Battle for Biosignals

Another war has been declared within digital media, the battle for the biosignal. This is a concept coined in an article on venturebeat by Frédéric Marceau of OM Signal, a French company specialising in intelligent fabrics, which designed the Ralph Lauren connected shirts used by tennis players in the US Open 2014.


(the original article published December 2014 on CMO.com)

Frédéric spoke at the Leweb Conference in Paris in December 2014 together with some of the most advanced “Wearable Tech” specialists in the world: David Rose of MIT, JP Gownder of Forrester Research and Cedric Hutchings, CEO of Withings.

There was a strong focus on Health-related wearables and we have seen numerous companies and solutions emerge in this space over the past years. Nike connected their shoes, Fitbit created their connected wristband, Withings launched the connected weight Scales and OM Signals have built the connected shirts and then of course we have the Apple Watch with its cardio functions.

OK, so where is the war going on? Well, there is of course a commercial battle between competing products but the underlying battle may be more important. The one where the big players are fighting for control of your biosignals – data collected from your body and used in intelligent ways for your own benefit. All the above mentioned applications are fun and useful but we may expect more serious health-improving solutions for all ages to arrive on the market shortly.

At the end of the 90’s we witnessed the Browser wars. Netscape had taken a large share of the web browser market and Microsoft woke up to take a fight back in the market for “access to information” with the launch of Internet Explorer. I believe it was the first time Microsoft invested heavily in a product they were giving away for free. They had been owning the access to computing space with the DOS and later Windows operating system for a long time and were challenged by a new and stronger user need: access to information. Later the same type of battle appeared in Mobile operating systems. The battle announced today is for the control of the access to your biosignals.

But the battle field is wide and mined with privacy issues. In essence, our biosignals are intimate private data points although their value is only expressed once they are processed. Monitoring the vitality of an elderly person for the purpose of coming to aid in case of disturbance is a life-saving application and connecting your scales to monitor the evolution of your body weight can be a health-improving application. But for someone else to be hacking my weight on verifying my vital signals is scary and for someone to use that information for commercial purposes seems even worse. Where credit scoring is a common practice today and reputation scoring is being discussed, perhaps one day our bankers and insurance agents will be checking our health score before doing business with us. The main re will be a battle for this information because it is of high value

Considering to what extent geolocation data has had an impact on marketing, we should expect biosignals to have an even stronger impact on marketing in the future. Not necessarily at the personal level but at the aggregate level.

And the usual suspects are already be positioning themselves for the battle. Google is investing in connected objects, like Nest and has an ambitious project for health-related technologies. They are also seeking to federate developers around a platform, Android Wear. Microsoft are investing in e-health management platforms, Facebook did their first health-related investment with a fitness-tracking company in 2014 and Apple are integrating health-monitoring capabilities into their own products but more importantly, have built the Healthbook, an ambitious app meant to centralize your biosignals acquired from various data points: Heart rate, Bloodwork, Hydration, Blood pressure, Activity, Nutrition, Blood sugar, Sleep, Respiratory rate, Oxygen saturation, Weight. A full view of your health situation in one app.

Still, the biosignals are only just starting to be produced via products and apps from the thousands of health wearable start-ups investing the space. And most of the time, the data remains in closed loops. The market is not monetizable yet but we should expect a lot of investment and many acquisitions in the space in 2015.

Forrester have predicted 10 million sales of Apple watches in 2015 and together with the Withings Activité watch which incorporates biosignals into the equation, this year could be the Year of the Watch and will be the year when our biosignals upload massively into the cloud.

My Day in Cryptoland seeing the Future of Money

Yesterday I opened the door to Cryptoland, the Magical Kingdom of Bitcoins, as a complete cryptocurrency virgin by going to the Inside Bitcoins conference here in Paris. It felt like entering a very exclusive club made up of old friends from all sorts of horizons who shared the same peculiar vocabulary as well as the same glint in the eye. The glint of passion.

Back in 2009 when the World was in deep financial crisis, a founding article was published by someone named Satoshi Nakamoto. It wasn’t known who this Satoshi really was – a genius developer, a government agency, or possibly a group of developers. More of that story on Wikipedia: http://en.wikipedia.org/wiki/Satoshi_Nakamoto. Despite a lot of speculation, it remains uncertain to this date who or what Satoshi is and perhaps his absence is useful for something meant to be completely decentralized. His spirit is still present although he retired from active participation apparently with a small capital of one million bitcoins. The mystery only adds to the magic of Cryptoland.

Birth of an Orphan

The article Satoshi published can be found here: bitcoin.org/bitcoin.pdf and is not for the common mortal to read and enjoy. What I understand from the 9-page document is the detailed description of a totally transparent internet-based monetary transaction system by which blocks of data are being validated by nodes in a network in real time. These nodes are computers and for each transaction, the original code of each monetary unit is reprocessed. If anyone tries to attack the network they will have to mobilise more processing power than the network itself.

