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FinTech - Lecture 4 : Internet Technology and Governance (2)

FinTech - Lecture 4 : Internet Technology and Governance (2)

These slides were used in the lecture 4 of FinTech - Financial Innovation and the Internet 2020 Fall at the Graduate School of Business and Finance, Waseda University, on October 16, 2020.

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Kenji Saito
PRO

October 16, 2020
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Transcript

  1. QIPUPCZ0MJWFS) FinTech — Financial Innovation and the Internet 2020 Fall

    Lecture 4 : Internet Technology and Governance (2) Kenji Saito Professor, Graduate School of Business and Finance, Waseda University Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.1/39
  2. This class is recorded Camera ON is recommended, but not

    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 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.2/39
  3. The lecture slides can be found at : https://speakerdeck.com/ks91 Recording

    and chat text will be posted at Moodle and Discord Trial automatic transcription of the lecturer’s part will be posted at Discord Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.3/39
  4. Schedule (provisional) Lecture 1 9/25 Overview of FinTech (1) •

    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 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.4/39
  5. Last Week, We Did . . . Assignment Review Internet

    Technology Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.5/39
  6. Today’s Topics Internet Technology – continued Internet Governance Discussion “Commons”

    in Finance Assignment Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.6/39
  7. Internet Technology – continued What’s “TCP/IP”? IP addresses and domain

    names IP over everything Everything over IP Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.7/39
  8. Railway Model of Computer Networks In the railway model, “××

    line” is a network (hopefully someday this map will look familiar for everyone) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.8/39
  9. Railway Model and a Relay "SFMBZTUBUJPODPOOFDUTUIF OFUXPSLT "OFUXPSLJTEJSFDUMZ DPOOFDUFECZBUSBJO -"/

    3BJMT 5P[BJ-JOF 8BTFEB4U &YJU 8BTFEB6OJW 8BTFEB 3BJMT .JUB-JOF .JUB4U ̖ ,FJP6OJW .JUB 3BJMT ɹ0UFNBDIJ4U .JUB-JOFc5P[BJ-JOF Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.9/39
  10. TCP/IP Lecture 4 : Internet Technology and Governance (2) —

    FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.10/39
  11. Railway Model and TCP/IP Lecture 4 : Internet Technology and

    Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.11/39
  12. IP Does Not Guarantee Does not guarantee packet delivery No

    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 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.12/39
  13. Railway Model and TCP/IP (Story of students sending scrolls) Lecture

    4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.13/39
  14. Story of Students Sending Scrolls (1/3) Background — Waseda and

    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 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.14/39
  15. Story of Students Sending Scrolls (2/3) Story – continued Either

    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 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.15/39
  16. Story of Students Sending Scrolls (3/3) Story – still continued

    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 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.16/39
  17. IP Addresses and Domain Names DNS (Domain Name System) is

    just another application of IP (with layer 4 by UDP (User Datagram Protocol) or TCP) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.17/39
  18. Centralized, Decentralized, Distributed Paul Baran, “On Distributed Communications Networks”, 1964

    Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.18/39
  19. The Internet Does Not Care It does not care about

    communication technology It doesn’t matter whether packets go through the satellites or the ground It could also use a homing pigeon ;) RFC 1149 (A Standard for the Transmission of IP Datagrams on Avian Carriers) * An RFC (Request For Comments) is a publication often of Internet Standards (or jokes, or both) If there is a good communication technology, we use it IP over Everything Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.19/39
  20. IP over Avian Carriers — Wikipedia Lecture 4 : Internet

    Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.20/39
  21. Protocol Architecture (1) There have been failures: Captain (NTT), ISDN,

    Minitel (its success slowed down deployment of the Internet in France?) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.21/39
  22. Protocol Architecture (2) Lecture 4 : Internet Technology and Governance

    (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.22/39
  23. Why Is IP Simple? How many programmers in the world

    can write IP? How fast can a router get? If it is not simple, it won’t work If it is not simple, it will be slow It is really important to make it simple and easy Smarter design, such as variable-length address instead of fixed-length, would have slowed down development of the Internet if it were chosen IPv4 uses fixed 32-bit IP addresses IPv6 uses fixed 128-bit IP addresses Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.23/39
  24. Internet Governance Autonomous, decentralized, and cooperative System of Internet governance

