Digital Yuan – Is it a war on cash or something else?

Estimated reading time: 15 minutes.

Photo by Karolina Grabowska on Pexels.com

The Digital yuan is an attempt by Chinese authorities to replace some of the cash in circulation with digital currency. This is a first-of-its-kind of an initiative by a major economy to create a sovereign digital currency. However, is this a war on cash or this is something that will create a tectonic shift in the global economy?

Human civilization has risen through channeling energy. We invented fire to use chemical energy. We built our homes next to the river to store water and utilize hydro energy. Lasers are channeling photons.

To better human lives, we need to continuously store and channel energy.

Money is an expression of energy and we use it to support our lives. Money is considered a store of value, and it allows us to trade with almost anyone.

If we look at the history of money. We have grown from commodity money to coinage of those commodities, to fiat currencies, and now we have cryptography as the basis of money.

CHINA IS NO ALIEN TO DIGITAL PAYMENTS

It would be hard for anybody living outside China to understand how digital payments are now commonplace in the world’s second-largest economy. Most merchants in China, from fruit vendors to Walmart, or even luxurious hotels accept digital payments. Much of this growth has taken place on the back of quick response (QR) codes, which were invented in Japan in 1994 but never really gained traction until taking off in China.

Pre-Covid China’s e-commerce was already clocking a decent $2 trillion. As per eMarketer, 52.1% of the country’s retail sales is estimated to come from e-commerce in 2021, up from 44.8% a year prior. This is unmatched worldwide. The countries with the next-highest rate of e-commerce as a share of total retail sales are South Korea and the US, where they are estimated to account for 28.9% and 15.0% respectively in 2021.

Ant Group’s Alipay and Tencent Holdings’ WeChat Pay control the majority of China’s mobile payment market.

I believe there are two parts to this whole story behind experimentation with digital yuan:

  • Firstly, Alipay and WeChat Pay are becoming too big, and almost all the digital transactions are happening on their platform (>90%)
    • Mu Changchun, director of the People’s Bank of China’s digital currency research institute, mentioned that the digital yuan could serve as a backup to Alipay and WeChat Pay, if they were to experience financial or technical problems — which could potentially affect China’s financial stability
    • WeChat Pay and Alipay own wealth of consumer’s data, and high utilization of digital yuan will eventually help the Chinese government to control big data
    • Alipay and WeChat Pay apps initially described themselves as alternatives to the government-backed banking system. However, in response to the government’s scrutiny, Alipay and WeChat deliberately now mention that they are partners to banks, not competitors. Several government-owned funds and institutions are investors in Ant Group, Alipay’s parent company
  • Secondly, this is almost a perfect time for China to dominate the world economy when the developed nations are reeling under Covid pressure. US national debt is likely to double from 102% in 2021 to 202% of its GDP by 2051 (as per Congressional Budget Office); the UK has exited from the EU in January 2020, and the EU is sliding towards a budget deficit of €976bn and the debt reaching almost 100% of the GDP. All these will have a major effect on the most favored currencies – US Dollar, Euro, and Pound sterling

The Digital yuan should not be considered as just one of the attempts by the Chinese to overtake the US in the technology field and a war on cash, however, this signals something which might further shake an already trembling US dollar-dominated global financial system.

LET’S FIRST TRY TO UNDERSTAND SOME FACTS

  • Dollar, Euro, Pound Sterling, Japanese Yen, Yuan, etc. are all fiat currencies, which are not backed by a commodity such as gold
    • The 1944 Bretton Woods agreement kickstarted the dollar into its current dominant position
    • The U.S. dollars are known to be backed by the “full faith and credit” of the U.S. government. In this sense, U.S. dollars are “legal tender,” rather than “lawful money,” which can be exchanged for gold, silver, or any other commodity (as per Investopedia)
    • Fiat money gives central banks greater control over the economy because they can control how much money is printed, and can control other important economic factors such as Inflation
  • It is a common practice for central banks all over the world to hold a significant amount of reserves in their foreign exchange. Most of these reserves are held in the U.S. dollar since it is the most traded currency in the world (as per Investopedia)
  • As per Bank for International Settlements, Dollar remains the pre-eminent international funding currency
  • However, Dollar is facing a lot of challenges:
    • The dollar’s share of global currency reserves dropped in the 4th quarter of 2020 to around 59%, the lowest in 25 years, according to International Monetary Fund data
    • The dollar’s share of official foreign-exchange reserves has declined from a little over 70% in 2000 to a little less than 60%

