Smart contracts are touted as having the potential

 to do all kinds amazing things. But, to fulfill their promise, they need a way to communicate with the outside world. That is not so easily done. Due of the nature of a blockchain (all nodes need to agree on any change in state of the database), smart contracts cannot simply fetch data on their own. So, instead, they rely on 'oracles'. A key part of the smart contract ecosystem, oracles allow smart contracts to access information, like a commodity, currency, derivative pricing and more, from websites, and then use that data to implement the terms of a smart contract. But oracles come with their own set of challenges.

For example, an oracle needs to be able to provide a tamper-proof source of information. So, if your smart contract offers insurance against flight cancellations, you want to make sure that the data you are getting on flights is accurate, and has not been altered at any point after being scraped from the website. Confidential queries are another issue. Say, a smart contract needs information on a personal bank statement or a medical record. A query from the oracle to the website would need to contain login, password or other private information. And you don't want anyone seeing that.

Sealed in a box

To that end, researchers at Cornell's Initiative for Cryptocurrencies and Contracts (IC3) have launched an oracle service that allows ethereum smart contracts to obtain trustworthy information and to securely send confidential queries to websites. Unlike other oracles, Town Crier, as the service is called, gets its added security from Intel's Software Guard eXtensions (SGX). IC3 has already implemented SGX on Teechan, a proposed off-chain payment solution for bitcoin, though not without some measure of debate. But Town Crier is officially IC3's first published and first deployed SGX-based tool.

If you are wondering how SGX works, it essentially lets you run code inside an enclave, or a type of black box environment, which provides extra protection against tampering. Not even a computer's own operating system can see the data inside the enclave. Another feature SGX offers are 'remote attestation'. That means those using the service will be able to validate Town Crier code is, in fact, running in a secure SGX environment. Ari Juels, a professor at Cornell Tech working on the project,

told CoinDesk:

"Assuming that you trust SGX, data delivered by Town Crier from a website is guaranteed to be free from tampering. This authenticity property means that to trust Town Crier's data, you only need to trust Intel's implementation of SGX and the target website."

While Town Crier runs its core code on a server with an SGX chip, the solution also has a front end that consists of a smart contract running on the ethereum blockchain. According to Juels, Town Crier will also be instrumental for permissioned blockchains, in which fewer, trusted participants exchange data.

He said:

"Even if banks trust one another to source data correctly, they are not going to trust one another to handle data on business plans or trades, so confidentiality features of a system like this are also very important in a permissioned setting."

Other solutions

Still, IC3 is not alone in seeking to provide assistance on oracles. Other oracles that have been proposed in the past include Augur and Gnosis, which are both prediction markets that rely on the 'wisdom of the crowd'. Another service is Oraclize, which relies on a TLSNotary – a service that allows an auditor to verify if a specific web page was accurately retrieved. Still, Town Crier has framed as unique in that it relies on a specific type of hardware for its security. Right now, although fully functional, Town Crier is still officially in alpha, nd supports only query types for flight data, stock tickers, UPS tracking and weather data. The project has also partnered with SmartContracts.com, so anyone wanting to spin up a Town Crier oracle and experiment with coin price queries, and easily do so.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Blockchain technology could help poor people around the world

  

Big Wall Street companies are using a complicated technology called “blockchain”

to further increase the already lightning-fast speed of international finance. But it’s not just the upper crust of high finance that can benefit from this new technology. Most simply, a blockchain is an inexpensive and transparent way to record transactions. People who don’t know each other — and therefore may not trust each other — can securely exchange money without fear of fraud or theft. Major aid agencies, nonprofits, and startup companies are working to extend blockchain systems across the developing world to help poor people around the globe get easier access to banks for loans or to protect their savings.

Listening to scholars of business and technology focusing on the impact of blockchain and other modern technologies such as cloud computing, big data and the Internet of Things on poor people, there are four main ways blockchain systems are already beginning to connect some of the world’s poorest people with the global economy.

How does a blockchain work?

