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The need-to-know takeaways from VidCon 2019

Posted by | Baidu, bytedance, Cargomatic, China, digital media, donald trump, DraftKings, events, Gaming, GGV, hans tung, Influencer Marketing, Kylie Jenner, Marketing, Media, musical.ly, new media, oprah winfrey, Singapore, social networks, Startups, STEM, synthetic media, TC, Tencent, tiktok, Twitch, Venture Capital, Video | No Comments

VidCon, the annual summit in Anaheim, CA for social media stars and their fans to meet each other drew over 75,000 attendees over last week and this past weekend. A small subset of those where entertainment and tech executives convening to share best practices and strike deals.

Of the wide range of topics discussed in the industry-only sessions and casual conversation, five trends stuck out to me as takeaways for Extra Crunch members: the prominence of TikTok, the strong presence of Chinese tech companies in general, the contemplation of deep fakes, curiosity around virtual influencers, and the widespread interest in developing consumer product startups around top content creators.

Newer platforms take center stage

GettyImages 1161447217

Photo by Jerod Harris/Getty Images

TikTok, the Chinese social video app (owned by Bytedance) that exploded onto the US market this past year, was the biggest conversation topic. Executives and talent managers were curious to see where it will go over the next year more than they were convinced that it is changing the industry in any fundamental way.

TikTok influencers were a major presence on the stages and taking selfies with fans on the conference floor. I overheard tweens saying “there are so many TikTokers here” throughout the conference. Meanwhile, TikTok’s US GM Vanessa Pappas held a session where she argued the app’s focus on building community among people who don’t already know each other (rather than being centered on your existing friendships) is a fundamental differentiator.

Kathleen Grace, CEO of production company New Form, noted that Tik Tok’s emphasis on visuals and music instead of spoken or written word makes it distinctly democratic in convening users across countries on equal footing.

Esports was also a big presence across the conference floor with teens lined up to compete at numerous simultaneous competitions. Twitch’s Mike Aragon and Jana Werner outlined Twitch’s expansion in content verticals adjacent to gaming like anime, sports, news, and “creative content’ as the first chapter in expanding the format of interactive live-streams across all verticals. They also emphasized the diversity of revenue streams Twitch enables creators to leverage: ads, tipping, monthly patronage, Twitch Prime, and Bounty Board (which connects brands and live streamers).

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Facebook’s testimony to Congress: Libra will be regulated by Swiss

Posted by | Apps, blockchain, Calibra, Congress, cryptocurrency, David Marcus, eCommerce, Facebook, Finance, Government, house of representatives, Libra, Libra Association, Mobile, payments, Personnel, Social, TC, U.S. Senate | No Comments

The head of Facebook’s blockchain subsidiary Calibra David Marcus has released his prepared testimony before Congress for tomorrow and Wednesday, explaining that the Libra Association will be regulated by the Swiss government because that’s where it’s headquartered. Meanwhile, he says the Libra Association and Facebook’s Calibra wallet intend to comply will all U.S. tax, anti-money laundering and anti-fraud laws.

“The Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA),” Marcus writes. “We have had preliminary discussions with FINMA and expect to engage with them on an appropriate regulatory framework for the Libra Association. The Association also intends to register with FinCEN [The U.S. Treasury Department’s Financial Crimes Enforcement Network] as a money services business.”

Marcus will be defending Libra before the Senate Banking Committee on July 16th and the House Financial Services Committees on July 17th. The House subcomittee’s Rep. Maxine Waters has already issued a letter to Facebook and the Libra Association requesting that it halt development and plans to launch Libra in early 2020 “until regulators and Congress have an opportunity to examine these issues and take action.”

The big question is whether Congress is savvy enough to understand Libra to the extent that it can coherently regulate it. Facebook CEO Mark Zuckerberg’s testimonies before Congress last year were rife with lawmakers dispensing clueless or off-topic questions.

Sen. Orin Hatch infamously demanded to know “how do you sustain a business model in which users don’t pay for your service?,” to which Zuckerberg smirked, “Senator, we run ads.” If that concept trips up Congress, it’s hard to imagine it grasping a semi-decentralized stablecoin cryptocurrency that took us 4,000 words to properly explain, and a six-minute video just to summarize.

Attempting to assuage a core concern that Libra is trying to replace the dollar or meddle in financial policy, Marcus writes that “The Libra Association, which will manage the Reserve, has no intention of competing with any sovereign currencies or entering the monetary policy arena. It will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy. Monetary policy is properly the province of central banks.”

Marcus’ testimony comes days after President Donald Trump tweeted Friday to condemn Libra, claiming that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity. Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.”

TechCrunch asked Facebook for a response Friday, which it declined to provide. However, a Facebook spokesperson noted that the Libra Association won’t interact with consumers or operate as a bank, and that Libra is meant to be a complement to the existing financial system.

Regarding how Libra will comply with U.S. anti-money laundering (AML) and know-your-customer (KYC) laws, Marcus explains that “The Libra Association is similarly committed to supporting efforts by regulators, central banks, and lawmakers to ensure that Libra contributes to the fight against money laundering, terrorism financing, and more,” Marcus explains. “The Libra Association will also maintain policies and procedures with respect to AML and the Bank Secrecy Act, combating the financing of terrorism, and other national security-related laws, with which its members will be required to comply if they choose to provide financial services on the Libra network.”

