Currency, Commodity and Bitcoins

Bitcoins : As I understand it !

In an earlier post, "First Look at a New Currency",  I had written about my hesitant entrance into the world of the Bitcoin economy and today, the Economic Times has an article that shows that even the regulatory bodies in India have started to have a point of view on this strange and disruptive technology. Since then, many people have been asking me about this piece of technology so let me take a stab at trying to understanding this currency that has appreciated from just US$ 200 to US$1000 in the space of just one month.

First question : What has caused this sudden jump in the value of Bitcoin ? Well the answer is that US Regulatory agencies have declared that there is nothing inherently wrong or illegal with the usage of this currency and the US cannot fall behind the rest of the world, and particularly China, in adopting this new technology. This has set off a flurry of trading activities that has resulted in this huge increase in the price. Second question : Is this a bubble ? Perhaps it is too early to call but let me explain how this works and then you can take your own decision.

Traditional currencies are printed, or created, by a government monetary authority like the RBI as per its discretion and convenience and the value of an individual unit of currency ( one Rupee ) is set by the free market. If many people want to buy Rupees and are willing to pay in US Dollars then the value of the Rupee goes up and you need to pay more Dollars to get a Rupee. If the value of the Rupee goes up then you also need fewer Rupees to buy a barrel of oil or a kilo of rice. On the other hand if people want to get rid of Rupees and buy US Dollars, then the price of Rupees fall and you need to pay fewer US Dollars to buy a Rupee. As a corollary, you would need more Rupees to buy a barrel of oil or a kilo of rice. To allow the man on the street to buy a kilo of rice, the RBI has the liberty (and the legal authority ) to print more Rupees and hand it out as a dole to Indian citizens ( the NREGA scheme and similar stuff) but with more Rupees in circulation, it's price goes down anyway and the currency depreciates. So net-net, the value of the currency is a function of its demand-supply in the market PLUS the discretionary power of the central monetary authority to print and release ( or withdraw ) units of the currency from the market.

This is how all national currencies operate until Bitcoins arrived on the scene and the currency market may never be the same again ..

Actually Bitcoins are less like currency notes and more like a commodity. Say gold.

The total quantity of gold in the world is fixed. No government can create or destroy gold and its price is set by market forces and the constraints imposed by demand and supply. However you can set up an elaborate mining operation and get the gold out of the ground and this is the only way that the supply can be increased. Moreover there is a fixed amount of gold that is available on the planet -- though we may not know exactly what that amount is.

Just as gold can, technically, be mined by anyone with a shovel and access to a piece of land, a Bitcoin can be created, or "mined" by anyone with a computer running a specific software and solving a class of mathematical problems. However these are not simple mathematical problems but extremely tough problems -- similar to finding the next prime number or finding the prime factors of a large number -- that consume a huge amount of computing resources. If you were to try solving these problems on your laptop it will take thousands of years and you may still not be able to solve it. Just as you can dig in your garden for years and never find the gold.

But if  you do solve the problem ( or do find the gold ) and the rest of the community accepts that your solution is correct ( or the rest of world agrees that the rock you have found in your garden is indeed gold) then you have "mined" a Bitcoin and you can call it your own and put it into your "wallet".  I will explain that "wallet" part in a minute. Do note however that the Bitcoin that  you have mined has not been created or printed by RBI or any national monetary authority.

However if you do not wish to solve the mathematical problem ( or go digging in your garden ) you can still get a Bitcoin ( or gold ) by going to a someone who has a Bitcoin ( a jeweller who has gold bar ) and buy a Bitcoin using any other convertible currency that you have.

So you either a mine a coin or buy one. Mining a coin ( like gold ) is difficult and so most of us leave it to the specialists and professionals. Instead, we can and do buy Bitcoins from the market.

But unlike a physical piece of gold, a digital artifact can be easily reproduced and used by multiple people. You can buy a copy of a book as PDF file or music in an MPG format and then you can make multiple copies that you can  give ( or sell )  to many people. If that were to happen in the case of Bitcoins then the economy will collapse ( as publishers of books and music are realising when they see their assets being copied and distributed at low or no cost ).

This is where the concept of a "wallet" comes in.

A wallet is a piece of software -- think of it as a password protected spreadsheet -- that has in it the data of how many Bitcoins the wallet contains at the moment. Each wallet is identified with a unique number -- but not the name or identity of the owner -- and when a Bitcoin moves from one wallet to another, the quantity of Bitcoins goes up in one and goes down in the other. This is nothing new, two entries in a ledger, one credit and one debit.

But why can I not fake this ? I send one Bitcoin to someone, so he gets a credit but I do not not debit my ledger and continue with my original balance. This is where the magic of the Bitcoin "network" steps in by ensuring that every wallet on the planet ( or Bitcoin network ) is synchronised with every other wallet on the planet. Since every wallet has a copy of the ledgers lying in all other wallets it is impossible for any one person to make a fake entry in his wallet. Even if two or three people collude, that will not work because all other wallets will not be in sync with the culprit(s) and the culprit(s) transactions will not be confirmed by other wallets.

Only if more than 50% of all wallets in the world can be simultaneously compromised with fraudulent data then, and only then, will it possible for someone to make a fraudulent entry into one's own ledger and make a double payment with the same Bitcoin. The probability of this happening is very low and is statistically negligible. So this shared and syncrhonised wallet ensures that even though a Bitcoin is non-physical artifact, it cannot be used more than once by the same person to make a payment. So it is like a real physical coin that can be spent only once.

So the Bitcoin currency is defined by (a) mathematical problems that, on being solved, create a bitcoin and (b) wallets that store the history of every transaction in the form of a continuously updated "blockchain" information.

