Season 4 Episode 2 Apr 21, 2021

U.K. Central Bank Digital Currency, the Environmental Impact of Digital Currency, a Problematic Spotify Patent, and WordPress’ Google FLoC Block

Pitch

Digital currency can have an environmental price

Description

In this episode, we talk about WordPress blocking Google’s Federated Learning of Cohorts tracking technology, a web app that received so much negative feedback from food bloggers it was taken down in less than a day, and The Bank of England and HM Treasury creating a joint task force to explore the possibility of creating a central bank digital currency in the U.K. Then we speak with Tim Swanson, founder and director of research at Post Oak Labs, and head of market intelligence at ClearMatics, as well as the author of the research paper, “Bitcoin and other PoW coins are an ESG nightmare,” about the environmental impact of digital currency. Then we chat with Isedua Oribhabor, U.S. policy analyst at Access Now about their letter to Spotify on why the company should abandon their recent speech-recognition patent of a technology to detect emotion, gender, and age.

Hosts

Saron Yitbarek

Disco - Founder

Saron Yitbarek is the founder of Disco, host of the CodeNewbie podcast, and co-host of the base.cs podcast.

Josh Puetz

Forem - Principal Engineer

Josh Puetz is Principal Software Engineer at Forem.

Guests

Tim Swanson

Clearmatics - Head of Market Intelligence

Tim Swanson is the founder and director of research at Post Oak Labs, head of market intelligence at ClearMatics, as well as the author of the research paper, “Bitcoin and other PoW coins are an ESG nightmare,”

Isedua Oribhabor

Access Now - US Policy Analyst

Isedua is Access Now's U.S. Policy Analyst and Business and Human Rights lead. She works to promote human rights in the digital age, focusing on the responsibility of tech companies to respect human rights.

Show Notes

Audio file size

75222166

Duration

00:52:14

Transcript

[00:00:10] SY: Welcome to DevNews, the news show for developers by developers, where we cover the latest in the world of tech. I’m Saron Yitbarek, Founder of Disco.

 

[00:00:19] JP: And I’m Josh Puetz, Principal Engineer at Forem.

 

[00:00:22] SY: This week, we’re talking about WordPress blocking Google’s Federated Learning of Cohorts tracking technology, a web app that received so much negative feedback from food bloggers it was taken down in less than a day, and the Bank of England and HM Treasury creating a joint task force to explore the possibility of creating a central bank digital currency in the UK.

 

[00:00:47] JP: Then we speak with Tim Swanson, Founder and Director of Research at Post Oak Labs and Head of Market Intelligence at Clearmatics, as well as the author of the research paper, “Bitcoin and other proof-of-work coins are an environmental, social, and governance nightmare”, about the environmental impact of digital currency.

 

[00:01:02] TS: Basically, if you add up every single data center from the cloud providers, Bitcoin itself alone consumes more energy than all of those combined.

 

[00:01:11] SY: Then we chat with Isedua Oribhabor, US Policy Analyst at Access Now, about their letter to Spotify on why the company should abandon their recent speech recognition patent of a technology to detect emotion, gender, and age.

 

[00:01:26] IO: I can’t think of any company that I would personally trust with wanting to detect my emotion or gender for whatever valid reasons.

 

[00:01:35] SY: So we’re starting this episode off with a little update about Google’s Federated Learning of Cohorts technology, which we talked about back in Episode 3 of Season 3. As a little refresher, Google’s FLoC technology is Google’s proposed alternative to cookies and works by using machine learning on a local device to analyze the data that is generated by users as they surf the web and puts them in giant buckets of thousands of users. Apparently, your local data wouldn’t be shared, but the buckets of users would still be able to be sold as a more anonymous bundle for the purposes of targeted ads and would potentially give more individual privacy. Well, WordPress has decided that they are not into this cookie alternative and are considering blocking it by default on any site using their blogging software, citing it as a “security concern”. There isn’t much in terms of why WordPress views FLoC as a security concern outside of users potentially opting into a technology that they don’t fully understand. Other services which have removed FLoC or blocked it include Brave Browser, Microsoft Edge, and Vivaldi. If implemented, this change is scheduled to go into effect in July’s WordPress 5.8 update. So what are your thoughts on FLoC?

 

[00:02:52] JP: Well, I don’t think anybody was really asking for a replacement for individual or even group tracking of activity on the web, except for advertisers like Google.

 

[00:03:07] SY: Oh! You think advertisers want this?

 

[00:03:10] JP: Oh, I definitely think they do.

 

[00:03:12] SY: Oh, tell me why.

 

[00:03:14] JP: A couple of years ago, Safari started off a trend of automatically blocking cookies. And that really has put a dent in advertising networks ability to track individual users. I think that combined with a lot of ad blocking technologies that users are using now in browsers, it’s really making it difficult for ad networks to track user behavior. And that makes it harder to sell those premium ad slots. I go on an ad network and I can dial it down to let’s say podcast hosts that live on the East Coast whose name starts with S.

 

[00:03:49] SY: Right. Right.

 

[00:03:49] JP: Like I can really nail it down.

 

[00:03:51] SY: That feels very personal.

 

[00:03:53] JP: But the more I narrow that down, the more expensive advertiser will sell those slots for. So if you take away the ability to track people on that micro level, they can’t charge as much for the ad slots. So this kind of seemed like Google saying like, “Okay, well, you’re concerned about privacy. Let’s give this a go.”

 

[00:04:11] SY: But isn’t this a good alternative? Like, I feel like instead of tracking us on an individual level, bundling us up in thousands, I mean, isn’t that a good alternative?