He argues that “Libra should improve detection and enforcement, not set them back,” because cash transactions are frequently used by criminals to avoid law enforcement. “A network that helps move more paper cash transactions—where many illicit activities happen—to a digital network that features regulated on- and off-ramps with proper know-your-customer (KYC) practices, combined with the ability for law enforcement and regulators to conduct their own analysis of on-chain activity, will present an opportunity to increase the efficacy of financial crimes monitoring and enforcement.”

As for Facebook itself, Marcus writes that “The Calibra wallet will comply with FinCEN’s rules for its AML/CFT program and the rules set by the Office of Foreign Assets Control (OFAC) . . . Similarly, Calibra will comply with the Bank Secrecy Act and will incorporate KYC and AML/CFT methodologies used around the world.”

These answers might help to calm finance legal eagles, but I expect much of the questioning from Congress will deal with the far more subjective matter of whether Facebook can be trusted after a decade of broken privacy promises, data leaks and fake news scandals like Cambridge Analytica.

That’s why I don’t expect the following statement from Marcus about how Facebook has transformed the state of communication will play well with lawmakers that are angry about how those changes impacted society. “We have done a lot to democratize free, unlimited communications for billions of people. We want to help do the same for digital currency and financial services, but with one key difference: We will relinquish control over the network and currency we have helped create.” Congress may interpret “democratize” as “screw up,” and not want to see the same happen to money.

Facebook and Calibra may have positive intentions to assist the unbanked who are indeed swindled by banks and money transfer services that levy huge fees against poorer families. But Facebook isn’t acting out of pure altruism here, as it stands to earn money from Libra in three big ways that aren’t mentioned in Marcus’ testimony:

  1. It will earn a share of interest earned on the Libra Reserve of traditional currencies it holds as collateral for Libra that could mount into the billions if Libra becomes popular.
  2. It will see Facebook ad sales grow if merchants seek to do more commerce over the internet because they can easily and cheaply accept online payments through Libra and therefore put marketing spend into those efficiently converting channels like Facebook and Google.
  3. It will try to sell additional financial services through Calibra, potentially including loans and credit where it could ask users to let it integrate their Facebook data to get a better rate, potentially decreasing defaults and earning Facebook larger margins than other players.

The real-world stakes are much higher here than in photo sharing, and warrant properly regulatory scrutiny. No matter how much Facebook tries to distance itself from ownership of Libra, it started, incubated and continues to lead the project. If Congress is already convinced “big is bad,” and Libra could make Facebook bigger, that may make it difficult to separate their perceptions of Facebook and Libra in order to assess the currency on its merits and risks.

Below you can read Marcus’ full testimony:

For full details on how Libra works, read our feature story on everything you need to know:

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Waze now shows road toll prices along your driving route

Posted by | Apps, Canada, crowdsourcing, Mobile, TC, transport, Transportation, United States, waze | No Comments

Navigation app Waze is making getting to where you’re going even easier — or at least more transparent. A new feature rolling out today will show you any tolls along your route, including the actual amount you’re going to pay, across both the U.S. and Canada.

This is above and beyond what you’ll get in most navigation apps, where you might get a visual or text indicator that there is a toll on one of the roads in your path (and you can opt to avoid them if possible) but you won’t know what you’re actually paying. With Waze, you’ll get the amount — sourced from its community of user-drivers, rather than direct from the official toll road operators — but Waze’s crowd-sourced navigation data often has a leg up on the official source in other cases.

Waze will show you the toll prices up front, too, before the navigation actually gets under way, which is great, because that’s when you actually have the opportunity to do something about it, whether it’s scrounging seat-cushion change or just choosing to drive a different way.

This will be rolling out beginning today, so keep an eye out if you’re trying to get somewhere in the U.S. or Canada.

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No technical reason to exclude Huawei as 5G supplier, says UK committee

Posted by | 5g, Asia, Australia, China, cyber security, Ericsson, Europe, huawei, human rights, Ian Levy, Internet of Things, jeremy wright, Mobile, National Cyber Security Centre, national security, Nokia, privacy, Security, TC, telecommunications, United Kingdom, United States, zte | No Comments

A UK parliamentary committee has concluded there are no technical grounds for excluding Chinese network kit vendor Huawei from the country’s 5G networks.

In a letter from the chair of the Science & Technology Committee to the UK’s digital minister Jeremy Wright, the committee says: “We have found no evidence from our work to suggest that the complete exclusion of Huawei from the UK’s telecommunications networks would, from a technical point of view, constitute a proportionate response to the potential security threat posed by foreign suppliers.”

Though the committee does go on to recommend the government mandate the exclusion of Huawei from the core of 5G networks, noting that UK mobile network operators have “mostly” done so already — but on a voluntary basis.

If it places a formal requirement on operators not to use Huawei for core supply the committee urges the government to provide “clear criteria” for the exclusion so that it could be applied to other suppliers in future.