And finally, here are some more pieces of information that might explain the economy better.

a) The mathematical problems that define the creation of Bitcoins are such that the total number of Bitcoins will be limited to about 21 million and the production will slow down and stop around 2050 CE when it will become almost impossible to solve the mathematical problems. It is as if the world will run out of gold or oil.
b) Wallets can be kept in your personal laptop or smartphone but it may be better to keep it with a web based service provider. This is like saying that you can keep data as an Excel spreadsheet in your laptop or you can keep the same data as a Google Doc spreadsheet in the cloud and can access it with your Gmail ID. In banking terms, this would mean that you leave your wallet in a safe-deposit vault with a bank.
c) You may also choose to transfer your Bitcoins from your wallet to an account with a bank or currency exchange. This is analogous to depositing cash in a bank, or converting your equity shares from a  physical form  to a demat form and place them with a depository. It could also be something like depositing gold with a bank and getting a receipt for the "demat" gold.

After playing around with creating wallets, acquiring Bitcoins and placing them in my wallet -- as described in my earlier post "A first look at a new currency"  -- I have recently opened an account with MtGox, the world's best known Bitcoin exchange so that I can sell my Bitcoins, if I want to, and get the money into my StanChart Bank account in India. For this I had to provide the full KYC information including identity proof ( passport ) and address proof ( phone bill ). This ensures that Bitcoins cannot be used for money laundering or any other illegal activity.

This in short is Bitcoin. Please note that this area is so new and evolving that my personal understanding is changing almost every day and this post may be updated or altered with more information. If you can explain this better, please do so in a comment and I will be happy to learn from you.
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Update : Mt. Gox was robbed of all its Bitcoins through a very sophisticated cyber-heist and has filed for bankruptcy. Fortunately, I had not transferred my coins from my personal wallet to Mt.Gox. Hence, they are safe, so far !

Introduction to Data Science

Using a Bandook to Lure entrepreneurs to Roti, Bijli and Makaan !

Many young and energetic graduates from our premier institutes of learning have of late decided to opt-out of the placement services that these institutes provide to become entrepreneurs and set up new businesses. A recent slideshow-report by the Economic Times, features 10 such cases where students of IITs, IIMs and BITS Pilani have created a string of successful businesses. Prima facie this is an excellent development and we wish that many more students create many such enterprises but a closer look reveals some disquieting trends that may be worth a little more discussion.

Seven of the ten businesses featured -- and these include well known names like Flipkart and Redbus, were about a service delivered out of a website. This includes monitoring school kids, booking of taxis, buses and trips, selling of goods and services over the web. Two were focused on building a software that facilitate phone calls over the web and the tenth was about building a robot. In all of these businesses, except perhaps the robotics venture, there was hardly any new technology or any kind of breakthrough or innovation that is seen in the entrepreneurship that comes out of, say, Israel -- another country that is perhaps as obsessed as we are with knowledge. While innovation, or a lack of the same, in India is a topic that I have tried to address in another blog post, here we look at another angle of this student driven entrepreneurship, which is perhaps a part of a larger story of what interests our students.

The core issues that affect the happiness and well being of human beings are food, energy and shelter : roti, bijli and makaan. Without these in place, things like tourism and e-commerce become irrelevant, but none of our student-entrepreneurs seem to have any interest in these basic matters. In a sense, this is true even for students who go through the traditional placement route and look for jobs. Everybody wants jobs in the software and "technology" sector but this so called technology is all about software technology and that too for clients located in other countries.

But outside India, this software "technology" goes towards the enhancement and development of the core sector. For good or for worse, genetically modified food, is possibly adding more calories that is available for us to share, new developments are happening in the extraction of shale gas, and, as in China, lots of houses and townships are being built. There may be issues regarding the degradation of the environment but the fact remains that entrepreneurs are investing thought and money into areas that attempt to address our core concerns. They may be right or wrong, they may succeed or fail but there is no doubt that the focus is there.

In India on the other hand our entrepreneurs seem to be fixated on software and that too on software for the service industry. We all know that services are important and perhaps a measure of development of a country is the percentage of GDP that is generated by the services sector, but still as a nation we cannot survive by selling samosas to each other. Someone has to till the soil, grow the wheat -- grow lots of wheat if possible, so that the samosas can be made and more importantly bought by someone who has the money to do so.

There is no doubt that software is important and I have argued as much in my earlier post where I have argued that software skills are possibly a pre-requisite for success in other sectors, but the biggest heartburn in India is that our software skills are used for the development of the core sector in other countries but nothing much is happening here in India.

Is this sustainable ? Unless we address these core issues, India will remain a backward backwater in the global economy with a few islands that are aglow with the riches generated by the software services industry. On the other hand, if our entrepreneurs can devise solutions that improve the efficiency or productivity in these core areas, then the impact would be far higher not just on the national economy but also on personal finances.

But who will bell the cat ? and why ? It is so much more comfortable,  lucrative and more importantly much much easier, to write Java ( or Hadoop ??) code at TCS for an American company, than to build a pilfer-proof electricity distribution system or a more efficient solar panel for an Indian customer. It is also easier to advise others on what is to be done than to actually do the same yourself.

Even as we agree to the above, yet we as a nation and as individuals need to explore how our investment in education, in knowledge, can be used to address the core issues of roti, bijli and makaan. In this context, here is one approach that may work. Consider the following ...

image from http://alternathistory.org.ua/perspektivnye-proekty-defence-technology-plan-velikobritaniya

Every year, India spends nearly US$ 35 billion for defence and of this, nearly 50% is capital expenditure that is almost entirely paid out to foreign companies. If this money could be diverted to private Indian companies who could either work alone or have a foreign partner then this could stimulate a lot of engineering innovation in this country and make it lucrative for our students to start focusing on this sector. It may be argued that defence is not the same roti, bijli and makaan but then defence spending can, and has been, a stimulant and catalyst for creating an ecosystem of technological innovation that is financially rewarding. No student would want to work in the mine, the coalfield or in the farm but if there is big technology happening in a missile factory and there is good money to be made -- then many of our students will start flocking towards these sectors.