A blockchain is a fancy word for a transaction-recording computer database that’s stored in lots of different places at once. The best-known example of blockchain technology is the electronic cryptocurrency called bitcoin, but the concept can be applied in lots of different ways. One way to think about a blockchain is a public bulletin board to which anyone can post a transaction record. Those posts have to be digitally signed in a particular way, and once posted, a record can never be changed or deleted. The data are stored on many different computers around the internet and even around the world.

Together, these features — openness to writing and inspection, authentication through computerized cryptography and redundant storage — provide a mechanism for the secure exchange of funds. They can even involve what are called “smart contracts” — transactions that happen only if certain conditions are met — such as a life insurance policy that sends money to the beneficiary only if a specific doctor submits a digitally signed death certificate to the blockchain. Right now, these sorts of services are available — even in the developed world — only because nations have strong regulations protecting the money people deposit in banks and clear laws about obeying the terms of formal contracts.

In the developing world, these rules often don’t exist at all — so the services that depend on them don’t either or are so expensive that most people can’t use them. For instance, to open a checking account in some parts of Africa, banks require enormous minimum deposits, sometimes more money than an average person earns in a year. A blockchain system, though, inherently enforces rules about authentication and transaction security. That makes it safe and affordable for a person to store any amount of money securely and confidently. While that’s still in the future, blockchain-based systems are already helping people in the developing world in very real ways.

Sending money internationally

In 2016, emigrants working abroad sent an estimated $442 billion to their families in their home countries. This global flow of cash is a significant factor in the financial well-being of families and societies in developing nations. But the process of sending money can be extremely expensive. Using MoneyGram, for example, a worker in the U.S. with $50 to send to Ghana might have to pay $10 in fees, meaning the family would receive only $40. In 2015, transaction costs and commission rates averaged 10.96 percent for remittances sent from banks and 6.36 percent for sending money through money transfer operators. Companies justify their costs by saying they reflect the price of providing reliable and convenient services.

By contrast, Hong Kong’s blockchain-enabled Bitspark has transaction costs so low it charges a flat rate of about $2 for remittances of less than $150 and 1 percent for larger amounts. Using the secure digital connections of a blockchain system lets the company bypass existing banking networks and traditional remittance systems. Similar services helping people send money to the Philippines, Ghana, Zimbabwe, Uganda, Sierra Leone and Rwanda also charge a fraction of the current banking rates.

Insurance

Most people in the developing world lack health and life insurance, primarily because it’s so expensive compared to income. Some of that is because of high administrative costs: For every dollar of insurance premium collected, administrative costs amounted to $0.28 in Brazil, $0.54 in Costa Rica, $0.47 in Mexico and $1.80 in the Philippines. And many people who live on less than a dollar a day have neither the ability to afford any insurance nor any company offering them services.

In India, for example, only 15 percent of the population has health insurance. Even those people pay higher relative premiums than in developed countries. As a result, people in South Asia pay a much greater share of their health care costs out of their own pockets than do people in high-income industrialized countries. Because blockchain systems are online and involve verification of transactions, they can deter (and expose) fraud, dramatically cutting costs for insurers. Consuelo is a blockchain-based microinsurance service backed by Mexican mobile payments company Saldo.mx. Customers can pay small amounts for health and life insurance, with claims verified electronically and paid quickly.

Helping small businesses

Blockchain systems also can help very small businesses, which are often short of cash and also find it expensive — if not impossible — to borrow money. For instance, after delivering medicine to hospitals, small drug retailers in China often wait up to 90 days to get paid. But to stay afloat, these companies need cash. They rely on intermediaries that pay immediately but don’t pay in full. A $100 invoice to a hospital might be worth $90 right away — and the intermediary could collect the $100 when it was finally paid.

Banks aren’t willing to lend money in places where fraudulent invoices are common, or where manufacturers and their customers might have inconsistent and error-ridden records. A blockchain system reduces those concerns because these records must be authenticated before being added to the books and because they can’t be changed. Those Chinese pharmaceutical companies are getting help from Yijan, a blockchain that is a joint effort of IBM and Chinese supply management company Hejia. Electronics, auto manufacturing and clothing companies facing similar difficulties are the test markets for Chained Finance, a blockchain platform backed by financial services company Dianrong and FnConn, the Chinese subsidiary of Foxconn.

