Year: 2018

Recent news of Amazon’s engagement with law enforcement to provide facial recognition surveillance (branded ‘Rekognition’), along with the almost unbelievable news of China’s use of the technology means that the technology industry needs to address the darker, more offensive side of some of its more spectacular advancements.

Facial recognition technologies, used in the identification of suspects, negatively affects people of color — to deny this fact would be a lie.

And clearly, facial recognition-powered government surveillance is an extraordinary invasion of the privacy of all citizens, and, a slippery slope to losing control of our identities, altogether.

There’s really no ‘nice’ way to acknowledge these things.

I’ve been pretty clear about the potential dangers associated with current racial biases in face recognition, and open in my opposition to the use of the technology in law enforcement.

As the Black chief executive of a software company developing facial recognition services, I have a personal connection to the technology both culturally, and socially.

Having the privilege of a comprehensive understanding of how the software works gives me a unique perspective which has shaped my positions about its uses. As a result, I (and my company) have come to believe that the use of commercial facial recognition in law enforcement or in government surveillance of any kind is wrong — and that it opens the door for gross misconduct by the morally corrupt.

To be truly effective, the algorithms powering facial recognition software require a massive amount of information. The more images of people of color it sees, the more likely it is to properly identify them. The problem is, existing software has not been exposed to enough images of people of color to be confidently relied upon to identify them.

And misidentification could lead to wrongful conviction, or far worse.

Let’s say the person wrong person is held in a murder investigation. Let’s say you’re taking someone’s liberty and freedoms away based on what the system thinks, and the system isn’t fairly viewing different races and different genders. That’s a real problem, and it needs to be answered for.

There is no place in America for facial recognition that supports false arrests and murder.

In a social climate wracked with protests and angst around disproportionate prison populations and police misconduct, engaging software that is clearly not ready for civil use in law enforcement activities — does not serve citizens– and will only lead to further unrest.

Whether you believe government surveillance is ok, or not, using commercial facial recognition in law enforcement is irresponsible and dangerous.

PETER PARKS/AFP/Getty Images

While the rest of the world speculated the reasons we are being monitored, the Chinese government has been making the reasons they are watching all 1.4 billion of its citizens transparent– and it’s not for their safety.

China’s use cases for Face Recognition software for surveillance are actually an outstanding example of why we have never and will never engage with government agencies – and why it’s an ethical nightmare to even consider doing so.

China is currently setting up a vast public surveillance network of systems that are utilizing Face Recognition to construct “social credit” systems, which rank citizens based on their behavior, queuing rewards, and punishments, depending on their scores. They’ve already proven in the case of arresting one man spotted by their CCTV network in a crowd of 60,000 people exactly how poorly this could go.

The exact protocol is being guarded, but examples of ‘punishment worthy’  infractions include jaywalking, smoking in non-smoking areas, and even buying too many video games. ‘Punishment’ for poor scores includes travel restrictions and many other punishments.

Yes. Citizens will be denied access to flights, trains— transportation— all based on the ‘social behavior’ equivalent of a credit score. If all of this constant surveillance sounds insane, consider this:  right now the system is piecemeal, and it’s in effect in select Chinese provinces and cities.

China News Service via WSJ

Imagine if America decided to start classifying its citizens based on a social score?

Imagine if America and its already terrifying record of racial disparity in the use of force by the police – and had the power and justification of someone being “socially incorrect”?

Uber is in court in the UK today to try to overturn a decision by London’s transport regulator last fall to withdraw its license to operate in the city — where it claims to have some 3.5 million regular users.

Its appeal is being heard in Westminster Magistrates Court from today, with the hearing expected to last for several days. The company can continue to operate its service in London while it appeals the decision.

Transport for London (TfL) sent shockwaves through the ride-hailing giant last September when it rejected Uber’s application to renew its license on the grounds the company is “not fit and proper to hold a private hire operator licence” — a long history of rule-defying behavior finally catching up with the company.

TfL criticized the company’s approach and conduct, saying it demonstrated “a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications” — including how it reported serious criminal offenses, and explanations it gave for its use of proprietary software (called Greyball) which it had developed internally to try to prevent officials from undertaking regulatory or law enforcement duties.