After Satoshi published the paper, he also launched the network and created the first bitcoins. Later he faded out and transferred both the opensource code, the bitcoin.org domain and other assets to key members of the community.

Bitcoin Mining

An essential part of the network is the computing power of the nodes that verify transactions. The computers that participate in this work are called “miners” – possibly because they work very hard and get paid very little. Every day a limited number of bitcoins are being released into the economy through the miners as payment for the work they do. This helps make the bitcoins a scarce digital commodity, according to Nicolas Carey, blockchain.info, speaker on Inside Bitcoins.

On the Inside Bitcoins conference, I got to see what these miners look like.

… and the words they spoke were fascinating as they discussed hashpower and electricity prices.

They consider their activity as an Industrial activity where you invest in computing power and try to reduce operation cost to generate income over time. It seems computer chip manufacturers have a hard time keeping up with the Miner’s requirements for raw processing power and low heat emissions. Marco Streng from Genesis Mining explained how they had chosen Iceland for their servers because of a steady and cheap source of electricity and easy access to cooling. Perhaps a case for reindustrialization in Western Europe.

And we have take-off

Bitcoins took off massively back in 2009. As an example, the number of transactions on bitcoins for the first 3 years grew exponentially to make the growth rate of Paypal look pale in comparison (Nicolas Cary, blockchain.info on Inside Bitcoins). Perhaps, however, we are not comparing similar things as Paypal is merely a mode of payment whereas transactions of bitcoins can be of speculative nature.

When looking at the growth, there are 2 main things to look at. The number of transactions on one hand and the value of these transactions measured in another currency. With a gradual and continuous growth of transactions and an important level of volatility tied to a currency and furthermore a “new” currency based on a “new” technological approach, it seems logical that growth can be explosive.

The system is designed to progressively increase the circulation of bitcoins and reach an upper limit of 21 million bitcoins some time in 2040. Each bitcoin can be divided into a maximum of 8 decimal points. Today the market value is estimated at some 5 billion dollars – it is starting to become comparable to the GNP of a small nation-state.

The market value continued to increase and virtually exploded in November 2013 as can be seen in the chart from Blockchain:

2014-11-21 13-16-11 ScreenshotSource: Blockchain.info

But we also notice the subsequent decline. Was it a bubble? Is the show over? Most of the experts refer to the peak as having been caused by the Cyprus bank lock down where international account holders would suddenly use massive amounts of bitcoin transactions to circumvent the system. This peak is believed in turn to have been enhanced by automatic trading and possibly insider operations causing a partial collapse as well as a loss of credibility in cryptocurrencies around the world.

Bitcoin with a Capital B

But really, the currency and its fluctuations are very superficial elements of a much deeper concept and a much more powerful underlying motion. Bitcoin is 2 things, or rather Bitcoin with a capital B is the protocol on which money transactions are performed, whereas bitcoin with a lower case b refers to the currency (analogy from Elie Chevignaud on Inside Bitcoins). It is this latter bitcoin, the currency one, which is all the media and the general public care about.

The underlying motion of the Bitcoin (capital B), however, is where I saw the Future today. The protocol and the totally decentralized and independent nature of the Bitcoin approach is disruptive in its nature and possible a fix to a broken financial system. Of many great examples, Nicolas Cary addressed opportunities in relation with developing countries and money transfers. In his words: “Cash is inconvenient, a poor user experience, insecure and limiting” and subsequently “So why is 85% of the world’s money transactions still performed with cash?”

Additionally, fees on cross-border money transfers can surpass 20% commission whereas a cryptocurrency like bitcoin only require covering a cost of around 1%. There is a strong case for disintermediation and if I were in the International cash transfer business, I would probably start looking for another business area like Juan Llanos, Bitreserve.org did a few years ago.

An open and transparent system for financial transactions across the globe where nobody sits on the gold deposit seems like a very compelling solution. A system where nobody is “too big to fail” because they are central node in a dysfunctional system. The “too big to fail” is considered an anomaly in our capitalistic society by Hakim Mamoni of Seedcoin.

Our Future of Decentralization

A decentralized financial system like the one promised by Bitcoin, could be one of the building blocks of our future society. Hakim Mamoni takes us through the various areas of Human activity in which decentralization seems like a promising solution to many of today’s problem. In Water supply, in Food, in Energy and in Communication, decentralizing technologies are providing solutions that only require one last thing to fulfill their promise: Legal and Regulatory adaptions to allow for power to move away from the center.  But as we know, power shifts are the more difficult changes to make in any society.

So how do we make it happen?

In the same way the Internet revolution changed the way we produce, distribute and consume information, it looks to me like the Bitcoin protocol, the cryptocurrencies, the underlying technologies like the blockchain, as well as the amount of innovation in this space are announcing a complete change in the way we store, transact and manage money.

The challenges to address are likely to be 3-fold and interconnected: regulation, investment and compelling applications. Let’s go.