 

[00:04:20] JP: I don’t know. I understand why Google wants it. I kind of see this as maybe like a compromise, like advertisers aren’t going to be totally happy with this. Users aren’t going to be totally happy with this. And from an advertiser perspective, I imagined they would say like, “Hey, it’s a compromise. We all get something we want.” And WordPress’s statement seems to be, “No, actually, as users, we don’t want this ad tracking it all.” It’s really hard to pitch it to a user. What’s the benefit for you other than better targeted ads? That’s the one I always see. The ads will be more relevant to you. Well, how about if you just don’t track me at all, like in general ads?”

 

[00:04:57] SY: That’s also an option.

 

[00:04:58] JP: Yeah.

 

[00:04:59] SY: Yeah. Okay. So does WordPress block cookies in general?

 

[00:05:04] JP: So a lot of the cookie blocking has been happening at a browser level.

 

[00:05:09] SY: Right. Right. That’s what I’ve heard exactly.

 

[00:05:11] JP: Right. I don’t think they do it by default. And part of the reason is, remember, cookies are used for tracking, but cookies are also used for good things.

 

[00:05:25] SY: Exactly.

 

[00:05:26] JP: Like the often broken remember me on this website when you log in. So I think it would be very difficult for WordPress to operate without cookies because you’d have to log in every single time and all your preferences wouldn’t be saved.

 

[00:05:37] SY: Yeah. Okay.

 

[00:05:38] JP: Yeah.

 

[00:05:39] SY: Whereas FLoC is actually just ads. Like that’s it basically.

 

[00:05:42] JP: Right. Yeah. There’s no remember me log-in with FLoC. FLoC is just there for Google’s benefits.

 

[00:05:48] SY: Yeah. Okay.

 

[00:05:49] JP: I think that’s really gutsy of them. I think it was actually a really good move and it kind of kills FLoC right off the bat. When we were going through the story ahead of time, one of the articles we read mentioned that WordPress drives approximately 41% of all websites on the internet.

 

[00:06:05] SY: A lot of websites.

 

[00:06:05] JP: That is a bonkers statistic to me.

 

[00:06:08] SY: Yeah, that’s insane. That’s huge.

 

[00:06:10] JP: I found that really surprising. I dove a little bit more into that estimate and it really comes down to a majority of the internet is run by content management systems like WordPress and WordPress is by far the most popular. So that’s a big part of the web now that FLoC won’t work on by default. And I cannot imagine anybody being passionate enough about Google’s continued livelihood.

 

[00:06:33] SY: To fight for it.

 

[00:06:34] JP: To fight for it. Because with this, you can turn it back on, but you have to go into WordPress and edit some code. I just can’t see anybody wanting to do that.

 

[00:06:41] SY: Oh, okay. No. Like you said, there’s no advantage.

 

[00:06:44] JP: Yeah. Well, our next story comes from a great piece and protocol, which we’ll put in our show notes. It’s about a tech trend with developers trying to fix problems of only wanting the recipe portion of recipe blog posts, and not oftentimes the long essays that come around or above them. I know. This has happened to me a lot. The latest of these apps was called “Recipeasly”. This app came out in February of this year and it allowed users to paste a URL into the app and that would scrape out only the ingredients and the recipe stuff from the blog post and allow you to save them. Well, less than five hours after lodging the site, the creator, Tom Redman, pulled the plug. He said he took the site down due to the amount of negative feedback he received from food bloggers about how not only apps like this can destroy important cultural context for recipes, but they also remove the revenue stream from sites, which survive off of advertising. Redman posted on Twitter after shutting the website down, “I’m sorry. We hear you. Given the feedback, we are taking Recipeasly down as we re-examine our impact on the community. Our goal is to amplify the voices and content of creators, not diminish them. And if we come back, it will be with changes where we have fallen short.” Google’s search traffic and ad revenue fund many food bloggers, and this market encourages them to write longer pieces with the recipes buried within them. So readers have to look through and spot those ads. Bigger name chefs and organizations can charge for access to their recipes, but many smaller and beginning food bloggers don’t have access to those revenue streams. The story shines a light on the larger issue we’ve seen recently, tech fighting the simplest solution to a problem without empathy or fully understanding the collateral damage it might cause. Simplest solution often doesn’t take into account a holistic view of the ecosystem for the problem in which they’re trying to solve and a lot of times it’s leading to even more problems. Saron, recipe talk. What do you think?

 

[00:08:39] SY: Recipe talk. So first of all, Recipeasly is a terrible name. Let’s just all get that out there and put that on the table. Number two, I totally understand his pain point, man. Those recipe blog posts, those things are rough. You just want your chicken enchilada recipe and they’re telling you their whole life story and the story of the chicken and where it lived. And I’m just like, “Come on, man. Come on. Just tell me how many onions I need. That’s all.”

 

[00:09:07] JP: Really tap on my phone too when my hands are covered in flour and I’m trying to scroll down past the paragraphs. Oh!

 

[00:09:13] SY: It’s terrible. So I totally feel this. I think a lot of us feel this way, right? That’s one of the great things about the New York Times cooking app, which you do have to pay for where it’s all direct recipes and it’s very clean, beautiful photographs. It just really is the dream foodie, cooking book, app recipe thingy. So I’m not mad at the want of this product. I get that. I totally, totally get that.