Notably, the court will be deciding whether Uber is fit and proper to hold an operator license at the time of the appeal hearing — rather than determining whether TfL made the right call to refuse a renewal last year.

So operational changes Uber has made since then will be taken into consideration.

In its favored media mouthpiece — the London Evening Standard newspaper, whose editor, George Osborne, consults for major Uber investor, BlackRock — Uber’s UK general manager Tom Elvidge has been given space for a lengthy op-ed where he admits the company “got things wrong along the way” before setting out the case for Uber having turned over a new leaf.

“Over the past year we’ve been working hard to put right past mistakes as we’ve gone through a much-needed period of reflection and change,” he writes. “Our new global CEO, Dara Khosrowshahi, is establishing a new culture and direction for the company from the top, while in the UK we’ve brought in three experienced independent directors to help us stay on the right track. If there are times when we fall short, we are committed to being open, taking responsibility for the problem, and fixing it.”

Talking to Politico last month, Khosrowshahi — the Uber outsider tasked last summer with cleaning up its problematic legacy under founder and former CEO Travis Kalanick — said technology companies need to take greater responsibility or prepare to have responsibility imposed upon them by more regulation.

“We’re open to doing business with cities in the way in which cities want to do business,” he told the publication. “We’re not going to be absolutist in our approach, we will adjust on a local basis.”

“This was a company that had a very particular culture that worked for it during the unbelievable growth years, during the startup phase. But it was time for the culture to change,” Khosrowshahi also added.

Among the changes Elvidge flags up are a cap on driver hours that Uber brought in in January (this after rising political pressure — including explicit scrutiny of gig economy practices by UK MPs); an incoming 24/7 phone support line for the UK (a measure that the Uber of three-years-ago was lobbying against, along with a raft of other rule changes TfL was considering and which that Uber railed against as “bureaucratic”… how times change!); and the launch of insurance products for drivers and couriers in Europe — including a big expansion of cover to 21 European countries from this month.

Although — on the latter front — Uber continues to face criticism over how its business model classifies service providers on its platforms (i.e. as self-employed contractors, rather than workers). And a 2016 decision by UK employment tribunal judged a group of Uber drivers to be workers — a decision Uber continues to appeal.

At the end of last year Europe’s top court also ruled against Uber’s regulation-swerving claim to be just a technology platform — judging it a transport provider service instead — a decision that firmly closed the door on the old Uber playbook of claiming local taxi regulations don’t apply to its business.

Meaning Uber really does have to work with cities and play nice if it wants to grow its business. (And it has been selectively expanding in Europe, at the same time as parking its service in other markets where regulatory conditions remain unfavorable — so the company is generally abiding by political traffic lights.)

Elvidge also claims that Uber has improved its working relationship with the Met Police — whose criticisms of its conduct were core to TfL’s license decision last year — saying it now “proactively” reports “any serious incident related to an Uber trip in London”.

Another operational evolution he flags up is that Uber is sharing “anonymised and aggregated data” from millions of trips — via its Movement tool — to help transport planners “identify bottlenecks and make informed decisions”.

In February TfL published a policy statement setting out its intentions for adopting transport regulations that could mesh well with the fast-changing sector — and the statement called for operators to share “travel pattern data” with it. So Uber has clearly responded positively to that.

In its policy statement TfL also said it was looking at expanding accessibility by requiring a minimum percentage of private hire vehicles to be wheelchair accessible. And again Uber looks to be trying to show it’s listening, with Elvidge saying it’s “working to make wait times for wheelchair-accessible vehicles even shorter and an extra 1,000 drivers will soon go through disability equality training”.

He also lays out Uber’s intention to go multi-modal in time — including by adding “public transport and cycling options to our app, so we help more people ditch their own cars and tackle congestion too”.

Uber does now have its own e-bike division, Jump, so this is a natural step for the company to take — and the direction of travel generally for urban mobility. But air quality and traffic congestion have been key areas of policy concern for TfL and London’s mayor, Sadiq Khan — so there’s a clear underlying political pull to this Uber gear change too.