Humanitarian aid

Blockchain technology also can improve humanitarian assistance. Fraud, corruption, discrimination and mismanagement block some money intended to reduce poverty and improve education and health care from actually helping people. In early 2017 the U.N. World Food Program launched the first stage of what it calls “Building Block” — giving food and cash assistance to needy families in Pakistan’s Sindh province. An internet-connected smartphone authenticated and recorded payments from the U.N. agency to food vendors, ensuring the recipients got help, the merchants got paid and the agency didn’t lose track of its money.

The agency expects using a blockchain system will reduce its overhead costs from 3.5 percent to less than 1 percent. And it can speed aid to remote or disaster-struck areas, where ATMs may not exist or banks are not functioning normally. In urgent situations, blockchain currency can even take the place of scarce local cash, allowing aid organizations, residents and merchants to exchange money electronically. Blockchains can even help individuals contribute to aid efforts overseas. Usizo is a South Africa-based blockchain platform that lets anyone help pay electricity bills for community schools. Donors can track how much electricity a school is using, calculate how much power their donation will buy and transfer the credit directly using bitcoin.

Future potential

In the future, blockchain-based projects can help people and governments in other ways, too. As many as 1.5 billion people — 20 percent of the world’s population — don’t have any documents that can verify their identity. That limits their ability to use banks but also can bar their way when trying to access basic human rights like voting, getting health care, going to school and traveling.

Several companies are launching blockchain-powered digital identity programs that can help create and validate individuals’ identities. Using only an internet-connected smartphone, a person is photographed and recorded on video making particular facial expressions and speaking, reading an on-screen text. The data are recorded on a blockchain and can be accessed later by anyone who needs to check that person’s identity. Without email, phones, passports or even birth certificates, a blockchain could be the only way many poor people have to prove who they are. That could really make their lives better and expand their opportunities.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

How Blockchain Could Help
Emerging Markets Leap Ahead

  

Much has been made of the potential for blockchain technologies

to open up new vistas for business and society. But is there a way for this revolutionary technology to empower the rich and poor alike? We argue that, like previous revolutionary ideas, blockchain has the potential to help developing nations leapfrog more developed economies.

Leapfrogging — using the lack of existing infrastructure as an opportunity to adopt the most advanced methods — has been a highly effective strategy for developing nations over the last few decades. The most visible example of leapfrogging today is in nations like Kenya and South Africa, which have rolled out near-universal telephone access using 3G networks instead of laying down copper cables, and provided internet access by smartphone rather than with desktop PCs. But it’s not just physical infrastructure that can be leapfrogged.

One of the 20th century’s most celebrated examples of leapfrogging happened in Japan, when the country recovered from the ravages of World War II by embracing sophisticated new manufacturing techniques. Quality control revolutionized Japanese manufacturing in the 1960s and 1970s, even though the concept could not find a foothold in American manufacturing (although it was originally developed by an American, W. Edwards Deming). Quality control became a cornerstone of industry in Japan, reshaping the country’s national brand around companies known for manufacturing excellence, such as Toyota, Canon, and Nikon. European and American companies had to play catch-up for decades.

How Blockchain Works

Here are five basic principles underlying the technology.

1. Distributed Database

Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

2. Peer-to-Peer Transmission

Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.

3. Transparency with Pseudonymity

Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain, has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.

4. Irreversibility of Records

Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all others on the network.

5. Computational Logic

The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.

————————-

One of today’s most celebrated examples of leapfrogging is the M-Pesa mobile payment system in Kenya and Tanzania, which lets people bank in their national currency using only their phones, leapfrogging traditional banking practices and creating a mobile banking revolution. This, in turn, boosted development by allowing relatively poor farmers to reliably send and receive payments at affordable rates, fostering economic growth by lowering transaction costs. Research funded by the Bill & Melinda Gates Foundation has found that mobile money services have lifted 194,000 Kenyans out of poverty, with a particularly large impact in female-headed households.

