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November 21, 2018
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Can Bitcoin find its practical use case as a currency in Latin America?

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Eduardo Gomez started with Bitcoin in 2012, though he didn’t quite understand what he was getting himself into nor how it would change his life.

Back in his home country of Venezuela, the struggling computer science student signed up to manually process thousands of captchas at a time, and he received Bitcoin in return. Little by little, Eduardo became intrigued. He saw bitrapreneurs pop-up all around him as savvy hackers set up mining operations that took advantage of the country’s subsidized though irregular electricity. He started reading more, writing more, and pretty soon he became a recognized authority on all things crypto.

Eventually he would be hired by a company that allows people to purchase things on Amazon using Bitcoin. When Venezuela became unlivable, Eduardo’s company helped him and his support team relocate to Argentina. In a moment of euphoria, Eduardo wrote:

Though Venezuela crumbled around him, Eduardo found a way to opt-out of his government’s mass-imposed misery. He still worries about his family and friends, but he’s grateful to have had a choice. Unlike the Silicon Valley-based techno-libertarians and utopians who claim Bitcoin will save us from inevitable tyrannical government meddling, Eduardo feels Bitcoin actually did save him from tyrannical government meddling. He believes it can do the same for other Latin Americans, as well.

Since its triumphant arrival to mainstream polite conversation, Bitcoin and its underlying technology blockchain have promised to revolutionize everything from commerce to voting.

While blockchain appears to be fulfilling its promise, many wonder if Bitcoin will ever get around to acting as a viable currency rather than just a store of value or speculative asset.

While Bitcoin can be credited with spawning a new industry of cryptocurrency, in 2018 we still seem to be a ways away from purchasing ice cream or hourly parking with Bitcoin — or any other cryptocurrency for that matter.  

If Bitcoin is to become a viable means of exchange, Latin America would appear to be the currency’s first point of entry on its journey toward ubiquity. Indeed, the region’s long history of economic mismanagement makes Bitcoin adoption as much a necessity as a luxury.  

For example, when you arrive at Simon Bolivar International Airport in Caracas you’ll see an official exchange rate listed above the currency exchange kiosks, and you might be tempted to cash-in your U.S. dollars for whatever the local currency happens to be that month.

Maybe even before you leave the airport someone, possibly a taxi driver, will approach you and offer a completely different and far more beneficial exchange rate. Though the government purports to control the exchange rate across the country of 30 million people, it struggles to control the exchange rate inside the airport.

If you’re dining in Buenos Aires and you offer to pay in U.S. dollars, you’ll be happy to know you’ll receive a favorable exchange rate for your Benjamins. However, once you pull a bill from your pocket, you may find yourself in a seemingly nonsensical discussion with the waiter about the quality of the bill and how the slightly bent edges means a lower rate than the one initially offered.

Finally, if you arrive in Quito, Ecuador as a tourist, you’ll be delighted to see that the country has no currency of its own in circulation: the country has used the greenback since a financial crisis in 1999 destroyed the banking system and the country’s currency. In an act of desperation, the country switched to the U.S. dollar.  

Your glee may turn to discomfort after you ask a taxi driver to break a $20 bill and you’ll see him fidget nervously and probably ask you for exact change. Few things are harder in the Andean capital than breaking a $20. Never having the right mix of bills is one of the downsides of not controlling your own money supply.

For your average tourist, these encounters are befuddling. To economists, these incidents are both sad and bemusing: all of the worst-case currency management scenarios first-year economics students study in textbooks seem to come to life in the countries that are fed by the Amazon river and its tributaries — like a twisted Narnia for economists.

To the local populations of the aforementioned countries, managing currencies has turned common people into artisanal forex traders. While annoying, volatile currencies have been around for as long as anyone can remember, and people adjust their behavior in order to survive. If you want to buy an apartment in Buenos Aires, for example, you’ll be expected to arrive with the payment in U.S. dollars in cash. Best to invest in a good briefcase.

Unequal access to technology often means unequal access to the benefits of technology.

