Malta A.I. & Blockchain Summit 2019
How to draw attention to your business in 2019? — Just say that your product has A.I. and blockchain.
Even tho this wit is being used all the time, we do need to realize the significance of both of these inventions, as well as be able to separate those who are using A.I. and blockchain to improve their systems and deliver value from those who simply place it as sprinkles on an ice cream just to draw attention.
Let’s see what the Malta A.I. & Blockchain summit has highlighted.
Why Malta?
Because it’s beautiful there, duh.
Seriously tho, when I heard that Malta is a “blockchain island” I imagined something very futuristic (for whatever reason): each store / cafe / restaurant accepting crypto, all the citizens being equipped with a digital ID, government storing their citizen data on a secure private ledger… flying cars maybe? (idk)
Well… no. As it turns out, the Maltese government simply fosters the development of crypto solutions by adjusting the regulation to fit the needs of startups (or, at least, this is my understanding). This is their way of aiding the economy of one of the smallest countries in the world.
What has Malta done to achieve this:
- Early 2000s: Malta passes legislation that allows it to host online gambling companies (which now account for 12% of their GDP)
- November 2018: first country in the world to introduce full crypto regulation by introducing:
- VFAA (Virtual Financial Assets Act) — regulates VFAs (Virtual Financial Assets) and VFAOs (VFA offerings) (basically ICOs) by defining the “necessary license requirements and conditions which must be adhered to by individuals or entities who issue VFAs or who provide certain specified activities in relation to VFAs.” (source)
- ITASA (Innovative Technology Arrangements and Services Act) — an act which will “establish the regime for the voluntary registration of Technology Service Providers and the voluntary certification of Technology Arrangements to promote transparency and accountability of cryptocurrency and the blockchain technology.” (source)
- MDIAA (Malta Digital Innovation Authority Act) — an act that “will provide for the establishment of the Malta Digital Innovation Authority, which will be the government authority that promotes blockchain technology development in Malta through policies.” (source)
- Hosting an A.I. & Blockchain summit since early 2018, which claims to have gathered 5,500 delegates this year. (source)
You can find more information on this in the amazing video by Cointelegraph.
The conference
It all started on Wednesday with early registration and welcoming drinks at Hilton hotel, where the place was packed with people with their “free welcoming drink” tickets and a mile long queue to the bar.
Everyone was given a badge, an agenda, and a hand bracelet (which is not present in the picture, as I had to break it, since it was literally a Chinese finger trap: you can tighten it, but you cannot loosen it up. I have seen many people struggle with it).
Thursday and Friday were packed with topics from 9:00 to 18:00. Since I managed to get a free ticket (kudos to Rob & Shilten), only the main hall was accessible to me (from 9:00 to 15:00), yet, even that was enough.
Special kudos to the organizers and designers that worked on the event: everything was very pleasing to look at.
My top highlights (Day 1)
It’s hard to summarize all of the topics, as there were around 12 of them (even with my free pass), and, I believe, everyone should take out of the conference what they believe is important to them, so, here are my key points:
A European approach to A.I.
Ludovic Bodin, Mariella Baldacchino, Lydia Barbara, Wayne Grixti
What’s going on in Europe and other countries in regards to A.I.?
- France, Germany and Finland have a national A.I. plan and a strong budget for realizing it (Finland along allocated 3 billion, France — 1,5 billion) (I have found this interesting article that has many AI strategies listed).
- 90% of all A.I. investments in the last 18 months have been between China (mainly Beijing) and USA.
- The Federal Trade Commission of the U.S. have issued an Algorithmic Accountability Act that would require large companies to audit machine learning-powered systems.
Fintech, Securities & Regulation
Kenneth Farrugia, Jacek Czarnecki, Jon Matonis, Benjamin Griscti
Jon Matonis. Jacek Czarnecki wasn’t there at the time of taking the picture :)
How do banks look at the emerging fintech operators? What are the current challenges for STOs?
- Traditional banking domains are being disrupted by fintech operators that are entering the market. This is due to the fact that the banks that offer a multitude of services cannot really focus on one particular area of business — this is where disruptors in the payment space are coming to the market. This is why banks are collabing with fintech companies to improve.
- Companies have three primary ways to raise capital: sell equity, sell debt or offer a utility token. Regulators are fine in understanding the first two, but when it comes to the third one there is really no clear regulation.