Reached for a response to the recommendations, a government spokesperson told us: “The security and resilience of the UK’s telecoms networks is of paramount importance. We have robust procedures in place to manage risks to national security and are committed to the highest possible security standards.”

The spokesperson for the Department for Digital, Media, Culture and Sport added: “The Telecoms Supply Chain Review will be announced in due course. We have been clear throughout the process that all network operators will need to comply with the Government’s decision.”

In recent years the US administration has been putting pressure on allies around the world to entirely exclude Huawei from 5G networks — claiming the Chinese company poses a national security risk.

Australia announced it was banning Huawei and another Chinese vendor ZTE from providing kit for its 5G networks last year. Though in Europe there has not been a rush to follow the US lead and slam the door on Chinese tech giants.

In April leaked information from a UK Cabinet meeting suggested the government had settled on a policy of granting Huawei access as a supplier for some non-core parts of domestic 5G networks, while requiring they be excluded from supplying components for use in network cores.

On this somewhat fuzzy issue of delineating core vs non-core elements of 5G networks, the committee writes that it “heard unanimously and clearly” from witnesses that there will still be a distinction between the two in the next-gen networks.

It also cites testimony by the technical director of the UK’s National Cyber Security Centre (NCSC), Dr Ian Levy, who told it “geography matters in 5G”, and pointed out Australia and the UK have very different “laydowns” — meaning “we may have exactly the same technical understanding, but come to very different conclusions”.

In a response statement to the committee’s letter, Huawei SVP Victor Zhang welcomed the committee’s “key conclusion” before going on to take a thinly veiled swiped at the US — writing: “We are reassured that the UK, unlike others, is taking an evidence based approach to network security. Huawei complies with the laws and regulations in all the markets where we operate.”

The committee’s assessment is not all comfortable reading for Huawei, though, with the letter also flagging the damning conclusions of the most recent Huawei Oversight Board report which found “serious and systematic defects” in its software engineering and cyber security competence — and urging the government to monitor Huawei’s response to the raised security concerns, and to “be prepared to act to restrict the use of Huawei equipment if progress is unsatisfactory”.

Huawei has previously pledged to spend $2BN addressing security shortcomings related to its UK business — a figure it was forced to qualify as an “initial budget” after that same Oversight Board report.

“It is clear that Huawei must improve the standard of its cybersecurity,” the committee warns.

It also suggests the government consults on whether telecoms regulator Ofcom needs stronger powers to be able to force network suppliers to clean up their security act, writing that: “While it is reassuring to hear that network operators share this point of view and are ready to use commercial pressure to encourage this, there is currently limited regulatory power to enforce this.”

Another committee recommendation is for the NCSC to be consulted on whether similar security evaluation mechanisms should be established for other 5G vendors — such as Ericsson and Nokia: Two European based kit vendors which, unlike Huawei, are expected to be supplying core 5G.

“It is worth noting that an assurance system comparable to the Huawei Cyber Security Evaluation Centre does not exist for other vendors. The shortcomings in Huawei’s cyber security reported by the Centre cannot therefore be directly compared to the cyber security of other vendors,” it notes.

On the issue of 5G security generally the committee dubs this “critical”, adding that “all steps must be taken to ensure that the risks are as low as reasonably possible”.

Where “essential services” that make use of 5G networks are concerned, the committee says witnesses were clear such services must be able to continue to operate safely even if the network connection is disrupted. Government must ensure measures are put in place to safeguard operation in the event of cyber attacks, floods, power cuts and other comparable events, it adds. 

While the committee concludes there is no technical reason to limit Huawei’s access to UK 5G, the letter does make a point of highlighting other considerations, most notably human rights abuses, emphasizing its conclusion does not factor them in at all — and pointing out: “There may well be geopolitical or ethical grounds… to enact a ban on Huawei’s equipment”.

It adds that Huawei’s global cyber security and privacy officer, John Suffolk, confirmed that a third party had supplied Huawei services to Xinjiang’s Public Security Bureau, despite Huawei forbidding its own employees from misusing IT and comms tech to carry out surveillance of users.

The committee suggests Huawei technology may therefore be being used to “permit the appalling treatment of Muslims in Western China”.

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Petcube’s Bites 2 and Play 2 amuse pets and humans alike with Alexa built-in

Posted by | albums, cameras, Gadgets, hardware, laser, pet, petcube, products, Reviews, smart speakers, Sonos, sonos one, Speaker, TC | No Comments

Petcube’s original Bites smart treat dispenser and Play pet camera with a built-in laser pointer were great for pet parents who couldn’t always be around to hang out with their furry charges, but the new Bites 2 and Play 2 come with one big new upgrade that make them far more versatile than the original: They both double as Alexa-powered smart speaker devices.

Both the Bites 2 and Play 2 can hear and respond to Alexa requests, with a four-microphone array that in my limited testing actually outperforms the Alexa mics built into my Sonos One and Sonos Beam speakers, which is pretty impressive for devices whose main features are serving up treats and keeping an eye on your pets. That’s on top of the Bites 2 being able to remotely dispense treats for your pet, and the Play 2 providing playtime away from home with a built-in laser pointer you can direct from your phone.