As crypto enters its peak or its decent, depending on who you ask, Latin America offers the perfect testing ground for the technology’s practical application. Specifically, Argentines and Venezuelans would appear to be the test group for the use of crypto currencies as an alternative to unstable and unreliable national currencies.

In a parallel world, both Argentina and Venezuela would be the region’s richest countries, were it not for their leaders’ penchants for mismanagement and corruption. With oil reserves greater than those of Saudi Arabia, Venezuela should be thriving. Instead, its experiment with socialism has resulted in more than two million people leaving the country, a wrecked economy and a humanitarian crisis that threatens regional stability.  

Argentina’s current crisis is far more complex, and yet also more predictable due to the country’s history of boom and bust.

Despite the initial optimism voiced by foreign investors when a right-leaning pro-market government came to power in 2017, such optimism has not been reflected in support for the peso.

The peso has suffered due to, amongst other factors, a strengthening dollar, dwindling foreign currency reserves and investor mistrust. Inflation caused by past policies of over-printing money to service local debt combined with the current government’s elimination of energy subsidies means that Argentines can’t be sure on Monday what their money will be worth on Friday.

The theatrics of Argentina’s politics also doesn’t inspire confidence, and breaking news can often send the peso on nosedives. Stories of corruption unfold like Emmy-winning soap operas.  

For example, the recently discovered notebooks of a government chofer reveal that businesses close to the current president are alleged to have paid bribes to its bitter rivals from the previous government. Regardless of their ideological differences, Latin America’s political class is often united in its penchant for corruption.

The cyclical nature of Argentina’s currency crisis is what gives some hope that the country can become the first to develop a thriving national Bitcoin market. Already a hotbed for blockchain-based companies such as Ripio, Buenos Aires has a higher percentage of businesses that accept Bitcoin than New York. By the end of 2018, Argentina will have more than 100 Bitcoin ATMs, a number expected to increase to 1,600 by the end of 2019.

For Agustina Fainguersch, an Argentine entrepreneur who helps companies, including many in Latin America as managing partner at Wolox, manage digital transformation through the adoption of technologies such as the blockchain, Bitcoin is a practical solution for the average Argentine just trying to make ends meet.

“In Argentina, we exchange pesos into dollars and then back again within the span of a week,” she says. Given that the peso has lost 50 percent of its value against the dollar since the beginning of 2018, most are changing money for the purpose of short-term survival rather than long-term savings. “Many Argentines are often just trying to make sure they have enough money to cover basic expenses.”

According to Fainguersch, the advantage Bitcoin has over other currencies is its increasingly availability, and as such acts as an alternative to the U.S. dollar. Fainguersch has seen how, over the span of a few years, more and more Argentines can access the cryptocurrency and easily exchange pesos. “So long as it’s less volatile than the peso, it’s attractive. Argentine’s have a long history of navigating volatility,” notes Fainguersch.

That volatility, however, is also a risk that places Bitcoin at a disadvantage when compared to the U.S. dollar. Also widely available, the dollar is relatively stable and relatively easy to exchange, though not without burdens and risks, such as falsified bills, hence the extra-value placed on crisp bills.

The future of Bitcoin will depend on which narratives become the meta-narratives.

For Matías Bianchi, the Argentine political scientist and founder of the regional think-tank Asuntos del Sur, the demand for Bitcoin in Argentina follows a familiar pattern: Like much technology that promises to democratize access to something, the benefits of said technology most likely end up helping a wealthy few at the expense of the increasingly hard-luck masses.

In the case of Bitcoin, Bianchi opines that its adoption in Argentina is driven in large part by a wealthy class that has always looked for ways to subvert the country’s institutions to protect its wealth and to benefit from speculative financial activities. “Bitcoin allows the elites to opt-out of the poor decisions made by the government they help install.” After all, unequal access to technology often means unequal access to the benefits of technology.