- Alongside ICOs and STOs there are now also IEOs, which are Initial Exchange Offerings (created as a solution to China’s ICO ban in 2017). You can read more here.
- The current problem with STOs are: 1) They believe that they will have the same liquidity and mobility as ICOs; 2) Have a more mundane routine around them then ICOs; 3) Can only be traded within certain jurisdictions where they are approved in (as opposed to borderless ICOs)
- Main concerns for banks to accept STOs are: 1) Anonymity; 2) Hacking incidents; 3) Reputation risks
Worth the Risk: The Global State of Chains
Brock Pierce
When Brock Pierce came on stage I immediately got the impression that he must be famous in the crypto world. And, as it turned out, I was right: https://brockpierce.io/
Since this was a presentation, it’s better if you watch it (I recorded the whole thing):
A World First — Giving DAO its Legal Personality
Leonard Bonello, Irina Heaver, Steve Tendon, Amandine Doat
What exactly is a Decentralized Organization as opposed to the traditional centralized government structure? Why do we need to grant a legal personality to DAOs?
- The Bitcoin protocol has in practice replaced the clearing and settlement houses that typically were in between the endpoints of a transaction. The software has replaced a human organization.
- Bitcoin is paying miners, therefore, it is software that has employed humans.
- The legal personality is required not only to protect the users, but is also required to protect the participants of the DAO. Who is liable for the decisions that the code makes? You can read more on this topic here.
- We need to entice developers to want to make their software (DAO) a “good citizen”, like Satoshi Nakamoto created incentives to make people behave in a certain way. Therefore, the idea is that a legal personality will not be granted to any sort of DAO that is out there, but only to certain DAOs that exhibit certain features. End users would probably favor the DAO with guarantees (legal personality).
- Off top from one of the speakers: Dubai has announced that by 2021 they will be running the government on blockchain.
Towards a Common Sandbox Environment
Minister Carmelo Abela, Lord J. Marland, Dr Amanda J Sharkey
What are the implications of a regulatory sandbox environment?
- We have to pay attention to what to regulate exactly without preventing creativity to flourish.
- As A.I. is having an increasing impact on our lives and we are affected by the decisions made by algorithms, we definitely need schools to educate children on the topic of A.I. This is due to the fact that we can create a humanoid looking robot and expect it to do far more than it’s able to do. Therefore, children need to program robots, so that they would understand their limitations.
- Since A.I. and robots do not really understand human social world (can’t be moral agents), we need to be careful about what decisions they are allowed to make.
A.I. Framework Initiatives: How Should We Regulate A.I.?
Olga Finkel, Gagandeep Singh, Alexiei Dingli, Dinis Guarda
Will regulating A.I. at this stage kill creativity and development potential?
- We are currently in machine learning, but not in A.I. Although, even with machine learning we are already creating bias, fake news and manipulation of data. Example of this is what happened in the last 3 years: from U.S. elections to what is happening in Europe.
- Facebook is an example of an entity that is in control of a massive amount of information that was previously not available at any time in the history of humankind. And since 60% of the board of Facebook is controlled by Mark Zuckerberg (even tho he owns only 18% of shares), this kind of means that he is controlling more data than any other person on the planet.
- Most of the A.I. today is mostly a black box: we are giving it input, getting an output and training it, but we are not sure what’s inside. Therefore the question is why is A.I. making a certain decision?
- People are pointing out the bias in self driving cars when it comes to making decisions in extreme situations. Although, taking into account the amount of fatal accidents that happen today, which involve self driving cars, and the amount which involve human drivers — the difference is massive (my personal note: I think we should also consider the amount of self driving cars vs. amount of human driven cars).
- The training sets of self driving cars have reached 60 years of driving experience, whereas very few human drivers can claim 60 years of driving experience.
- A.I. regulation has to concentrate on specific tasks, and not general regulation.
A.I. Start-up Pitch
10 A.I. start-ups competing for the title of the… best start-up pitch, I believe? Each given only 3 minutes to present followed by a 3 minute round for questions from the judges. The start-ups presenting were:
Unfortunately, I couldn’t find all of the websites. Maybe some don’t have them yet.
Conclusion
For me the whole topic of blockchain and A.I. is somewhat similar to how our planet formed: “Temperatures are extremely hot, with frequent volcanic activity and hellish-looking environments.” Seriously, what is happening now is forming the next social evolution and it is more than amazing to be part of its formation.
Day 2 summary to follow :)