The Bites 2 and Play 2 also feature other improvements, including new wider angle lenses that offer full 180-degree views of your home for more likelihood you’ll spot your pets wandering around, and better Wi-Fi connectivity support with additional 5GHz networking, plus night vision and full HD video. Currently, the field of view is limited to 160-degrees, with an update to follow that will unlock the full 180; for most users, the 160 FOV is going to show you an entire room and then some.

With the Bites 2, you can also initiate video calls and chat with your pet, though my dog Chelsea basically is just confused by this. It is handy if I need to ask my partner if there’s anything else I’m forgetting to pick up from the store, however. And the treat-flinging feature definitely does appeal to Chelsea, especially now that it’s Alexa-integrated so that I can easily issue a voice command to give her a well-earned reward.

This has actually proven more than just fun — Chelsea suffers from a little bit of separation anxiety, so when we leave our condo she usually spends a few quick minutes complaining audibly with some rather loud barks. But since getting the Petcube Bites 2 to test, I’ve been reinforcing good behavior by reminding her to keep quiet, waiting outside the door and then flinging her a treat or two for her troubles. It’s pretty much done away with the bye-bye barking in just a short time.

The Play 2 doesn’t fling treats, but it does have a built-in laser pointer (which the company says is totally safe for your pet’s eyes). Chelsea straight up does not understand the laser or even really acknowledge it, so that’s a bit of a miss, but with a friend’s cat this proved an absolute show-stopping feature. I’ve also known dogs previously who loved this, so your mileage may vary, but if you’re unsure, it’s probably worth picking up a dollar-store laser pointer keychain first to ensure it’s their jam.

The $249 Bites 2 and $199 Play 2 offer a ton of value in just the image and build quality upgrades over their original incarnations, and their basic features are probably plenty enough for doting pet parents. But the addition of Alexa makes these both much more appealing in my opinion, since it essentially bundles an Echo in each device at no extra cost.

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Hero Labs raises £2.5M for its ultrasonic device to monitor a property’s water use and prevent leaks

Posted by | Earthworm Group, Europe, Gadgets, Hero Labs, Recent Funding, Startups, TC | No Comments

Hero Labs, a London-based startup that is developing “smart” technology to help prevent water leaks in U.K. properties, has raised £2.5 million in seed funding. The round is led by Earthworm Group, an environmental fund manager, with further support via a £300,000 EU innovation grant and a number of unnamed private investors.

The new capital will be used by Hero Labs to accelerate development of its first product: a smart device dubbed “Sonic” that uses ultrasonic technology to monitor water use within a property, including the early detection of water leaks.

Founded in 2018 by Krystian Zajac after he exited Neos, a smart home insurer that was acquired by Aviva, Hero Labs was born out of the realisation that a lot of smart home technology either wasn’t very smart or didn’t solve mass problems (Zajac had also previously run a smart home company focusing on ultra-high-net-worth individuals that delivered bespoke designs for things like motorised swimming pool floors or home cinemas doubling up as panic rooms).

Coupled with this, the Hero Labs founder learned that water wastage was a very costly problem, both financially and environmentally, with water leaks being the number one culprit for property damage in the U.K., ahead of fires, gas explosions or break-ins combined. This sees water leaks cost the U.K. insurance industry £1 billion per year, apparently.

“My vision for the company is to solve real-life problems with truly smart technology,” Zajac tells me. “From working at Neos and alongside some of the world’s largest home insurers I understood the problems that impacted ordinary homeowners and their families on a day-to-day basis. Perhaps most surprisingly, I learnt that water leaks are far and way the biggest cause of damage to homes… I also wanted to do more for the environment in my next venture after learning that water leaks waste 3 billion litres of water a day in the U.K. alone.”

KZ Event

To that end, the Sonic device and service is described as a smart leak defence system. Aimed at anyone who wants to prevent water leaks in their property — including homeowners, landlords, facilities management, property developers and businesses — the ultrasonic device typically attaches to the piping below your sink and “listens” to the vibrations coming off the interconnected pipes.

Sonic then monitors the water flow using machine learning and its algorithms to identify usage and detect anomalies. This requires the technology to understand the difference between appliances, running taps and even flushing toilets so that it can build up a picture of normal water usage in the home and in turn identify if that pattern is broken. Crucially, if needed, Sonic can automatically shut off the water supply to prevent a water leak from damaging the property or its possessions.

Will a full launch planned for later this year, Sonic is targeting consumers as well as small businesses initially. “We are [also] in discussions with insurers who might subsidise the product or give it away completely for free to certain more affluent customers to minimise the risk of water escape,” adds Zajac.

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Archinaut snags $73 million in NASA funding to 3D-print giant spacecraft parts in orbit

Posted by | 3d printing, Archinaut, Gadgets, hardware, Made In Space, Space, TC | No Comments

A project to 3D-print bulky components in space rather than bring them up there has collected a $73.7 million contract from NASA to demonstrate the technique in space. Archinaut, a mission now several years in development from Made In Space, could launch as soon as 2022.

