will the blockchain destroy Facebook’s key value?

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kurt
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Joined: Fri Jan 03, 2014 6:13 pm
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will the blockchain destroy Facebook’s key value?

Post by kurt »

Wasn’t it Groucho Marx who said “I don’t want to belong to any club that will accept me as a member.” Years ago when Dave first wrote the Trust and the Trillion Dollar Brain expose’ on Facebook (http://tradewithdave.com/?p=20142) what was making Facebook unique is that they were sticklers when it came to YOU being YOU when YOU were on Facebook. For those who have been Traders for a while you may recall that Dave’s site was seriously hacked and that the hacking seemed to revolve around that article in particular. I’m sure that was a coincidence (cough).

This verification whether by social network associations, outright submission of your mobile phone # or passport or by Facebook’s facial recognition (http://www.theguardian.com/technology/2 ... cal-issues and http://www.fastcodesign.com/3030206/sub ... ce-cameras) is essentially IMHO what makes Facebook Facebook. You pretty much know that when someone is identified on Facebook then it is THAT someone…. at least to a point.

Facebook comes up just a little bit shy of say a Paypal verification where they have accessed your bank account and you have provided verification of their deposit and Paypal is layered upon your local bank’s requirements of Know Thy Customer (KTC not KFC) which is layered upon the Patriot Act or Know Thy Colonel Sanders which is all layered up on the Constitution being turned from a granite cornerstone based on the Bill of Rights to a pile of ground up sandstone known by Zuckerbergian principle of privacy is no longer a social norm but working for the CIA and NSA is a good gig when you can get it.

Facebook is good at what they do, if you can call it that, and with Deep Face they’re extra good at turning your identity into a monetizable asset, but Dave has a sneaking suspicion that Facebook met its match when a match rate of 97.25 percent is no longer a social OR business norm and a claim of “first use” gets associated with a person’s certificate of live birth (regardless of the country of origin) and their first baby photos being hashed into the Bitcoin blockchain protocol.

Social Media Maven Jeff Jarvis said it this way…
So Facebook wants my passport to verify my identity. As Mr. Public, you’d think I wouldn’t object. But I don’t think Facebook has given me sufficient cause to do it. Where’s the value? I can get recommended for more followers, they say. Well, I have 44k here and 700k on Google+. Don’t need more here. Now if they thought like a user and gave me a portable verified identity I could use in other cases, maybe. But they’re not thinking of adding value to me but instead to Facebook.
https://plus.google.com/+JeffJarvis/posts/N1ax6HgufYn

…and in the same thread Mark Sykes said…
I have a friend who has forgotten his FB login information. To get in, they want a picture with him holding his driver’s lisence, which is information that he has not provided them to confirm it is him. I can see where this might be a problem for minors, who have no ID, but taking it a step further, does this also require a camera? Not all people or even all nations have the same things we do, and not all people are of the same station in life to be able to provide the things asked. Taking it another step, why is photographic proof required when security questions have been well enough for government and financial institutions? And going just a little farther, could not someone trying to cause problems get the account holder drunk, get their photo with ID, and go the long means about stealing an account? The root of the problem I am really seeing is that this sort of information is meaningless and an invasion of personal privacy that a private company really should be barred from taking, even veiled under the guise of account retrieval as the basis for the very active invasion.

Facebook is fairly good at verifying someone’s identity, but it stops just shy of being able or willing to function as an assurance contract. That’s why Facebook isn’t Paypal and why Facebook may know everything imaginable about you, including your mobile phone number and a copy of your passport photo, but they don’t do contracts… at least if you don’t buy advertising from them. Terms of service could be construed to be a contract, but it lacks genuine consideration and is more like that relationship you had with a girl in sixth grade where someone told Dave on the playground that she “liked” me and my response was to push for clarification by asking “Does she like-like me…. or just like me?” and that was long before Facebook co-opted the like and back when you could still use your thumb for something tangibly useful such as non-virtual hitchhiking. Dave “like-likes” his wife and we’ll leave it at that.