 

[00:09:37] JP: I think the bigger problem is there are a lot of ways for food bloggers and recipe developers starting out to monetize. Like if you’re The New York Times or you happen to work for The New York Times, great. You get a salary, there’s an app. That’s terrific. It seems like the other potential end point is creating YouTube videos and selling advertisements there, which is also not accessible to everyone, or getting a library of your own recipes and getting popular enough that you can write a book and sell a book about them. But if you don’t get to that spot, if you’re just starting out, maybe you’re just making recipes in your home or you just want to start a career doing this, other than putting ads on your site, I can’t see a way to monetize. And I think my frustration comes with I’m totally willing for ads to appear there and to display them and to maybe interact with them if that helps the creator, but Google rewards these creators for people spending more time on their site. And that’s where you get the recipe embedded in these really long posts. I can’t think of any other genre of online text creatorship where this seems to happen. I don’t see a lot of newspaper and magazine ads on the web. I see a lot of them being structured that I have to click through to look at them, but I don’t see them being really long winded so that I scroll more on the page.

 

[00:11:05] SY: Yeah, absolutely. I mean, it’s kind of the same argument for any content creator really, right? I mean, if you think about bloggers, not even food bloggers, just regular bloggers, same issue. If you want to be some well-paid blogger, writer, author type person, good luck having your own little WordPress site and making a ton of money off of that, It’s probably just not going to get that much traffic and you have the same issue of maybe you turn that into a YouTube video. Maybe you become a podcaster. Maybe you write a book and self-publish. You know what I mean? I don’t think it is unique to food bloggers. I think that food bloggers tend to have things that we want maybe more than the average blog post.

 

[00:11:47] JP: Right.

 

[00:11:47] SY: I think.

 

[00:11:48] JP: Yeah. No, I agree.

 

[00:11:49] SY: I think they might have a little bit more leverage in that respect. So in that sense, they’re a little bit more desirable just because I think that when you want that enchilada recipe, man, you’ll plug your way through all that annoying stuff just to get to those lists of ingredients in those steps.

 

[00:12:07] JP: It’s kind of transactional too, like at no point am I ever like sitting around like, “Oh, man, I really need a blog post about 18th century art. I need it now.” But when I'm cooking, I’m like, “Oh, I want a chicken enchilada recipe and I want it now.” And I think that is combined with, I don’t know about you, but I feel like there isn’t a great way to credit recipe authors in a lot of cases.

 

[00:12:29] SY: That’s true. That’s true. Yeah.

 

[00:12:31] JP: Other than if it’s someone famous and I’ll say like, “I got this recipe from so-and-so’s cookbook or I got this recipe,” like The New York Times is doing this and food magazines do this. Well, they’ll list the author of the recipe right next to it. And I’ve definitely passed recipes to friends and said, “Oh, I’m cooking so-and-so’s new dish like this.” So I’m trying to normalize talking about where I get recipes from when people ask me about it. Or if I post Instagram pictures, I like credit where I found the recipe. That’s like a little thing I’m doing to give back to them.

 

[00:13:00] SY: That’s nice. Oh, I love that. That’s really nice.

 

[00:13:06] JP: Something that our producer, Levi, brought up. There’s also a very similar problem to this with photography in the photography world. He pointed out that Google actually went back and changed their image search. It used to be when you search for an image, you got a picture and you could save it right from your Google Image Search. They changed that partially in response to criticism from photographers that now when you search for an image and you find that image, you are linked directly to the site where the image appears, but you can’t just directly save it from Google Image Search.

 

[00:13:38] SY: So annoying.

 

[00:13:38] JP: Okay. So annoying. I wonder if something like that could benefit food bloggers and recipe creators where maybe it might reduce the need to have all these ads and tricks on their blog posts. If I search for a recipe and it comes up like, “This is chicken enchiladas from Smitten Kitchen,” great blog, by the way, it credits them right there and Google can track and monetize. Like when I click on the listing there, maybe that could help.

 

[00:14:09] SY: Yeah. That could be really interesting. I’d love to see how that works, and there’s also just this general, speaking of Google, what we’re seeing with the guy who pulled out all the recipes isn’t unique to just that one developer.

 

[00:14:22] JP: Right.

 

[00:14:22] SY: Google pulls content out of websites a lot. And it’s unfortunate because it’s a great experience for the user. I don’t have to dig through different links and go through different websites and try and find the information I need. It’s just right there on Google, but they do stuff like lyrics. Right? If you put in the name of a song and asked for the song lyrics, instead of taking you to a bunch of links with song lyrics, it’ll just show the lyrics themselves right at the top of the page, which again super convenient for me, probably really sucky for those lyric websites that are relying on ad revenue. So that’s unfortunate. You know that little section on Google where it has kind of like top questions asked and then the answers immediately?

 

[00:15:03] JP: Yeah.

 

[00:15:03] SY: Again, really great for us. Right? Like I have a question, I don’t need to go anywhere. I just click the little drop down arrow. I see the little board with my answer and then I’m done. It saved me so much time. I’m sure that’s terrible to the person who wrote that article and isn’t able to get money off that ad revenue. So it’s not just something that’s unique to individual developers. Google has been doing this for a while as well.

 

[00:15:24] JP: Yeah. This reminds me of the story we talked about in Australia where the news industry banded together to force Google and Facebook to pay them for these lengths. There’s no recipe-author conglomerate that’s going to be able to exert that kind of pressure.

 

[00:15:39] SY: Very good point. Very, very good point. Yeah. If this was something that a bigger entity did, I’m not sure what the recourse would be for that kind of action.

 

[00:15:49] JP: Yeah. I hope we see recipe apps, maybe try to find a way to monetize and compensate the recipe authors. I think that’s just a general thing that tech has to get better at.