Elvidge says the company will go fully electric in London by 2025, adding that it will be setting out more details on the “plan to get thousands of diesel cars off the road” in the coming weeks. “We are… determined to help the Mayor with one of his biggest priorities: tackling air pollution in the capital,” he adds.

Another change Uber is keen to spotlight going into the court hearing is the recent launch of Uber driver advisory groups in the UK — as a mechanism for it to take and respond to their feedback, with Elvidge claiming Uber is “acting on what they tell us”.

Although — also today — the IWGB Union has put out the results of a survey it conducted with around 500 private hire vehicle drivers in the UK and which it claims shows there’s an “epidemic of violence in the trade”.

The survey found that 55% of all private hire drivers have been physically assaulted at work; 78% have been threatened with violence; and 80% have been victims of hate crime.

For Uber driver specifically just under half (49%) said they have been assaulted, but the percentages for threats of violence and hate crime were the same.

While 75% of Uber drivers surveyed said the firm “rarely or never” supports them with police complaints including disclosure of the identity of the offending passengers; 67% said the firm “rare or never takes responsibility for their safety”; and 68% said they rarely or never receive training on safeguarding or vulnerable passengers.

Uber declined to comment on the IWGB survey results when we asked.

By the middle of this week, all Amazon Prime members will have access to discounts at Whole Foods Market stores across the U.S. — finishing a nationwide rollout that’s part of the retailer’s master plan to dominate physical and virtual commerce in America.

All Prime members will receive 10% off hundreds of sale items and “deep discounts on select popular products,” the retailer said in a statement.

In the six weeks since Amazon first made the discounts available to shoppers in Florida, the company said its Prime members had already saved “millions of dollars”.

Starting Wednesday, June 27, Amazon Prime members who shop at Whole Foods Market and Whole Foods Market 365 stores can save on everything from baby back pork ribs, sockeye salmon, and cherries to nuts, granola, mochi ice cream and lemonade.

“Customer feedback has been overwhelmingly positive – in fact, Prime members have adopted this benefit at one of the fastest rates we’ve seen,” said Cem Sibay, the vice president of Amazon Prime, in a statement. “Since starting this rollout in mid-May, Prime members have already saved millions of dollars on everything from seasonal favorites to popular products.”

To take advantage of the in-store savings, Prime members need to download the Whole Foods app and sign in with their Amazon account and scan the app’s prime code at checkout. Shoppers can also use their mobile phone number to save. Prime members can also get an additional 5% back on purchases at Whole Foods if they use Amazon’s Prime Rewards Visa Card.

“Since launching Prime savings at Whole Foods Market, we’ve seen excitement and momentum from both Prime members and our supplier partners,” said A.C. Gallo, President and COO at Whole Foods Market, in a statement. “Our weekly Prime member deals are a hit and we’re excited that Prime members across the U.S. will now be able to take advantage of these savings in our stores.”

It looks like Indonesian ride-hailing firm Go-Jek will finally initiate its long-awaited expansion in Southeast Asia over the next month.

The company announced today that it’ll launch businesses in Vietnam and Thailand under the names of Go-Viet and Get, respectively, using a model that sees local founders run each business independently with backing from local partners and the Go-Jek mothership.

TechCrunch understands that the Thai and Vietnamese entities will go live for customers from August. The plan is to initially launch motorbike and car-based services. Later, it may introduce services-on-demand as it done with significant success in Indonesia.

Go-Jek didn’t provide a timeline for launches in its announcement today, but a source with knowledge of the plans told TechCrunch that Go-Viet is likely to be up and running by August with Get in Thailand set to follow a month later. The Philippines launch will come next, but the timeframe is currently unspecific and simply “before the end of 2018.”

That just leaves Singapore, which is a more complicated market since it doesn’t support Go-Jek core motorbike on-demand service and it has been flooded by new entrants following Uber’s exit.

As TechCrunch previously reported, Go-Jek has held partnership talks with Comfort Del Gro, Singapore’s largest taxi operator which formerly had an agreement with Uber. However, it looks like any potential deal will take time and Go-Jek is prioritizing other markets initially.