Simply copying the banking systems of the West, which have been built up over centuries, would not have been as easy or as effective for the people of Kenya and Tanzania. An added benefit is that mobile money services such as M-Pesa are more advanced and sophisticated than those found in many developed economies. It simply made more sense to leapfrog the financial infrastructure of the developed world, rather than support outdated legacy systems.

Where are the opportunities for developing economies to leapfrog now?

India’s Aadhaar biometric ID card system is a great example. It secures transactions by “anchoring” people’s identities, thus facilitating trade. The system assigns a unique 12-digit number to all Indian residents, which is stored in a central database along with biometrics such as fingerprints and iris scans. If someone wants to perform a transaction, such as opening a bank account, they present the card and have their fingerprint or iris scanned. This helps to prove their identity, cutting down on fraud and creating market efficiencies. The system currently serves a billion people. This is by far the largest and most comprehensive adoption of biometrics technology by any government in the world; transactional security is a priority in India. Aadhaar can be used to sign up for new mobile phone service, a process that still requires paper ID in many countries and is frequently subject to fraud.

Transactional security extends beyond biometrics, which only secures the last link in a financial transaction; blockchain could secure the entire transactional process. For developing economies, this security is vital for ordinary people who want to trade. Even better, blockchains can spur local high-tech innovation. The natural decentralization of blockchain means that distance to infrastructure like data centers doesn’t matter. Developing nations can build their own technology hubs, and any code created there would be as secure as services created anywhere else in the world. Everywhere is the same to the blockchain, which could support home-grown technology industries in many developing countries.

Blockchains can also address the most pressing needs of developing-world governments: the modernization and digitization of government functions. The current world leader in blockchain adoption is Dubai, and there is much in Dubai’s approach that could be adopted by developing world nations. The Dubai Blockchain Strategy (disclosure: Vinay is the designer) envisions moving all government documents — more than 100 million documents per year — onto a blockchain by 2020, creating a new platform for innovation and huge cost savings.

The approach Dubai is taking to blockchain adoption, with the central government providing services on the blockchain as a way to spur innovation, could be an example for developing countries looking to kick their economic growth into a higher gear by establishing standards of integrity in fundamental systems of trade — particularly where exports require strong evidence about the origins of goods, like coffee or timber. The Internet of Agreements is our technology vision for trade facilitation, building on core concepts in the blockchain space. We believe that any agreement or transaction can be supported by technology, and our vision is simple: global trade, local regulation, and computers handle the red tape.

Global trade, with local regulation facilitated by technology, works because technology makes the transaction costs manageable. We don’t necessarily need huge unifying platform agreements like the Trans-Pacific Partnership or even the European Economic Area to reduce the paperwork associated with trade and borders — if we have the right technologies. Blockchains default to being open data, which would allow governments and companies to rapidly learn from, test, and evolve new, more efficient best practices for conducting and facilitating trade. In such a future, the transaction costs of the economic activity are drastically reduced in much the same way that the internet reduced the transaction costs of publishing and communication, resulting in the explosion of ideas we associate with it today. The usefulness of blockchain has similar promise. Just getting the costs of regulation and compliance down would open world markets and create wealth, but that doesn’t have to mean changing local regulations.

Blockchain has already drawn the attention of the economist Hernando de Soto, who has worked for decades on improving access to the formal economy for the world’s poor. He has commented that the reason poor people don’t have more access to the formal economy is twofold: (1) the record-keeping systems in their developing world countries are unreliable and (2) they won’t give up information about themselves and their transactions because they don’t trust the people they’d be giving it to (i.e., their own governments). “They don’t want to be vulnerable to something that can be used against them,” says de Soto. “And that’s what’s interesting about the tamper-proof blockchain — if you can get the right message about it out there, [people will see] that it’s worthwhile recording you.”

Because it was explicitly designed to function in an environment where participants cannot necessarily trust each other, blockchain technology is extremely secure. Records held on a blockchain database are immune to being tampered with by third parties, and can thus be authoritative. Smart contracts can provide automatic and predictable execution, again removing the ability for third parties to subvert agreed-upon processes. The benefits for a developing economy are clear: There’s less potential for fraud and corruption, trade becomes more efficient and less costly, government becomes more effective, and local technology hubs can form to build out the infrastructure and export the knowledge gained.

