🗞️ Smoke & Mirrors and Innovation to Extinction

Writing a paper for an International journal resulted in a better understanding and stopped me in my tracks.

Excuse the rambling. This is written in the true sense of blogging, and it started life as a short blog post idea, transforming into this, for what it’s worth. So I decided to cross-post it here first. I’ll publish it verbatim on my blog soon. That blog is another outlet for my brain, and not exclusively about matters digital.

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I wrote a paper proposal for an international hotel industry journal sometime last year. My proposal was accepted, and I started writing in earnest. The paper had a deadline, and I was on track to finish on time, which is extremely rare for me. Sadly, that went south as I progressed and began to formulate a more complete picture of the technology I was writing about and its origins.

The title was:

Is Web 3.0 the next great opportunity in tourism?

The introduction goes like this:

Since the advent of the commercial internet, businesses in the travel and tourism industry have harnessed technology to promote their destinations. Some early tourism websites tried, in vain, to replicate the marketing materials traditionally used to promote destinations, mainly hotels.

This “copy and paste” methodology was seriously limited due to the underlying factors that meant that media-rich websites were near unusable for those with dial-up internet at 56kb/s and invisible for the majority who had not yet become connected to the internet. These simplistic lists of hotels and tourist attractions displaying available amenities neither incited nor informed potential visitors.

Broadband’s wide deployment and adoption enabled a new generation of technologies that would later be named Web 2.0. These technologies allowed media-rich websites to be developed. Many hotel websites today not only market properties in attractive ways but also allow potential visitors to reserve rooms, pay for their stay, and in some cases, simplify check-in and check-out, all achieved automatically without any interaction with reception staff. Today, many of the technologies of Web 2.0 allow hotels to generate first-party data for use elsewhere in their business. For example, for marketing, demand generation or even stock control. It allows benchmarking against other hotels within the same group or in comparison to similar competition. The distinction is important, and it separates these businesses from others that operate through travel agencies, typically providing little or no valuable data for such purposes.

Today, we are at an inflexion point where technology is evolving rapidly, and the adoption is accelerating and becoming more democratised. Technologies like Blockchain, Augmented/Virtual Reality, digital money (through tokens and CDBCs), and the metaverse can allow businesses in the travel and tourism industry to take advantage of this shift. It enables better value and faster client discovery. For example, several key performance indicators, such as the technology acceptance model (TAM), perceived usefulness (PU) and perceived enjoyment (ENJ), showed how virtual reality helped maintain potential visitor interest in destinations cut off by the pandemic and how that technology affected the tendency to visit the actual site (TenAS) (El-Said and Aziz, 2021).

This paper will discuss these technologies and how they may be harnessed so that visitors and non-visitors alike can be incited to visit destinations around the globe, thus generating value for the tourism industry.

Do the new technologies of the Metaverse and web3 provide opportunities for the tourism industry?

Specifically, the following research questions will be addressed:

  1. What are the new technologies, and how are they used?

  2. What are the opportunities and risks associated with this technology?

  3. How can the tourism industry best utilise this technology to its advantage?

The paper’s structure was pretty classic in that there is an introduction (see above), a discussion on what web3 is, a literature review, and a discussion ending with conclusions. All sections are researched and backed up with examples and references.

A lot of it has already been written. Sadly, I started this at possibly the worst possible time for the technology, as it coincided with when web3 began to be exposed for the smoke and mirrors it turned out to be.

I couldn’t faithfully finish the paper as I was becoming increasingly sceptical about the fundamentals of web3, its purported merits and far-right origins. How could I write such a paper and stand by it when I didn’t believe or support most of it?

I have always been crypto sceptical, but I have kept an open mind on blockchain tech and have publicly said so on several occasions here and as a guest on various podcasts. No longer. I’m no longer much of an enthusiast about it.

How did I get here?

