Stick in the mud

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  • The World Opened up when it Locked Down

    The World Opened up when it Locked Down

    There was a great awakening in India around the second half of the 1990s. Internet access was becoming easily available, even if via VSNL shell accounts (if you know what they are, welcome fellow veteran). Till then, the few things that we wanted to obtain of the Internet as it existed was dependent on some friendly soul getting it to us from FTP servers, usually via ERNET. Documents, tools, source code …. everything on the internet was a few steps removed. With the availability of the Internet to everyone it gradually started making access easier. The same documents and source code that would take days to get could now be accessed on demand. 


    One would find about new tools, references or research papers in magazines or journals and find the source for it on the Internet. For a few years, everyone basked in this new found ease of access. It provided great convenience. This, very soon, changed to discovering new pieces of information that one didn’t know of through those mags or journals. That sparked the first shift in how people used the Internet. Before the end of the decade (and the millenium) there were many people participating actively in forums, in groups, contributing to discussions, specifications, open source products. These were suddenly opportunities that simply did not exist for the vast majority of people, outside the top academic institutions and IT firms. It provided access to a playing field, level or otherwise, that resulted in the breakneck speed of growth around that period (a lot of which is usually attributed to the Y2K and sadly ignores the impact of the Internet in India). 
    Its tough to overstate the impact this had. Imagine you have only purchased at a retail store, across a counter, with a shopkeeper getting you things you ask for (which is still the case in many shops even today). You know what you want and ask for it, and get it. But you don’t have any idea of what else you could have asked for. And then, one day, you get access to Amazon all of a sudden. 


    I was a direct beneficiary of this great awakening. We (at Integra Micro Systems) could suddenly access documents and specs which would have been unimaginable just a few years earlier. One of the specs we discovered, could get hold of and build around, mere months after everyone else in the world had access to the same specs were that of the WAP Forum. It seems corny today that we were celebrating, in 2000, that we were the fourth in the world to launch a product based on that standard! The fourth! But, what a thrill to be counted. What happened after that is a story for another day. But without the Internet opening up the window to the world and our minds to what was out there, none of it would have happened.


    Catching up with more current times, the worldwide lockdown has created a flurry of online activity. Every trade show has moved online. Every seminar is now a webinar. Every training session seems to become a MOOC. Every cultural program is available on tap. In the last 4 weeks, I have participated in, attended, viewed or in some way involved myself in a dozen or more different online activities almost none of which I would have been able to do so if they were in meatspace as they were earlier. I have attended an API security seminar, training on how museums manage artifacts, a Kannada ventriloquist’s performance, a bhajan, a trade event on transport ticketing, a how-to on watercolors and several more which in their earlier avatar were inaccessible or not even discoverable. What was surprising was that many of these online events attracted 100s of people, sometimes crossing 500 while in real life they would have stalled at the few dozens. The free/low price was, of course, a factor but more than that it was the sheer possibility that could not have existed. I attended a session on ventriloquism, hosted in Bengaluru, and switched at the moment that finished, instantly, to a session on transport ticketing hosted in Europe.


    I don’t believe that life will go back to exactly the way it was and many of these changes that we see during the lockdown are here for good.  Like with the Internet in the 1990s, this will not be just about ease of access. It will bring about, very quickly, a change in the way people participate, in the way communities get formed, and how in these days of absolute geographic and political boundaries, new bridges get built. Life will be different in the After Corona world – the veil has been pulled back and there is no going back. What took 10 years in the 1990s to change behaviour will likely take 10 weeks to change how people adjust to the new normal and find ways to build with it rather than fight it.


    I am eagerly looking forward to the lockdown ending and, even more, to the new way of doing things that will emerge from this.

  • Don’t look inside yourself!

    Don’t look inside yourself!

    I have always heard from friends, life coaches and, most often, from WhatsApp Wellwishers that it is important to Look Inside. These pithy messages have grown more virulent in recent times, urging people to use their Work From Home time for this. 

    Most of these try to answer the quintessential questions of life – who am I? what do I really know? who do I want to be? Perhaps going all the way to – do I really exist? These are particularly nifty programs where they state upfront that they don’t know any of the answers and only YOU can find your answer. These questions are intended (I understand, through several experts on WA) to put you into meditative states and hopefully find the answers yourself.
    They don’t just ask these questions but prescribe a series of steps – a veritable Dummy’s Guide to getting into that introspective state. These steps tend to follow a pattern:

    1. Close your eyes
    2. Be aware of your body
    3. Let go of tensions
    4. Observe (through your mind’s eye) your small left toe
    5. Observe your heart beat – feel every pulse
    6. Observe your breath and the gentle rise and fall of your chest

    It is around this step 6 that you get the first hint that your breathing is not as deep and smooth as you think it should be. (“Why is my breathing getting heavier, as I read this?”). You recollect every forwarded message and hammered home advice about COVID-19. Is your breathing a little shallower than earlier? Is it a bit irregular? Just the thought makes you super focused on the breathing and you command it to become smooth and easy. A lifetime of chair-bound work and years of regular venti lattes and blueberry muffins have left your lungs with their feet up on a recliner and a devil-may-care attitude. This, dear readers, is where things start unraveling.