Net-net, let us not beat our chest about why our youngsters work as cyber-coolies in TCS. Let us prime the pump of the engineering economy by diverting our defence expenditure into Indian engineering companies so that they can pay more than what our software factories do.

The Three Proto-Skills of Civilisation : Language, Mathematics & Infotech

A species evolves when some of its members acquire some characteristics that gives them an advantage in the competition for resources, a characteristic that makes them more "fit to survive" in a hostile and adverse environment. From this perspective, the appearance of language in the animal world was a watershed moment in the ascent of man.  It may not have happened overnight but the emergence of this unique ability  to capture fleeting perceptions and experiences as concepts and ideas in a matrix of grammar and vocabulary and then transmit them for debate and discussion gave such huge evolutionary advantage to those apes who acquired this ability that in effect a new society was born. Language was a very unique skill -- a skill that allowed one to acquire, modify, transmit and disseminate knowledge and information about other skills like hunting, cooking, farming and building shelters. It did not matter which skill was important for survival, a language to talk about the skill was a pre-requisite to acquire all the other skills. Hence language is the first proto-skill.

free image from http://www.freegreatpicture.com/

Using language as a key differentiator, human society evolved rapidly away from the rest of the animal kingdom and established itself as the dominant species of the planet. Things were relatively placid for the next 100,000 years as human society gradually fractured itself along racial, geographic and finally national boundaries and then as nations started competing with each other, the importance of a new skill or ability made itself apparent and this was the rationality of the scientific method or, its epitome, mathematics.

The renaissance in Europe, that brought down the curtains on the Medieval Era in Europe in the 15th century and led the way to the Modern Era was powered by mathematics. This may sound a little odd to those who have been brought up on a staple diet of algebra, arithmetic and geometry in school but one must understand that mathematics is something far more fundamental. We may be aware of Euclid's theorems of geometry but what is far more important is the brilliant structure of axioms and proofs that allow us to begin with the simplest of facts and create an edifice of knowledge whose completeness and veracity can be established beyond doubt even in the face of extreme complexity. Knowledge is power and mathematics makes knowledge infinitely extensible, both in width, that is across domains, and in depth into each specific domain. All areas of modern knowledge are based on these fundamental principles of mathematics, though in some cases, as in science and technology, the importance of mathematics is more readily apparent. Hence mathematics is the second proto-skill. In this context it is interesting to note that mathematics depends on and cannot exist without language -- even though the language of mathematics may be very different from the language used in the bazaar !

However mathematics, the second proto-skill, works as very significant force multiplier on the advantage provided by language, the first proto-skill. A group that "has" language has a strong advantage over a group that does not,  just as a group that "has" mathematics has a strong advantage over a group that does not, but a group that "has" both language and mathematics has a far, far stronger advantage over a group that "has" just language.

While there is no doubt that language and mathematics are key proto-skills that a population (or a community or a group) needs to ascend the evolutionary spiral it is also true that the first mover advantage is temporary. Once all human populations acquired the first proto-skill, language, it ceased to have the same value across human populations and it was the appearance of the second proto-skill, mathematics, that provided the next level of differentiation and dominance. Even today, we find that societies that have adopted the path of rationality or mathematics, are more successful than societies that are stuck in irrational beliefs and prejudices of the middle ages.

The main hypothesis of this post is that information technology, or infotech is the third proto-skill -- both at the personal as well as at the societal or group level -- that is powering and will continue the power the next phase of the upward evolutionary spiral.

It goes without saying that infotech is everywhere. While there may be spectacular progress in many areas  --  from the design and constructions of space stations, through genetics, molecular biology, robotics, manufacturing, supply chain optimisation, advertisements, marketing, movie making, human relationship management, energy management, smart cities and all the way up to social relationships through social media, and the list can go on as long as you want -- the key driver in each and every area is the usage of increasingly complex tools of information technology.

Irrespective of its skill or aptitude in any other area of  human endeavour, an individual or an organisation that is uncomfortable with the usage of infotech is extremely vulnerable to the competitive threat posed by one that has mastered infotech, the third proto-skill. It is not that infotech is valuable only to a computer scientist, a professional programmer or an infotech company. Anyone who chooses to specialise and excel in any area must first get his infotech right because it is infotech that will be the force multiplier that will propel the individual or the organisation in whatever direction that it wants to move.

Does this mean that everyone must study the algorithms and data structures of computer science ? Or learn to write Java, Python, or Hadoop :-) programs ? Or build faster microchips ? No certainly not. In the case of language, it is not that everyone had to become Panini, Shakespeare, Wren & Martin or Rabindranath Tagore but it was the ability to articulate and manipulate thoughts that separated the men from the apes. In the case of mathematics, it is not that everyone has to be Newton, a Gauss or a Godel but every humble engineer working on any branch of engineering was using their tools and techniques to create better systems related to machinery, habitat, energy and food. So is the case with infotech. You or  your company may be in a business that is far removed from infotech -- you may be prospecting for oil, selling soap or even serving idlis and dosas for lunch -- but unless you have a deep understanding of infotech and how it can, does and will impact your business then the possibility of your growth is severely limited.