If M-Pesa and similar services could lift tens of thousands of people out of poverty, imagine what a full-scale transformation built on blockchain might do. It could create a hyper efficient government with provably trustworthy infrastructure; new markets and opportunities for citizens to access the formal economy on equal terms; efficiencies of operations that lower prices and improve the quality of goods for all consumers; and a kickstart to high-tech innovation around the world. All the goods flowing in and out of developing world countries could be tagged. For example, safe medication, protected from fraud, could flow in, while properly harvested wood and safely manufactured goods flow out. Educational records, business histories, health care information and edit ratings could all be made usable the world over, helping those who want to trade or travel to prove their credentials. Anybody who has ever paid too much for a college transcript or tried to clear a shadow on their credit score can see how systems like this would be helpful in our daily lives.

Nations that already have somewhat efficient systems might lack the incentive to adopt blockchain technologies at this time, but the rest of the world may well see an opportunity to innovate on internet time. If they do, the many ways they might leapfrog developed nations are limited only by the imagination of billions of people whose first real access to governance and trade infrastructure will look entirely 21st-century. Those are big dreams, and we should not be surprised if some of the world’s next leading megabrands and global platforms are born far away from the traditional centers of technology development. The future is global and so is blockchain innovation.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Intertwining Artificial Intelligence With Blockchain

 Is your management team asking about the future

of your contact center technology & strategy? This webinar will show you how to avoid pitfalls when replacing infrastructure, as well as how to create an effective migration plan. Except for those folks living under rocks (sounds uncomfortable), everyone knows about or at least has heard of bitcoin. However, not everyone understands the technology of bitcoin, which extends well beyond Internet-based currency.For the rock people, bitcoin is an Internet-based currency that allows for transparency with respect to each transfer of the currency through the use of a distributed database. Each transaction is locked in a block, and blocks are connected to form a "blockchain."

What Is Blockchain?

The blockchain is an open source technology that facilitates creating each block, locking each block, and connecting the resulting string of blocks. Because it is a write-only database that never can be edited or deleted, the blockchain gives integrity to the complete history of the transaction. For example, if we purchase a new tablet online using bitcoin, the seller wants certainty that the purchaser actually owns the bitcoins used to purchase the tablet. Also, the seller wants to be certain that the bitcoins have not already been spent by the purchaser for other goods.

The blockchain shows the ownership history of the bitcoins used before the purchase of the tablet. As a result, blockchain makes it difficult for a dishonest person to break the law by stealing some else's data. We are now entering a time when blockchain is expanding to wider, nonmonetary activities — at least since earlier this year, when the U.S. Food and Drug Administration signed an agreement with IBM to explore Watson, famous from Jeopardy!, and blockchain to protect electronic health records. As a matter of fact, the use of Watson's artificial intelligence recently has expanded beyond the FDA deal to other important areas. For instance, IBM earlier this year began offering Watson/Blockchain as a Service, so we likely will see even more AI interfacing with blockchain.

Where Are We With AI?

AI is hardly new — it has been a part of the IT world for about 50 years. However, it was not until 2011 — when Watson became a public success in on Jeopardy! — that most people began to understand AI as more than just something from a science fiction novel. Today, one only has to acknowledge the recent and extensive media coverage of driverless cars to realize just how ubiquitous AI has become. Back in 1955, James McCarthy of Dartmouth College and a team of researchers defined AI as follows:

"… the conjecture that every aspect of learning or any other feature of intelligence can in principle be so precisely described that a machine can be made to simulate it. An attempt will be made to find how to make machines use language, form abstractions and concepts, solve kinds of problems now reserved for humans, and improve themselves."

The process of self-improving computers, AI, or machine learning has an inherent legal risk if the process violates a law in one or more countries.For example, if an AI system learns that it is acceptable to alter true facts (for the rock people, we are referring to "lying"), what is to stop it from altering something like a financial report made to the SEC to make a company look profitable, when in fact, is not, or a contract for the sale of the Brooklyn Bridge in New York as being executed by the true owner of the property?