The problem at hand is this: If you want a spacecraft to have solar arrays 60 feet long, you need to bring 60 feet of structure for those arrays to attach to — they can’t just flap around like ribbons. But where do you stash a 60-foot pole, or two 30-foot ones, or even 10 six-foot ones when you only have a few cubic feet of space to put them in? It gets real complicated real fast to take items with even a single large dimension into space.

Archinaut’s solution is simple. Why not just take the material for that long component into space and print it out on the spot? There’s no more compact way to keep the material than as a brick of solid matter.

Naturally this extends (so to speak) to more than simply rods and poles — sheets of large materials for things like light sails, complex interlocking structures on which other components could be mounted… there are plenty of things too big to take into space in one piece, but which could be made of smaller ones if necessary. Here’s one made for attaching instruments at a large fixed distance from a central craft:

optimast3Made in Space already has contracts in place with NASA, and has demonstrated 3D printing of parts aboard the International Space Station. It has also shown that it can print stuff in an artificial vacuum more or less equivalent to a space environment.

The demonstrator mission, Archinaut One, would launch aboard a Rocket Lab Electron launch vehicle no earlier than 2022, and after achieving a stable orbit, begin extruding a pair of beams that will eventually extend out 32 feet. Attached to these beams will be flexible solar arrays that unfurl at the same rate, attached to the rigid structures of the beams. When they’re finished, a robotic arm will lock them in place and do other housekeeping.

You can see it all happen in this unfortunately not particularly exciting video:

Once finished, this pair of 32-foot solar arrays would theoretically generate some five times the power that a spacecraft that size would normally pull in. Because spacecraft are almost without exception power-starved systems, having more watts to use or store for the orbital equivalent of a rainy day would certainly be welcome.

In another print, the robot arm could rearrange parts, snap on connectors and perform other tasks to create more complex structures like the ones in the concept art up top. That’s still well in the future, however — the current demonstrator mission will focus on the beam-and-array thing, though the team will certainly learn a lot about how to accomplish other builds in the process.

Naturally in-space manufacturing is a big concern for a country that plans to establish a permanent presence on and around the Moon. It’s a lot easier to make something there than make a quarter-million-mile delivery. You can keep up with Archinaut and Made In Space’s other projects along the space-printing line at the company’s blog.

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These robo-ants can work together in swarms to navigate tricky terrain

Posted by | artificial intelligence, EPFL, Gadgets, hardware, robotics, science, TC | No Comments

While the agility of a Spot or Atlas robot is something to behold, there’s a special merit reserved for tiny, simple robots that work not as a versatile individual but as an adaptable group. These “tribots” are built on the model of ants, and like them can work together to overcome obstacles with teamwork.

Developed by EPFL and Osaka University, tribots are tiny, light and simple, moving more like inchworms than ants, but able to fling themselves up and forward if necessary. The bots themselves and the system they make up are modeled on trap-jaw ants, which alternate between crawling and jumping, and work (as do most other ants) in fluid roles like explorer, worker and leader. Each robot is not itself very intelligent, but they are controlled as a collective that deploys their abilities intelligently.

In this case a team of tribots might be expected to get from one end of a piece of complex terrain to another. An explorer could move ahead, sensing obstacles and relaying their locations and dimensions to the rest of the team. The leader can then assign worker units to head over to try to push the obstacles out of the way. If that doesn’t work, an explorer can try hopping over it — and if successful, it can relay its telemetry to the others so they can do the same thing.

fly tribot fly

Fly, tribot, fly!

It’s all done quite slowly at this point — you’ll notice that in the video, much of the action is happening at 16x speed. But rapidity isn’t the idea here; similar to Squishy Robotics’ creations, it’s more about adaptability and simplicity of deployment.

The little bots weigh only 10 grams each, and are easily mass-produced, as they’re basically PCBs with some mechanical bits and grip points attached — “a quasi-two-dimensional metamaterial sandwich,” according to the paper. If they only cost (say) a buck each, you could drop dozens or hundreds on a target area and over an hour or two they could characterize it, take measurements and look for radiation or heat hot spots, and so on.

If they moved a little faster, the same logic and a modified design could let a set of robots emerge in a kitchen or dining room to find and collect crumbs or scoot plates into place. (Ray Bradbury called them “electric mice” or something in “There will come soft rains,” one of my favorite stories of his. I’m always on the lookout for them.)

Swarm-based bots have the advantage of not failing catastrophically when something goes wrong — when a robot fails, the collective persists, and it can be replaced as easily as a part.

“Since they can be manufactured and deployed in large numbers, having some ‘casualties’ would not affect the success of the mission,” noted EPFL’s Jamie Paik, who co-designed the robots. “With their unique collective intelligence, our tiny robots can demonstrate better adaptability to unknown environments; therefore, for certain missions, they would outperform larger, more powerful robots.”

It raises the question, in fact, of whether the sub-robots themselves constitute a sort of uber-robot? (This is more of a philosophical question, raised first in the case of the Constructicons and Devastator. Transformers was ahead of its time in many ways.)