For Bianchi, talk of an alternative to the national currency is elitist hogwash. Even if a larger and larger percentage of Argentines use Bitcoin, Bianchi argues, 100 percent of Argentines still need to use pesos. As such, opting out of the peso is a luxury for some but not for a viable solution for all. In Bianchi’s view of the world, Bitcoin is more like a modern-day offshore account that removes wealth from the economy and shifts the burden of bad government to the poor. It’s like a Cayman Islands account on your phone, and in countries where corruption is rife and stability is rare, such technology is bound to thrive.

For Venezuelans arriving in Argentina like the aforementioned Eduardo Gomez, their new country’s currency woes are not unfamiliar. As previously mentioned, Eduardo was a student in Venezuela when he first discovered Bitcoin. As the bottom fell out of the Venezuelan economy, Bitcoin mining became a popular activity in a country where everything is subsidized, including energy. Eventually the government caught on and cracked down, but not before a nascent Bitcoin community took form.

Undemocratic Socialist governments tend to replace economic elites with elites who are connected to the sources of power, and, according to Gomez, people with connections in the government eventually took over the Bitcoin mining space. Venezuela even launched its own cryptocurrency, the Petro, whose value is tied to oil production. The Petro has been met with skepticism from both crypto-enthusiasts as well as average Venezuelans who have long lost faith that the government responsible for their problems is capable of solving them.

As previously mentioned, Venezuelans have been leaving their country en masse to escape the entirely man-made crisis that has engulfed their country, and more than 130,000 have settled in Argentina. Gomez sees the parallels between Argentina’s current predicament and the one he left behind in Venezuela, though he feels Argentina’s crisis is tame compared to the complete social breakdown suffered in Venezuela.  

Compared to Venezuela, trading Bitcoin in Argentina is much easier: users in both countries use LocalBitCoin.bom to connect with buyers and sellers to facilitate converting money to and from local currencies. The process is somewhat archaic and not without risks. Unlike in Venezuela, in Argentina many money exchangers also offer Bitcoin exchange services. Whereas in Venezuela buyers and sellers run the risk of the government discovering their Bitcoin activities and blocking their bank accounts, in Argentina the government is more concerned about individuals not declaring their income or capital gains.

Both Argentina and Venezuela have offered the ideal conditions for the development of national Bitcoin communities, including the two key ingredients: subsidized energy and unstable national currencies.

As a result, both countries have benefited from the emergence of developer communities focused both on cryptocurrencies as well as blockchain-enabled technologies. Nonetheless, neither country is likely to fulfill the Bitcoin fantasy of replacing their national currencies, nor even overtaking the greenback as an alternative to unstable national currencies.

Bitcoin’s ultimate use cases are more likely to appear along the lines of existing power structures. Wealthy people in Argentina will use Bitcoin to hide their money. Corrupt Venezuelan officials will find a way to enrich themselves at the cost of the struggling masses. Having said that, if Bitcoin becomes as stable as the U.S. greenback, its use as a store of value will continue to increase.

Other innovations will also emerge: as Gomez points point, the launch of Coinbase’s USD coin, a cryptocurrency pegged to the U.S. dollar, could make it a lot easier for people to move money between dollars, pesos and bitcoins without the need to carry physical cash. One of Argentina’s leading Bitcoin thinkers, Santiago Siri, has proposed to the country’s Central Bank that it hold 1 percent of its foreign currency reserves in cryptocurrency. Though the plan is unlikely to succeed, Argentina’s desperate circumstances has opened the door for out-of-the-box thinking.

Is it easier for technology to co-opt power than it is for power to co-opt technology?

The emergence of Bitcoin as an alternative to the U.S. dollar will not reduce the need for sound monetary policy, nor will the stability promised by the U.S. dollar become less attractive for the average Argentine or Venezuelan looking to make ends meet rather than speculate away their savings. In either case, Bitcoin does not replace the need for sound institutions.

Of course, if President Trump is successful in gaining control of the U.S. Federal Reserve in order to begin manipulating monetary policy to benefit his short-term political agenda, the U.S. dollar could lose its attractiveness. So far, however, U.S. institutions appear to be fairly resilient in the face of the type of intrusive leadership Latin Americans know all too well.