Follow the Data Trail

Combining AI with blockchain allows for the secure, transparent review of data that is changed or moved over time, giving both the buyer and seller confidence in the validity, title and transfer of that bridge in Brooklyn. The Federal Trade Commission last year issued a report entitled "Big Data: A Tool for Inclusion or Exclusion?" The report focuses on privacy for citizens, since many companies rely on big data for AI to provide help with strategic business decisions without understanding the validity of the data. The use of big data has distinct concerns for electronic medical records. The Federal Trade Commission earlier this year held its third FinTech Forum, which included a discussion about blockchain payment systems and smart contracts to ensure consumer protection.

Blockchain and Electronic Medical Records

The FDA agreement with IBM/Watson "will explore the exchange of owner-mediated data from several sources, such as electronic medical records, clinical trials, genomic data, and health data from mobile devices, wearables and the Internet of Things." Initially, the project will explore the use of blockchain to share oncology-related patient data for research.

As the use of EMRs has expanded, the quantity of data has exploded. The mass of medical data tied to an individual gives medical researchers and professionals a complete view of the individual. The data, though, must be accurate and complete. Blockchain technologies keep an unalterable audit trail of all the medical data. As the use of blockchain expands, it is reasonable to see its use not only in medical research but in real and intellectual property transactions, contracting and auditable file storage.

Arizona Adopts Blockchain Laws!

Arizona recently recognized blockchain as legal, when the governor signed HB2417 into law. Among its provisions:

• A signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature.
• A record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record.
• Smart contracts may exist in commerce. A contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a smart contract term.

As more states adopt laws recognizing the legality of the blockchain, more lawyers will need a full understanding of this disruptive technology.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Bitcoin wallet and data company Blockchain

has expanded its leadership team with two new executive hires. Perhaps most notably is the addition of Sarah Maxwell, former communications lead at Uber, who left the ridesharing giant in 2016 to join the staff of Hillary Clinton’s presidential campaign. Maxwell has been appointed to lead Blockchain's global communications team.

Before joining Uber in May 2014, Maxwell had been working as a White House staffer since 2010, and, prior to that, served as a senior account executive at the San Francisco-based BergDavis Public Affairs, according to her LinkedIn bio. Blockchain’s second new exec is Xen Baynham-Herd, who has been brought on to become the company's lead economist, focusing on new initiatives for the brand. Baynham-Herd previously worked as a director at the London office of Swiss investment bank UBS.

The new appointments demonstrate Blockchain's continued interest in tapping premier executive talent for its operations, following the addition of former Barclays Bank group chief executive Antony Jenkins to its board of directors last December. Founded in 2011, Blockchain is the largest provider of software wallets for the bitcoin network. Headquartered in Luxembourg, the startup has so far raised $30m from backers including Lightspeed Venture Partners and FuturePerfect Ventures.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Sign up to the new-look Media Briefing: bigger, better, brighter

  

However, the leader of the UK’s psychiatrists said the findings were too simplistic

and unfairly blamed social media for the complex reasons why the mental health of so many young people is suffering. Prof Sir Simon Wessely, president of the Royal College of Psychiatrists, said: “I am sure that social media plays a role in unhappiness, but it has as many benefits as it does negatives. We need to teach children how to cope with all aspects of social media – good and bad – to prepare them for an increasingly digitised world. There is a real danger in blaming the medium for the message.”

Young Minds, the charity which Theresa May visited last week on a campaign stop, backed the call for Instagram and other platforms to take further steps to protect young users. Tom Madders, its director of campaigns and communications, said: “Prompting young people about heavy usage and signposting to support they may need, on a platform that they identify with, could help many young people.” However, he also urged caution in how content accessed by young people on social media is perceived. “It’s also important to recognise that simply ‘protecting’ young people from particular content types can never be the whole solution. We need to support young people so they understand the risks of how they behave online and are empowered to make sense of and know how to respond to harmful content that slips through filters.”