    Your lungs’ incapacity (or unwillingness!) to respond to you makes you concentrate even harder on your breathing – guaranteeing that it will get more flustered. You do a flash-back – who all did you meet? All in aid of trying to answer the one true question that matters now – do I have it? Naturally this gets your heart beating faster – you get to know because you have back-tracked to step 5 and, being a diligent student, are acutely aware of your pulse rate. You recollect that quick, nothing-will-happen-to-me, 15 minute saunter outside home a couple of days ago and being to wonder. Wonder if …? Your small left toe begins to twitch. You start getting worried. (“Should I have bought the Hydroxychloroquine tablets that all my neighbors did?“). Step 3 has bit the dust. As you reach step 2 your deep awareness of your body tells you that there are beads of sweat forming on your forehead. Beads-of-sweat equals feverishness. Which confirms your instinctive diagnosis of a full blown infection. Your eyes snap open.

    COVID19, the lockdown, the extended WFH and all the associated worries are making hypochondriacs of everyone. Avoid going out or meeting people and breathe easy.

    Or if you are the type that gets easily stressed, maybe what you need is a de-stress program which helps you Look Inside Yourself 🙂

  • Real Price Index – The Method

    Real Price Index – The Method

    The clarity of having a personalized index crystallized all the steps needed. It was a matter of hours to create a list of our own regular purchases with specific quantities of each that we consumed in a month. My list ended up with around 100 products covering staples, personal hygiene, household cleaning, cosmetics, fruits-and-vegetables and packaged food. This looked like a fairly good list to begin tracking. 


    The next step was to find a source for each of these products to get regular prices from. A few trials on sites we regularly use showed that no single site was adequate to cover the 100 odd products in my list. But there was one (which shall remain unnamed to keep my scripts going!) which could give me prices for 80 products. That looked like a very viable option.


    The easy part next – a script to pick up prices for those 80 products every day early in the morning. A few tweaks to make sure we get the data correctly and can handle the errors that can get thrown and the tool was ready to get going. 
    The first day when I collected a full set of data for the 80 products was a special day, in more days than one. Feb 29th, the Leap Day made for a perfect reference point. The total price of the basket became my Index.


    The cost of my basket of 80 goods, at their respective quantities, on Leap Day 2020 was â‚ą15,928.23. The first Real Price Index.

    Leap Day 2020, 29TH FEBRUARY 2020


    This became the benchmark for measuring the change every day. 
    Not every product price could be picked up every day. Either due to availability issues, or more likely due to the website rejecting our crawl request. The index calculation evolved to use the most recent available price, if the day’s price was unavailable. A freshness parameter was associated with an index to indicate how current it was. A few missing prices wouldn’t really invalidate the index.


    The final piece was in putting together a front-end to view this data. realpi.tanksali.com was born.

  • What can a govt disclaim? literally.

    What can a govt disclaim? literally.

    The world, it feels, is on self-destruct mode with everything crashing and burning all around. Matters of great import are being debated on every social media. It is almost sacrilegious to write about this frivolous topic. I apologize and urge you to skip reading this and return to making the world a better place. 

    If you do persist, first a DISCLAIMER: This post does not reflect what my employer, my dog, my neighbours or even I think and are merely the output of my fingers banging away on a keyboard. Your reading this does not constitute a writer-reader relationship and if you are not the intended reader, please destroy this and wipe your mind while at it. No information is guaranteed to be accurate or complete and YOU ACKNOWLEDGE THAT YOU READ THIS AT YOUR OWN RISK.

    You have seen disclaimers like these in every email and many websites and are intended to protect the sender’s organization. Such disclaimers have uncertain legal applicability and even if you did notice them you would almost certainly have ignored them (except in long email chains with multiple organizations involved, where alternating disclaimers can form beautiful patterns – if you look carefully and have lots of time to spare). 

    Some months ago I happened to notice the disclaimer in a mail from the GST department acknowledging a routine filing and it piqued my interest in what Government disclaimers read, and even more on what they should mean. As these things go, I had some time at the end of the year, a few weeks ago, and I saw another mail which re-triggered this original interest and it took me down a rabbit hole.

    Let’s start with the #startupindia website. This site, a part of the Ministry of Commerce and Industry, list among other things Government Schemes and Regulatory Updates. All good stuff. But then, it throws in this in its disclaimer section : 

    Though all efforts have been made to ensure the accuracy of the contents on this portal, the same should not be construed as accurate reproduction of the text for use for any legal purposes. DeitY and NIC accept no responsibility in relation to the accuracy, completeness, usefulness or otherwise, of the contents

    The Directorate General of Foreign Trade website also has a similar disclaimer: 

    Content published on this website have no legal sanctity and are for general reference only.

    What does it mean for a Govt website to say that they don’t guarantee the accuracy of information on their site, particularly when they are about their own schemes and policies? Not all Government websites are like this and there are some sane ones. For example, the Law Ministry website has this more sensible disclaimer: 

    Please note that this page provides links to the websites / webpages of Government Departments/ Organisations.The content of these websites are owned by the respective organisations and they may be contacted for any further information or suggestion.