To reiterate the centrality of infotech in the 21st century may sound like a tautology to a generation that has been weaned on smartphones and social media but perhaps because we are living in the age of computers we do not have the perspective to understand the immensity of the impact that it is causing on human society. The first apes who made the first few noises that eventually became language never knew the revolution that they were unleashing on the world. Da Vinci and Newton might have had the foresight to understand what they were doing but it is highly unlikely that their neighbours would have been any wiser. We, who have the good fortune to be a witness -- as a participant or a bystander -- to this emergence of infotech must understand and appreciate that we are living through the third great surge in human civilisation. Where man and machine, mind and matter is coming together to create an incredible tomorrow.
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Change Log : The original post used the word Meta-skill to describe what is being referred to as a Proto-skill. I just thought that proto is better than meta to describe the skill that comes before or is a pre-requisite for the subsequent skills

Controlling Men and Machines with Thought

 I spoke about this unique concept at the Technology Forecast Conference organised by PricewaterhouseCoopers Ltd in Calcutta on 26th September 2013 at the Hyatt.

At the end of the presentation, I asked members of the audience to send me an SMS and  vote on whether they thought that there would be an internet of human minds in the next 50 years. 16(+1, added later) people voted YES, 6 people voted NO.

Uttarakhand 1997 - Kedarnath and Badrinath

The Kedarnath Temple that was nearly destroyed in the recent natural calamity has now been thrown up to the public again but a lot of reconstruction and rehabilitation has be done to bring this tiny temple town to its pristine glory.

We had been to Kedarnath and Badrinath in 1997 and here are some ancient pictures that are in our treasured memory.

notice the snow in the courtyard of the Kedarnath temple and this was June-July.

This was the Bharat Sevasram Sangha guest house or dharmashala that we stayed in.

After the stiff Kedarnath trek, we had some rest at this beautiful tent colony and Nandaprayag, right next to the rushing Alakananda River

Next stop was Badrinath the soaring Neelkantha Mountain

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and here are a few more pictures from this trip

Karnaprayag

Lachchhmanjhoola

Mussoorie

For more beautiful pictures and videos of Uttarakhand, please see my blog post on Gangotri and Tunganath that we visited more recently in 2011.

Dual Vocational Training System (TVET) model for MBA programs

MBA programs in India, and perhaps abroad as well, are at the crossroads. While the top 3 IIMs may be comfortably placed with their placement story, students of other B-Schools in the country are in a state of tension -- will they or will they not be placed in a job of their choice ? In this post, we explore how the famous German system of Dual Vocational Training (TVET) can make an MBA program more meaningful for corporates, students and for the teaching institution.

As I have argued in another post, B-Schools and the Placement Syndrome, placements are the only reason why B-Schools exist ! We may talk about research in management and of papers  being published in respected journals like Management Science but 99% of B-School students, the primary customers who actually pay for the faculty and the infrastructure, do not really care about such stuff. To them, the reputation of a B-School depends on the percentage of the graduating batch that is placed and the average salary that they have got.

In a sense, the prefix "Master" in the MBA may be the same as in an M.Tech, M.Sc, or M.A. but at the end of the day one must admit that while the last three are designed to be stepping stones to a career in research and a PhD, the MBA is essentially a skill based vocational program that equips students with the tools and techniques that will make him an effective manager.

We can of course redesign the MBA curriculum so that the V-School can become a B-School with a Research Agenda, but I am not sure whether the employers, the secondary customers, of B-Schools would really be interested. Rarely do employers select students on the basis of what they have been taught in a B-School. Had that been so, then students of an IIM would be no better placed than students from any other B-School since the course content is almost identical and the delivery is hardly any better ! Employers go to an IIM because because they know that the selection process of CAT+GD+PI means that the best students are there and if they employ these students it is more likely than not that these students will deliver better results. So the only value that an IIM ( or for that matter, an IIT in a different context ) adds is to act as a filter in the companies recruitment process.

Which brings us back to the idea of placements being central to the reputation of a B-School. Lost in this mad obsession with placements is the fact that the curriculum in a B-School can and does impart substantial and significant skills that can really help a manager with his or her line functions. But the focus being on placements and placements alone, the contents of the curriculum and the quality of delivery is generally ignored. This is the tragedy of the MBA ecosystem in India.

Is there a way out of this unfortunate and uncomfortable situation ? Can a B-School remove the placement pressure, both from itself and from its students, and focus instead on  the delivery of quality education that is really appropriate for companies that hire its MBAs/PGDBMs ?

The answer is "Yes, if we look beyond the standard two-year residential MBA model -- the one with a summer internship in the middle and a placement season at the end !"

An alternate model and one that has worked very successfully in Germany and certain parts of Europe is the Dual Vocational Training System (TVET) -- a time-tested economic model that has been incorporated in the national laws of Germany. This German model is designed for students passing out of (the equivalent of our) Class XII and joining various vocational schools like our ITIs but with a little bit of adjustment can fit our "post-graduate" MBA students as well. Let us see how it works !

After passing out of high school, students apply for internships in companies that offer such a role. Once accepted, the students also join a publicly funded vocational school and for the next two or three years they split the time between the school and the company. This means that the student could be at the company for three days a week, or every other week or a week after every two weeks depending on the model adopted by the school and the company. The school provides a generic, common set of training that leads to a diploma while the company provides training that is specific to the company or the trade ( machinist, boiler operator etc). At the end of the internship period, the student has acquired skills that are of interest to the company and so he or she is generally offered a full time employment.

This Dual Vocational Training System has been credited for Germany's low unemployment figures because it fine tunes student training with exactly the kind of skills that the country's industry needs and ensures that students are trained to fit the job profiles that actually exist. No student is left in the lurch without a job at the end of his coursework.

How can we tailor this model to fit the MBA ecosystem in India ?

