Internet Technology and Governance (2), Lecture 4 of FinTech

Slides I used at FinTech - Financial Innovation and the Internet, Graduate School of Business and Finance, Waseda University, on October 18, 2019.

Transcript

1. Manifesto of Futurism. Lecture 4 : Internet Technology and Governance (2) FinTech — Financial Innovation and the Internet 2019 Fall Kenji Saito Professor, Graduate School of Business and Finance, Waseda University ks91@aoni.waseda.jp Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.1/31
2. The lecture slides can be found at : https://speakerdeck.com/ks91 Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.2/31
3. Schedule (provisional) Lecture 1 9/27 Overview of FinTech (1) • Lecture 2 10/4 Overview of FinTech (2) • Lecture 3 10/11 Internet Technology and Governance (1) • Lecture 4 10/18 Internet Technology and Governance (2) • Lecture 5 10/25 The World of Apps (1) Lecture 6 11/8 The World of Apps (2) Lecture 7 11/15 Blockchain (1) Lecture 8 11/22 Blockchain (2) Lecture 9 11/29 Other Ledger Technology and Applications (1) Lecture 10 12/6 Other Ledger Technology and Applications (2) Lecture 11 12/13 Cyber-Physical Society and Future of Finance (1) Lecture 12 12/20 Cyber-Physical Society and Future of Finance (2) Lecture 13 1/10 FinTech Ideathon (1) Lecture 14 1/17 FinTech Ideathon (2) Lecture 15 1/24 Presentations and Conclusions Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.3/31
4. Last Week, We Did Assignment Review On the tetrad of the Internet Internet Technology On communications and protocols TCP/IP Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.4/31
5. Today’s Topic Internet Technology – continued Internet Governance Discussion “Commons” in Finance Assignment Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.5/31
6. TCP/IP Engineers often call TCP “layer 4”, IP “layer 3”, and so on (although application resides layer 7) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.6/31
7. 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 development 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 (Each layer has error detection capability of some kind) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.7/31
8. Railway Model and TCP/IP (Story of students sending scrolls) Level of flow is controlled by cooperation between TCP stacks at the both ends Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.8/31
9. 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 2019 Fall — 2019-10-18 – p.9/31
10. Centralized, Decentralized, Distributed Paul Baran, “On Distributed Communications Networks”, 1964 Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.10/31
11. 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) 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 2019 Fall — 2019-10-18 – p.11/31
12. IP over Avian Carriers — Wikipedia Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.12/31
13. 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 2019 Fall — 2019-10-18 – p.13/31
14. Protocol Architecture (2) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.14/31
15. 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 Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.15/31
16. 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 2019 Fall — 2019-10-18 – p.16/31
17. 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 2019 Fall — 2019-10-18 – p.17/31
18. Roundabout (traffic circle) Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.18/31
19. 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 2019 Fall — 2019-10-18 – p.19/31
20. 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 2019 Fall — 2019-10-18 – p.20/31
21. 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 2019 Fall — 2019-10-18 – p.21/31
22. 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 Muraiɼ1999-07-07 From “DOCUMENT LIFE a ryuichi sakamoto opera 1999” Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.22/31
23. 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 “Cyber-First”) Commons = resources accessible to all members of a society Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.23/31
24. 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) Provision of 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 2019 Fall — 2019-10-18 – p.24/31
25. 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 2019 Fall — 2019-10-18 – p.25/31
26. 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 2019 Fall — 2019-10-18 – p.26/31
27. “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) 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 2019 Fall — 2019-10-18 – p.27/31
28. 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 2019 Fall — 2019-10-18 – p.28/31
29. Assignment Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.29/31
30. Exercise 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 23, 2019 at 17:59 JST From Course N@vi Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.30/31
31. See You Next Week! Lecture 4 : Internet Technology and Governance (2) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-10-18 – p.31/31