Tech

Op-ed: Offshoring crypto hurts the financial system and America’s geopolitical standing, says Coinbase CEO Brian Armstrong

Published

3 weeks ago

March 1, 2023

ironity

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Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York City.

Steven Ferdman | Getty Images

The traditional financial system has served us well for centuries, but it’s beginning to show its age. Like all systems before it, the day has come when technological advancement provides the opportunity to make it faster, more efficient and easier. From cable to streaming, cell phones to smartphones, and mail to email, advancements in technology have updated almost every industry we interact with in an ever more connected online world. Except for one.

While you might be able to bank online, the way in which the traditional financial system operates behind the scenes has largely gone unchanged for at least 40 years. And the American people are starting to feel it. Nearly seven in 10 Americans believe that the financial system needs major changes or a complete overhaul, according to the most recent research from Morning Consult. That’s where crypto and the technology that underpins it, the blockchain, come in. Crypto is a faster, more private, efficient, cheaper, and user-controlled financial system. It’s not a replacement of the traditional financial system, it’s an update. An update that has the potential to increase global economic freedom and empower millions of previously unbanked people around the world.

While the consumer benefits that crypto could bring to the financial system are myriad, it’s also important to recognize the geopolitical benefits. The U.S. has long been the leader in global economic and political affairs, but its dominance is being challenged by other global superpowers. China, for example, has made significant progress in digital currencies and has already launched its own digital yuan. Additionally, the U.K., Japan, and EU have all made significant progress, with the EU most recently introducing MiCA which is intended to close gaps in existing EU financial services legislation by establishing a harmonized set of rules for crypto-assets and related activities and services.

By embracing crypto and other forms of digital finance, the U.S. can not only update its financial system, but also solidify its status as a geopolitical powerhouse. The dollar has enjoyed being the world’s global reserve currency for decades, but it has never been under more pressure. Imagine a world in which the U.S. issues its own USD stablecoin on the blockchain. Not only would this provide access to the dollar to millions of the previously unbanked and underbanked people, but it would also be the de facto digital currency for remittances and international currency transfers ensuring that the dollar remains the global reserve currency both on and off chain. We’ve recently seen this in effect in Ukraine where the United Nations Refugee Agency (UNHCR) has used USDC to get aid into the hands of those impacted by the regional conflict.

America is at a once-in-a-generation inflection point: we have the opportunity to be the leader in the digital currency space and reap the benefits this leadership enshrines, or we can concede our leadership role to geopolitical adversaries who are eager to take the mantle as the 21st century’s global heavyweight. As other countries implement regulations and guidelines for cryptocurrency, the U.S. risks falling behind both technologically and politically.

I chose to build Coinbase in the U.S. because I believe that America should be at the forefront as the architecture of the internet evolves into the next generation of the financial system. Coinbase has been advocating for clear regulatory frameworks for crypto for more than a decade. Yet while we see other jurisdictions progress, the U.S. seems more focused on turf battles between regulators. No other country in the world has spent as much time and energy trying to convince its citizens that crypto assets are securities. The U.S. is missing the forest for the trees.

To see the impact of sending innovation offshore, we need only turn to mid-2020. The U.S. semiconductor industry was once at the forefront of innovation, with companies like Intel and IBM leading the way in developing new technologies. However, in the 1980s and 1990s, a combination of factors led to a shift in the industry, with semiconductor manufacturing increasingly moving offshore. Today, we’re suffering the consequences — chip shortages have impacted our entire economy — from the automotive industry, to healthcare to the supply chain. It’s critical that we learn these lessons and keep innovation onshore.

The U.S. government needs to take a more proactive approach to cryptocurrency and provide a clear regulatory framework for the industry, one with forward-looking policies that recognize the many unique and innovative aspects of blockchain technologies. This will create a more stable and secure environment for cryptocurrency to thrive and will help to attract more investment and talent to the US.