Ideally we should begin with a group of MBA colleges but even a single one should be good to start with. This institution ( or group of institutions ) would talk to a group of companies that generally hire MBA students to understand actual requirements of freshers in the current year. Next a common fresher recruitment process is conducted at the institution through a job fair where company HR staff interview and select fresh graduates on the basis of educational background, CAT scores and the usual GD/PI process. Selected candidates are made an offer of appointment, subject to standard rules of probation and confirmation after one year. [ This is very similar to Indian Oil recruiting engineers at the entry level on the basis of GATE scores and not on the basis of the M.Tech program that uses GATE as the entry criteria !]

The students selected by different companies will join the MBA/PGDBM program and pay their own tuition with the understanding and assurance from each company that barring serious disciplinary issues they will be employed by the company at the end of one year.

Since the companies would expect the students to join in the same year itself, the MBA program offered by the institution must be shortened from the standard two-year format to an equivalent one-year format that is explained in my earlier blog post, the 49 week MBA program. In fact this program can be shortened even further if we use the first 22 weeks ( or 6 months ) to deliver the core, compulsory modules of the MBA program and then send the students to the company for their actual internship process.

In a normal MBA program, the students come back to the institution after their internship for their final year classes and this is where this modified program can create a killer advantage if the last trimester of elective subjects are delivered through an inexpensive distance learning mechanism at the company itself where the student is doing his internship !

This means that within six months of the admission process -- the kind of time it takes to run a decent Management Trainee program in any company -- the student is already onboarded into the company and actually working in the area where the company has a need or a vacancy. The last one-third of the MBA coursework can then be executed at leisure through distance learning that could be hybrid of asynchronous, synchronous and even periodic face-to-face interactions. Moreover the kind of electives that are offered could be tailored to meet the requirements of a majority of who are participating in this exercise. Once coursework is completed, the student gets the degree and joins the company as a confirmed employee.

This arrangement is a win-win situation for all participants.

• For companies who are looking for freshers in their management cadre, this is a confirmed pipeline of people whom they themselves have chosen. Irrespective of the number of people that they have selected, the hassle of running a management trainee program for freshers is offloaded to the college at no cost to the company ! Internship payments start only after the first six months when the student comes on board.
• For students the assurance of an internship/probation guaranteed after six months and the high likelihood of its conversion into a employment at the end of the year is a big source of comfort before investing Rs 6 - 8 lakhs in an MBA program. Moreover they can focus on their studies and acquire skills that are important and not get distracted with numerous internship and placement processes that happen in a normal B-School program.
• For the institution the benefit is that both and inbound and outbound supply chains are taken care of and the faculty can focus on their subject, their research and make their pedagogy more effective. Moreover by conducting courses over the distance learning network they can create educational assets whose intellectual property can be monetised and converted into good revenue both for the institution and for the individual faculty members.

Are there any drawbacks in this model ?

Of course companies can renege on their promises and refuse to take the students after six months. This is possible though unlikely because if a professionally managed company has a plan to hire and train freshers then this plan will not change dramatically within 6 months.

However if a student performs very badly in the first six months of coursework or there are performance and disciplinary issues during the internship process then the company should have the right to refuse a final appointment and this must be made very clear to the student before he or she invests in the program.

Finally, how effective is the distance learning mechanism that will be used for the elective courses in the final trimester ? Can these be considered the equivalent of face-to-face courses delivered in a traditional residential program. ? The answer is "Why not ?" Distance learning is fast becoming the norm and MOOCs ( Massively Online Open Courseware ) are being offered by many of the world's finest universities. Georgia Tech is offering an entire MS degree through this route. With a little bit of effort on the part of the faculty to acquire some basic teaching skills, the distance learning route can become the norm not just for electives but for an entire online MBA program as well.

So to sum up we propose that we 

• Adopt the methodology of the time tested Dual Vocational Training System (TVET ) from Germany
• Modify the two-year residential MBA program to shorten it and place it in the TVET mode
• Create a situation that meets the requirements of the corporates, is a safe investment for the students and allows institutions to focus on teaching and research.

Since this process would involve a degree of commitment from the industry, perhaps the CII or Chamber of Commerce could champion this model and take it up with its member companies.

Speaking ....

at the Public Relations Society of India, Kolkata Chapter, annual event at the ITC Sonar, Calcutta on 22nd June 2013, where I spoke about Personal TV Channels

Your Personal TV Channel could be here ..

Oasis : At the end of the rainbow

Looking Beyond Social Media : Cloudcast

I know that Social Media is the toast of the town but boy, am I getting tired of it ! You may say that I am being a hypocrite, since I post regularly on Twitter (hence automatically by  passthrough on Facebook ) and Linkedin, but I will be frank and admit that I do so more out of habit and perhaps out of a misplaced sense of necessity.

Habit is understandable. At Level 4 of Maslow's hierarchy of needs, one needs esteem, the acceptance by one's peers and it does give you a kick if your post is liked and commented upon by a small band of people who form a mutual appreciation society. Of course, the key word in the last sentence is mutual -- if you want your posts to be liked and commented upon, then you have to return the favour as well and this is where the habit part kicks in. But other than casual chit-chat or  twitter (the guys who created this phenomenon, could not have named it any better) I doubt if social media has any purpose other than to keep an idle mind busy !

But somehow we all believe -- or at least the connected generation does  --  that social media is terribly important and if we are not there then we are missing out on something very important. While some people might have used social media to change the world -- turning obscure events into major causes -- let us admit that the vast majority of us are doing nothing useful. For us, it is necessary and important to see and to be seen on social media! That is about it.

So in a sense, social media is somewhat like the adda or gossip so beloved of the Bengali bhadrolok gentleman -- a gathering of like minded souls to talk, talk and talk about the world and its uncle but generally making sure that no talk is ever converted into anything actionable.