    This clearly makes sense. And you have some disclaimers which one struggles to parse with, like in the motherlode of all Govt websites, that of NIC – see if you can figure out what exactly they are disclaiming: 

    Disclaimer : This website is designed to disseminate information/activities related to National Informatics Centre, Ministry of Electronics & IT (MeitY).

    Emails also have a similarly mixed situation. Take the mail from the Passport Office. It has this disclaimer:

    *** This message is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged information. If you have received this message in error, please notify the sender immediately and delete this message from your system ***

    Rather plain and simple and while it doesn’t mean much it doesn’t hurt either.  The Ministry of Company Affairs has more verbose but essentially the same as the Passport one: 

    Notice: The information contained in this e-mail message and/or attachments to it may contain confidential or privileged information. If you are not the intended recipient, any dissemination, use, review, distribution, printing or copying of the information contained in this e-mail message and/or attachments to it are strictly prohibited. If you have received this communication in error, please notify us by reply e-mail or telephone and immediately and permanently delete the message and any attachments. Thank you

    The Income Tax department has several variants but they are largely brief and don’t say much, except hold out the threat of law: 

    This e-mail contains privileged and confidential information intended solely for the use of the addressee(s). If you are not the intended recipient, notify us immediately and delete the original message. Further, you are not to copy, disclose, or distribute this e-mail or its contents to any other person and any such actions are unlawful.

    The Customs and Excise department kicks things up a notch, by disclaiming any responsibility for the safety of the mail:

    The message (including the attachment) in this e-mail is intended solely for the addressee(s) and may be confidential. If you have received this message by mistake, please inform the sender immediately via return e-mail and delete the e-mail. Though all reasonable precautions have been taken to ensure that the message and its attachments are free from Malware, Central Board of Excise and Custom does not accept any responsibility for any loss or damage the use of this e-mail may cause.

    A somewhat commercial wing, BESCOM (which is the electricity discom for Bengaluru) sends this in their email:

    CAUTION - Disclaimer ******************************************************************************** Any views or opinions presented in this email are solely those of the author and do not necessarily represent those of BESCOM. BESCOM accepts no liability for the content of this email, or for the consequences of any actions taken on the basis of the information provided, unless that information is subsequently confirmed in writing. This e-mail may contain viruses. BESCOM is not liable for any damage you may sustain as a result of any virus in this e-mail. You should carry out your own virus checks before opening the e-mail or attachment. If you are not the intended recipient of this mail, you are notified that disclosing, copying, distributing or taking any action in reliance on the contents of this information is strictly prohibited. Refer www.Bescom.org for detailed e-mail disclaimer of BESCOM.

    Someone has definitely copy/pasted this from some unrelated service as this is in the monthly bill that BESCOM sends!  Not all are bad or generic and the one from RBI is the most sensible of all the Govt ones that I have received. It has relevant messages instead of generic boilerplate and even the usual one of “if not the intended recipient” requests a notification which is better than the silent delete prescribed by most.

    The Reserve Bank of India never sends mails, SMSs or makes calls asking for personal information such as your bank account details, passwords, etc. It never keeps or offers funds to anyone. Please do not respond in any manner to such offers, however official or attractive they may look. Notice: This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you are not the intended recipient, any dissemination, use, review, distribution, printing or copying of the information contained in this e-mail message and/or attachments to it are strictly prohibited. If you have received this email by error, please notify us by return e-mail or telephone and immediately and permanently delete the message and any attachments. The recipient should check this email and any attachments for the presence of viruses. The Reserve Bank of India accepts no liability for any damage caused by any virus transmitted by this email.

    And then we come to the doozy that sent me originally sent me on this wild goose chase, from the GST department.

    It is a system generated acknowledgement and does not require any signature
Disclaimer:
This is a system generated mail for general information purposes only and unless otherwise specifically mentioned therein should not be construed as an acknowledgement, authentication and/or approval of any kind about the correctness of the information/data successfully submitted by you.
Though all efforts have been made to keep the contents of this mail accurate, the same is not intended for and/or should not be construed as a statement of law or used for any legal purposes against GSTN.
The information transmitted as part of this mail is meant only for the intended person/entity only and may contain confidential, proprietary and/or privileged information/material of GSTN. GSTN does not accept or assume any liability of any nature against any person/entity in relation to the accuracy, completeness, usefulness and/or relevance or otherwise of the information as part of this mail.
Any use, reuse, review, retransmission, dissemination, paraphrasing, distribution or other uses of the in  formation contained in this mail, through any medium whatsoever, by any person/entity/recipient shall strictly be at their own risks and for any claims/issues in relation thereto GSTN shall not be liable for any expense, losses, damages and/or liability thereof.
If you are not the intended recipient of this mail or information contained therein, please forthwith, contact the sender and delete the material completely from your computer/s and/or the device/s wherein the contents/information of this mail may have been stored.
WARNING:
Computer viruses can be transmitted via email. The recipient should check this email and any attachments for the presence of viruses. Goods And Services Tax Network (GSTN) accepts no liability for any damage caused as a result of any virus or other malware transmitted by this e-mail.
Recipient should carry out own virus checks before opening the e-mail or attachment. E-mail transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this message, which arise as a result of e-mail transmission