ENOUGH OF ECONOMICS AND POLITICAL LINGO. LET’S GET BACK TO THE ANALYSIS

Under a 2-tier distribution system, The People’s Bank of China issues the digital currency to banks, which passes the money to individuals, merchants, and companies.

While conducting beta testing in recent months, more than 100,000 people in China have downloaded a mobile phone app from the central bank enabling them to spend small government handouts (approx. 200 million yuan or $40 million in total circulation) of digital cash. However, there is no official timetable for the launch of China’s digital yuan despite various pilot programs in the cities of Shenzhen, Suzhou, Xiongan, and Chengdu. If some internal sources are to be believed, then China plans to launch digital yuan during Winter Olympics in 2022 to be held in China.

As China’s digital currency is controlled by its central bank. China’s government will now be able to monitor the flow of its currency and its people!!!

At this point, I am sure you must be thinking that isn’t this also similar to what THE Chinese do with Alipay or WeChat.

Well, to put it succinctly — When you’re sending payments over WeChat, you’re still transferring physical cash over an electronic medium. Digital Yuan meanwhile is a wholly different enterprise.

Digital yuan is more of programmable money.

As an article in Wall Street Journal notes:

“The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start. It’s also trackable, adding another tool to China’s heavy state surveillance. The government deploys hundreds of millions of facial-recognition cameras to monitor its population, sometimes using them to levy fines for activities such as jaywalking. A digital currency would make it possible to both mete out and collect fines as soon as an infraction was detected.”

In a nutshell, programmable money could mean that it can be programmed to be used for a specific purpose. For example, if someone has to transfer money to merchants to buy groceries, then the money could be programmed in a way such that it could only be used to buy groceries. The money could be easily tracked to see where people are spending it. So, this is not like the money in your traditional e-wallet. This is a completely out-of-the-box beast.

WELL, WHAT ABOUT PRIVACY CONCERNS?

As per an article on coindesk:

“The director of the People’s Bank of China’s (PBoC) Digital Currency Research Institute says designing its digital currency to be fully anonymous isn’t “feasible. The anonymity of the central bank’s digital currency is limited under the premise of controllable risks”.

‘Controllable risks’ are the essence here. This could mean that China will monitor transactions, however, the identity of transacting entities is likely to remain private – Maybe until and unless they aren’t breaking any rules!

WHAT ABOUT INTERNATIONAL TRANSACTIONS?

Currently, most cross-border payments happen over SWIFT (The Society for Worldwide Interbank Financial Telecommunication) —the international payment messaging system and most transactions are denominated in US Dollars.

SWIFT dominance is already under threat due to disruptive technologies such as cryptocurrencies (Bitcoin, Dogecoin, Ethereum, Litecoin).

In April 2021, the Crypto market cap surged to record US$2 trillion (bitcoin at US$1.1 trillion). The number of transactions and the acceptance of many mainstream investors and companies are making way for a new system, which may kill fiat currencies and most recognized settlement systems such as SWIFT, Ripple, TARGET Instant Payment Settlement (TIPS), and The Clearing House (TCH).

SWIFT has set up a joint venture with the Chinese central bank’s digital currency research institute and clearing center, in a sign that China is exploring global use of its planned digital yuan.

CONCLUSION

It is true that the next big disruptive force on the horizon could be a digital dollar, which could resemble cryptocurrencies such as bitcoin or ethereum in some limited respects. The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology have been developing prototypes for a digital dollar platform. However, this is still many years away.