The chatter may be pointless but apparently listening to this idle chatter big business. Social media analysis has become a new field of study right from academia, through the popular press and all the way to conferences organised by professional bodies and learned societies. Everybody claims that once you can filter out the noise you can reach a gold mine of information that will drive your sales through the roof -- irrespective of what you sell !  Once again the amount of tangible actionable intelligence that is gleaned from such analysis is debatable -- most of evidence in support of this activity is anecdotalal -- but then, just as in social media itself, you must see and be seen by others in the process of analyzing social media.

In a sense this is like the dot com era once again, when it was thought that site visits and eyeballs could be easily monetized to improve the bottom-line of the company. Today, social media analysts believe that they are about to find the gold at the end of rainbow. We wish them all the best !

Turning to the rainbow itself, social media and its leitmotif, the incessant chatter, is becoming more of a fatigue. It is like having to keep up with the Mukerjees, Malhotras, Mehtas and Murugans of the world and meet-and-exceed them on a post to post basis ! If only the posts were a little more substantive ? But alas that is not to be. The real stuff, interesting articles, podcasts and videos that enlighten and entertain are not in social media. Instead they are out there in the real, searchable web.

However, to give social media its due, the location of this real stuff can be found as people share links in their posts. Social media helps play a role in that instead of having to go out and search for these nuggets on Google, they can be delivered to your timeline by a well defined set of social media friends.

Another important contribution of social media is the concept of user generated content, one of the pillars of the Web 2.0 architecture. Even the dumbest of social media enthusiasts, when they post something, are adding to the total content of the web. They are creating content. Unfortunately the content created on social media is too little, too meagre, too shallow and hence inconsequential.

Which is why at Engage 2013 -- an event organised by the Public Relations Society of India, Kolkata -- when I spoke about emerging trends in digital communications, I decided on the blasphemous route of ignoring social media completely and spoke instead of how to create your own radio and TV channels using free resources on the web. I introduced the concept of Cloudcasting or using the internet to create radio and TV broadcasts.


Internet radio and television is a refreshing change from the mindless chatter of social media. I like it because it serves two purposes namely, the possibility of creating significant content and the freedom to publish it on a rich medium.

Blogs were the initial liberators, allowing people like us to publish our thoughts, for whatever they are worth, on a media whose reach, technically, is as long as that of any mainstream media. Similarly internet radio and TV stations allow us to communicate our thoughts and ideas without having to suffer the ignominy of Raghav Mahato of Mansoorpur who started his own radio station but had to shut it down because of the crippling laws of the land.

 We have been consuming radio and TV content for far too long, it is time to create our own.

The Unbearable Dullness of Being an Indian

Today, on Facebook, I came across another wisecrack comment on the dim prospects of the Indian software industry. Someone was taking another cheap potshot at Infosys ( and similar IT companies for that matter ) for working at the low end of the value chain. Coding, cyber coolies and what not. Why can the Indian software companies not "move up the value chain" and develop products that leverage intellectual property and not merely cost arbitrage ?

Good question. And it is not that this question is being asked for the first time and so it is unlikely that the issue is not known to the management of the IT companies. Having been at a reasonable senior position in the IT industry I know for sure that many of my colleagues and contemporaries were seized of the matter.

But being seized of the matter is different from being able to do something about it and unfortunately most attempts to do anything different ended up in failure. Why ? Because we as a nation suffer from an unbearable dullness of mind !

image from Zazzle

Before you ejaculate in anger and consternation at this assertion and claim that Indians are doing wonderfully in Silicon Valley and in Spelling Bee contests in the USA, stop and think ... has anything great come out of India in the last 200 years ?

I posted this question in the IIT KGP friends forum on Facebook and the results were an eye opener. The thread went on and on and on but we really could not come out with anything, right anything, great that has come out of India in the last 200 years. The exact question was:

"Can you identify one great product, service or even an idea that has emerged from India in the past 50, 100, 200 years ?"

and I have summarized the results from 368 replies in this spreadsheet.

You would notice that there are just about dozen ideas of which the concept of Zero and game of Chess were in the distant past. In the past 200 years we have great difficulty in coming out with even ten new and original ideas. Now you may claim that we have  been under foreign domination and other adverse situations but even then for a country as large as India, this is a disappointment if not an outright disgrace ! To put things in perspective, Estonia, a country with a population just 4 times the number of employees in TCS, could create a product like Skype that has become the defacto telephone service in the world.

 As a member of the leadership team in two fairly large Indian IT / Consultancy companies I have felt this acute disappointment whenever I have had to deal with Indian programmers. They are consumers, not creators ! They will merrily download code snippets from the web to solve the problem at hand but would rarely upload samples of their own for others to get the benefit of. The number of Free and Open Source (FOSS) projects and contributors from India is another pointer in t his direction.

So net-net our people and dull and that is why no great product or idea comes out of India.

But why are we dull ? Is it something to do with our culture ? our religion ? our weather ? our ethnicity ? our genes ?

My guess is that it has something to do with our way of life or dharma (though not religion in the narrow western sense )

In the long term it could be our reverence for the past, our ancestors and the guru-shishya parampara or the concept of respect for (and hence not challenging ) the teacher. We believe that our gurus ( or teachers) are superior to us and I think that this is utterly wrong. While the philosophical concepts envisioned in the Vedas are indeed eternal, their interpretation and practice needs to change depending on the locale and time of its application and that is not something that we, as a nation are capable of or even prepared to contemplate.

Even at a more prosaic or mundane level, new ideas, processes, goods, services or products are not accepted in India unless someone else has shown us the way. We need a guru to look up to, even if today these are marketing and commercial gurus from western companies. Genetically, we have been programmed to  believe that we cannot do anything new unless it has been shown to us by someone else.