Interesting, our source confirmed that the apps — Go-Jek, Get and Go-Viet — will not be interoperable. On one side that gives the local teams the flexibility and autonomy to introduce services and customize their offerings to suit the local market, but it will mean that consumers traveling between countries will need to download different apps.

Back in May the company formally announced plans to enter four new markets via a $500 million budget. Consumers may have been expecting a quick launch, particularly since Uber’s exit from Southeast Asia, but the process takes significant time. Now that Go-Jek has installed local teams — led by Nguyen Vu Duc in Vietnam and former head of Line Man Thailand Pinya Nittayakasetwa for Get — it is readying the operations side of the service to launch for consumers.

Grab, Go-Jek’s key rival, raised $2.5 billion over the last year and it is currently raising a new round that values its business at over $10 billion. The first investor confirmed for the new raise is Toyota, which has pledged $1 billion in what is the largest investment from an automotive company into a ride-hailing provider.

Go-Jek hasnt raised as much as Grab, but it is still well capitalized. The company raised $1.4 billion from a bevy of backers that include Tencent, JD.com and Meituan from China as well as global names like Google and Allianz.

Tencent, the $500-billion Chinese internet giant, is increasing its focus on open source after it became a platinum member of the Linux Foundation.

The company has long been associated with the foundation and Linux generally, it is a founding member of the Linux Foundation’s deep learning program that launched earlier this year, and now as a platinum member (the highest tier) it will take a board of directors seat and work more closely with the organization. That works two ways, with Tencent pledging to offer “further support and resources” to foundation projects and communities, while the Chinese firm itself will also tap into the foundation’s expertise and experience.

Along those lines, the company said it will contribute its open source microservices project called TARS and an open source name service project (Tseer) to The Linux Foundation. It added that an open source AI project — Angel — will be contributed to the deep learning foundation.

“We are honored to be a Platinum member of The Linux Foundation. Open source is core Tencent’s technical strategy,” Liu Xin, general manager of Tencent’s Mobile Internet Group said in a statement.

Other platinum members include Cisco, Huawei, Microsoft, AT&T, Samsung and IBM.

Earlier this year, Tencent joined another open source industry body — the Open Compute Project (OCP) community — as part of a push for open source in the hardware space.

Tencent’s chief rival Alibaba also maintains a large presence in the open source community.

Alibaba is a gold member since last year, but more than that it has invested resources into projects directly as part of a push for its cloud computing service Alicloud. The Chinese firm led a $27 million investment in MariaDB, which became its first cloud investment outside of China. At home, its Alicloud-focused deals have included investments in cloud storage provider Qiniu and big data firm Dt Dream.

Singapore’s upcoming licensing for dock-less bike-sharing services has claimed its first scalp after oBike — a Singapore-based company run by Chinese founders — announced that it would cease its service in the country ahead of the implementation of regulations.

The Land Transport Authority (LTA) is introducing measures to protect Singapore’s streets from a glut of bicycles left all over the place, as photo essays from China and beyond have cautioned can happen.

oBike launched its service at the beginning of 2017, and it claims over one million registered users but still it will end its service today, June 25. oBike said it will continue to run operations in other markets, although it hasn’t said if/when it will refund Singapore-based users with the deposits that they paid upon registration.

“oBike strongly believes and is committed to provide [sic] dock-less bicycle sharing service that would benefit users’ commuting and Singapore’s transportation system, however it is with regret that the new regulation measures do not favour this belief of ours,” the company said in a statement that posted to Facebook.

This move comes weeks after oBike exited Melbourne in Australia following issues with regulation.

oBike has directed its customers to the newly-launched bike service from ride-hailing giant Grab, which went live in March, although that service has temporarily paused new user sign-ups. Other alternatives in Singapore also include services from Chinese duo Ofo and Mobike.

Grab is actually an investor in oBike, as TechCrunch reported last year, after taking part in its $45 million Series B round that was announced in August 2017.

Singapore’s upcoming licensing for dock-less bike-sharing services has claimed its first scalp after oBike — a Singapore-based company run by Chinese founders — announced that it would cease its service in the country ahead of the implementation of regulations.