The Digital euro is also in the making. EU is still developing the concept and conducting practical experimentation.

Digital Yuan certainly has the first-mover advantage. The U.S. central banks are taking it seriously because it may threaten their power to freeze individuals and institutions out of the global financial system by barring banks from doing transactions with them (a practice criticized as dollar weaponization).

It would surely be interesting to watch how global currencies will fare in the race to go digital. However, I sincerely hope that in this race we do not forget that the actual purpose of harnessing energy was to better human lives.

Sources: The New York Times, The Wall Street Journal, The Japan Times, PYMNTS.com, The Financial Times, Bloomberg, Reuters, Bank for International Settlements, The Development Bank of Singapore Limited, European Central bank, eMarketer, Investopedia, Stansberry Research

Digital Advertisements – You are the centerpiece of “digital advertisement exchanges”

Estimated reading time: 5 minutes.

your data is the most important commodity in the world today – Worth more than Gold and Oil.

The data that you generate while making any payment, or while searching on Google, or sharing on WhatsApp, Snapchat or FB, tweeting, or retweeting are all being stacked up, and analyzed. For what? To provide more products/services to you so that you can spend more, like more, search more, and share/tweet/retweet more…

advertising revenues

In 2019, Google’s ad revenue amounted to 134.81 billion US dollars (83% of Google’s total revenue) v/s US$ 69,655 for Facebook (98.5% of total FB’s revenue).

Google generates advertising revenue through its Google Ads platform, which enables advertisers to display ads, product listings, and service offerings across Google’s extensive network (own sites, partner sites, and apps) to web users (additional details below). The company holds a market share of around 90 % in a wide range of markets, having little to no domestic competition in many of them. China, Russia, and to a certain extent, Japan, are some of the few notable exceptions, where local products are more preferred.

Google’s data and analytics platform products have been the largest drivers of growth in Google’s revenue over the years.

Google and FB may be the leaders in the online Ads market. However, another tech giant is getting closer now more than ever.

In the data storage/cloud market, Amazon is currently the undisputed leader. In 2006, Amazon Web Services (AWS) was launched as a cloud computing platform to provide online services. One of the largest clients of AWS is the streaming video service Netflix, which uses Amazon’s services to store their content on servers throughout the world. Some other famous or top-notch companies that use AWS (based on EC2* monthly spend data) are Twitter, Airbnb.

*EC2 lets users run their applications on Amazon’s instances. Why companies use AWS? Simply because it is cost-effective and it is easier to scale based on their demands. Building own datacenters and doing all this own their own would cost them a fortune, and they would not be able to focus on their core business.

While AWS represents only 11% of Amazon’s total revenue, it continues to serve as the company’s cash cow after years of dominance in the market, at a greater scale than Alibaba, Microsoft, Google, and other companies.

However, there could be another cash cow for Amazon soon…

Amazon’s advertising business (only tiny at the moment as compared with Google’s 83% or FB’s 98.5%) is booming ! Analysts at Juniper Research believe Amazon.com Ad revenues will swell to $40 billion by 2023, a growth of 470% from its advertising revenues in 2018.

Online advertising is A MONOPOLISTIC MARKET

The majority of online display advertising space is bought and sold via “advertising exchanges”, just like electronically traded financial markets. The only difference is that in advertising exchange marketplace, only one player dominates.

In 2005, borrowing practices from the Wall Street, advertisement business became a commodity business from being a relationship business for many decades.

Over the years, the advertising market has become less competitive. Now Google dominates this market.

Google operates the largest exchange (known as Google Ad Exchange) and also owns leading intermediaries** that publishers (e.g. newspapers such as The New York Times or a Blog page) and advertisers or buyers (such as Walmart or a local dry cleaner) must use to trade. Google not only sells others’ ad spaces but also its own spaces appearing on its websites, such as Google search and YouTube.