Companies like Coinbase are leading the way in fostering innovation and creating a secure environment for cryptocurrency to thrive, but we can’t do it alone. It’s time for the U.S. to take action and work with its U.S.-based crypto companies, not against them, to build a comprehensive regulatory framework that protects users, empowers innovators, and gives the American people a financial system built for the 21st century.

Brian Armstrong is the CEO and Cofounder of Coinbase.

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Tech

TikTok CEO appeals to U.S. users ahead of House testimony

Published

2 hours ago

March 22, 2023

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N.H. Gov. Chris Sununu says TikTok should not be banned

TikTok CEO Shou Zi Chew appealed directly to the app’s users ahead of what’s expected to be a heated grilling in the U.S. House Energy and Commerce Committee this week, in a video posted to the platform Tuesday.

Filming from Washington, D.C., Chew emphasized the large scale of TikTok users, small and medium-sized businesses and its own employees based in the U.S. that rely on the company. The message may preview his appeal to lawmakers Thursday, where he will be faced with questions about the ability of its Chinese parent company ByteDance, and the Chinese government, to access U.S. user information collected by the app.

TikTok says it has worked to create a risk mitigation plan to ensure that U.S. data doesn’t get into the hands of a foreign adversary through its app. The company has said U.S. user data is already stored outside of China.

But many lawmakers and intelligence officials seem to remain unconvinced that the information can be safe while TikTok is owned by a Chinese company. TikTok said last week that the Committee on Foreign Investment in the U.S., which is reviewing risks related to the app, is pushing for ByteDance to sell its stake or face a ban.

Chew disclosed in the video that TikTok has more than 150 million monthly active users, or MAUs, in the U.S., representing massive growth from August 2020, when it said for the first time that it has about 100 million MAUs in the country. That number includes 5 million businesses that use the app to reach their customers, with most of those being small or medium-sized businesses. He also said TikTok has 7,000 U.S.-based employees.

“This comes at a pivotal moment for us,” Chew said, referencing lawmakers’ threats of a TikTok ban. “This could take TikTok away from all 150 million of you.”

Chew then appealed to users directly to share in the comments what they want their representatives to know about why they love TikTok.

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WATCH: TikTok and ByteDance spied on this Forbes reporter

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Tech

Bill Gates says OpenAI’s GPT is the most important advance in technology since 1980

Published

5 hours ago

March 22, 2023

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Microsoft founder Bill Gates speaks during the Global Fund Seventh Replenishment Conference in New York on September 21, 2022.

Mandel Ngan | AFP | Getty Images

Microsoft co-founder Bill Gates says that OpenAI’s GPT AI model is the most revolutionary advance in technology since he first saw a modern graphical desktop environment (GUI) in 1980.

Before that, people used their computers through a command line. Gates took the “GUI” technology and based Windows around it, creating a modern-day software juggernaut.

Now, Gates sees parallels with OpenAI’s GPT models, which can write text that resembles human output and generate nearly usable computer code.

He wrote in a blog post on Tuesday that he challenged the OpenAI team last year to develop an artificial intelligence model that could pass the Advanced Placement Biology exam. GPT-4, released to the public last week, scored the maximum score, according to OpenAI.

“The whole experience was stunning,” Gates wrote. “I knew I had just seen the most important advance in technology since the graphical user interface.”

“The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone. It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it. Businesses will distinguish themselves by how well they use it,” he continued.

Gates is the latest big name technologist to take a position on recent advancements in AI as a major shift in the technology industry. He joins former Google CEO Eric Schmidt and former Amazon CEO Jeff Bezos who have predicted that data-based machine learning could change entire industries.

Current CEOs also see major business opportunities in AI applications and tools. Nvidia CEO Jensen Huang said on Tuesday that the field is experiencing an “iPhone moment,” referring to the time when a new technology becomes widely adopted and entrepreneurs see opportunities for new businesses and products.

Gates and Microsoft have close ties to OpenAI, which developed the GPT model. Microsoft invested $10 billion in the startup and sells some of its AI software through Azure cloud services.