The robots are still in prototype form, but even as they are, constitute a major advance over other “collective” type robot systems. The team documents their advances in a paper published in the journal Nature.

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Digging into the Roblox growth strategy

Posted by | Apps, EC-1, funding, Fundings & Exits, Gaming, Media, Startups, TC, Venture Capital, Video, Virtual reality | No Comments

Could Roblox create a new entertainment and communication category, something it calls “human co-experience”?

When it was a small startup, few observers would have believed in that future. But after 15 years — as told in the origin story of our Roblox EC-1 — the company has accumulated 90 million users and a new $150 million venture funding war chest. It has captured the imagination of America’s youth, and become a startup darling in the entertainment space.

But what, exactly, is human co-experience? Well, it can’t be described precisely — because it’s still an emerging category. “It’s almost like that fable where the nine blind men are touching and describing an elephant.

Everyone has a slightly different view,” says co-founder and CEO Dave Baszucki. In Roblox’s view, co-experience means immersive environments where users play, explore, talk, hang out, and create an identity that’s as thoroughly fleshed out (if not as fleshy) as their offline, real life.

But the next decade at Roblox will also be its most challenging time yet, as it seeks to expand from 90 million users to, potentially, a billion or more. To do so, it needs to pull off two coups.

First, it needs to expand the age range of its players beyond its current tween and teen audience. Second, it must win the international market. Accomplishing both of these will be a puzzle with many moving parts.

What Roblox is today

Lineup All 1

One thing Roblox has done very well is appeal to kids within a certain age range. The company says that a majority of all 9-to-12-year-old children in the United States are on its platform.

Within that youthful segment, Roblox has arguably already created the human co-experience category. Many games are more cooperative than competitive, or have goals that are unclear or don’t seem to matter much. One of Roblox’s most popular games, for instance, is MeepCity, where players can run around and chat in virtual environments like a high school without necessarily interacting with the game mechanics at all.

What else separates these environments from what you can see today on, say, the App Store or Steam? A few characteristics seem common.

For one, the environments look rough. One Robloxian put the company’s relaxed attitude toward looks as “not over-indexing on visual fidelity.”

Roblox games also ignore the design principles now espoused by nearly every game company. Tutorials are infrequent, user interfaces are unpolished, and one gets the sense that KPIs like retention and engagement are not being carefully measured.

That’s similar to how games on platforms like Facebook and the App Store started out, so it seems reasonable to say Roblox is just in a similarly early stage. It is — but it’s also competing directly with mobile games that are more rigorously designed. Over half of its players are on smartphones, where they could have chosen a free game that looks more polished, like Fortnite or Clash of Clans.

The more accurate explanation of why Roblox draws big player numbers is that there’s a gap in the kids entertainment market. So far, only Roblox fills that gap, despite its various shortcomings.

“The amount of unstructured, undirected play has been declining for decades. [Kids] have much more homework, and structured activities like theater after school.

One of the big unmet needs we solve is to give kids a place to have imagination,” explains Craig Donato, Roblox’s chief business officer. “If you play the experiences on our platform, you’re not playing to win. You go into these worlds with people you know and share an experience.”

Games like The Sims tried to do the same, but eventually faded in the children’s demo. Roblox’s trick has been continued growth: it provides kids with an endless array of games that unlock their imagination. But just like we don’t expect adults to have fun with Barbie dolls, it’s unlikely most adults would enjoy Roblox games.

Of course, it would be easy to point at Roblox and laugh off its ambitions to win over people of all ages. That laughter would also be short-sighted.

As David Sze, the Greylock Partners investor who led Roblox’s most recent round, pointed out: “When we invested in Facebook there was a huge amount of pushback that nobody would use it outside college.” Companies that have won over one demographic have a good chance of winning others.

Roblox has also proven its ability to evolve. At one time, the platform’s players were 90 percent male. Now, that’s down to about 60 percent. Roblox now has far more girls playing than the typical game platform.

Evolving to new demographics

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Facebook answers how Libra taxes & anti-fraud will work

Posted by | Apps, blockchain, Calibra, cryptocurrency, donald trump, eCommerce, Facebook, Finance, Government, Libra, Libra Association, Mobile, payments, Policy, TC | No Comments

Facebook provided TechCrunch with new information on how its cryptocurrency will stay legal amidst allegations from President Trump that Libra could facilitate “unlawful behavior.” Facebook and Libra Association executives tell me they expect Libra will incur sales tax and capital gains taxes. They confirmed that Facebook is also in talks with local convenience stores and money exchanges to ensure anti-laundering checks are applied when people cash-in or cash-out Libra for traditional currency, and to let you use a QR code to buy or sell Libra in person.

A Facebook spokesperson said the company wouldn’t respond directly to Trump’s tweets, but noted that the Libra association won’t interact with consumers or operate as a bank, and that Libra is meant to be a complement to the existing financial system.

Trump had tweeted that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity. Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.”