Google Dominates the Online Ad Market

**Intermediaries: Buy-side – These are the buying tools/platforms that small and large advertisers use to trade. They also enable advertisers to store their adverts/creatives and allows them to track metrics and set the buying parameters for their campaigns. The small and medium advertisers use self-service tools such as Google Ads, whereas large enterprise uses enterprise software tools/platforms, such as Google’s DoubleClick Bid Manager (now known as Display & Video 360), or Amazon DSP, or Facebook Ads Manager.

Supply-Side These platforms, also known as Ad Servers (e.g. Google Ad Manager, combining features of two former services from Google – DoubleClick for Publishers and DoubleClick Ad Exchange), helps publishers to manage/sell their inventory on several ad exchanges in an automated manner.

As per eMarketer, nearly 1/3rd of US advertisers spending on display ads goes to tech and software intermediaries (the so-called “ad tech tax”) just to execute ad transactions, before publishers receive the rest as ad revenues.

how you are continuously being tracked

Tracking your identity is of utmost importance to advertisers. For example, when you go to The New York Times and probably read an article let’s say about Endangered Lemurs finding a private refuge in Madagascar, their Ad Server (probably Google Ad Manager) will assign an ID to you (e.g. 1Q2W3E). Whenever you return to the websites again (maybe even after a month), the same Ad Server will recognize you as 1Q2W3E, and may show you an advertisement about planning your holidays in Madagascar, even though you might be reading an article on US elections.

still there is hope for privacy, at least for some users

Without access to your user IDs, the demand for ad space decreases, and their prices on exchanges drop dramatically as a result. As per a randomized controlled experiment conducted by Google in 2018, prices for ad space trading on Google’s exchange drop by 50+% when advertisers cannot identify users associated with ad space for sale. This happens when the user has disabled cookies, the most commonly used technology for tracking.

After Apple introduced Intelligent Tracking Prevention feature# with the release of iOS 11 in September 2017, the cost of reaching Safari users has fallen more than 50% since then. This shift is significant in the online advertising business because iPhone/iPad/iMac owners are generally affluent and help in generating more ad revenues.

Following Apple’s footsteps, Firefox also locked down on ad targeting in 2017.

#Intelligent Tracking Prevention uses on-device machine learning to block cross-site tracking, while still allowing websites to function normally.

Sources: Whitepaper by antitrust scholar Dina Srinivasan on ‘Why Google Dominates Advertising Markets’, Google’s/Facebook’s/Amazon’s SEC Filings and Fiscal Results Documents, Juniper Research, The AlgoAware study by the European Commission, Google Ads, Amazon DSP, Facebook Ads Manager, Google Display & Video 360, eMarketer, The New York Times, Safari Privacy Overview, Report by Google on ‘The effect of disabling third-party cookies on publisher revenue’

You are the centerpiece of ‘digital advertisement exchanges’

What is your byte worth?

Estimated reading time: 15 minutes.

Dawn of a new era: Data is the oil of THE digital economy

We are surrounded by all kinds of smart devices, from smart televisions, smartwatches, to even smart refrigerators. Every dumb device is being made smart, venting out bytes, and bytes of structured and unstructured data.

With the advent of next-gen technologies such as Artificial Intelligence, Internet of Things, and Open Banking tech, there is no doubt that data has become the new Oil of the digital economy. Some may wonder whether it is more powerful than oil ever was because it is not owned by a consortium of countries. However, if you look deep, things are not as they appear!

We are witnessing the monopoly of so-called GAFAM* (Google, Amazon, Facebook, Apple, and Microsoft), which are using our data to build billion-dollar products and services. This makes us wonder, why is our data so lucrative for these tech giants?

*Also include Netflix to the list as well as Asian tech giants such as Alibaba and Tencent (which are also giving stiff competition to American tech giants in third world countries such as India, Brazil, and Africa).

New economy

First of all, we are generating large volume of data per second, as per IDC, a market-research firm. It predicts that the collective sum of the world’s data will grow to 175 zettabytes (175 followed by 21 zeros) by 2025 v/s 33 zettabytes in 2018, growing at a compounded annual growth rate of 61 %. IDC also predicts that by 2025, 6 billion people will interact with data every day (i.e. 75% of the world’s population). Many of these interactions are because of billions of smart devices (or Internet of Things) connected across the globe.

