BIG DATA AND THE FUTURE OF MONEY

Daniel Austin,

Principal Architect

PayPal, Inc.

2nd World Big Data Congress

London, UK

June 27 2013 v1.3

Today’s Talk

Big Data is King

Big Data and Money

The Future of Money – Three Predictions

And the usual disclaimer – these views are my own and not necessarily those of my employer.

Ben Chaim - fotolia

BIG DATA MAKES ALL THE DIFFERENCE• The real Big Data problems are only now becoming

evident – in Media, Finance, & Administration• It’s not an accident that these problems are surfacing

now, just as we are able to bring the tools online to solve them

BIG DATA LETS US ASK BIG QUESTIONS• Are you a Big Data problem?

–How much data will you generate over the course of your lifetime? (~ 5 petabytes)

• How much of human behavior is predictable?–At what scales?–The answers may make us

uncomfortable• How much control can we have over the

Big Data about ourselves?

BIG DATA + BIG MONEY = BIG CHANGES

We can know more about what’s happening now

We can store it and manage it for a lot longer

This allows us to know more about the past

in order to better predict the future

MONEY IS A MEASURE OF ORDER• We add order to the

system by doing work on it – adding value by opposing entropy

• Big Data is a means of imposing order on large volumes of data

• Taking the friction out of payments increases their value

• Predictability also contributes to stability

Monetary Digital Encoding Methods

Bitmint• A means of digitizing the

value of money (in existing currencies)

• Respects the sovereign currency system – transparent and credible

• Allows for digital storage and transfer of funds

• Focused on cryptographic security and associated metadata

• Reduces anonymity

Bitcoin• Virtual standalone

currency• Lies outside the

sovereign currency system

• May be subject to instability

• Irreversible transactions offer high levels of anonymity – but at high risk

• May not enjoy the trust factor associated with nation-based financial systems

CURRENCIES AND CURRENCY OVERLAYS• Commercial services offer a ‘currency

overlay’ facility– Allows for the free flow of digital money while

preserving the distinctions between currencies

– Reduces ‘friction’ in payments, accelerating the flow of money globally and locally, perhaps at different rates

– Big Data facilitates this ability, allowing us to manage these flows in a secure and stable way

PRIVACY & SECURITY AS COMMODITIES?• Our ability to process Big Data problems

will open the door to recording a great deal of personal information

• As the value of security and privacy goes up, they will naturally come to be sold on the market

• How much of the data about your behavior can be kept truly private, given our ability to collect and manage large data systems?

EVOLUTION: MONEY AS AN APPLICATION • Digitally encoded currencies are only the

first step• Need to add application functionality

– “Object-oriented Money”– Encapsulate data, business rules – May include its own models – Allows for indeterministic behavior

• Conditional Money– Tied to a specific purpose or intent

SELF-AWARE MONEY?

What if you wanted to send $1000 into the future, say 1,000 years?• We need a means of preserving and

transferring value across longer timescales than existing currencies allow

• By giving money autonomy and conditionality we could enable action on our behalf over long periods of time.

•

PROGNOSTICATION - TIME HORIZONS 2

5-50 years

• National currencies become fully digitized

• Acceleration of money leads to acceleration of development

• Long-term autonomous financial instruments

5 -10 years

• Money as an application

• Monetary flows accelerate exponentially

• Privacy and Security as commodities

• First self-managing funds and financial models

36-60 Months

• Mobile payments continue to surge globally

• Evolution of digital currencies

• Big Data begins to blur the line between money and information

3 PREDICTIONS:THE FUTURE OF MONEY

• Big Data and (digital) Money will become more tightly coupled as the line between money and information blurs

• Our ability to control the Big Data we produce about ourselves will be limited

• Money will evolve toward becoming an application, with autonomous, self-managing long-term behavior

BIG DATA AND THE FUTURE OF MONEY

Daniel Austin,

Principal Architect

PayPal, Inc.

2nd World Big Data Congress

London, UK

June 27 2013 v1.3

Thank You!

daaustin@paypal-inc.com@daniel_b_austin

The future of money?