    This email comes in response to the regular GST filing and is in the nature of an acknowledgement and contains various details, including an Acknowledgement Reference Number. Now the GST is a system which was designed as digital first – which means there are no paper acknowledgements needed or generated. This email is the only acknowledgement that one gets and it shoots itself in the foot by saying it should not be construed as an acknowledgement. When a paper receipt or acknowledgement is given they don’t come with such disclaimers. In fact, the first line says that it does not need a signature as it is system generated (implying absolute accuracy with no need for a human to validate and authorize) and yet the rest of the disclaimer undermines that confidence.

    This brings me to the basic question of legality of Government communications. Can (and should) the Govt disclaim responsibility for accuracy, completeness or legality of their content whether on the website, email or in other forms? I believe that the current state of this plethora of disclaimers, with all kinds of things being disclaimed, is due to ignorance, indifference and perhaps in some cases incompetence rather than any intentional plan to escape responsibility. These variations possibly arise because the Government does not have a policy for this. They cover many things in their published policy on Emails but not disclaimers. 

    Looking beyond GoI, other governments are not particularly better, though at least some seem to have made a concerted effort to tackle this question. A mail from ACRA of Singapore (the equivalent of MCA here) is not very different:

    [This email is computer-generated, please do not reply to this email].
*************************************************************************
This is a system-generated email. Please do not reply to this email.
For more information, please visit our website at www.acra.gov.sg or use our interactive virtual assistant, AskJamie@ACRA.

    The UK Govt website T&Cs are very similar to those of the GoI. But there are others who seem to do a much better job. Look at this analysis and recommendation from the Queensland, Australia Government on how their email disclaimers should be planned.

    I believe it is time that these disclaimers, particularly from the Governments, stop being meaningless boilerplate and start being relevant, useful and genuinely thought through. We, as users, should do our bit by not ignoring the junk that keeps getting appended to every email.

    DISCLAIMER 🙂 : All the disclaimers cited are from emails received by me personally and YMMV.

  • Calculating inflation

    Calculating inflation

    With the quest begun, it was now a matter of trying to connect the dots. 


    I read all about inflation from my daughter’s economics books, read many results that Google presented and ended up no wiser. The theory was simple enough. Something that used to cost X at a given time costs (x + I%*x) when inflation is ‘I‘. Find the base price at a given time and its current price and elementary math will give you the inflation. 


    I hunted around and found a table of “somethings” that is used to calculate Consumer Price Index (CPI) in India. This table is constructed from a list of everything that people in the country spend on – food, housing, transport, clothing, education, fuel and lots more including even intoxicants. There are tables, organized by state to account for differences in consumption patterns. Data is collected from over 2300 urban and rural locations across the country. Every month. This makes it look pretty sound and a robust and defensible metric. But, I wondered, does it represent something real – something that I could relate to in my own expenses or is it like the proverbial data of the average person with 2.2 children who no one can ever meet?


    Looking around at how other countries arrived at inflation did not yield much satisfaction. They all followed similar patterns with similar high level categories. With data collected at a similar periodicity.


    This called for a deeper dive. Going beyond the categories to each individual item resulted in a list 300 items long, an eminently manageable list. Each item looked like we could find the price for it online, in real time, from a suitable e-commerce provider. Food was easy, clothing with a bit of stretch, things like fuel also were manageable, but education, housing and transportation were trickier. 


    That started the challenge of finding a online source of price for each item in the list. Two thirds were relatively easy to manage and the rest required some calisthenics to reach. In this process of mapping the CPI index to online sources, a bigger question arose. The list of items were such that, in my opinion, there wouldn’t be a single family anywhere in India that would consume that specific basket of goods. If we did proceed with obtaining appropriate prices for all the CPI components, would it still reflect actual inflation observed by any single person anywhere? Would it relate to anything that I can experience?


    The answers to both these questions clearly showed that a changed approach is needed. A more personalized one. What’s needed was a personalized Price Index.

    This should show, in very concrete terms, that I will actually be paying X% more (or less) than the previous month for my needs. It should be a measure of an impact on my wallet that I can correlate directly with this index. It should be as close as I (or anyone) can get to having inflation index that you can almost touch and feel. Something true. Something Real.

    The Real Price Index.

  • In The Beginning … there was inflation

    In The Beginning … there was inflation

    I am not talking about the Big Bang or the Inflationary Theory of Cosmology but the prosaic, far more mundane, almost boring inflation that Economists talk about.