For a primer on how Libra works, watch our explainer video below or read our deep dive into everything you need to know:

In a wide-reaching series of interviews this week, the Libra Association’s head of policy Dante Disparte, Facebook’s head economist for blockchain Christian Catalini and Facebook’s blockchain project subsidiary Calibra’s VP of product Kevin Weil answered questions about regulation of Libra. Here’s what we’ve learned (their answers were trimmed for clarity but not edited):

Would Facebook’s Calibra Wallet launch elsewhere even if it’s banned in the USA by regulators?

Calibra’s Kevin Weil: We believe that creating a financial ecosystem that has significantly broader access where all it takes is a phone and lower transaction fees across the board is good for people. And we want to bring it to as many people around the world as we can. But as a custodial wallet we are regulated and will be compliant and we will only operate in markets where we’re allowed.

We want that to be as many markets as possible. That’s why we announced well in advance of actually launching a product — because we’ve been engaging with regulators. We’re continuing to engage with regulators and we can help them understand the effort that we’re taking to make sure that people are safe and also the value that accrues to the people in their countries when there’s broader access to financial services with lower transaction fees across the board.

Facebook Calibra Libra Wallet

TechCrunch: But what if you’re banned in the U.S.?

Weil: I’m hesitant to give a blanket answer. But in general, we believe that Libra is positive for people and we want to launch as broadly as possible. The world where the U.S. does that I think would probably cause other regulatory regimes to also be concerned about it. I think that’s very much a bridge that we’ll cross when we get there. But so far we’re having frank, open and honest discussions with regulators. Obviously, that continues next week with David’s testimony. And I hope it doesn’t come to that, because I think that Libra can do a lot of good for a lot of people.

TechCrunch’s Analysis: The U.S. House subcommittee has already submitted a letter to Facebook requesting that it cease development of Libra and Calibra until regulators can better examine it and take action. It sounds like Facebook believes a U.S. ban on Libra/Calibra would cause a domino effect in other top markets, and therefore make it tough to rationalize still launching. That puts even more pressure on the outcome of July 16th and 17th’s congressional hearings on Libra with the head of Facebook’s head of Calibra, David Marcus.

How will users cash-in and cash-out of Libra in person?

We already know that Facebook’s own Libra wallet called Calibra will be baked into Messenger and WhatsApp plus have its own standalone app. There, those with connected bank accounts and government ID that go through a Know Your Customer (KYC) anti-fraud/laundering check will be able to buy and sell Libra. But a big goal of Libra is to bring the unbanked into the modern financial system. How does that work?

Weil: Because Libra is an open ecosystem, any money exchange business or entrepreneur can begin supporting cash-in/cash-out without needing any permission from anyone associated with the Libra Association or member of the Libra Association. They can just do it. Today in a lot of emerging markets [there’s a service for matching you with someone to exchange cryptocurrency for cash or vice-versa called] LocalBitcoins.com and I think you’ll see that with Libra too.

Second, we can augment that by by working with local exchanges, convenience stores and other cash-in/cash-out providers to make it easy from within Calibra. You could imagine an experience in the Calibra app or within Messenger or WhatsApp, where if you want to cash in or cash out, you’ll pop up a map that highlights physical locations around that allow you to do it. You select one that’s nearby, you select an amount, and you get a QR code that you can take to them and complete the transaction.

I’d imagine that most of these businesses that we work with will support Libra more broadly, so even if we get these deals started it will benefit the whole ecosystem and every Libra wallet, not just Calibra.

Facebook Calibra

TechCrunch: Have you struck relationships with any convenience store operators or money exchangers like Western Union or MoneyGram, or Walgreens, CVS or 7-Eleven? Are you in talks with them yet?

Weil: I probably shouldn’t comment on any specific deals but we’re in conversation with a lot of the folks you might think, because ultimately being able to move between Libra and your local currency is critical to driving adoption and utility in the early days . . . If you’re banked there are easier ways to do that. If you’re not banked and you’re in cash — those are the people we really want to serve with Libra — we’re working very hard to make that process easy for people.

TechCrunch’s analysis: This approach will let Calibra largely avoid the complicated and potentially error-prone process of KYCing people in person or handing out cash by offloading the responsibility and liability to other parties.

How will Libra stop fraud or laundering while offering access to unbanked users without ID?

Weil: There are very important populations that don’t have an ID. People in a refugee camp may not, as an example, and we want Libra to serve them. So this is one example of many of why it’s important that Calibra isn’t the only option for people who want to participate in the Libra ecosystem  . . . Others of these will be run by local providers and they have programs to meet customers face-to-face and other ways to serve people and even KYC them that we may not . . .  We’re not going be the only wallet, we don’t want to be the only wallet.

This is one of the reasons NGOs have been members of the Libra association from the start, because we want to encourage the monetization of identity processes both through working with governments issuing credentials for more people and also making use of new types of information for identity and authentication. We hope this process will hep the last mile problem.

In the case of a non-custodial wallet, the user isn’t trusting anyone. The way the regulations have worked and this is evolving as we speak. The on-ramps and off-ramps to the crypto world are regulated and they have direct customer relationships and it’s their responsibility to KYC people. In our case we’ll be a custodial wallet and we’ll KYC people. There are a number of wallets in the Bitcoin or Ethereum ecosystem — non-custodial wallets that don’t have a direct relationships with the users. . . They have to get that Bitcoin somehow. Usually they’re going through an exchange where usually as part of the process they’re KYC’d.