    What the Internet means Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.24/39
  25. The Railway Model and Distributed Autonomy There is no owner

    of the whole railway network Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.25/39
  26. Roundabout (traffic circle) Lecture 4 : Internet Technology and Governance

    (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.26/39
  27. Governance Structure of the Internet ISOC (Internet Society) IETF (Internet

    Engineering Task Force) (a group of individual engineers) ICANN (Internet Corporation for Assigned Names and Numbers) (a non-profit in California) ASO (The Address Supporting Organization) GNSO (Generic Names Supporting Organization) ccNSO (Country Code Names Supporting Organization) United Nations IGF (Internet Governance Forum) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.27/39
  28. IETF The IETF is a loosely self-organized group of people

    who contribute to the engineering and evolution of Internet technologies It is the principal body engaged in the development of new Internet standard specifications The IETF is unusual in that it exists as a collection of happenings, online and in-person, in which individuals voluntarily participate. It has no members, and no dues —The Tao of IETF – A Novice’s Guide to the Internet Engineering Task Force Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.28/39
  29. IETF Principles Principle for decision making (like, we don’t really

    make decisions) “We reject kings, presidents and voting” “We believe in rough consensus and running code” — David D. Clark General principle of robustness “In general, an implementation should be conservative in its sending behavior, and liberal in its receiving behavior” — Jon Postel Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.29/39
  30. Everyone Is Main Character of Communication . . . The

    Internet is at a crossroads It means whether the main character is a person, a different unit, a circle of friends, an organization or a country It is important to be able to define it freely Basically, each and every one of us must be able to have a presence on the Internet, and we must ensure that each of us is the main character of communication on the Earth This is very important — Jun Murai 1999-07-07 From “DOCUMENT LIFE a ryuichi sakamoto opera 1999” Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.30/39
  31. Characteristics of the Internet Architecture The Internet is a logical

    architecture . . . It is the basis for distributing digital information through transparent channels and providing a commons environment The key to Internet architecture is to provide alternatives On the communication side, multiple media can be used freely — Robert Elliot Kahn, 2004-11 (translated back from Japanese) In a private conversation with Prof. Hiroshi Esaki of the University of Tokyo (from his book “Cyber-First”) Commons = resources accessible to all members of a society Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.31/39
  32. 10 Characteristics of the Internet Architecture (1) Global (2) Independent

    and autonomous system (no authority) and social (3) Being connected is assumed (4) The only one on the Earth (5) Providing a commons environment (6) Providing alternatives (7) Providing opportunities (8) Only trust “rough consensus” and “running code” (9) Transparency and End-to-End (10) Best effort Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.32/39
  33. Commons Environment — Network Neutrality Users can (1) Freely have

    access to (legal) information (2) Freely execute applications within legal limits (3) Freely connect equipment unless it would harm the network (4) Freely choose providers Network providers, application/service providers However . . . What is the scope of the “law”? Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.33/39
  34. Best Effort Because there is no quality target to be

    followed, there is an incentive to make efforts to improve quality and gain market competitiveness — Hiroshi Esaki, “Cyber-First” Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.34/39
  35. “Electronic Something” and Ease of Entry e-mail Everyone can open

    a post office, so to speak Electric Vehicles (EV) ← not exactly electronic, but . . . Everyone can build a car e-publishing (e.g. Kindle by Amazon) Everyone can be a publisher ← rather, WWW has done it e-money (e.g. Suica by JR East, xxPay, etc.) Everyone can be a bank ← rather, digital currency is doing it e-government Everyone can be or do what? Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.35/39
  36. Discussion : “Commons” in Finance Can we expect positive effects

    of turning monopoly into commons in some financial areas? Commons = resources accessible to all members of a society Let’s talk with neighbors first, and then discuss it as a whole Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.36/39
  37. Assignment Lecture 4 : Internet Technology and Governance (2) —

    FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.37/39
  38. Assignment 2. “Bank/Payment API” Given that banks and xxPay will

    publish APIs (Application Programming Interface), think of a new and unusual example application, and describe it briefly Deadline and how to submit October 20, 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 Just plain text, please Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.38/39
  39. See You Next Week! Lecture 4 : Internet Technology and

    Governance (2) — FinTech — Financial Innovation and the Internet 2020 Fall — 2020-10-16 – p.39/39