 

[00:16:01] SY: Absolutely. So this bit of news isn’t specifically developer focus, but we thought it was noteworthy nonetheless. The Bank of England and HM Treasury have banded together to create a task force to explore the possibility of creating a central bank digital currency in the UK. Now I find this development very interesting, especially since Bitcoin was first conceived back in 2008 by someone or someone’s calling themselves Satoshi Nakamoto as a deregulated currency. Meaning, there is no governmental centralized issuing authority. Also, if they don’t end up calling it Britcoin, that will be a huge missed opportunity.

 

[00:16:41] JP: Oh my God!

 

[00:16:41] SY: Right? Oh my goodness! It has to be called Britcoin. Now Rishi Sunak, Britain’s Chancellor of the Exchequer, said about this possible central bank digital currency, “Our vision is for a more open, greener, and more technologically advanced financial services sector.” And coming up next, we speak with Tim Swanson, Founder and Director of Research at Post Oak Labs, Head of Market Intelligence at Clearmatics, and author of the research paper, “Bitcoin and other PoW coins are an ESG nightmare,” about whether digital currency is really all that green after this.

 

[MUSIC BREAK]

 

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[00:18:10] SY: Here with us is Tim Swanson, Founder and Director of Research at Post Oak Labs and Head of Market Intelligence at Clearmatics. Thank you so much for joining us.

 

[00:18:19] TS: Thanks for having me.

 

[00:18:20] SY: So tell us about your career background.

 

[00:18:22] TS: Yeah. So when I moved back from China, I was out in Asia for about six years and China was the last stop. My girlfriend at the time and I, we moved to California where she was an engineer and I ended up putting together a couple small little books based on some research from conversations of early entrepreneurs and developers and engineers in this little world. And then towards the end of that year, I ended up becoming an advisor to a few companies. One was called Hyperledger, which was acquired by Digital Assets, and they donated that name Hyperledger to the Linux Foundation. So you may have heard that it’s not related to the work I was doing then. And there’s another company called R3, which is still around, which created the first banking consortia in 2015 around distributed ledgers, and then another company called Clearmatics, who I was an advisor for now and a full-time employee of, which created the first central bank digital currency consortia in late 2015 as well. So been completely by accident around some really smart people and been fortunate to learn quite a bit from them the last six, seven years.

 

[00:19:27] SY: So this week, the Bank of England and HM Treasury announced a joint task force to explore a central bank digital currency in the UK, citing it as a possible greener option. But you recently came out with a report that might say otherwise. Can you talk about your paper titled, “Bitcoin and other PoW coins are an ESG nightmare,” and what pushed you to write it?

 

[00:19:48] TS: Sure. And in fact that that Bank of England announcement directly is involved with what I’m doing here at Clearmatics. We created a consortium, like I said, almost five and a half years ago called USC, which was spun out to be its own entity almost two years ago called “Fnality”. Fnality is one of the companies that applied for and put an application in for having access to what the Bank of England just announced two days ago. And they’re not the only ones. There will not be any exclusivity, whatsoever, and I’m actually not involved with the Fnality itself. But I say that all because very much close to the central bank digital currency, I’ve actually written a series of articles and papers on this topic since May, 2014. That was the first one I wrote. It was a paper on Bitcoins mined in China. I think the title was called “Bitcoins: Made in China”, kind of a pun on that entire concept. Basically every 18 to 24 months, I write kind of a follow-up update to that. And this one I wrote in January received a lot of attention, I think, because I looked at seven different PoW coins, proof-of-work coins, instead of just looking at Bitcoin itself or Ethereum. And if you look at the aggregate amount of footprint that these coins as a whole are consuming, it’s likely that it’s around the size of Poland or Thailand, if you add up all seven of them, and that’s the upper bound. The lower bound is somewhere probably near Kuwait, which is about 60 terawatt hours per year, I recall. The impetus of writing it is every 18 to 24 months, I read an update, but the longer answer is I am deeply wedded into the world of alternative methods of creating digital currencies.

 

[00:21:33] JP: So you touched on this a little bit and we’ve talked about it in the past. But can you talk a little bit more about how exactly is that our data could be an environmental issue?

 

[00:21:42] TS: So in this case with blockchain. So we know in general that most of the large publicly accessible blockchains have validating nodes run by typically anonymous individuals or companies outside of one jurisdiction. How can we see and measure what kind of data is sitting on these chains and what kind of impact may they have on the environment? The shortest answer is it really depends on what type of chain. If you’re using a proof-of-work chain by design, these chains are made and architected to make it expensive to reverse transactions or reverse blocks. And that’s done to make attacks less successful. And so you can’t have both the energy efficient proof-of-work blockchain and something that’s secure. That’s a contradiction. It has to be inefficient on purpose. Otherwise, it’s easy to reverse. In contrast, you have other ways of creating, I guess you could say secure blockchains that are publicly accessible. One method is doing something called staking. Proof of stake is kind of like the generic term for that. We don’t have a whole lot of time to go into the technical nitty-gritty about that. But ultimately, a lot of these ideas that are being experimented on probably don’t need a blockchain for it all. So you could actually just use a regular database. And then the discussions around how much energy or how much hardware is used to process and handle that type of data becomes a bit more traditional, which is easier to handle. We know for instance how much energy Amazon, Microsoft Google, the largest cloud providers in the West, we have a pretty good handling of how much energy is being used by those. The question of, say, proof of work, I think I cited that in the paper is basically if you add up every single data center from the cloud providers, Bitcoin itself alone consumes more energy than all of those combined.