So despite the much vaunted "jugaad" -- which I personally believe is a tragic outcome of our failure to develop and deliver quality products and servcies -- we remain a nation of dull people and nothing perpetuates this unfortunate state of affairs more than our education system.

Our much vaunted, and greatly overrated, IITs and IIMs -- from where our corporates love to recruit their next generation of managers and leaders, are filled up with people who can simply  "crack" the notorious entrance examination through "clever" memorization and "brute force" practice. Creative and imaginative people with original ideas are squeezed out of the system early in the game and are forever at a disadvantage in the corporate world.

So India is caught in the pincers : Its companies do not have a pool of creative people to churn out new ideas and even if some ideas come out, the population outside will never accept these new ideas because they have not come from some foreign gurus.

Net-net let us not blame TCS, Infosys, Wipro and Cognisant -- they are doing a good job of providing the daily bread to many of us in India. They are what we deserve.

Thank you for reading till the end. Now you can go back to Facebook and "like" the latest pictures of your friends !

Bitcoins - A first look at a new currency

Bitcoin is a new "currency" that has caught the imagination of the world and I thought it may be worthwhile to step in and see what it looks like. But before that what is Bitcoin ?

A Google search on the topic will lead to lots of fairly detailed explanations but let me summarize what I have understood so far.

1. It is more like a commodity, like gold or guar seeds, that are being traded at a price dictated by the demand and supply in the market.
2. Since it is a digital artifact, it is being "mined" or "created", by running a computer program -- that consumes time, power and CPU cycles -- and seeing if the result meets certain requirements. Think of it as if you are asked to locate the next prime number.
3. These requirements are defined "collaboratively" by a federation of computer servers located on the internet. So unlike a Central Bank there is no single body that controls the supply Bitcoins.
4. Anyone can join this federation by installing the server software on his machine and running the Bitcoin program, that is available for free download. Think of it as an SMTP mail server or a P2P file sharing server that must obey the mandated protocols if it wants to operate.
5. Since the Bitcoin is a digital artifact that can be "duplicated" and "spent twice", each transaction of a Bitcoin is cryptographically signed by the payer and the payee and recorded across all federated servers. So the probability of a double spend is almost negligible.

So how do you enter the Bitcoin economy ?

In the case of gold you can either lease land, buy mining equipment and employ people to get the gold out of the ground or  you can buy it at a jewellery store. Even simpler is if you by units of a Gold based mutual fund and store it in a demat account. Bitcoins are similar. You can "mine Bitcoins" using heavy duty servers or you can "get" or "buy" Bitcoins and store them with you.

So let me tell you what I did ..

Mining Bitcoins is a complicated process and I decided to stay away from it. Instead my focus was on acquiring some Bitcoins, but even if you want to acquire you need a place to store it. You need a wallet.

A wallet is a piece of software that is identified with a long string of numbers. This software can be located on your desktop or laptop machine ( like having a safe built into the wall of your house to store gold, cash ) or you can get an online wallet hosted by vendor ( like having an demat account with a depository or a cash account with a bank )

I opened an account with Blockchain and created my wallet with this identifier 1AoD4Ax1xHtwPCa99GbiQo86Bya77Hu8Bo The next challenge is to fill the wallet with some Bitcoins.

Where do you get Bitcoins ? You can join a Bitcoin mining consortium, offer your internet connected machine for running the "mining" program and get a tiny share of a Bitcoin if and when your consortium gets a Bitcoin.

Or you can search Google for places where you can get free Bitcoins. I visited Bitvisitor and entered my wallet identifier (given above ) and pressed submit. This leads through a series of websites where you are required to spend 5 minutes at the end of which a tiny fraction of a Bitcoin was credited to my wallet. This was good but far too slow. After spending hours, I just had less than a thousandth of a Bitcoin !

Clearly something faster was required !

Then I remembered Second Life and the stash of Linden Dollars that I had accumulated as my avatar called Calcutta Cyclone. Now to extract my Linden Dollars and convert them to Bitcoin. This is possible through an account in the Virtual World Exchange.

So I entered Second Life with my Calcutta Cyclone avatar, located a Virtual World Exchange terminal and transfered my Linden Dollars to my Virtual World Exchange account. Next I logged into Virtual World Exchange -- which is nothing but a normal commodity or currency exchange -- converted my Linden Dollars to Bitcoins at the current rate of exchange ( around SLL 36,000 = 1 BTC). The last step was to transfer the Bitcoins from my Virtual World Exchange to my Bitcoin wallet at BlockChain.

This takes time because this transaction must be agreed to by a large number of Bitcoin servers who must confirm that there was no double spend. This process can be accelerated by paying higher fees but I was patient and after a couple of hours, the transfer was formally recognized by the Blockchain server.

So now I have a clean pile of Bitcoins in my wallet. I can either withdraw this money as US Dollars through my Paypal account, which will show up in my Standard Chartered Bank account, or -- and this what I intend to do, I will use it to pay for website domain payments. If and when Bitcoins become more acceptable to mainstream eCommerce platforms then I would be able to use them on Flipkart or eBay.

The Red Ravines of Gangani

Gangani is an unusually picturesque place on the banks of the Shilabati River, near Garhbeta, West Midnapur, West Bengal. Here erosion by water has created strange earth and rock formations on the banks of the river and the red colour of the soil gives the place an eerie look. The following slide show will help explain what we are talking about.