What is Dave getting at here? Let’s call it the marketing department’s battle with the accounting department’s control over the company’s CRM (customer relationship management) software. It’s the classic problem of the sales and marketing department having lots of juicy information about customers and prospects while the accounting department has the customers purchase orders, payment history and accounts receivable file. Dave’s built lots of businesses and integrated lots of applications where this showdown happened and I can tell you from experience which one always wins out…. and Dave’s a big believer in the “nothing happens til somebody sells something adage” but at the same time “the job isn’t finished till the paperwork is through.”

Sales will always win out when it comes to controlling the customer, but the CFO will always win out when it comes to controlling the company’s checkbook (Marc Benioff not withstanding). In the rock/scissors/paper battle of customer information, the folks who manage (if not entirely hold) the purse strings will go nuclear on you… just ask Jon Corzine if you want definitive proof. Don’t mess with accounting or they will mess with you and I’m normally the CEO and I have a background in accounting, but in my heart I’m a salesman. If I’m going to make that type of a change, heads are going to roll in advance of the implementation because otherwise finance will sabotage it every time – it’s a controller’s job to control and you take that control away at great risk to the entire business, but who could have seen this coming except maybe the author of Revelation?

So, what’s the point? It’s pretty simple actually. When it comes to identity verification on the internet, the blockchain protocols 100% accuracy is going to win out over even Facebook, Google, LinkedIn, Twitter or even your local bank’s 99% accuracy (“Hey, honey where’s my ATM card… have you been in my wallet again?”) when it comes to saying just who exactly is who. Triple entry accounting is as close to bullet proof accounting is it comes because it doesn’t simply require Assets = Liabilities + Capital, but it starts off with a global measurement of the entire money supply so it knows that if everyone’s Assets don’t total up to equal the predetermined balance (Say 21 million Bitcoins for example) then somebody is hiding something under Mt. Gox and those missing Assets can be tracked down easy as… uh… easy as Pi.

We started covering “Triple Entry Accounting” here back in the Fall of 2012. You can search for “Yuji Ijiri”, “the map is the territory”, “the receipt is the transaction”, “means testing”, “Ricardian contracts” and “blockchain” and you’ll get a hundred articles on the subject matter and if I was Mark Zuckerberg I’d be boning up on my bookkeeping before the blockchain bowls me over in the identity verification space.

“We want to make sure that this is really you and that you’re connecting to Facebook with just one account. To verify your identity, you’ll need to log into Facebook and follow the on-site instructions to add your mobile number. As soon as we confirm who you are, you can get back to using Facebook. We won’t contact you by phone without your permission and you can choose who your number is shared with on your Timeline. Note: Maintaining more than one account is a violation of the Facebook Terms.” From Facebook’s website

Dave’s had a bit of his own personal experience with Facebook. For one thing, I ended up with two identities one time because I was launching a new project associated with a company. I set up a page for the company’s Facebook and everything was fine for a couple of days and then suddenly Facebook shut me down. I emailed Facebook and then they emailed me back and used the word “fraud” in their email directed towards Dave. That got my dander up so I called them up. You can imagine how that went. So, WDDD (what did Dave do?), I did what I always do. I became a big customer.

After I became a big customer, bought and paid for advertising, then I got my sales rep on the line. It’s amazing how easy it is to get a sales rep on the line when you’re a paying customer. A couple of weeks after I got the BIG CUSTOMER status, I asked my sales rep… “Hey sales rep… our company had this other Facebook page and then it got taken down… I think we may have accidentally created a duplicate identity… could you get the page put back up?” Done… it was that easy and there weren’t any “social fraud charges” brought by any one then Dave quickly goes back to being a small customer again. It’s kind of like pushing the Staple’s Easy Button, only it’s the Eric Schmidt/Mark Zuckerberg Creepy Button. If it gets stuck, you just lubricate it with some cash (assuming your bank will give you yours) and you’re good to go.