 

[00:23:47] SY: Wow! That’s incredible. Okay. So can you go into a little bit more detail about some of the big issues of all this? How much energy usage is tied to Bitcoin, specifically getting into maybe some of those numbers? And what are the ramifications of that? I’m curious about, if you look a little bit more into the future, what is Bitcoin mining today mean for us years down the line?

 

[00:24:10] TS: To be clear, I actually thought that the reaction to the paper, specifically the big point section was as expected. You had the maximalist and the tribalist who are climate change deniers who will make any excuse to whitewash or greenwash Bitcoin-related activity, mining activity. But you didn’t have a whole lot on the other six coins, seven coins or so, did I mention, and that’s because you have a group of pragmatists, like with the Ethereum world who are like, “Look, yeah, this is horrible. We shouldn’t be consuming the energy footprint of a small country to process 15 transactions, 20 transactions a second. Let’s find a different way of doing it through proof of stake.” So since day one, the Ethereum world has been trying to transition to something called proof of stake. They have had their own battles and hurdles along the way, and it still hasn’t launched. They’re going through these different phases and Phase Zero was launched in December, just a few months ago. So the reason I say that is because the co-founder of Ethereum, Vitalik Buterin, has gone on the record multiple times and multiple venues saying, “Hey, the legacy I’d like to leave on this planet isn’t contributing to global warming. So I’m really keen on finding a way to short circuit and move it to proof of stake as quickly and as safely as possible. So you have people who are not denialists who are very smart, understand how mining works. In fact, Vitalik himself was the co-founder of Bitcoin Magazine and used to write a lot about how Bitcoin mining worked back in 2012 and wasn’t booed off the stage by these tribalists, these maximalists out there. So we’ve had a shift that really the last couple of years, especially as the large institutions are required to have ESG mandates come into the world of investing in these coins. And they’ve been completely blindsided in my view by groups like CoinShares, which is a listed company I believe in the UK now, who have gone out of their way to effectively lie to large institutions, corporates, governments on a regular basis. They do this on social media. They co-founded a new organization to say how Bitcoin is not only a battery, but it’s going to make the world greener. And it’s just intellectually dishonest. In order for Bitcoin to be effective, like in terms of mining, it has to consume resources. And these resources don’t come from the sky. It’s not like manna from heaven or something like that. So in order for it to be secure, in order to generate this hash rate that we know publicly exists, that hash rate has to come from somewhere and that hash rate is being generated through scarce resources that are effectively crowding out other economic activities we could do. So that’s a very long answer to your question of, “What can the world look like 10 years from now?” I can only speculate on what’s that world may look like, but at some point ESG mandates and climate change mandates are going to probably put up a cap on what society is going to say is allowable.

 

[00:27:11] JP: So how much bigger of an issue could this be if governments start dipping their toes into digital currency? I’d imagine they’re going to have to mine this currency as well, and that will also have an environmental impact.

 

[00:27:24] TS: It’ll be marginal because central bank digital currencies, as most people talk about, don’t require any type of proof of work. In fact, if you look at CoinGecko or CoinMarketCap, there’s only a handful of proof-of-work coins that are still like a top 100 or top 200. It’s almost all proof of stake-based networks.

 

[00:27:43] JP: Interesting. Just a little bit of definition, when you say proof of work versus proof of stake, can you just define those terms?

 

[00:27:48] TS: Proof of work is literally as the name suggests, some type of CPU, GPU or ASIC machine is churning and generating hashes. For example, in the Bitcoin world is generating about 5 to 10 billion dollars a year in hardware sales for hardware manufacturers. You have a group of companies, half a dozen that basically create specialized hardware to generate these hashes in a given second, minute, day. There’s ways you can measure how much hash rates are being generated. But with proof of stake, it’s a completely different model. You basically have a set of coins that have been created already, pre-allocated, pre-mined, whatever you want to call it. And those coins effectively live on chain and the participants who own those don’t need expensive hardware, don’t need large scale amounts of hardware. You can run it off of just a laptop.

 

[00:28:44] JP: Oh, that makes sense. Because as a government currency, you wouldn’t want Joe down the street to be able to create it. You just want one entity to be able to create it.

 

[00:28:52] TS: Well, there’s actually more of a nuance than that. Central bank digital currencies are a separate type of set of inventions than proof of stake. Proof of stake would be the underlying method of generating what we call consensus. It’s just one way that you could run a network that creates or stores central bank digital currencies. In fact, you don’t need a blockchain at all to create something like a central bank digital currency or digital account. You can do that all with traditional database technology.

 

[00:29:22] SY: So then in that case, how big of an environmental impact can we expect from governments being involved in a centralized digital currency system? Is that something that we should be very worried about? Or how should we think about that?