Gates suggests that people talking about AI should “balance fears” of biased, wrong or unfriendly tools with its potential to improve lives. He also believes governments and philanthropies should back AI tools to improve education and health in the developing world, because companies won’t necessarily choose to make those investments themselves.

The entire post from Gates is worth a read over at his blog.

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Tech

Google CEO tells employees that 80,000 of them helped test Bard AI, warns ‘things will go wrong’

Published

9 hours ago

March 21, 2023

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Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum (WEF) annual meeting in Davos, on January 22, 2020.

Fabrice COFFRINI | AFP | Getty Images

Google and Alphabet CEO Sundar Pichai told employees that the success of its newly launched Bard A.I. program now hinges on public testing.

“As more people start to use Bard and test its capabilities, they’ll surprise us. Things will go wrong,” Pichai wrote in an internal email to employees Tuesday viewed by CNBC. “But the user feedback is critical to improving the product and the underlying technology.”

The message to employees comes as Google launched Bard as “an experiment” Tuesday morning, after months of anticipation. The product, which is built on Google’s LaMDA, or Language Model for Dialogue Applications, can offer chatty responses to complicated or open-ended questions, such as “give me ideas on how to introduce my daughter to fly fishing.”

Alphabet shares were up almost 4% in mid-day trading following the announcement.

In many disclaimers in the product, the company warns that Bard may make mistakes or “give inaccurate or inappropriate responses.”

The latest internal messaging comes as the company tries to keep apace with the quickly evolving advancements in generative AI technology over the last several months — especially Microsoft-backed OpenAI and its ChatGPT technology.

Employees and investors criticized Google after Bard’s initial announcement in January, which appeared rushed to compete with Microsoft’s just-announced Bing integration of ChatGPT. In a recent all-hands meeting, employees’ top-rated questions included confusion around the purpose of Bard. At that meeting, executives defended Bard as an experiment and tried to make distinctions between the chatbot and its core search product.

Pichai’s Tuesday email also said 80,000 Google employees contributed to testing Bard, responding to Pichai’s all-hands-on-deck call to action last month, which included a plea for workers to re-write the chatbot’s bad answers.

Pichai’s Tuesday note also said the company is trying to test responsibly and invited 10,000 trusted testers “from a variety of backgrounds and perspectives.”

Pichai also said employees “should be proud of this work and the years of tech breakthroughs that led us here, including our 2017 Transformer research and foundational models such as PalM and BERT.” He added: “Even after all this progress, we’re still in the early stages of a long Al journey.”

“For now, I’m excited to see how Bard sparks more creativity and curiosity in the people who use it,” he said, adding he looks forward to sharing “the breadth of our progress in AI” at Google’s annual developer conference in May.

Here’s the full memo:

Hi, Googlers

Last week was an important week in Al with our announcements around Cloud, Developer, and Workspace. There’s even more to come this week as we begin to expand access to Bard, which we first announced in February.

Starting today, people in the US and the UK can sign up at bard google.com. This is just a first step, and we’ll continue to roll it out to more countries and languages over time.

I’m grateful to the Bard team who has probably spent more time with Bard than anything or anyone else over the past few weeks. Also hugely appreciative of the 80,000 Googlers who have helped test it in the company-wide dogfood. We should be proud of this work and the years of tech breakthroughs that led us here, including our 2017 Transformer research and foundational models such as PalM and BERT.

Even after all this progress, we’re still in the early stages of a long Al journey. As more people start to use Bard and test its capabilities, they’ll surprise us. Things will go wrong. But the user feedback is critical to improving the product and the underlying technology.

We’ve taken a responsible approach to development, including inviting 10,000 trusted testers from a variety of backgrounds and perspectives, and we’ll continue to welcome all the feedback that’s about to come our way. We will learn from it and keep iterating and improving.

For now, I’m excited to see how Bard sparks more creativity and curiosity in the people who use it. And I look forward to sharing the full breadth of our progress in Al to help people, businesses and communities as we approach I/O in May.

—Sundar

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