Parents and mental health experts fear that platforms such as Instagram can make young users feel worried and inadequate by facilitating hostile comments about their appearance or reminding them that they have not been invited to, for example, a party many of their peers are attending. May, who has made children’s mental health one of her priorities, highlighted social media’s damaging effects in her “shared society” speech in January, saying: “We know that the use of social media brings additional concerns and challenges. In 2014, just over one in 10 young people said that they had experienced cyberbullying by phone or over the internet.” In February, Jeremy Hunt, the health secretary, warned social media and technology firms that they could face sanctions, including through legislation, unless they did more to tackle sexting, cyberbullying and the trolling of young users.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Inbound Marketing.

Alan Zibluk – Markethive Founding Member

The findings follow growing concern among politicians,

health bodies, doctors, charities and parents about young people suffering harm as a result of sexting, cyber bullying and social media reinforcing feelings of self-loathing and even the risk of them committing suicide. “It’s interesting to see Instagram and Snapchat ranking as the worst for mental health and wellbeing. Both platforms are very image-focused and it appears that they may be driving feelings of inadequacy and anxiety in young people,” said Shirley Cramer, chief executive of the Royal Society for Public Health, which undertook the survey with the Young Health Movement.

She demanded tough measures “to make social media less of a wild west when it comes to young people’s mental health and wellbeing”. Social media firms should bring in a pop-up image to warn young people that they have been using it a lot, while Instagram and similar platforms should alert users when photographs of people have been digitally manipulated, Cramer said. The 1,479 young people surveyed were asked to rate the impact of the five forms of social media on 14 different criteria of health and wellbeing, including their effect on sleep, anxiety, depression, loneliness, self-identity, bullying, body image and the fear of missing out.

Instagram emerged with the most negative score. It rated badly for seven of the 14 measures, particularly its impact on sleep, body image and fear of missing out – and also for bullying and feelings of anxiety, depression and loneliness. However, young people cited its upsides too, including self-expression, self-identity and emotional support. YouTube scored very badly for its impact on sleep but positively in nine of the 14 categories, notably awareness and understanding of other people’s health experience, self-expression, loneliness, depression and emotional support.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Inbound Marketing.

Alan Zibluk – Markethive Founding Member

Facebook and Twitter 'harm young people's mental health'

Young people scored Instagram the worst social medium for sleep,

body image and fear of missing out. Four of the five most popular forms of social media harm young people’s mental health, with Instagram the most damaging, according to research by two health organisations.Instagram has the most negative impact on young people’s mental wellbeing, a survey of almost 1,500 14- to 24-year-olds found, and the health groups accused it of deepening young people’s feelings of inadequacy and anxiety.

Alan Zibluk – Markethive Founding Member

Signs that you're addicted to Social Media

         

A new survey reveals that Instagram

Chuck Reynolds
Contributor
Please click either Link to Learn more about Inbound Marketing.

Alan Zibluk – Markethive Founding Member

 

  

They're using manipulative tricks from casinos, among other things.

On February 9, 2009, Facebook introduced the like button. Initially, the button was an innocent thing. It had nothing to do with hijacking the social reward systems of a user's brain. "The main intention I had was to make positivity the path of least resistance," explains Justin Rosenstein, one of the four Facebook designers behind the button. "And I think it succeeded in its goals, but it also created large unintended negative side effects. In a way, it was too successful."

Today, most of us reach for Snapchat, Instagram, Facebook, or Twitter with one vague thought in mind: Maybe someone liked my stuff. And it's this craving for validation, experienced by billions around the globe, that's currently pushing platform engagement in ways that in 2009 were unimaginable. But more than that, it's driving profits to levels that were previously impossible. "The attention economy" is a relatively new term. It describes the supply and demand of a person's attention, which is the commodity traded on the internet. The business model is simple: The more attention a platform can pull, the more effective its advertising space becomes, allowing it to charge advertisers more.

But the problem is that attention isn't some non-sentient resource like wheat or oil. Attentiveness is a human state, and our reserves of attention are finite. They're hemmed in by sleep, work, children, and relationships with friends who find it rude when we're on our phones. So ideally we'd want to invest our limited supply of attention on things that make us happy. But as Facebook observed, social feedback induces a burst of happiness so brief it's addictive, causing us to return more and scroll further.