 

[00:29:38] TS: Yeah. I mean, if the goal is to hold entities and individuals accountable for the carbon footprint, environmental footprint they do, then yes, we should obviously use a microscope to look at all these types of activities. Even-steven, right? Hold them accountable irrespective of what type of entity they are. So this is one of the problems I think with the Bitcoin world is they’ve done this whataboutism. They’ll say, “Oh, yes. So what? We ended up using this much energy, but so does the US military.” So whataboutism, it’s a deflection, it’s a logical fallacy. And so with central banks, if they get involved, yes, we should scrutinize the amount of energy that they’re using and try to find ways to limit that if we can. But fundamentally, because how central bank networks, again, all central banks around the world, I shouldn’t say all, 70 of them run something called an RTGS, Real-Time Gross Settlement system, which is what the national payment systems of those countries run off of. These are gated. These are permission networks that don’t require something like proof of work. So by default, RTGS systems provide the same type of utility that a typical blockchain system that’s promoted can, but they don’t need, at least in this case, they don’t need something like proof of work. So they absolutely are much more energy efficient per transaction, per user. And that’s something that when we looked at alternatives here in the US for basically banking the unbanked or underbanked, again, there’s a good 20% or so of the population that meets that standard. You don’t need a blockchain to help the marginalized folks in this economy. We simply need ways to enable access to central bank itself. So there’s been a lot of efforts announced or proposed over the last decade. And again, you don’t need a blockchain to do that. You have Fed now and several others, like Fed Accounts is another proposal. In either case, you don’t need an actual blockchain to run those.

 

[00:31:41] JP: Going back to proof-of-work currencies. What can be done about the potential impacts of it? Are we seeing governments or groups that are actively trying to mitigate it?

 

[00:31:51] TS: I have some proposals of what governments couldn’t do. I’ve had several conversations in the last three, four years with we called PUCs, Public Utility Companies, asking me for my own thoughts. Again, this is a side, I don’t want to say even side gigs. This is something that I’m interested in from a hobbyist standpoint. So I’m not out there. I don’t have an organization that’s spearheading this. In fact, the company I work for day to day, this is not something that is on their agenda whatsoever, at least at this stage. So I say all this because yes, you’ve had quite a few different environmental groups in the last six months identify this as a major issue because you basically have, at least in the terms of proof-of-work coins, for every step forward we’re making with say electric vehicles or PV solar panels, we are taking a step backwards with anytime the price increase of a proof-of-work coin occurs because any time you have a price increase, you have an incentive as a minor to deploy more capital in this case, more mining hardware. So again, I’m not here to demonize any specific person. These are economic actors who are following incentives. But we, as a society, also say, “Hey, just because you’re incentivized to do these things doesn’t necessarily mean you should go or you should be allowed to or maybe there should be a tax towards it. So I offer a couple of policy suggestions at the end of the paper, specifically around taxing, not just the miners, but the holders at institutions or its intermediaries. So if you are a holder of coins, maybe you should bear the environmental costs that you are incentivizing through holding. So again, we can talk about what that model would look like. I didn’t go into specific details. I just proposed it.

 

[00:33:34] SY: So is there anything that we can do as normal people, as developers, people who aren’t necessarily in the Bitcoin or the coin world ourselves to help in all this?

 

[00:33:46] TS: I think there’s some pragmatic things we could do, which is we could encourage proof-of-work chain operators and developers to try and migrate to proof of stake. You get roughly the same security of what you would get with proof of work, but without the environmental costs and impact. Ethereum is really leading the way with that. Again, I don’t own any Ether. I’m not like a shill for them. But if they prove that they can do it, then why should we not try to encourage other teams to do it? I don’t think we need to do anything draconian personally to solve this really easily identifiable issue. And if anything, Bitcoin holders and others should be happy about moving to something like proof of stake because it means that that value is staying on chain within that little life cycle, instead of being drained to utility companies and silicon manufacturers, like that 5 to 10 billion dollars of hardware sales a year isn’t going back into the on-chain economies or it’s going out towards a small set of manufacturers in East Asia and living with that world. It’s off-chain. It’s contributing back to the application development. So again, I think that there’s a happy ending for everybody that doesn’t involve any kind of massive no-knock raids and stealing of hardware or anything like that.

 

[00:35:09] JP: Is there anything else you’d like to add that we haven’t covered?

 

[00:35:12] TS: Yeah. On the central bank digital currency front, I think there’s a lot of conflation between what that will operates as versus something called a stable coin world, which is a whole another conversation we can have. But if listeners are really interested in seeing and understanding the utility of these ideas, it’s worth Googling BIS, which is the Bank of International Settlements. They’ve published quite a few papers on this topic. They’re actually probably the world leaders along with the Bank of England, specifically on CBDCs and specifically central bank digital accounts. So again, if listeners are really interested in the utility of this technology, worth looking at ways of exploring different models that actually don’t, again, involve any type of blockchain, maybe you could use one, but digital account actually is very much an enabler for marginalized types of people that do not have access to traditional banking systems.

 

[00:36:07] SY: Well, thank you so much for being here.

 

[00:36:08] TS: Thank you for having me. Appreciate it.

 

[00:36:18] SY: Coming up next, we speak with Isedua Oribhabor, US Policy Analyst at Access Now, about their letter to Spotify on why they should abandon their recent speech recognition patent of a technology to detect emotion, gender, and age after this.

 

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[00:37:46] SY: Here with us Isedua Oribhabor, US Policy Analyst at Access Now. Thanks so much for joining us.

 

[00:37:53] IO: Thank you. It’s good to be here.

 

[00:37:55] SY: So tell us about your career background.

 

[00:37:57] IO: Yeah. So I work at Access Now, which is a digital rights organization, that we focus on the intersection of technology and human rights. So looking at how the technologies we use on a daily basis have an impact on our rights to freedom of expression, to privacy, and a whole host of other related things. So my job at Access Now is focused on the business and human rights angle. So the corporate responsibility and accountability piece of holding tech companies accountable.

 

[00:38:25] JP: So you mentioned you’re a policy analyst, like specifically what kind of work does a policy analyst do?

 

[00:38:31] IO: As a policy analyst, what we do essentially is providing recommendations to companies, to lawmakers, and governments, international organizations like the UN on how to have practices and policies that respect human rights within the tech sector.