Though its proponents will continue to tout Bitcoin’s superiority vis-à-vis fiat currencies, Bitcoin’s ultimate challenge is that it is hard to understand and will therefore be defined by stories we tell about it. In other words, the future of Bitcoin will depend on which narratives become the meta-narratives: will Bitcoin be defined by the Eduardo Gomez stories of individuals who escape systems of tyranny thanks to Bitcoin, or the corrupt government officials who receive bribes in their anonymous crypto-wallet, or the drug traffickers who evades detection by shifting from U.S. dollar payments to crypto?

Over 50 years ago Marshall McLuhan wrote, “the new media and technologies by which we amplify and extend ourselves constitute a huge collective surgery carried out on the social body with complete disregard for antiseptics.” Bitcoin is the perfect example of a surgery we are undertaking on the body politic without necessarily understanding the far-reaching consequences. We have to consider that making policy decisions based on the currency’s theoretical promise may not result in a better world.

At the same time, we should also be open to re-thinking how the world operates for the sake of empowering people through technology. The challenge for democratizing technologies is that they must take on and overcome existing power structures. In Latin America institutions are often weak, which is part of the reason why Bitcoin can flourish there: the poison and the antidote spring from the same well. That doesn’t mean, however, that there aren’t powerful and resilient interests filling the voids left by those floundering institutions.

Ultimately the question for Bitcoin in Latin America and elsewhere in the world is following: Is it easier for technology to co-opt power than it is for power to co-opt technology? Argentina and Venezuela are putting that question to the test. The world watches.

News Source = techcrunch.com

Cities that didn’t win HQ2 shouldn’t be counted out

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The more than year-long dance between cities and Amazon for its second headquarters is finally over, with New York City and Washington, DC, capturing the big prize. With one of the largest economic development windfalls in a generation on the line, 238 cities used every tactic in the book to court the company – including offering to rename a city “Amazon” and appointing Jeff Bezos “mayor for life.”

Now that the process, and hysteria, are over, and cities have stopped asking “how can we get Amazon,” we’d like to ask a different question: How can cities build stronger start-up ecosystems for the Amazon yet to be built?

In September 2017, Amazon announced that it would seek a second headquarters. But rather than being the typical site selection process, this would become a highly publicized Hunger Games-esque scenario.

An RFP was proffered on what the company sought, and it included everything any good urbanist would want, with walkability, transportation and cultural characteristics on the docket. But of course, incentives were also high on the list.

Amazon could have been a transformational catalyst for a plethora of cities throughout the US, but instead, it chose two superstar cities: the number one and five metro areas by GDP which, combined, amounts to a nearly $2 trillion GDP. These two metro areas also have some of the highest real estate prices in the country, a swath of high paying jobs and of course power — financial and political — close at hand.

Perhaps the take-away for cities isn’t that we should all be so focused on hooking that big fish from afar, but instead that we should be growing it in our own waters. Amazon itself is a great example of this. It’s worth remembering that over the course of a quarter century, Amazon went from a garage in Seattle’s suburbs to consuming 16 percent — or 81 million square feet — of the city’s downtown. On the other end of the spectrum, the largest global technology company in 1994 (the year of Amazon’s birth) was Netscape, which no longer exists.

The upshot is that cities that rely only on attracting massive technology companies are usually too late.

At the National League of Cities, we think there are ways to expand the pie that don’t reinforce existing spatial inequalities. This is exactly the idea behind the launch of our city innovation ecosystems commitments process. With support from the Schmidt Futures Foundation, fifty cities, ranging from rural townships, college towns, and major metros, have joined with over 200 local partners and leveraged over $100 million in regional and national resources to support young businesses, leverage technology and expand STEM education and workforce training for all.

The investments these cities are making today may in fact be the precursor to some of the largest tech companies of the future.

With that idea in mind, here are eight cities that didn’t win HQ2 bids but are ensuring their cities will be prepared to create the next tranche of high-growth startups. 