Writing a paper is nothing like writing a blog post or firing off a simple observation on social media. For one, papers are generally peer-reviewed before publication. That process starts at the proposal phase, and my proposal didn’t pass on initial inspection, requiring some changes to be considered for publication. Peer review is brutal. If someone doesn’t like or agree with you, they’ll tell you straight and point out why with facts, observations and references as to where you are wrong. When diving deep into a subject, you can quickly build a cognitive bias and eventually see things that aren’t necessarily there or see something that you wish was there (wish casting). During peer review, this is spotted and called out almost immediately.

Secondly, as I researched deeper into the world of web3, I found more things that I couldn’t agree with. It made me uncomfortable and left me dealing with cognitive dissonance. Cognitive dissonances never end well. One example of the things I was struggling with was the criminal amounts of energy wasted by one of the most useless technologies ever conceived. Blockchain. Without getting into the technical details, some blockchains use what is termed Proof of Work. Linked is the Wikipedia article on what that is. Take the time to read it. Reread it if you have already. I refer to it as Proof of Waste, as I have concluded that it is a more accurate term. Blockchains waste disgraceful amounts of energy on slow validations that could easily be done with existing database technology for a fraction of the cost and an order of magnitude faster.

Yes, I know that the new shiny kid on the block is Proof of Stake, and its energy consumption is vastly reduced. But it also goes directly against a central tenet of web3, decentralisation. Proof of stake puts power into the hands of the most invested (as in money). That sounds very distributed and democratic to me. The EU has recommended that Proof of Stake be used instead of Proof of Waste, threatening an outright ban on it. Only one high-profile cryptocurrency has completed the move to Proof of Stake, taking over eight years in the process.

But here’s another aspect that many seem to have misunderstood. Blockchain is directly against the law in the EU, as outlined in the General Data Protection Regulation (GDPR). Of the advertised “advantages” of blockchain is immutability. Blocks are Immutable, i.e., permanent. This is illegal in the EU because the GDPR mandates that people have the right to correct errors and rectify false information through due process. Blockchain doesn’t (can’t) do that. Data on the chain is not erasable. Likewise, illegal. Blockchain prevents ledger data from being deleted. That data is part of the chain. Break the chain, and you break the system.

Then there’s the whole thing of NFTs or Non-Fungable Tokens. What a scam! Personified recently by a certain DT, camply cosplayed up as various imaginary Superheros, and a grift so big it could probably be seen from space.

For the paper —getting back to the subject— I’d thought about how destinations and hotels could mint tokens and sell them as souvenirs. I still quite like the idea and think it has some merit, but the ecosystem is not yet there. Regulation is missing. How do you display them? Can you resell them? What governs gains, losses, and value? Do people really want to virtue signal they’ve been to Bali in this way? How do you prevent grifters and scammers?

For the moment, NFTs are essentially simple pump-and-dump scams that prey on the unsuspecting, the vulnerable, and the plain stupid. I don’t think that is a morally acceptable way to run a business. But then again, I’m not a thief.

On the energy aspect, with energy costs rising and no near-term solution to the impending climate crisis, any project that adds to the planet’s burden should be considered illegal. Yes, you can say that my words here are useless and use energy wastefully in their production, distribution (email) and reading. That’s true. But wake me up when this uses the amount of energy of a small European country, and I’ll gladly stop. Wake me up when the sum total of all the WordPress blogs on the internet reaches the same energy levels as that wasted by Bitcoin to “prove” your magic bean is worth something. And don’t forget that there are literally hundreds of thousands of other magic beans out there too!

They presented some of the systems they’d built and yep, we were impressed. Then, with the startup CTO in the room, one of my fellow engineers asked the key question: “All these systems, are there any that wouldn’t work without blockchain?” The guy didn’t even hesitate: “No, not really.”

The above is taken from a blog post by Tim Bray (AWS). Pro blockchain or not, you should read it as it nicely sums up blockchain’s uselessness.