Data is powering a new economy, which is not restricted to only storing rows or columns of personal data. The new economy is more about analyzing and making predictions from often unstructured data, and to either generate new revenue streams or cultivate the existing.

Reduction of storage and computing costs led to the rise in Machine learning** (ML), and Artificial intelligence (AI). These technologies are giving way to new business models, and new data monetization revenue streams for tech as well as non-tech companies.

**In layman’s terms, AI lets machines perform multiple as well as complex tasks in a smart method, related to human minds. Machine learning helps computers to scrutinize and solve problems by teaching basic logic and allowing the machine intellectual enough to learn on its own, as it progresses to solve different variations of the problem.

Some of the popular use cases are Google Search Engine, Chatbots (e.g. Siri, Alexa, Google Assistant), Fraud Detection (by Banks/Financial Institutions), and Marketing Personalization (by Google AdSense, Facebook Ads).

The value of data

The data that you generate while making any payment, or while searching on Google, or sharing on WhatsApp, Snapchat, or FB, tweeting, or retweeting are all being stacked up and analyzed. For what? To provide more products/services to you so that you can spend more, like more, search more, and share/tweet/retweet more…

To keep things simple, let me give you some examples of the companies you already know!

It is estimated that around 3 % of the world’s computer storage capacity is used to store the data of Google’s billions of users. Your data doesn’t sit idle in huge Google’s datacentres. It is continuously circulated, transferred, and shared with a lot of stakeholders in the data monetization value chain.

When you search for anything on Google, from financial information to even wedding planners near your location, you normally get a long list of highly relevant search results. Along with these results, you may also find related suggested pages from Google Ads advertiser.

As per Investopedia, “Advertisers pay Google each time a visitor clicks on an advertisement. A click may be worth anywhere from a few cents to over $50 for highly competitive search terms, including insurance, loans, and other financial services.”

In 2019, Google’s ad revenue amounted to 134.81 billion US dollars (83% of Google’s total revenue) v/s US$ 69,655 for Facebook (98.5% of total FB’s revenue).

Google’s data and analytics platform products have been the largest drivers of growth in Google’s revenue over the years.

To know in detail about how your data is a commodity for tech giants, and how they are making a fortune out of it – Please visit – “Digital Advertisement Revenues – Your Data is too Important”.

Enough of high-level talk. Let’s dig deeper!!!

Citing the example of Google was important to make the reader understand that your data is a commodity for tech giants.

You must be thinking, did I miss Facebook…Ohh not at all. Now I would like to remove one doubt, which most people have – “Has Facebook more of my personal data or Google?”

If you think Facebook knows a lot about you, then you may be wrong!

An investigation by Daily Mail (UK) in 2018 revealed that Google is spying on millions of its users and keeping detailed records of web browsing stretching back nearly 10 years! Over a year, Google would gather the equivalent of almost 570,000 pages of A4 paper of data of an individual. Google amasses billions of pieces of information from people using the products and services it owns, including its search engine, google maps, voice assistant, email, and YouTube.

“Sinister surveillance” techniques, as the report calls them, would allow Google to collect data even from browsing sessions made in incognito mode.

ANOTHER SET OF PLAYERS OR DATA OWNERS

As per McKinsey experts in the fields of digital transformations and Artificial Intelligence, “Any large business or bank has two types of customer data: line-of-business (LOB) data owned by a particular part of the business, and common data, which falls into two groups: enterprise-level data and supplemental data.”

Please do not forget that here customer refers to you!

Enterprise-level data consists of the same elements as LOB data—customer preferences, needs assessments, and so on—but spans the organization, and in most evolved enterprises is drawn from a single source, such as a data lake.

Supplemental data ranges from raw data derived from external sources such as social media, weather data, and digital IDs to synthesized, value-added analytics. This type of data is captured through predictive modeling, sentiment analysis, and so on.