Austin

Austin just built a medical school adjacent to a tier one research university, the University of Texas. It’s the first such project to be completed in America in over fifty years. To ensure the addition translates into economic opportunity for the city, Austin’s public, private and civic leaders have come together to create Capital City Innovation to launch the city’s first Innovation District at the new medical school. This will help expand the city’s already world class startup ecosystem into the health and wellness markets.

Baltimore

Baltimore is home to over $2 billion in academic research, ranking it third in the nation behind Boston and Philadelphia. In order to ensure everyone participates in the expanding research-based startup ecosystem, the city is transforming community recreation centers into maker and technology training centers to connect disadvantaged youth and families to new skills and careers in technology. The Rec-to-Tech Initiative will begin with community design sessions at four recreation centers, in partnership with the Digital Harbor Foundation, to create a feasibility study and implementation plan to review for further expansion.

Buffalo

The 120-acre Buffalo Niagara Medical Center (BNMC) is home to eight academic institutions and hospitals and over 150 private technology and health companies. To ensure Buffalo’s startups reflect the diversity of its population, the Innovation Center at BNMC has just announced a new program to provide free space and mentorship to 10 high potential minority- and/or women-owned start-ups.

Denver

Like Seattle, real estate development in Denver is growing at a feverish rate. And while the growth is bringing new opportunity, the city is expanding faster than the workforce can keep pace. To ensure a sustainable growth trajectory, Denver has recruited the Next Generation City Builders to train students and retrain existing workers to fill high-demand jobs in architecture, design, construction and transportation. 

Providence

With a population of 180,000, Providence is home to eight higher education institutions – including Brown University and the Rhode Island School of Design – making it a hub for both technical and creative talent. The city of Providence, in collaboration with its higher education institutions and two hospital systems, has created a new public-private-university partnership, the Urban Innovation Partnership, to collectively contribute and support the city’s growing innovation economy. 

Pittsburgh

Pittsburgh may have once been known as a steel town, but today it is a global mecca for robotics research, with over 4.5 times the national average robotics R&D within its borders. Like Baltimore, Pittsburgh is creating a more inclusive innovation economy through a Rec-to-Tech program that will re-invest in the city’s 10 recreational centers, connecting students and parents to the skills needed to participate in the economy of the future. 

Tampa

Tampa is already home to 30,000 technical and scientific consultant and computer design jobs — and that number is growing. To meet future demand and ensure the region has an inclusive growth strategy, the city of Tampa, with 13 university, civic and private sector partners, has announced “Future Innovators of Tampa Bay.” The new six-year initiative seeks to provide the opportunity for every one of the Tampa Bay Region’s 600,000 K-12 students to be trained in digital creativity, invention and entrepreneurship.

These eight cities help demonstrate the innovation we are seeing on the ground now, all throughout the country. The seeds of success have been planted with people, partnerships and public leadership at the fore. Perhaps they didn’t land HQ2 this time, but when we fast forward to 2038 — and the search for Argo AISparkCognition or Welltok’s new headquarters is well underway — the groundwork will have been laid for cities with strong ecosystems already in place to compete on an even playing field.

News Source = techcrunch.com

Quantum computing, not AI, will define our future

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The word “quantum” gained currency in the late 20th century as a descriptor signifying something so significant, it defied the use of common adjectives. For example, a “quantum leap” is a dramatic advancement (also an early ’90’s television series starring Scott Bakula).

At best, that is an imprecise (though entertaining) definition. When “quantum” is applied to “computing,” however, we are indeed entering an era of dramatic advancement.

Quantum computing is technology based on the principles of quantum theory, which explains the nature of energy and matter on the atomic and subatomic level. It relies on the existence of mind-bending quantum-mechanical phenomena, such as superposition and entanglement.

Erwin Schrödinger’s famous 1930’s thought experiment involving a cat that was both dead and alive at the same time was intended to highlight the apparent absurdity of superposition, the principle that quantum systems can exist in multiple states simultaneously until observed or measured. Today quantum computers contain dozens of qubits (quantum bits), which take advantage of that very principle. Each qubit exists in a superposition of zero and one (i.e., has non-zero probabilities to be a zero or a one) until measured. The development of qubits has implications for dealing with massive amounts of data and achieving previously unattainable level of computing efficiency that are the tantalizing potential of quantum computing.