The Land Transport Authority (LTA) is introducing measures to protect Singapore’s streets from a glut of bicycles left all over the place, as photo essays from China and beyond have cautioned can happen.

oBike launched its service at the beginning of 2017, and it claims over one million registered users but still it will end its service today, June 25. oBike said it will continue to run operations in other markets, although it hasn’t said if/when it will refund Singapore-based users with the deposits that they paid upon registration.

“oBike strongly believes and is committed to provide [sic] dock-less bicycle sharing service that would benefit users’ commuting and Singapore’s transportation system, however it is with regret that the new regulation measures do not favour this belief of ours,” the company said in a statement that posted to Facebook.

This move comes weeks after oBike exited Melbourne in Australia following issues with regulation.

oBike has directed its customers to the newly-launched bike service from ride-hailing giant Grab, which went live in March, although that service has temporarily paused new user sign-ups. Other alternatives in Singapore also include services from Chinese duo Ofo and Mobike.

Grab is actually an investor in oBike, as TechCrunch reported last year, after taking part in its $45 million Series B round that was announced in August 2017.

After months of speculation, Meituan, the largest service booking app in China, confirmed that it has filed for a public offering. The company’s IPO application was submitted to the Hong Kong stock exchange earlier today and is being sponsored by Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch. A spokesperson for Meituan said the company is currently not disclosing information about fundraising amount or valuation. Reuters reports that Meituan wants to raise more than $4 billion.

Meituan was created after Meituan and Dianping, two competitors in the group deals space, merged in 2015 (it is still formally known was Meituan Dianping). Since then, the company has added more services to become China’s leader in O2O (online-to-offline), a catchphrase for goods and services that are purchased online, but bring people into brick and mortar businesses, like movie ticket bookings.

One interesting aspect of the merger is that it brought together two archrivals, Alibaba and Tencent. Alibaba was one of Meituan’s investors, while Tencent backed Dianping. Since then, Alibaba has sold off most of its Meituan Dianping stake to focus on Koubei, its own O2O app, while Tencent has maintained an investment relationship with the company. For example, it led Meituan’s $4 billion Series C last October.

Meituan initially focused on restaurant reservations and food delivery, before expanding into more local services to create what it describes as a “one-stop super app” that allows users to buy movie tickets, make spa and salon appointments, book transportation and hotel rooms, and even pay for bike-sharing program MoBike, which Meituan acquired for $2.7 billion in April. The company says one advantage of its business model is customer conversion between verticals. For example, it claims over 80% of its new hotel booking consumers first began using the app for food delivery or restaurant reservations.

In its announcement today, Meituan said it currently has 310 million transacting users and 4.4 million active merchants. Over the past three years, its revenue grew from 4 billion RMB in 2015, to 13 billion RMB in 2016, before hitting 33.9 billion RMB (about $5.2 billion) in 2017. Meanwhile, its gross transaction value went from 161 billion RMB in 2015 to 237 billion RMB in 2016, then 357 billion RMB (about $54.8 billion) in 2017. Meituan also said that it’s adjusted net loss dropped from 5.9 billion RMB in 2015 to 2.9 billion RMB (about $430 million) in 2017.

“So what’s going on here then?” I ask. “Two good friends just got even better [friends],” replies TransferWise co-founder Kristo Käärmann laughing, while Monzo co-founder Tom Blomfield, who is also on the video call, smiles approvingly. “Sorry for spoiling your news,” I tell the pair, who I’m interviewing ahead of an announcement today that the two companies are working together.

The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that the fintech unicorn has unveiled this month, after announcing that it has begun working with France’s second largest bank BPCE Groupe.

TransferWise also powers international money transfer for Germany’s N26, and Estonia’s LHV. However, a previously announced partnership with the U.K.’s Starling Bank never materialised and has since been disbanded.

Asked why Monzo has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.

International payments has also been one of the most requested features by Monzo users since the challenger bank posted a roadmap of things it intends to “fix” over the next three months now that the switch from a pre-paid card to a full current account has been completed.