 

[00:38:46] SY: So you and others at Access Now sent a letter to Daniel Ek, CEO of Spotify, about concerns over a speech recognition patent of theirs that was recently approved. Can you describe what exactly this patent is for?

 

[00:39:00] IO: Yeah. So we came across this a few months ago and realized that actually the patent had been filed a few years before, but was finally approved early this year. So this patent that Spotify got approved is for a technology that would be able to detect things about Spotify users, such as gender, emotion, accent, age. It also claims that it could be able to detect things within your environment, like the number of people in there, for instance. So we were a bit surprised to see this. I mean, we understand that companies will oftentimes file patents for things that will never use, but with a growing interest in not just facial recognition, but voice and speech recognition technologies that are proliferating throughout the world and it was very important for us to understand why Spotify is trying to do this and to make sure that they don’t implement this kind of technology that is just simply too invasive to have anything to do with music listeners.

 

[00:39:59] JP: So your letter goes into four main reasons why you find the patent for this technology to be problematic. Could you go through those reasons for us?

 

[00:40:06] IO: So as I mentioned, the patent that Spotify now has approved is to detect things like emotion, gender, age, and a whole host of other things. But the main issues that we had with that’s really relates to, one, the emotion manipulation piece. So a technology that presumably can detect your emotion being used in conjunction with the advertising regime that Spotify of course and like many other platforms relies on means that in a way like they have this dangerous position of power in relation to their user. Our concern there is of this kind of technology, like understanding and detecting people’s emotions could be used to not just like to give you music, if you’re feeling sad or happy, that matches that. But there is essentially an incentive for continuing the kind of emotion to show you ads and music that are relevant to that. So it’s just a really dangerous position to have a company that could have that much understanding and influence over your emotion states when you’re just trying to listen to music. The other issues that we raised are also about gender discrimination. So the fact that a technology can try to detect your gender means that inherently it’s been to discriminate against trans and nonbinary people. So even if it is a category that is more expensive than just a binary category, it still ends up creating these sorts of filter bubbles of what is masculine or versus what is feminine and pushing people into those categories. Also, we raised issues of privacy violations. So because the technology would always be on, this means that it’s constantly monitoring environments, processing data, and we’ve already seen data breaches occur at Spotify and other companies as well. So this kind of sense of information being collected and being compromised would have very grave impacts. And finally, of course, there’s an issue of data security. It’s essentially when you have a treasure trove of data just sits in there, of course, it’s going to be a target for third-parties from hackers to governments, authorities, for both legitimate and illegitimate reasons seeking this kind of information. Those are the major concerns we outlined. And for this technology or really any other technology that collect such sensitive information, it’s really, really important that whoever’s doing this is transparent about what they’re doing, how much they’re collecting, for what purpose because this kind of information is way too sensitive and way too personal to have it just sitting in the hands of companies without the accountability.

 

[00:42:40] SY: Yeah. All that makes a lot of sense. And it is, I don’t know, just kind of strange to have such sensitive information being taken in by a music company. It just feels funny to me, but it does make me wonder. Should anyone be able to have this technology? Because all the issues that you mentioned would be issues I imagine at any company. So is there a right use for this type of data or are we trying to just generally keep this type of data collection away from all companies?

 

[00:43:11] IO: That’s a really great question. And I think something that we, as a society, would need to continue to struggle with. Our specific ask of Spotify now actually is not just that they don’t use this, but then they also don’t license it or sell it or monetize it in any way. Because we can talk later about it. We actually spoke with Spotify and their replied to us was a bit illuminating, but let’s say like even if Spotify is being good and doing everything correctly and not using this technology, if it’s sold to someone else, I can’t think of any company that I would personally trust with wanting to detect my emotion or gender for whatever valid reasons. So it’s not just who is using this technology, but why this information needs to be collected in the first place? Maybe not so much for this specific speech recognition, but when we go deeper into biometric data collection, things like facial recognition for example, particularly when it enables the capability of mass surveillance, there’s just no valid reason whatsoever that any company or even government needs to have technology that would allow it to surveil people in a mass level. So I don’t think the speech recognition technology would go in that way, but the kind of information it still collects is really has no place in any regime, whether it’s a company or a government that is supposed to be human rights respecting.

 

[00:44:32] SY: So you mentioned that Spotify did respond to you. What did they say?

 

[00:44:35] IO: Yeah. So they responded to us and we’re very pleased to get a response to them, I’ll be honest, that a lot of times when we reach out to other companies, they’re not quite as open as Spotify has been. So we do appreciate the fact that Spotify was willing to get into this conversation with us. Essentially, what they said is that they don’t currently implement that technology in any of their products and that they have no plans to do so, which is good, but we really want a clear commitment to that. Just because they have no plans to do so, it doesn’t mean that can’t change. So we want something with a clear commitment, not only that they won’t implement it, but that they won’t license it or sell it or monetize it in any way so that no one else will be able to use this kind of technology. And I think a clear and more specific commitment from them is important because it gives us as the public, as civil society, a tool to hold them accountable if that changes in the future.

 

[00:45:26] SY: If they know they’re not going to use it, did they say why they have it?

 

[00:45:30] IO: Yeah. So they mentioned that oftentimes, and this is true that oftentimes companies, their research and development teams, in search of innovation, will create a bunch of technologies that they will never actually use. So it’s the drive for innovation part, which again, I understand, but innovation can’t come at the expense of human rights. So as far as I understand, they have this technology just because they are innovating and creating, thinking of new ways to improve experience for their users. But again, I’ll just say that that cannot come at the expense of human rights.