    In 2018 the RBI, in its bi-monthly meeting, decided that inflation was higher than it should be and they should increase the interest rate to rein it in. This meant prices are rising faster than desirable. However, nearly everything I could buy was cheaper than at any time in the previous few years. This was driven largely by the boom in digital payments, nearly all of which involved some form of cashback, discount or offer that made prices really low. This divergence between my personal experience and the view that central bank carried made me start looking at prices more closely. I began looking at personal household expenses to see if I could correlate my experiences to the macro data that was reported periodically. To my disappointment I found that I could not discern any direct correlation at all. Obviously, inflation was a very well established metric and calculated by experts at every country’s central banker/government etc. But then why couldn’t I relate it to my personal experiences? Perhaps it was just that my methods were too informal. Or perhaps it was to do with the averaging effect over a billion++ people.

    Feb 2016: CPI was 123.8

    Feb 2019: It was 138.6

    an inflation of 11.9% relative to an year ago

    FEB 2020: 147.7 – 6.5% over the year

    Govt of India statistics


    When seen on the macro scale of my life, inflation was so clearly obvious that it did not need math. Salaries of engineers fresh out of college had moved from a few thousand Rupees when I started working to the few tens of thousand – a 10x increase for what was (arguably) the exact same type of work. School fees that my dad paid for my schooling was approximately a thousand times lower than that I paid for my daughter’s schooling. Key groceries like sugar were 20-30 times higher now than in my childhood. But why couldn’t I observe this factor playing a role in my daily life? Too small a change on timescales of months or even an year? And yet, there seemed to be a very clear expectation that changing interest rates by 0.5% will change people’s behaviour.


    Inflation of 5% – 8% were the norm in the last decade. That meant nearly everything should be twice as expensive as ten years ago. Rentals in my area were very similar, perhaps 15% more than they were 10 years ago. Staples were more expensive but I felt that they were not 2x – though the lack of personal records meant that I could not really tell. Milk did seem to be 2x from memory while domestic help seemed to be at about 4x. 


    Going further back, I recollect a company, who we used to supply our products to, which had this unusual practice of linking compensation directly to inflation. Each employee would get a performance rating at the end of every year. This would translate into a salary raise as rating+a base (which was equal to the country’s inflation rate). This, when I first heard of it, was sort of an eye opener. I tried to apply this in my organization and it fell flat – a 5-6% base raise (which was the inflation then) for a software engineer at that time would have elicited either convulsions of laughter or a quick departure to a saner company. But my interest was piqued. 


    Then there were the doomsday predictors – the insurance salesmen – who would whip out sheets which showed that nothing you saved could help once you stopped earning, as everything would be super expensive by then. Medical expenses for the merest consultation would cost more than a year’s income after retirement, children’s education would take the arm and leg it does now and one will need to trade in a kidney as well. The source of these enormous projected costs? Inflation.


    Amidst all this were economists who would, in more recent times towards the end of 2019, be confidently predicting that inflation was falling and people will spend more because interest rates were reducing and yet my housing loan EMI stayed where it was, with such a minor change in the tenure that I would need a microscope to see its movement.


    So what really is inflation that is relevant to me and, more importantly, what role does it play in my life?  That’s the question that started this quest.

  • Libra Cryptocurrency – Understanding by Implementing a Wallet

    Libra Cryptocurrency – Understanding by Implementing a Wallet

    Libra has caused quite a stir since it was announced, about a month ago. This cryptocurrency led by Facebook (formally by the Libra Association, but it is Facebook’s presence which generates all the attention) is scheduled to be launched early next year and has already had its fair share of controversies. The possibility of Facebook providing a currency, through its proposed Calibra wallet, which its billions of users can use to pay for everything, across the world, has struck fear in most traditional financial strongholds, including regulators. A lot of the reaction is knee jerk – reacting to Facebook’s involvement, the current privacy concerns, unflattering equivalences to bitcoin, pricing volatility assumptions and, at its root, the fear of changing the status-quo. However, it is worth looking at the technology itself, separate from who is backing it or assumed comparisons to bitcoin, to get a more rounded perspective. We, at Nearex, built a wallet, abracalibra.online, over Libra to explore it better and understand it as a technology platform, divorced from its hype. This post is a summary from those learnings. The whitepaper and technical papers from Libra provide a lot more detail – treat this post as an easy-read version.

    Before we go too far, I want to set at rest questions about Nearex‘s connection to Libra. Nearex has been pioneering payment systems in the emerging markets for the last 6 years. Every opportunity, technology or development that can move the needle in our quest is of interest to us and one we want to study and see how it can help. This experiment is towards those ends and, given the conceptual stage of Libra, will likely remain just that for the moment. 

    Jumping into the technical details, Libra has set up a Testnet – a platform to explore the Libra protocol and prototype. The code is open sourced (written in Rust) and they have provided a convenient command line program to connect to the Testnet and use it, as an end user. It still needs to be built from source to use and hence there is a need to have a more convenient alternative for the lay person to interact with Libra. This is the reason we created abracalibra.online to let anyone create a wallet, connect to the Testnet and transact. Feel free to go there (https://abracalibra.online) and check it out. There is a convenient HowTo there to help you use it.