While Schrödinger was thinking about zombie cats, Albert Einstein was observing what he described as “spooky action at a distance,” particles that seemed to be communicating faster than the speed of light. What he was seeing were entangled electrons in action. Entanglement refers to the observation that the state of particles from the same quantum system cannot be described independently of each other. Even when they are separated by great distances, they are still part of the same system. If you measure one particle, the rest seem to know instantly. The current record distance for measuring entangled particles is 1,200 kilometers or about 745.6 miles. Entanglement means that the whole quantum system is greater than the sum of its parts.

If these phenomena make you vaguely uncomfortable so far, perhaps I can assuage that feeling simply by quoting Schrödinger, who purportedly said after his development of quantum theory, “I don’t like it, and I’m sorry I ever had anything to do with it.”

Various parties are taking different approaches to quantum computing, so a single explanation of how it works would be subjective. But one principle may help readers get their arms around the difference between classical computing and quantum computing. Classical computers are binary. That is, they depend on the fact that every bit can exist only in one of two states, either 0 or 1. Schrödinger’s cat merely illustrated that subatomic particles could exhibit innumerable states at the same time. If you envision a sphere, a binary state would be if the “north pole,” say, was 0, and the south pole was 1. In a qubit, the entire sphere can hold innumerable other states and relating those states between qubits enables certain correlations that make quantum computing well-suited for a variety of specific tasks that classical computing cannot accomplish. Creating qubits and maintaining their existence long enough to accomplish quantum computing tasks is an ongoing challenge.

IBM researcher Jerry Chow in the quantum computing lab at IBM’s T.J. Watson Research Center.

Humanizing Quantum Computing

These are just the beginnings of the strange world of quantum mechanics. Personally, I’m enthralled by quantum computing. It fascinates me on many levels, from its technical arcana to its potential applications that could benefit humanity. But a qubit’s worth of witty obfuscation on how quantum computing works will have to suffice for now. Let’s move on to how it will help us create a better world.

Quantum computing’s purpose is to aid and extend the abilities of classical computing. Quantum computers will perform certain tasks much more efficiently than classical computers, providing us with a new tool for specific applications. Quantum computers will not replace their classical counterparts. In fact, quantum computers require classical computer to support their specialized abilities, such as systems optimization.

Quantum computers will be useful in advancing solutions to challenges in diverse fields such as energy, finance, healthcare, aerospace, among others. Their capabilities will help us cure diseases, improve global financial markets, detangle traffic, combat climate change, and more. For instance, quantum computing has the potential to speed up pharmaceutical discovery and development, and to improve the accuracy of the atmospheric models used to track and explain climate change and its adverse effects.

I call this “humanizing” quantum computing, because such a powerful new technology should be used to benefit humanity, or we’re missing the boat.

Intel’s 17-qubit superconducting test chip for quantum computing has unique features for improved connectivity and better electrical and thermo-mechanical performance. (Credit: Intel Corporation)

An Uptick in Investments, Patents, Startups, and more

That’s my inner evangelist speaking. In factual terms, the latest verifiable, global figures for investment and patent applications reflect an uptick in both areas, a trend that’s likely to continue. Going into 2015, non-classified national investments in quantum computing reflected an aggregate global spend of about $1.75 billion USD,according to The Economist. The European Union led with $643 million. The U.S. was the top individual nation with $421 million invested, followed by China ($257 million), Germany ($140 million), Britain ($123 million) and Canada ($117 million). Twenty countries have invested at least $10 million in quantum computing research.

At the same time, according to a patent search enabled by Thomson Innovation, the U.S. led in quantum computing-related patent applications with 295, followed by Canada (79), Japan (78), Great Britain (36), and China (29). The number of patent families related to quantum computing was projected to increase 430 percent by the end of 2017

The upshot is that nations, giant tech firms, universities, and start-ups are exploring quantum computing and its range of potential applications. Some parties (e.g., nation states) are pursuing quantum computing for security and competitive reasons. It’s been said that quantum computers will break current encryption schemes, kill blockchain, and serve other dark purposes.