 

[00:46:05] JP: So many of our listeners are developers and a lot of them work at companies like Spotify that are doing research projects like this. Would you have any advice for developers working in companies that might be experimenting with biometric data and machine learning? I’m curious, like what your advice would be for developers at the ground level? Is there anything I could do as a day-to-day developer to try to influence my company or give them guidance?

 

[00:46:33] IO: Yeah. So I’m really glad that we’re talking about developers because in my work, oftentimes the people we interact with are like the policy DC people, which is good. But at the end of the day, I think the tool builders, the developers who are actually creating this technology, need to be as much human rights minded as everybody else within the company. So for developers, I’d really encourage you to talk to your companies about implementing privacy by design. So rather than creating something to sort of “move fast, break things” model that seems to be more prevalent in the tech sector, but rather than creating something and then thinking afterwards, “How could this affect people down the line?” Think about that right from the beginning, because oftentimes, especially for us here in the US, we sit in Silicon Valley or wherever we are, and don’t think about the ways that things we create for, even if it’s an innocuous or simple purpose could end up being used in ways I would never imagine. Having human rights at the forefront, privacy by design at the very beginning of creating a tool is essential. And one way to understand those impacts is by plugging into impacted communities and civil society. We know that you can do your job alone and we can’t do our job as civil society alone without talking with the people who build these tools. So finding ways, whether it’s through multi-stakeholder forums, I’ll plug very quickly our conference, RightsCon, which is a convening of people from all across the tech sector, whether it’s governments, private sector, public sector that come together and talk about these issues. So I think that is a place where we need more voices of the people who are actually building these tools of developers to get to know the wider community of who could be impacted by the things that you’re building. And I think that would really inform the way that a product is created from start to finish.

 

[00:48:19] SY: Can you talk about some of the other projects and efforts that Access Now is working on?

 

[00:48:23] IO: A lot of stuff. So besides the biometric collection thing, one thing that’s kind of related to that as our WhyID campaign. Sometimes biometric data collection is being used as a way to provide social services. So our WhyID campaign kind of gets at the heart of before implementing any kind of biometric data collection, why is this necessary? For instance, the refugees in Gulf States have to have their Iris scan in order to receive food. So that’s a really huge power imbalance where you can’t really opt out as someone who’s in a dire situation. So the WhyID campaign is another big thing I’ve been working on. One of the biggest things that we’ve done for years at Access Now is our KeepItOn campaign, which focuses on internet shutdowns. So I’m sure that you’ve probably heard about some of the internet shutdowns that have been going on around the world, in Myanmar, and frequently in India. And our KeepItOn campaign has been doing a really good job for years of documenting and collecting information about shutdowns, understanding why and where they happen and encouraging the telecom companies, the platforms, everyone really involves the push back against internet shutdowns, wherever they happen. We’re also doing some work around surveillance and lots of work around data protection and privacy, a bunch of things around free expression. Basically we’re very busy.

 

[00:49:47] JP: If our listeners want to help out, what’s the best way that they could help out and take action on these campaigns that Access Now is working on?

 

[00:49:54] IO: Yeah. So I’d encourage you to go to our website, accessnow.org, and you’ll see a list of all the campaigns that we have. I didn’t mention some of the big ones my colleagues reminded me, but I would also encourage you to get involved in RightsCon. Internet again aside, I really think RightsCon is a good place to have the voices of developers there. So RightsCon will be happening online, again, this year, June 7th to the 11th, usually some person in somewhere also like Costa Rica, Tunisia, but last year and this year, it’s going to be online. We have keynote speakers from across the public and private sector that speak to all these issues. And I think just being in that community is really important for our listeners today to understand how technology makes an impact on people’s daily lives.

 

[00:50:42] SY: Well, thank you so much for joining us.

 

[00:50:43] IO: Thank you so much for having me. This has been such a pleasure.

 

[00:50:56] SY: Thank you for listening to DevNews. This show is produced and mixed by Levi Sharpe. Editorial oversight is provided by Peter Frank, Ben Halpern, and Jess Lee. Our theme music is by Dan Powell. If you have any questions or comments, dial into our Google Voice at +1 (929) 500-1513 or email us at [email protected] Please rate and subscribe to this show on Apple Podcasts.

 

[00:51:28] SY: This waka FLoC, what?

 

[00:51:31] JP: Oh my God!

 

[00:51:31] LS: I'm waiting with bated breath to see what you would do with this.

 

[00:51:34] SY: This waka flocka block… I’m not saying that. I'm not!

 

[00:51:39] JP: Wow!

 

[00:51:40] LS: It’s waka flocka blocka.

 

[00:51:42] SY: Levi, this might be your worst one.

 

[00:51:45] JP: Really outdone yourself.

 

[00:51:47] SY: You’ve truly outdone yourself.

 

[00:51:47] JP: We’re blocking this pun.

 

[00:51:50] SY: Oh my God!

 

[00:51:51] JP: All I can picture is like, “Was it Fozzie Bear of the Muppet?” “Waka! Waka! Waka!” That’s what it sounds like is, “Waka! Waka! Waka!”

 

[00:51:57] SY: This is waka flocka blocka is scheduled to go into effect in July’s WordPress 5.8 update. Oh my God! I can’t believe I just said that.

 

[00:52:06] JP: Okay.

 

[00:52:07] SY: This is the worst. This is the worst. I'm so glad I can read this much story, Levi.

 

[00:52:15] LS: It’s the little things.