Several digital companies and start-ups are creating value by combining internal and external data, or by helping others to do so.

In the data monetization value chain, many players are involved. As per the chart below, it can be seen that payment providers have particularly good access to the overall data, as it has access to not only the consumer but also the merchant data.

Source: Mckinsey&Company

Your data is not in your hands!

Taking an example of a simple digital transaction like swiping a card, let me show you how your data is likely to go to various types of businesses that could mine and share elements of your purchase.

Banks and Card Issuers:

For example, when signing the undertaking while getting a credit card (for example), you must have already provided consent to the credit card issuer to use your data. For example, Citibank explicitly mentions:

“The Customer hereby authorizes Citibank to exchange, share, part with all information related to the details and transaction history including Customer’s personal information to banks/financial institutions/credit bureaus/agencies/participation in any telecommunication or electronic clearing”

The card network

The e-payments industry is dominated by four companies. Visa, MasterCard, American Express, and Discover are responsible for handling the majority of card payments globally. In some Asian countries, there might be some other players also, for example, India’s RuPay and China’s Union Pay.

Probably you end up having one of these cards.

These networks, whose main business is to connect with the banks internationally, have revenue streams being generated from aggregating purchases and selling them as “data insights”.

As per Bloomberg, Google and MasterCard cut a secret Ad deal to track retail sales in the US. Google paid MasterCard millions of dollars for MasterCard customer’s transaction data. Eventually, Google used this data to help select Google advertisers to track whether the ads they ran online led to a sale at a physical store in the U.S. However, most of the billion MasterCard holders aren’t aware of this behind-the-scenes tracking.

Stores

The store from where you are buying things most probably uses your card data to help build a “Guest Profile” about you. This is effective for them as they can learn about your purchasing habits, your likes/dislikes. The tech, which helps these stores track you, often comes from payment platform providers, card-swipe machines, and the merchant banks that process transactions for them. The firms gain access to your name, card number, and other details. The data is most probably being shared not only with the merchant bank but also with card machine manufacturers, for example, Verifone or Ingenico.

Moreover, whenever you are providing them additional details for example, by filling up their feedback form, you are eventually helping them to enhance your guest profile!

Mobile wallets

When you are paying using mobile wallets, a lot of additional details go to the stakeholders.

Google Pay does mention on its website that “We do not sell your personal information to anyone. When you pay with Google Pay, your personal information won’t be sold to third parties.”

However, this is deceiving:

When you will check the Google Privacy & Terms, it mentions that the data may be shared outside of Google – such as “trusted businesses or persons”. Moreover, as per Google Payments Privacy Notice, in addition to the information listed in the Google Privacy Policy, Google may also collect other kinds of information while you are using Google Pay for transactions. This could be “date, time and amount of the transaction, the merchant’s location and description, a description provided by the seller of the goods or services purchased, any photo that you choose to associate with the transaction, the names and email addresses of the seller and buyer (or sender and recipient), the type of payment method used, your description of the reason for the transaction and the offer associated with the transaction, if any.”

As per Google, your personal data may be shared in some circumstances:

“For example, when you make a purchase or transaction using Google Payments, we make certain personal information about you available to the company or individual that you purchase from or transact with. This includes sharing your personal information with the developer from whom you purchase when you use Google Payments to make a purchase on Google Play.”

“When you add a third-party payment method to your Google Payments Account, we may exchange certain personal information about you, such as your name, profile image, email, IP and billing address, phone number, device info, location and Google Account activity info, with the third-party payment provider as necessary to provide the service.”

The Samsung Pay app has details from your past 20 transactions. However, the company says that the information isn’t stored on its servers. The app also delivers location-based promotions.

Apple says “when you use Apple Pay with credit, debit, or prepaid cards, Apple doesn’t retain any transaction information that can be tied back to you—your transactions stay between you, the merchant or developer, and your bank or card issuer.”

We all have a responsibility towards the new economy

Photo by Anastasia Shuraeva on Pexels.com

To summarize, we all are producing a vast amount of personal data, and this is a commodity for many tech giants and start-ups. Yes, data protection and privacy policies are being worked upon by regulators, for example, GDPR (General Data Protection Regulation) by the European Union.