“I’ve personally been a TransferWise customer for five or six years and the service is amazing,” says Blomfield. “Compared to my old bank, it’s really, really transparent, the fees are really fair, and they’re continually working on bringing fees down and to make transfers more instantaneous. So I can’t think of a better a partner to do foreign transfers with than TransferWise”.

I ask Käärmann how different the conversation is with a challenger bank like Monzo — which arguably has nothing to lose by partnering with TransferWise and will generate affiliate revenue on each transfer — compared with larger incumbent banks who have historically generated fat margins on foreign exchange fees. He says it is similar, and usually centres on the fact that customers are already using TransferWise and that if a bank wants to put those customers first it makes sense to offer TransferWise functionality within its own app.

“When we announced the large French bank, which is clearly an incumbent — a massive incumbent — they were thinking about their customer,” he says. “That maybe does feel a little bit rare for banks to think this way, but they figured that ‘if we are going to do this, then why don’t we do it properly’. They were actually fully driven by their users and thinking about how to get the best user experience”.

The TransferWise functionality will start rolling out to Monzo users as of today and will let them send money from their current accounts to 18 of the most popular currencies, with “more being added in the near future”. The user experience will be near-identical to TransferWise’s own app, and will see transfers happen at claimed ‘mid-market’ rates in addition to TransferWise’s low and transparent fee. This means you’re told upfront exactly how much you’ll pay in fees and the amount you’ll receive in the exchanged currency.

The integration is pretty deep, too. Monzo customers who don’t have an existing TransferWise account will have an account automatically created for them when they first initiate an international money transfer. If they already have a TransferWise account, they can use their existing details to authenticate with and link their account to Monzo. This means that any international money transfers made from within Monzo will also show up in your TransferWise account and the TransferWise app.

“One of the coolest things for us, other than just working with cool people, is there’s another bank in the U.K. who is transparent with their international fees,” says Käärmann. “We’re kind of getting to the place where once there is enough banks who are as transparent in their foreign fees as Monzo is then it becomes quite untenable for everyone else to keep hiding their fees and that’s very interesting. Not just for us as companies, but more generally in terms of how banking works”.

One notable dynamic to TransferWise adding another bank partner is that the fintech giant recently launched a banking product of its own. Positioned as a companion to your existing bank account, the TransferWise “Borderless” account and debit card lets you deposit, send and spend money in multiple currencies. Acting like a local country bank account, it is primarily designed to solve the specific problem of earning, receiving and spending money abroad and TransferWise says it is not intended to be a fully fledged bank replacement — at least not yet.

“We’re pretty chilled about it,” says Blomfield when I ask him if TransferWise’s tentative entry into the bank account space was in any way a concern. “Honestly, we are not competing with TransferWise. Both of us are looking at the big high street banks, as either partners or competitors. Our customers come from Barclays, Lloyds, HSBC and RBS. I think anything that increases both of our brand awareness is a really positive thing. We have 750,000 customers, which is something like 2 percent of the adult population, we’re targeting the other 98 percent who are still using the big banks. I just think there is so much headroom in this space that it would be crazy to think that we are competing with each other”.

“If we take a step back, what is the problem we are solving?” says Käärmann rhetorically. “The problem we are solving is that moving money across borders is expensive”. He then reiterates a point that TransferWise co-founder and Chairman Taavet Hinrikus has made often, which is that the company is entirely agnostic on how customers access the service. The more money moving via its infrastructure, the better, with economies of scale also meaning it has been able to lower fees on an increasing number of routes.

“For us, it doesn’t really matter if the money is in a bank account that is connected directly to TransferWise or if it is in the Borderless account,” he says. “There’s really no difference, and I know the user experience is better today if you’re banking in the U.K. with Monzo, so that’s what users should do”.

At this point I can’t resist mentioning Revolut, the digital bank startup and newly crowned unicorn that, on paper at least, competes with both TransferWise and Monzo. Revolut’s original “attack vector” (to borrow Blomfield’s phrase) was cheap foreign currency exchange coupled with a debit card for traveling. And although not yet a licensed bank, it has rolled out bank account features at a shockingly fast pace, putting it on feature parity with Monzo in a number of instances.