Some people refer to this place as the Grand Canyon of Bengal but of course in terms of size, the place is miniscule compared to the original in the US. This is what the place looks like in Wikimapia

The Inevitability of Universal Online Education

Students today are trapped in a strange dilemma precipitated by disturbing trends. One hand we have the devaluation of the college degree as more and more employers are demanding college degrees for jobs that essentially call for high schools ( see New York Times ) and on the other we have colleges rising exponentially and leading to a second debt crisis. ( See Time ) This may be a new phenomenon affecting the United States but has been a well known problem in the dismal economic scenario in poorer parts of the world. In India we have had the tragedy of graduate and even post graduate students fighting over janitorial opportunities in the arid job market while thousands of students never have the wherewithal to continue their studies beyond high school ( Class XII) or even middle school (Class X) In the gloom that is gathering over the global economy it is the student and the education system that is finding itself trapped in a cul-de-sac that seems to be leading nowhere in general and despair in particular !

image taken from www.usnews.com

Yet, it is only education and learning that could provide a safe, guaranteed, environment-friendly and sustainable way for the world to dig itself out of the hole that it has found itself in. But to use it effectively we must be open to throwing away many of the myths and misconceptions that cloud our judgment and inhibit us from crafting a bold new architecture on which the world of the future can or should be based. An architecture that is based on distance learning and online education.

The biggest myth about online education is that it can never be as effective as face to face classroom training. This has been repeated ad nauseum and has acquired a ring of Gobbelsian authenticity. The fact is that very often face to face classroom education, when delivered by incompetent and under prepared faculty, is no better than no education at all even though students are presented with a degree or diploma for simply sitting through the course and writing an exam. On the other hand, self motivated acquisition of knowledge from websites and Youtube videos have equipped many people with the skills that are necessary in their daily work -- even though there is no universally accepted certification in the end. The bottom line is that it is futile to compare online and class room education. Instead the comparison should be between effective and ineffective pedagogy, between good and bad teachers -- irrespective of the medium or the technology used to transfer data, information, knowledge and wisdom from the teacher to the taught.

The Massively Open Online Courseware ( MOOC ) movement is a step in this direction. In fact big name universities on either side of the Atlantic have come together to create two major consortia -- Edx created by MIT, Harvard and UC Berkeley in the US and FutureLearn consisting of 12 British Universities namely  Birmingham, Bristol, Cardiff, East Anglia, Exeter, King’s College London, Lancaster, Leeds,  Southampton, St Andrews and Warwick, along with UK distance-learning organization The Open University (OU)  -- have been formed to develop the concept. And then of course there isCoursera a commercial entity  and Udacity created by Google employees who have all stepped into the game. While the jury could be out on the effectiveness and eventual viability of these enterprises, it might make sense  to see what is it that a traditional university has that distance learning must meet, match and exceed to be taken seriously. To understand that let us ask ..

What is a University ? At its most fundamental level a university has three critical characteristics, namely

1. People : Lots of people, both students and teachers
2. Space : A shared space that all these people can access simultaneously
3. Interaction : An environment that encourages vigorous and rich interaction amongst all these people

Now let us look around us and see if these three conditions are being met anywhere in the digital world and the first place that we look at is

Social Media : Facebook, Twitter, Linkedin, Youtube, Google+, Instagram ... what is common to all these platforms ?

1. People : Again we have lots of people, though not necessarily teachers and students, though they are not excluded.
2. Space : Obviously these platforms are accessible to, and are indeed accessed by, all the people who participate
3. Interaction : There is no dearth of interaction and in fact interactions are the lifeblood of any social media platform.

What is even nicer is that these interactions can be very, very "rich" interactions, not just in terms of media -- that is images, audio, video -- but in terms of questions, answers, clarifications, comments, appreciation, criticism and even evaluation in terms of likes, shares and votes on each and every interaction. In fact I believe that social media interaction is far more richer in terms of diversity and depth than what could ever be possible in the physical world.

So the success of a distance learning program in emulating and surpassing a traditional university lies in its ability to map the university model on the social media model that has become so wildly popular.

In this context, it would be nice to keep in mind that when Apple had first introduced the Newton, a personal digital assistant, way back in the dim, dark “middle ages”, it was not accepted. But the iPad, which is essentially a similar device, was an instant success because ubiquity of the web and proliferation of the cellphone network through which the web could be accessed inexpensively created an environment where the iPad (and other tablet computers) could thrive.

Similarly, distance learning and the concept of open universities as established by institutions offering correspondence courses may not have been very popular but the same when delivered through the medium of a “Web 2.0” or social media platform could be far more effective and popular and pose a credible alternative to the established brick-and-mortar classroom that have become so impossible expensive and unaffordable for large parts of the global population.

One key area that distance learning falters on and yet, one that is of crucial importance to students is a credible evaluation mechanism that employers can depend upon and on the basis of which they can offer job placements. In fact, the popularity of most universities rest, not on what they teach or how, but how many of the graduating batch is placed and at what salaries. In fact, irreverent commentators have compared universities to job placement agencies but from the student’s perspectives that is great significance.

So the real challenge in distance learning is to put together a periodic examination process that attaches a credible grade or marks to each student that the employer can use to sort and sift the good, the bad and the ugly ! This can easily be arranged if we adopt a hybrid model where teaching is online but evaluation done in a  physical classroom under the supervision of strict invigilators in a number of distributed locations that need not be anywhere near the teacher who taught the course. This is hardly a big challenge since we are quite used to conducting examinations like the GRE, GMAT, CBSE, JEE on a nationwide or even global basis through certified and credible franchisees.

The last thing that we need is a placement service that will allow employers to reach out to qualified students and evaluate them in an objective manner. Job portals like Monster and Naukri can be plugged in with the online university and interviews can be conducted on Skype or Google Hangout to any level of detail.

All the pieces are in place. We just need someone to tie all this together and create a solution to problem of delivering credible college degrees to motivated individuals in an inexpensive manner.

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This article originally appeared in techtaffy.com a technology blog published from San Jose, California, USA.