"The like button, simple as it was, tapped into a bottomless font of social feedback," explains Adam Alter, author of Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked. "And I don't think social media companies are trying to make 'addictive' platforms, per se. But since they're all competing for our (limited) time and attention, they've always been focused on making the most engaging experience possible."

Following the introduction of Facebook's like button in 2009, YouTube moved to a binary like/dislike format in 2010. Instagram launched that same year and came ready-made with a like function shaped as a heart. Twitter adopted this same heart-shaped system in 2015, while, in the years since, Silicon Valley has come up with a multitude of new ways to gamify our need for social validation.

Former Google designer and ethicist Tristan Harris lays out the most common ways we're being manipulated on his blog. And as he explains, all of them use something called intermittent variable rewards. The easiest way to understand this term is by imagining a slot machine. You pull the lever to win a prize, which is an intermittent action linked to a variable reward. Variable meaning you might win, or you might not. In the same way, you refresh your Facebook updates to see if you've won. Or you swipe right on Tinder to see if you've won.

This is the most obvious way social feedback drives platform engagement, but others are harder to spot. You know when you open Instagram or Twitter and it takes a few moments to load updates? That's no accident. Again, the expectation is part of what makes intermittent variable rewards so addictive. This is because, without that three-second delay, Instagram wouldn't feel variable. There's no sense of will I win? because you'd know instantly. So the delay isn't the app loading. It's the cogs spinning on the slot machine.

Another piece of psychology hijacked by social platforms is that of social reciprocity; if someone pats your back, you'll feel pressure to pat his or hers. Facebook exploits this by alerting you when someone has read your message, which encourages the receivers to respond—because they know you know they've read it. And at the same time, it encourages you to check back to read the inevitable response. The same bits of your brain get a rush on Facebook as a set of wavy dots appear as someone writes a message. You might not exit if you think you're getting a message, or at the very least you're more likely to come back. And while Apple also employs this feature, at least it allows you to turn it off.

All this might seem a little underhanded, but it's nothing compared to some of the design features currently showing up on Snapchat. Of these is the one causing the most concern, and uses elongating red lines to display the number days of since two users interacted. According to Adam Alter, this design feature is so effective that he's heard of teens asking friends to babysit their streaks while on vacation. "It's clear here that the goal—keeping the streak alive—is more important than enjoying the platform as a social experience," he says. "This is a clear sign that engagement mechanisms are driving usage more than enjoyment." We asked like button co-creator Justin Rosenstein what he thinks is the most insidious form of social media manipulation, and according to him, it's the humble push notification.

"The vast majority of push notifications are just distractions that pull us out of the moment," he says. "They get us hooked on pulling our phones out and getting lost in a quick hit of information that could wait for later, or doesn't matter at all." And of course, all these little efforts to keep us hooked are having a very real impact. As Facebook's current head of marketing bragged in this speech, the average millennial checks his or her phone 157 times daily. That's a total average of 145 minutes every day that we're trying to feel connected, validated, and liked.

The increasingly time-absorbing nature of the internet is one of the reasons Justin Rosenstein left Facebook to start his own company. Today he's the co-founder of Asana—a web and mobile app that tracks work app that tracks work and allows collaboration without distractions like email. But according to author Adam Alter, change will only come from the bottom up. He claims the social media business model, built around the needs of marketing agencies instead of lives, are already far too entrenched and profitable for self-governing.

"It might diminish a bit," he says. "But as long as companies have an incentive to make their platforms as engaging as possible, the arms race forcing them to 'manipulate' users will continue." He encourages users to try and curb their own addictions or to install phone apps that will do that for them. He also says that by demanding more ethical design practices from companies—in the same way that we demand ethical environmental practices—we'll force change and claw back our free time. Because as Like button co-creator Justin Rosenstein highlights, "These are our lives. Our precious, finite, mortal lives. And if we're not vigilant, computers and mobile devices will guide our attention poorly."

Chuck Reynolds
Contributor
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