at countering these threats in later classes Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.20/46
the Internet on finance? Let’s discuss in breakout rooms First, look at the tetrad you made collectively, see if blue, black and gray classification is right and if there are more effects of the Internet Then discuss side effects of the Internet to finance It will help to look primarily at RET (retrieval) and REV (reversal) Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.21/46
“network”? What’s “TCP/IP”? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.22/46
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 2022 Fall — 2022-10-14 – p.23/46
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 2022 Fall — 2022-10-14 – p.24/46
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 2022 Fall — 2022-10-14 – p.25/46
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 2022 Fall — 2022-10-14 – p.26/46
think they can Those who think they cannot Why? Lecture 3 : Internet Technology and Governance (1) — FinTech — Financial Innovation and the Internet 2022 Fall — 2022-10-14 – p.27/46
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 2022 Fall — 2022-10-14 – p.28/46
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 2022 Fall — 2022-10-14 – p.31/46
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 2022 Fall — 2022-10-14 – p.33/46
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 2022 Fall — 2022-10-14 – p.36/46
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 2022 Fall — 2022-10-14 – p.37/46
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 2022 Fall — 2022-10-14 – p.41/46
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 2022 Fall — 2022-10-14 – p.43/46
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 2022 Fall — 2022-10-14 – p.44/46
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 get 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 2022 Fall — 2022-10-14 – p.45/46
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