I reject that proprietary, cutthroat approach. It’s clear to me that quantum computing can serve the greater good through an open-source, collaborative research and development approach that I believe will prevail once wider access to this technology is available. I’m confident crowd-sourcing quantum computing applications for the greater good will win.

If you want to get involved, check out the free tools that the household-name computing giants such as IBM and Google have made available, as well as the open-source offerings out there from giants and start-ups alike. Actual time on a quantum computer is available today, and access opportunities will only expand.

In keeping with my view that proprietary solutions will succumb to open-source, collaborative R&D and universal quantum computing value propositions, allow me to point out that several dozen start-ups in North America alone have jumped into the QC ecosystem along with governments and academia. Names such as Rigetti Computing, D-Wave Systems, 1Qbit Information Technologies, Inc., Quantum Circuits, Inc., QC Ware, Zapata Computing, Inc. may become well-known or they may become subsumed by bigger players, their burn rate – anything is possible in this nascent field.

Developing Quantum Computing Standards

 Another way to get involved is to join the effort to develop quantum computing-related standards. Technical standards ultimately speed the development of a technology, introduce economies of scale, and grow markets. Quantum computer hardware and software development will benefit from a common nomenclature, for instance, and agreed-upon metrics to measure results.

Currently, the IEEE Standards Association Quantum Computing Working Group is developing two standards. One is for quantum computing definitions and nomenclature so we can all speak the same language. The other addresses performance metrics and performance benchmarking to enable measurement of quantum computers’ performance against classical computers and, ultimately, each other.

The need for additional standards will become clear over time.

News Source = techcrunch.com

Africa’s agtech wave gets $10 million richer as Twiga Foods raises more capital

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Kenya’s Twiga Foods has raised $10 million from investors led by the International Finance Corporation to add processed food and fast moving consumer goods to its product line-up.

The startup has built a B2B platform to improve the supply chain from farmers to markets. Twiga Foods now aims to scale additional merchandise on its digital network that coordinates pricing, payment, quality control, and logistics across sellers and vendors.

CEO and co-founder Grant Brooke sees “a growth horizon…to build a B2B Amazon,” with produce as the base.

“If we can build a business around fresh fruit and vegetables, everything else after that is much simpler to add on,” he told TechCrunch.

“Fresh food and vegetables gives you clients that are ordering every two days, and now that’s paying for access to vendors and a proper way to be on every street,” said Brooke.

“It’s now much easier to lay things over that that would have been very expensive to get to end retailers.” In addition to the processed food FMCG it will add now, CEO Grant Brooke named household goods, such as light-bulbs that stock and sell in lower volumes than produce, as something the startup could include in the future.     

The $10 million IFC led investment—co-led by TLcom Capital—comes in the form of convertible notes, available later as equity, according to Wale Ayeni, regional head of IFC’s Africa VC practice. As part of the deal, Ayeni will join Twiga Foods’ board.

Of the decision to fund the startup, Ayeni indicated IFC likes what the company’s already done in “figuring out a way to service a mass market with a digital platform focused on food in a sector that’s not really been touched,” he said. Another factor was Twiga’s prospects to create additional revenue by improving B2B supply chain for FMCG and other consumer products.

Co-founded in Nairobi in 2014 by Brooke and Kenyan Peter Njonjo, Twiga Foods serves around 2000 outlets a day with produce through a network of 13,000 farmers and 6000 vendors. Parties can coordinate goods exchanges via mobile app using M-Pesa mobile money for payment.

The company has reduced typical post-harvest losses in Kenya from 30 percent to 4 percent for produce brought to market on the Twiga network, according to Brooke.

“That’s savings we can offer the outlets and better pricing we can offer the farmers,” he said.

Twiga Foods generates revenues from margins on the products it buys and sells. As an example, the company could buy bananas at around 19 Schillings ($.19) a kilo and sell at 34 ($.34) Schillings a kilo.