In a lot of emerging markets you have LocalBitcoins.com where you can find a representative or agent who will meet you in person and exchange cash for bitcoin in whatever market you have to be in. And I believe that they just started making sure that they KYC everyone, but they’re doing it in person. And they have more flexibility in how they do it than you might otherwise. I think there are lots of ways that this will happen and the fact that Libra is an open ecosystem will enable people to be entrepreneurial about it.

There are lots an lots of people who are underserved by today’s financial ecosystem who have government ID. So even with requiring everyone go through a KYC process, we’ll be able to serve many, many people who are not well-served by today’s financial ecosystem. We want to find ways to support people who can’t KYC and the important part is that Calibra will fully interoperate with any other wallet, including ones that people in local markets are using because it’s a better fit for their needs.

TechCrunch: Through that interoperability, if someone with a non-custodial wallet receives Libra and then sends it a Calibra wallet user, does that mean you Libra coming into Calibra from users who weren’t KYC’d and could be laundering money?

Weil: So it’s part of the regulatory situation that’s evolving as we speak. There’s something called the Travel Rule . . . If there’s a transfer above a certain value you have to make sure that you understand both who the sender is, which you do if they’re using a custodial wallet, and who the receiver is. These are evolving regulations, but it’s something that obviously we’re going to make sure that we implement as regulations solidify.

TechCrunch’s Analysis: Calibra appears to be inviting regulation that it can strictly abide by rather than trying to guess at what the best approach is. But given it’s unclear when concrete rules will be established for transfers between non-custodial wallets and custodial wallets, or for in-person cashing, Facebook and Calibra may need to establish their own strong protocols. Otherwise they could be guilty of permitting the “unlawful behavior” Trump describes.

Libra Mission Statement

How will Libra be taxed?

Dante Disparte of Libra: Taxing of digital assets is something that’s being designed at the local level and at the jurisdiction level. Our view of the world is that like with any form of money or any form of payment or banking, the onus in terms of compliance with tax is with the individual user and consumer, and the same would hold true broadly here.

We expect that the many, many wallets and financial services providers building solutions on the Libra blockchain would begin to provide tools that make it much easier than it is today [to calculate and file taxes] for digital assets and cryptocurrencies more generally . . .  There’s plenty of time between now and Libra hitting the market to begin defining this more strictly at the jurisdictional level among providers.

TechCrunch’s Analysis: Again, here Facebook, Calibra and the Libra Association are hoping to avoid shouldering all the responsibility for taxes. Their position is that just as you have to take the initiative of paying your taxes whether or not you use a Visa card or your bank’s checks to transact, it’s on you to pay your Libra taxes.

TechCrunch: Do you think in the United States that it’s reasonable for the government to ask that Libra transactions be taxed?

Disparte: Tax treatments of digital assets broadly hasn’t been entirely clarified in most places around the world. And we hope that this is something that this project and the ecosystem around it helps to clarify.

Tax authorities will see a benefit from Libra at the consumption level and at the household level, while some cryptocurrencies have avoided taxes until the point they tried to cash out. But the nature of it and the lack of speculation and its design we think should give it a light tax treatment the way you would find with traditional currencies.

Calibra Transactions 2

Christian Catalini of Facebook: Cryptocurrencies are taxed right now every time you have a sale on the differences in gains and losses. Because Libra is designed to be a medium of exchange, those gains and losses are likely to be very tiny relative to your local currency . . . Sales tax would likely be implemented the exact same way on Libra as it is today when you pay with a credit card.

At launch giving current regulations, the Calibra wallet will have to track every purchase and sale of Libra for a U.S. user and those differences will have to be reported on tax day. You can think of the losses, albeit they may be very small gains and losses relative to USD, as similar to the what people do today when they have a Coinbase account with Bitcoin.

The sales tax I think could be implemented in the exact same way as it today with any other sort of digital payment, it would be no different. If you’re buying goods or services with Libra you’ll be paying sales tax the same way as if you used a different form of payment. Like today when you see a percentage, that is the sales tax on your total.

Disparte: Maybe the best way to frame how taxes work all over the world is that it’s not up to Libra, Calibra, Facebook or any company to make that determination. It’s up to regulators and authorities.

TechCrunch: Does Calibra already have plans in place for how to handle sales tax?

Weil: That’s also a pretty rapidly evolving part of the regulatory ecosystem right now. It’s really an ongoing discussion. We will do whatever the regulation says we need to do.

TechCrunch’s Analysis: Here we have the firmest answers of our interviews. Facebook, Calibra and the Libra Association believe the proper approach to taxes is that Libra transactions carry a country’s traditional sales tax, and that Libra you hold in your wallet will have to pay taxes based on the Libra stablecoin’s value (that’s pegged to a basket of international currencies) relative to the U.S. dollar.

If the Libra Association recommends all wallets and transactions follow these rules and Calibra builds in protocols to handle these taxes simply, at least the government can’t argue Libra is a method of dodging taxes and everyone paying their fair share.

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