    Libra is distinguished from the other cryptocurrencies, like Bitcoin, in that it is built on a permissioned blockchain rather than a proof-of-work basis. This brings in several significant differences in its operating model. Only “approved” entities can participate as the key nodes, validators, in these operations. It is not that anyone can choose to start participating as a peer as in the case of bitcoin. The Libra whitepaper does seem to indicate a transition to a more open ecosystem in the distant future, but the current implementation is very solidly permissioned. The current set of validator nodes are run by members of the Libra Association. Fears of a majority takeover by an unexpected third party just doesn’t exist. More predictable latencies and guarantees can be achieved. Another side effect, secondary but still important, is that the elimination of proof-of-work also eliminates the enormous amounts of energy that are expended in mining. 

    Validators are the entities that manage all updates to the Libra blockchain. They have a consensus protocol amongst themselves that allows a majority of them to sign any transaction in. All access to the Libra platform is via the interfaces that the validators provide. These interfaces are built on GRPC, Google’s RPC mechanism, which aims to simplify integration of systems written in potentially disparate languages. The primary interface the Libra protocol exposes, via GRPC, is that of AdmissionControl. This allows clients to submit requests to a validator and have it get queued up for acceptance. 

    Requests use a combination of SHA3 for hashing and Ed25519 for signatures. Requests can be one of 2 types – submitting a transaction or getting the ledger updates. These both go in via the AdmissionControl interface and allow clients (like wallets, including our very own abracalibra.online) to submit requests. Each of the wallets needs to generate requests which match the crypto expectations of the validator. There is another service, the faucet, on the Testnet allowing “free” minting of Libra on the Testnet. This, obviously, will be structured quite differently in a full-blown implementation as this is where the fiat currency gets converted to Libra.

    Submitting a transaction to the validator is a very generic and flexible operation. The actual transaction is defined in terms of Smart Contracts. Move is the language in Libra to write these Smart Contracts. Move is a script language which allows custom transactions to be written. The scripts get compiled to executable byte code and this byte code is included in the transaction request. This opens Libra to the power of languages like Solidity, with the ability to create custom, flexible transactions. At the time of writing this post, though, only a few pre-defined scripts are allowed by the Testnet. This includes the script to mint, create an account and a peer-to-peer transfer. These capabilities are the ones exposed via the abracalibra.online interface as well.

    So, that in essence is Libra. A set of validators, a GRPC API and clients submitting requests containing smart contracts written in Move and meeting certain crypto expectations. Rather underwhelming, but precisely because of that elegant in its simplicity. Feel free to create a wallet and mint or spend Libra at abracalibra.online â€“ no technical skill required!

    The initial exploration of the Libra protocol indicates that it is a very promising platform, technically speaking, and quite simple and clean. Importantly, its availability in open source form well ahead of its launch, gives a lot of time for interested parties to figure it out; and for the Libra Association to improve it (they have already made breaking changes once in the 5 weeks or so since it became available). There are already a lot of attempts, like ours, to build around, with and integrate with Libra. These are worthwhile exploratory endeavours and, policies and politics permitting, can lead to a truly interesting platform with a rich ecosystem of players. 

    Meanwhile, the name Libra aptly captures how its fate hangs in the balance, much like its namesake constellation.

  • Digital payments for the disconnected majority

    Digital payments for the disconnected majority

    Last week two companies announced the availability of IVR based payments for their wallet offerings. PayTM lets users with a wallet initiate a payment by making a call to a toll free number. So does ToneTag. To most people this was mystifying at best and just one more reason to do a full page ad for the rest. A short while ago, Ola had announced that it now supports requesting cabs via SMS (sent from the app). Witness also the recent push for NUUP based services. These are not isolated incidents of digital services tacking on just another new feature. For those working in the mass market space in India or other emerging markets, this reflects a catching up with reality and not a new feature.

    Data connection availability, taken for granted in the urban areas, is on far more shaky grounds a short distance beyond the big cities. This is not just physical connectivity which is a problem (which it certainly is), it is also to do with people having exercised the option of having such connectivity. This could be temporary (data plan exhausted, or expired) or could be more fundamental in that the user has never had data connectivity. As Nandan Nilekani said in a recent talk, 250m people have smartphones in India, another 350 million have feature phones and the rest have no phones! The billion total phone connections, with overlaps, multiple SIMs and the like come down to about 600 odd million unique users. Most of the 350 million feature phone users don’t have data connection and, obviously, none of the 600 million without phones do. 

    This forms a natural barrier to adoption of digital services. Let’s look at how this impacts services specifically that for payments, the service that I started this article with and the topic of every conversation in the last few weeks.

    Payments require a few basic ingredients to work with. The payer (or customer) needs to have a digital store of money. The payee (or merchant) needs to have a visible means of conveying his/her identity. There needs to be a mechanism to communicate the intent to pay. The first part is met, directly or otherwise, by a bank account. You could use it directly (as in UPI) or by moving some funds to an online wallet (as with PayTM, Freecharge and others). The merchant is identified by an account number (or VPA in case of UPI) or a mobile number in case of wallets. The third part is where things get interesting. Since the first two parts are all online, the payment instruction necessarily needs to reach some server to be executed. Hence the rapid providing of an IVR option at first contact with markets beyond the tech-savvy.