Rightly or wrongly, I put it to Käärmann that there is a market perception that Revolut is often the cheapest option when spending or sending money abroad, even if questions remain about how it determines prices, especially at weekends, or if the startup actually makes money on foreign exchange at all.

“When you talk about other people getting into that space, we should be happy if someone figures out how to do parts of it, some routes, better than us or faster than us or cheaper than us,” he says, somewhat diplomatically.

“I wish these things were sustainable as well. We’re super anti-subsidising, just because we think that over the long-term it doesn’t make sense to get some users paying for other users’ transfers or for some routes to pay for other routes. Progress is going to be faster if it’s clean. But, at the end of the day, if there’s a better solution, we actually endeavour to recommend that better solution. It would be nice if that better solution was also transparent and we can confidently say that they’re not just better in the next 5 minutes but that they are going to be better for the next 5 hours when you can put in your transfer. It’s only fair to the consumers — they’re not stupid — that they should go wherever is cheapest, if they need that, or somewhere that is more convenient”.

Cue Monzo’s Blomfield to caution me not to get too caught up in the London fintech echo chamber. “Most people in the U.K. have never heard of Monzo or Revolut or TransferWise,” he says, “and so our mission over the next five years is to take market share off all of the big banks, who I think are gouging their customers on things like foreign exchange. There’s so much open space in front of us because big banks just aren’t able to keep up”.

Suppressed in Japan. Championed in New York. Accused of betraying the billion-dollar community he created with an arcane and byzantine ritual, while accidentally solving — maybe — a transnational clandestine mining mystery. All this while leading the rollout of some of the world’s most cutting-edge cryptographic technology into production.

It’s been an interesting six months for Zooko Wilcox, cryptographer, engineer, and CEO / driving force behind Zcash, one of the world’s most valuable, technically interesting, and politically fraught cryptocurrencies. Thoughtful, soft-spoken, quick to laugh, and eager to see all sides of every issue, he doesn’t seem like a man to inspire bans and rancor. But that’s the crypto world for you, these days.

When it comes to Zcash, “crypto” means both “cryptocurrency” and “cryptography,” for once. It is essentially a fork of Bitcoin which uses a mindbending branch of mathematics known as “zero-knowledge proofs” (which I’ve been writing about for years…) implemented in a form known as “zk-SNARKs,” to allow users to preserve their privacy by concealing both the participants and the amount of any given transaction, even though it is recorded on and guaranteed by Zcash’s public blockchain.

This privacy makes it a knee-jerk target of thoughtless governments and regulators, in the same way that cryptographic protection of your phone’s messages and data has become a knee-jerk target of law enforcement agencies who protest that they are “going dark.” Recently, in the wake of a $500 million hack of Japanese exchange Coincheck, which has been linked with North Korea, Japan’s financial regulator cracked down on privacy-preserving cryptocurrencies … even though they were not what had been stolen.

Zcash is not the only privacy-preserving cryptocurrency, of course; others include Monero and Dash. But it is the most cutting-edge. To an extent this has hampered it, as the first version of its zk-SNARK transactions were quite costly to process. Zcash has recently rolled out a new alpha version with remarkable improvements, though — you don’t often see a 98% improvement in anything in engineering — and we can expect a steady rise in zk-SNARK transactions once this hits its mainnet.

This vanguard position has not gone unnoticed. Ethereum made zk-SNARK primitives available to developers as part of its Byzantium release last year, though they have not yet been widely used. JPMorgan Chase has partnered with Zcash to implement privacy technology in its own corporate blockchain research. Perhaps as a result of this, and/or a deeper understanding that privacy is in fact important to the financial industry, New York State’s Department of Financial Services recently named Zcash as one of the six approved cryptocurrencies on the heavily regulated Gemini exchange. Yes, even as it was being suppressed in Japan. We live in interesting times.

Meanwhile, Zooko is being accused by his own community of turning turncoat. The reason? ASICs.

To oversimpify: (Almost) every cryptocurrency is secured by “miners” who prove they have solved computationally intensive problems, in order to show it would be impossible for anyone to have overwritten the consensus record of transactions unless they control more than half of the network’s computing power. In exchange for this service they get shiny new cryptocoins.