Even more sinister…

Back to the paper. During my research, I happened upon the following book:

The Politics of Bitcoin: Software as Right-Wing Extremism

Here’s an extract:

By far the majority of interest in Bitcoin came from technologists and those who follow and admire the work of technologists. To those of us who were watching Bitcoin with an eye toward politics and economics, though, something far more striking than Bitcoin’s explosive rise in value became apparent: in the name of this new technology, extremist ideas were gaining far more traction than they previously had outside of the extremist literature to which they had largely been confined. Dogma propagated almost exclusively by far-right groups like the Liberty League, the John Birch Society, the militia movement, and the Tea Party, conspiracy theorists like Alex Jones and David Icke, and to a lesser extent rightist outlets like the Fox media group and some right-wing politicians, was now being repeated by many who seemed not to know the origin of the ideas, or the functions of those ideas in contemporary politics. These ideas are not simply heterodox or contrarian: they are pieces of a holistic worldview that has been deliberately developed and promulgated by right-wing ideologues. To anyone aware of the history of right-wing thought in the United States and Europe, they are shockingly familiar: that central banking such as that practiced by the U.S. Federal Reserve is a deliberate plot to “steal value” from the people to whom it actually belongs; that the world monetary system is on the verge of imminent collapse due to central banking policies, especially fractional reserve banking; that “hard” currencies such as gold provide meaningful protection against that purported collapse; that inflation is a plot to steal money from the masses and hand it over to a shadowy cabal of “elites” who operate behind the scenes; and more generally that the governmental and corporate leaders and wealthy individuals we all know are “controlled” by those same “elites.”

David Golumbia continues to outline how Bitcoin embodies extremist ideologies through Cyberlibertarianism and Internet Exceptionalism frameworks. Simply put, governments should not regulate the internet, and the internet is different and can’t be governed by mere mortals that don’t ‘get it’. This is in line with the extreme right’s ideology, which has brought us to world war, mass ethnic killings, and, more recently, the genuine possibility of a wholesale destabilisation of society. Linking these ideas to the Tea Party, the John Birch Society and conspiracists like David Icke and Alex Jones, the book does an excellent job of showing how the definition of “freedom” is less clear when you question it more robustly. Presciently, he mentions how some public figures do not necessarily outwardly declare their adherence to these ideologies but have demonstrated just that. Elon Musk is one such specimen. There are others, but take note of the ongoing (December 2022) train wreck at Twitter for context. Another article cited in the book is that of Langdon Winner (1997). A must-read, in my view, in which is discussed a personality not talked about much outside Silicon Valley. Ayn Rand. She’s a darling of Silicon Valley but was almost certainly a sociopath. If you have access to the BBC, watch “All Watched Over by Machines of Loving Grace” to better understand her and her effect on the Silicon Valley mindset and culture.

To these people, freedom always seems to mean the freedom to do “what I want”, without regard for others.

The Politics of Bitcoin is short —70-odd pages— but I highly recommend it. If you are from a technical background, like me, this will provoke thoughts and perhaps challenge some of your preconceived ideas about tech in the 21st Century. You don’t have to agree, but disagreeing through knowledge is infinitely better than a position to the contrary through ignorance.

Final thoughts

The tourist industry is already under scrutiny for its environmental effects, from ecosystem-damaging hotel developments to carbon waste (mostly travel). I didn’t want to be the author of a paper that promotes or encourages damaging consequences through needless and scam-enabling technologies like crypto and NFTs. Especially not just because it is “cool stuff”. I didn’t want to be part of a group that ignorantly legitimises innovation to extinction.

There may be a future for NFT-type spin-offs once regulation and other parts of the ecosystem are ready, and blockchain might evolve to become genuinely useful. But I suspect that evolution to look remarkably similar to database technology we’ve had for decades.

This experience was enlightening, and I wouldn’t change it for the world because it helped me come to a better, more nuanced understanding. In the near future, I may propose a different paper, although I suspect it might not be accepted. We’ll see.

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Have a great holidays, and I’ll probably write some thoughts in the new year.

Thanks for reading The Future is Digital! Subscribe for free to receive new posts and support my work.

Matthew Cowen @matthewcowen