We’re Going From The Creepy Line To The Bottom Line

“Right now you need someone to be the arbiter of identity – either Facebook, Twitter or Google – somebody who developers can use for login and other information sharing. I think you could do the same thing with a block-chain architecture, where there is no third party, there is no clearinghouse of identity information.” VCer Fred Wilson @ TechCrunch Disrupt

With Satoshi, there’s no longer rolling the dice when it comes to that box of receipts to prove how you spent your Disney Dollars and the same can be said for your identity. Just the other day Dave needed an agreement notarized and I headed down to the bank. It was the same bank that I had called the week before and ask them if it was okay to come in an pick up a few thousand dollars to go to an auction. They said “No… if you need more than $5,000 you will have to go to more than one branch.” I said “Even if I call ahead?”…. they said “Even if you call ahead.”

After I got “some” of my money that I needed for the equipment auction, I headed over to the desk area of the bank and asked the nice lady if she could notarize my signature on an agreement. This is the same lady that has seen Dave walk into this same bank for the past six years. She said “Come into my office… I’ll take a look at your agreement.” Dave immediately responded by saying “I don’t really need you to look over the agreement (cough), I just need you to notarize my signature.” She looked at me kind of strange. I look back at her kind of strange. Then she sat there and read the agreement.

At this point, she said something like “I’m not sure I’m supposed to notarize this type of agreement.” I said… in my nice voice “What type of agreements do you notarize?” while what I am really thinking is “Wow, this former bank teller is going to give me free legal advice…. what a deal.” She said “I’ll be right back” and she got up and went to another glass office in the corner of the bank and came back and said “I’m sorry I can’t notarize this…. we don’t notarize these types of agreements.” Dave said “No problem, I’ll go three doors down to the UPS store and pay $15, but I came here first because I thought the bank would notarize my signature for free”… you know the Patriot Act and all. “Have a nice day.”

So, Dave heads on over to the UPS store and scrounges in his pocket for $15, not wanting to open the “money envelope” I had been so successful in forcing the bank to give me some of my money for the equipment auction… but I would still need to visit some other branches – FUN! I get the agreement notarized in about two minutes by a lady who has never even met me and doesn’t have any of my money (sans $15) but fortunately my driver’s license was sufficient evidence for her of Dave’s bona fide nature and she was a member of the Notary Country Club and had a seal to prove it.

Speaking of Clubs there is one club that Dave has always wanted to be a member of. Technically, it’s not a club… it’s an association. It’s called The National Association of Association Executives. You gotta love that. Dave actually had a friend who was applying for the job as the Executive Director of The National Association of Association Executives. That even beats being a notary or having your own blog and I bet you get to go out to lunch every single day with a different Association Executive from a National Association. You would leave more shoe leather on the sidewalks of K Street than Cliff The Mailman from Cheers as you check out the latest and greatest restaurants at the expense of your rank and file members and everybody knows your name… so identity is no issue… but I digress.

The point is that there’s big money in being able to establish a foolproof system for identity verification. Heck, that’s what The Book of Revelation and the Capital One Eraser that erased Alec Baldwin’s career are all about. Who are you… who-who… who-who? I really want to knooooow. Once your identity, or your birth certificate, or your baby picture or maybe a copy of that Courtesy Notice from the Other People’s Public Trust (remember those guys) is hashed into the blockchain via Namecoin or NXT or Bitshares or maybe your Airbitz wallet or even via Bitcoin, your identity isn’t in there for a mere 17 second video, on the contrary it’s in there…



Is your identity “personal property” or are you a natural man?:

http://www.coindesk.com/how-block-chain ... -property/

Maybe you can make a claim on your own face as intellectual property and join a class action lawsuit against Facebook for selling it. Check out Monegraph:

http://techcrunch.com/video/monegraph-a ... 518221293/

Fred Wilson at Techcrunch Disrupt on the power of the blockchain to identify YOU:

http://www.coindesk.com/vc-fred-wilson- ... y-bitcoin/

Daniel Larimer’s Delegated Proof of Stake:

http://107.170.30.182/security/delegate ... -stake.php

Square Dave on Zooko’s Triangle:

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