“Our margin is how efficient we are at moving products between those two elements” and the company purchases from farmers at roughly 10 percent higher than Kenya’s traditional produce middle-men, according to Brooke.

Agtech has become a prominent startup sector in Africa. A number of companies, such as Ghana’s Agrocenta and Nigeria’s Farmcrowdy, have raised VC for apps that coordinate payments, logistics, and working capital across the continent’s farmers and food markets.

In 2017 Twiga Foods raised a $10.3 million Series A round lead by Wamda Capital. Earlier this year the startup partnered with IBM Africa to introduce a blockchain enabled finance working capital platform to its network of vendors.

With the new investment and product expansion, Twiga Foods will explore offering additional financial services to its client network. The startup doesn’t divulge revenue information but “profitability is on the horizon for us,” said Brooke.

Twiga Foods will maintain its focus primarily on Kenya, but “we’re starting to research and dabble in Tanzania,” according to Brooke.

The startup doesn’t plan to move beyond B2B to direct online retail. “I don’t think B2C e-commerce is viable on the continent once you factor in job size and cost of acquisition versus lifetime value,” said Brooke. He also named the high cost of marketing: “In B2C e-commerce space you really have to be in the advertising space. Our clients are ordering every two days with no marketing budget,” said Brooke.

So for the time being, Twiga Foods aims to stick with improving the supply chain for products between Kenya’s buyers and sellers.

News Source = techcrunch.com

Nigerian data analytics company Terragon acquires Asian mobile ad firm Bizense

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Nigerian consumer data analytics firm Terragon Group has acquired Asian mobile marketing company Bizense in a cash and stock deal.

Based in Singapore, with operations in India and Indonesia, Bizense specializes in “mobile ad platform[s] for Telco’s, large publishers, and [e-commerce] ad networks” under its proprietary Adatrix platform—according to its website and a release.

The price of the acquisition was not disclosed.

The company lists audience analytics, revenue optimization, and white label SSP services among its client offerings.

Headquartered in Lagos, Terragon’s software services give its clients — primarily telecommunications and financial services companies — data on Africa’s growing consumer markets.

Products allow users to drill down on multiple combinations of behavioral and demographic information and reach consumers through video and SMS  campaigns while connecting to online sales and payments systems.

Terragon clients include local firms, such as Honeywell, and global names including Unilever, DHL, and international agribusiness firm Olam.

The company’s founder and CEO Elo Umeh sees cross-cutting purposes for Terragon services in other markets.

“Most of the problems we seek to solve for our clients in Africa also exist in places like South East Asia and Latin America,” Umeh told TechCrunch.

The Bizense acquisition doesn’t lessen Terragon’s commitment to its home markets, according to Umeh.

“We are…super focused on Africa right now, building out propriety platforms powered by data and artificial intelligence to help Telco’s, SMEs, FMCGsand financial institutions …increase their customer base and drive more transaction volumes,” he said.

Terragon’s CEO would not divulge the acquisition value, saying only that it consisted of  “a combination of cash and stocks, with the actual amount not disclosed.”

In an interview with TechCrunch earlier this year, Umeh confirmed the company was looking into global expansion.

Tarragon already has a team of 100 employees across Nigeria, KenyaGhana and South Africa.

Umeh indicated the company is contemplating further expansion in Asia and the Latin America, where Terragon already has consumer data research and development teams.

With the Bizense acquisition Terragon plans to “build out platforms, tools and machine learning models to help businesses…acquire new customers and get existing customers to do more.”

Bizense founder and CEO Amit Khemchandani will be involved in this process. “We are excited about the next phase of this journey as we innovate for Africa and other emerging markets,” he said.

With the exception of South African media and investment giant Naspers, acquisitions of any kind—intra-continental or international—are a rarity for Sub-Saharan African startups and tech companies.

Terragon’s acquisition in Singapore, and other moves made by several other Nigerian startups this year, could change that. African financial technology companies like Mines and Paga announced their intent to expand in and outside Africa. They would join e-commerce site MallforAfrica, which went global in July in a partnership with DHL.

News Source = techcrunch.com

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