Bitcoin mining has long been taken over by mining companies / consortiums who use custom-built “application-specific integrated circuit,” chips to mine with hardware specifically dedicated to solving these problems, known as “hash functions,” with speed and energy efficiency that general-purpose processors cannot match.

In an attempt to democratize mining, many third-wave cryptocurrencies chose hash functions which were thought to be ASIC-resistant. Zcash was among them. However, ASIC designers are smart people too, and have announced ASICs for essentially all cryptocurrencies. Interestingly, when an ASIC was announced for Monero, its developers promptly changed their hash function to foil the would-be miners … and their “hash rate” dropped by nearly 50%, indicating that someone had likely secretly been mining Monero with ASICs for some time.

This is big business. Across all cryptocurrencies tens of millions of dollars a day are at stake, not even counting the costs of a so-called “51% attack” which have victimized a few smaller currencies of late. So when ASICs for Zcash were announced, and Zooko did not immediately move to change the hash algorithm as Monero did, he was accused of betrayal, and of being in the pocket of Jihan Wu, CEO of the miner manufacturer Bitmain and, if you believe the frothier corners of some cryptocurrency subreddits, all-around evil crypto boogeyman.

Every tradeoff in a billion-dollar market is going to hurt someone. In this case, on the one hand, you’d want the stereotypical “Venezuelan with a GPU miner,” who’s providing for their family with Zcash, the opportunity to keep doing so; on the other, ASIC mining means more dedicated hardware keeping the entire Zcash network more secure. Onn the gripping hand, drastic changes in mining capacity raise the spectre of a 51% attack. Zooko’s current notion is to try to support both GPU and ASIC miners, by dividing the mining rewards between them.

In passing he may have accidentally solved the secret Monero mining mystery. A fascinating thing about the cryptocurrency world, a way in which it’s increasingly a synecdoche for global geopolitics, is that it’s divided between a Chinese sphere and a Western sphere, and the two seem to be mostly tethered by bonds of mistrust, miscommunication, and misinterpretation.

Zooko was less inclined to believe that Jihan Wu was a Bond villain, because, as he puts it, “I’ve met him, at a conference in Buenos Aires, and he just seemed like a nerd like the rest of us. And I like nerds!” So he decided to communicate; he called up Wu and asked him if he was responsible for the stealth mining, and found Wu’s denials convincing. Then he called up Innosilicon, the other main mining company, asked if they had a Monero mining farm going back to last year, and received the hilariously casual answer “Yeah, I think so?” None of this is at all dispositive, of course — but it speaks to how the crypto world often seems to run on rumor and rancor more than open communication.

While we’re on the subject of conspiracy theories: perhaps the single most colorful thing about Zcash is that in order for its zk-SNARKs to work, they have to be initiated by a group of participants who must construct and then discard secret information. If they don’t, and if they subsequently collaborated, they’d then have the ability to create free Zcash out of thin air. Zcash was initiated with a complex six-person ritual, and if any one of those people was honest then the Zcash network is free of this so-called “toxic waste” taint … but obviously this still isn’t optimal, and is a breeding ground for beliefs of betrayal.

However, this underpinning can be replaced. Zooko is looking into new cryptographic developments such as “STARKs” and “bulletproofs” which provide even stronger guarantees. He envisions a world of “non-custodial exchanges,” where people can trade cryptocurrencies without ever giving up control of them. He’s plotting to implement Ittay Eyal and Emin Gun Sirer’s “Bitcoin-NG” protocol to scale Zcash up by an order or two of magnitude.

Meanwhile, the Secret Service has called for action on privacy-preserving cryptocurrencies like Monero and Zcash — after citing numerous cryptocurrency thefts which, er, were not of those currencies — and they’ve felt compelled to respond. All this a week before the Zcon0 developer conference he’s organized this week in Montreal … which will doubtless be attended by some people who consider him a sellout in the pocket of the evil Jihan Wu. I’ll say this for the cryptocurrency world: it’s rarely boring, and for better or worse, Zcash may well be its least boring front.