    I believe there is a better and alternative option. Before we get to that, there are a couple of other aspects that are worth bringing up. Most people with bank accounts (which are nearly all households now, thankfully) are very wary of having their account used in any way which they don’t comprehend fully. ATMs are starting to get befriended – faceless as they are and representing banks. POS machines are a distinct no-no – as much to do with the machines as the people involved. So the principle of having a store of funds (wallets etc) as distinct from bank accounts is critical for adoption by the mass market. UPI may provide restriction-linked VPAs but digital wallets do that for now. The second aspect and perhaps even more fundamental is the user experience. Digital wallets, for all their goodness, still retain a lot of hand-waving mystique about them for people not used to smartphones. Particularly, auto-topup options as provided by wallets today can only increase distrust amongst people. 

    The better option, I believe, is for the use of stored value cards. ePurse cards. Prepaid cards. They go by various names and are similar to the metro cards or other fare cards. Imagine the simplicity of tapping a card like that at a shop and paying for coffee in an instant (< 1s). No connectivity required. Neither the merchant nor the customer need to be connected for this. Controlled funds – you can’t spend what has not been put physically on the card. The touchy-feely-ness of real cash. The supreme simplicity of just a tap to pay. Equally easy to topup. Familiar security methods – treat it exactly like you would cash! Best of all, this can be an extension to the wallets and bank accounts that exist today and provide a controlled use of small portion of funds while the bulk continues to remain in their trusted bank end systems. 

    In order to bridge the digital payments divide, ePurse systems provide a far better reach and likelihood of adoption. Interested in conversing about this? Do write to us.

  • The Age of Offers

    The Age of Offers

    An elderly person I know sells honey that he picks from village groups. He buys pre-bottled honey for Rs.260 (just under $4) and the bottle has a retail price of Rs.310 (about $5) which he sells in his shop in the city. He is really not trying to make money off it as he spends considerably more in getting a batch of bottles to his shop and keeping them on display, than the small margin he makes.

    Last week, a young customer was mighty reluctant to pay the listed price of 310 and was demanding a discount. He argued to get at least a Rs10 discount and finally paid with poor grace. I was just a bystander, but this got me thinking. Every hour of the day and every day of the week, nearly everything I buy seems to come with offers. Breakfast (15% off on home delivery), cab to work (20% when paid with a mobile wallet), lunch (50% off for second person), and so on covering everything from cosmetics to computers, mobile phones to movies, flights to pharmacies, and hotels to houses. Quite literally, the only thing for which you don’t get some discount, offer, or cashback is for payments to the government. Consumers are used to this, and in fact find it laughable that anyone will pay the full price for anything!

    Offers and discounts have transitioned from promotional schemes to a way of life. Freebies are de rigueur to succeed, and increasingly even to survive. On the face of it, this seems to be fostering a wave of companies who are innovating and finding ways to drive down prices. All the buzzwords that matter – dis-intermediating, cutting-out-the-middleman, economies-of-scale, and the dreaded app-based service – have been applied to achieve this end of low prices. I believe that this current trend is also inhibiting innovation. There are far more companies who have drowned while throwing around money than those who have genuinely found ways to deliver value. Due to these, only those products and services which are backed by deep venture-funded pockets can afford to get into most domains today. Everything else, which aims to provide a useful service or product for a reasonable fee, finds no favor with the pampered consumer.

    There was a time in the early 2000s when some people would speculate if telecom services (voice, data, etc) could be made completely free by using ad-funded models. However unlikely the proposition was, it had some serious backers as well. Fortunately, sanity prevailed and we rarely hear such talk nowadays. Though such buzz, instead of dying down, has merely moved onto other areas, including the payments domain where Nearex operates.

    This sounds particularly strange today, when the flag bearers of such deep discounted services – news, content, discounted movie tickets or cheap flights – have all moved on to more reasonable business models. News and content is increasingly behind paywalls today and the convenience fees that aggregators charge almost always make a movie ticket more expensive online than at the theater or a flight ticket and stay cheaper at the airline and hotel chain directly.

    Intuitively getting X conveniently should cost more than merely getting X. It is a lesson that the startups of the last decade seem to have learned. Will the new crop of startups learn from them or tread the same painful path all over again? For the sake of all the startups out there, I hope it is the former.

    As to the person selling honey? He declares that there is no better honey in the local market and those who value his product will pay his price.

    And that, perhaps, shows the best way forward.

  • First impressions of UPI, as an user

    First impressions of UPI, as an user

    Much has been said and written about the impact UPI will have on everything. I am a strong believer and, therefore, when UPI was launched last week and the first apps became available it was but natural that I give it a spin as the one participant that I had been unable to be throughout the buildup – as an end user. Specs, lofty visions, protocols, and comments by pundits have all been eagerly devoured and I was real curious to see how an end user will actually perceive it.

    Early on Saturday morning, as I reached for my phone with bleary eyes (as every person who reads this will be doing, I bet) it indicated that half a dozen apps that had been updated overnight. I usually flick that notification away without a second thought, but I was keeping a watch for updates (for the UPI enabled apps that several banks had promised within a “few days” and also for my Nexus 6P to receive Nougat) so I checked. Sure enough, the Pockets app by ICICI was updated.