The GDPR means that 28 European countries now have strict laws and can impose heavy fines should a data breach happen. The US does not have any centralized, formal laws in place at the federal level to protect the electronic transmission and storage of individuals’ data to the extent of the GDPR. Still, some federal legislation does exist to protect data more generally.

However, the headlines in 2017 about Facebook and Equifax, where it exposed 150 million Americans’ personal data, or the famous Facebook-Cambridge  Analytica scandal in 2016, should be a warning to all the businesses: Data is not only the Oil of the digital economy, but it is also the new CSR (Corporate Social Responsibility).

Twitter’s security recently came under scrutiny when someone social engineered their way into the site’s admin panel (worst cybersecurity incident the company has ever faced), allowing the cyber intruders to access and post cryptocurrency scams from some of the site’s biggest verified accounts (such as Elon Musk, Barack Obama, Kanye West, Jeff Bezos, Kim Kardashian, and accounts of Uber and Apple).

The governments are also realizing the monopolistic stand of tech giants and are taking actions, such as the recent suing of Google by US Justice Department for violating antitrust laws.

Google is accused in the lawsuit of harming competition in internet search and search advertising in which it pays other companies millions of dollars to prioritize its search engine in their products. This is only a beginning, as filing is first step in a battle that could take years.

In some Asian countries, especially India, where digital economy is poised to reach a valuation of $1 trillion dollars by 2022/23, strong regulations are getting framed.

India is trying to follow the EU’s General Data Protection Regulation (GDPR) guidelines in allowing global digital companies to conduct business under certain conditions, instead of following the isolationist framework of Chinese regulation that prevents global players like Facebook and Google from operating within its borders.

For example, India did not let Facebook to fully launch WhatsApp pay services until and unless it moved its payments system data exclusively to India.

As data owners (yes we are the owner no matter where our data resides), we should continuously seek to improve our understanding of where and how our data is being used, and we all must use all kinds of precautions to safeguard our privacy.

As a starter, take initiative by using privacy controls provided by Google, Facebook, Twitter, or any other platform that you use frequently. Also, control and delete Cookies on your browsers to stop being monitored continuously!

Sources: IDC, Investopedia, Juniper Research, CNBC, Daily Mail, Mckinsey, Bloomberg, The Guardian, Wired, PCMag, Google’s/Facebook’s/Amazon’s SEC Filings, and Fiscal Results Documents, Citibank Digital Banking Terms and Conditions, Google Safety Center, Google Privacy & Terms, Google Payments Privacy Notice, Apple Pay Security and Privacy Overview, Eur-Lex (Access to European Union Law), The United States Justice Department, The Ministry of Electronics and Information Technology

How Green is your Software ?

As per estimates, the ICT (Information and Communication Technologies) industry is responsible for around 2 to 3% of worldwide greenhouse gas emissions. By 2040, it is expected to account for 14% of the world’s carbon footprint — up from about 1.5% in 2007.

Traditionally, green IT topic has only been addressed by hardware vendors. However, recently there is a shift of focus towards the role of software in IT sustainability, which makes us think that on its own software doesn’t consume energy or emit any harmful discharge !

Actually, the problem lies in the way software is developed for use — and then in the way it is used. For example:

  • Blockchain is being touted as the next-gen technology to make an enormous impact on many areas such as cryptocurrency, smart contracts, supply chains etc. However, in 2019, researchers at the University of Cambridge estimated that the energy needed to maintain the Bitcoin network surpassed that of the entire nation of Switzerland.
  • Artificial Intelligence is helping a lot of enterprises with advanced analytics, estimations, and predictions. However, deep learning has a terrible carbon footprint. Training a single neural network model today can emit as much carbon as five cars in their lifetimes.

It would be impractical to limit the development or usage of software. However, companies can make software an integral part of their sustainable efforts, by regularly measuring and improving the performance of software systems.