    I spotted a UPI icon, as my vision cleared up rapidly, on the enhanced Pockets app and was my first stop. I was apprehensive that it would be buried three levels deep in some obscure menu and was glad to see it bright and green on the home screen. Augurs well, I thought.  Before going further, I should mention that my Pockets app is linked to my ICICI bank account and hence my experience could be very different from those who have the same app without the linkage.

    There were options to send money, collect money and respond to a collect money request – all through UPI and pretty straightforward. I have this rather unfortunate habit of going to the settings/preferences/configuration of any app or tool that I try out, before I do anything with it, and hence the “Manage” option was my first stop. A “Create VPA/Add Bank Accounts” option lead me quickly to the part that I was really looking forward to – creating a new VPA (the Virtual Payment Address). I was asked to type in an identifier, like the registration option on any self-respecting website, and hit “Check availability”. This was such a refreshing start to doing anything with a bank account which usually requires a visit to a bank or uploading some document or at the very least entering some obscure information from a document that you will almost certainly not have at hand.

    My preferred ID was available and the next step was to link this newly created VPA to a bank account. The dropdown showed all the UPI integrated (but not necessarily launched) bank accounts. I picked ICICI, my ICICI account number appeared; I selected it and set that as the default account to send and receive money from and I was done.

    It took me about 2 minutes. And I was not even out of bed. Now to use this I needed someone else with a VPA. Sent out a message, with my newly minted VPA ID (arun.blog@pockets â€“ yes I can share it freely), on one of  my WhatsApp groups which I knew had a few people who would be up early even on a Saturday morning. One of my friends responded, and a few minutes later I heard the rather strident (and alarming) notification from Pockets – he (or rather his VPA ID) was asking for 50Rs via the collect UPI facility and a couple of taps later I had completed the payment. While he was still typing a message on WhatsApp that he had sent me a collect request, I had completed the payment! Wow, was all I could say. Wallet apps have been doing this for a while, but to get such simplicity for transacting with bank accounts is really something else.

    The experience as a user was as simple as it could be. All that power and sophistication that one had discussed and heard about was all present – in as easy a package as one could expect. We should be seeing a flood of UPI enabled apps and services in the next few weeks and if they are as easy to use as this (and I suspect they will be even more easier), then UPI is all set for a truly life changing run.

    Circling back to my last blog, this is one huge step that can actually make every merchant a digital merchant. Looking forward to it.

    If you are wondering what we will do with this at Nearex, all I will say is “Watch this space”.

    PS: I have no affiliation to Pockets or ICICI and it just happened to be the first of a round dozen payment related apps on my phone which supported UPI.

  • 2 billion merchants are waiting

    2 billion merchants are waiting

    There are two billion unbanked adults in the world, according to this CGAP report. I think these are really 2 billion unserved merchants. Want to know why? Read on.

    To understand this we have to go all the way back to Adam Smith and the Wealth of Nations, his 1776 masterpiece that kicked off the period of what is now called classical economics. It covers a lot of ground, but one sentence that struck me as particularly relevant today, as I re-read it recently, was this gem:

    Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society. 

    CHAPTER 4, OF THE ORIGIN AND USE OF MONEY

    The back-story for this line was that division of labor was getting more and more established (remember, this was 1776) and every man’s wants were met only in a small measure by the produce of his own labor; and he would need to depend on others to meet the greater part of his wants. And, in turn, fulfilling a portion of other’s wants himself.

    Pause for a moment and reflect. You need to do that often when reading Adam Smith.

    Every person has something to exchange – be it produce, goods, or skills. Anyone who exchanges any of these for money is a merchant. Ergo, every economically active person is a merchant.

    Step back a bit and observe  – who is a merchant when you look around your neighborhood? The grocer, the plumber, the bartender, the taxi driver  – all clearly identifiable by a shop or other visible trappings of business. But look closer (and read Adam Smith’s line above again) and you will start noticing merchants everywhere – the hawker at the traffic signal, the fortune-teller under the tree, the guy hanging from the open door of the minibus and soliciting passengers, and even the beggar exchanging benediction for alms (this one is Mayank’s favorite, BTW). Think back and you will now see where the 2 billion merchants come from.

    Yet, your original reaction of looking at only those with shops or establishments as merchants is completely understandable for that’s how society has been classifying them for long. Banks and other conventional financial institutions have so conditioned society to think, that anything else borders on blasphemy today. Mobile money service providers, telcos in most cases, have disrupted how financial services reach the common man, the ones left outside of conventional financial systems. When it comes to merchants and commerce, they should continue their disruption of financial traditions and make every merchant, in the full Adam Smith sense, a first class citizen of the modern commercial society.

    The time has come for every merchant to stand up and be counted. The time has come for true financial inclusion for every unserved merchant. The time has come for Xip.

    PS: Read Wealth of Nations, listed amongst the most influential books ever by the World Economic Forum, for free at geolib.