Social Credit : What China does today ...

Credit rating is a big business. Thanks to companies like CRISIL and  ICRA and the research they do into the finances of companies, bond investors get an independent view of a company’s financial status. Then they can take a call on whether they should invest or not. At a personal level, the CIBIL score is a relatively new product in India and its value is used as a benchmark by financial institutions to determine whether an individual qualifies for a personal loan and if so for what amount. In all cases, the financial credit score, whether personal or institutional, is the primary determinant for access to loans or financial credit and by extension, to goods and services that are available on credit. In India, these extensions may not be evident but in the US and other financially mature societies, the financial credit score is used to allow or deny telephone connections or even rental of residential apartments. The utility of the financial credit score is well understood and it is generally accepted as a useful tool to ensure safety and stability in a financial ecosystem.

China has taken this concept and is planning to extend it to the social domain. By defining a metric called social credit and determining it’s numeric value for each citizen, it seeks to create a new tool that will ensure a safe and stable social and political system. Or will it create a high tech, low life, cyberpunk dystopia? This article explores this idea and speculates on how it may or may not be used in other countries, including India.

The financial credit score for an individual is calculated, or built up, with information about the individual that is available with the participants in the financial ecosystem and which they are willing to share without compromising the privacy of the individual. Generally, assets like income stream, home value, bank balance are private but information on liabilities like loans -- secured, as in car and home loans and unsecured, as in personal or credit card -- that are sanctioned along with a history of utilisation and repayment are available with credit rating agencies. The key determinant in this case is behaviour. While ability to repay a loan is certainly important, what is perhaps more important is the willingness to repay. This behavioural trait is measured and quantified by keeping track of actions that can be used as a proxy for the corresponding behavioural traits. For example, if a person has taken loans in the past, there is a behavioural pattern -- of repayment, or lack thereof -- that can be used as a proxy. Not having taken a loan means that there is no observable behavioural pattern to go with.

In 2014, the Chinese government operating through the State Council defined the architecture of a new national social credit system. Designed as an extension of the well known financial credit system, it will begin as any normal credit scoring system that will assess the creditworthiness of businesses operating in China but then it will go far beyond recording just financial behaviour. Though it is not very clear how non-financial behaviour will actually be recorded, there are pointers that some very sophisticated tools from the world of data science and artificial intelligence will be used to collect, collate and interpret digital data that may exist with one or more government agencies and private companies.

“Big Data” techniques are already used by search engines like Google, Baidu, social media firms like Twitter, Weibo, and eCommerce sites like Amazon, Alibaba to gather vast amount of data on what people search for, talk about and purchase. In western societies, concerns about privacy and legislation limit the amount of that can be collected or the way that this can be used by government agencies. In China, where national security and the need to maintain social order overrides any concerns about privacy, this kind of data will be readily -- if not compulsorily -- available. Hence the Chinese government will have a fairly detailed view, not just into the buying patterns of its citizens, but also into what they are thinking and talking about. This obviously means that any kind of behaviour that threatens national security or social order -- an euphemism for anti-government behaviour -- will be detected with relative ease.

But even this is not enough. Anyone who has been to China would have noticed the large number of CCTV cameras that are deployed not just in public and private buildings but also on roads. Using facial recognition and vehicle number plate reading technology it is very much possible to track the actual physical movement of individuals and the vehicles registered in their name across any part of the country. All it needs is to collect the digital imagery from thousands of cameras and run them through a centralized system, neither of which is difficult with the technology that is readily available today.

Some of the data that is gathered and the use to which it is put is sometimes funny, though occasionally useful. For example, time spent on online gaming ( and perhaps on pornography, though this is not stated as such) is tracked and if it is excessive then the social credit score gets reduced. People on matrimonial or dating sites are encouraged to display their social credit score, along with their other characteristics, as this is expected to ensure social compatibility of partners! Similarly hospitals are being encouraged to ask patients for their social credit score and offer preferential services to those whose scores are high.

The financial credit score, like CIBIL, determines  access to loans. So a bad financial credit score means that one cannot get loans or the interest charged on loans is high. China’s social credit score mechanism takes this to the next level by placing similar restrictions on access to other services. Some of these restrictions could seem logical, as in denying access to the best schools and colleges to children of parents who have low social credit. What is more troublesome is the restriction on travel implemented by creating a no-fly no-train ( or no-travel)  list of people who are not allowed to purchase train or airline tickets for themselves. This means that in one shot, people whom the government deem to be troublemakers are now physically restrained from leaving their residential neighbourhood and participate in any troublesome activity. Forget about guns and bombs, the person cannot even travel to the capital and meet with fellow activists there. This is like a house arrest, or in this case, a neighbourhood arrest.

This no-travel scenario is not from a hypothetical cyberpunk novel. The system has become operational from March 2018 when and by May 2018 the process of denial of air and train tickets has been implemented. It is reported that nearly 10 million people were not allowed to buy airline or high-speed train tickets. The reason for denial of tickets is not very clear and it seems that at the moment,  most of the people on the no-travel list are debtors with bad history of repayment. But as is evident, it would be very easy to extend the same no-travel list to include people with low social credit as well.

One challenge with the current Chinese system is that unlike financial credit, the basis of determining social credit is not clearly known. The definition of good and bad behaviour is still ill-defined and there is no clear explanation about which all entities are contributing data. Nor is there any mechanism to question the validity of a social credit score or appeal against a low score.

Is such pervasive surveillance possible? Certainly yes.  We -- not just China but every country -- have the technology to make it happen. A combination of data science and artificial intelligence along with free and open source tools to use them is readily available to anyone who wants to do so.

Is such pervasive surveillance permissible? This is where the issues become murky and questions become difficult to answer. If you subscribe to the Western ideals of liberalism, individualism and social contract articulated by philosophers like Locke and Rousseau, then such surveillance and the subsequent restrictions are unacceptable. But if you were to subscribe to the philosophy of Confucius who believed that disorder and chaos is the biggest hindrance to peace, prosperity and happiness and that the average person does not have ability to make important decisions, then the surveillance and restrictions suddenly make a lot of sense. In China, obviously, they believe more in Confucius than in Rousseau and hence there is little known objection to this new concept of social credit. But then what happens behind the Bamboo Curtain is something that is difficult for us to know.

Where does India figure in all this?

Unfortunately, or perhaps fortunately, India is a country of inertia and momentum. Nothing changes easily and if anyone tries to change anything, there is always a tremendous opposition. Plus we have politicians who will oppose anything that is proposed by the government. We have three ways to tag, and track, individuals, namely, the Voter Card issued by the Election Commission, the PAN  issued by the Income Tax department and finally Aadhar from UIDAI. The Voter Card number is of little use in tracking anything beyond the polling booth because it is neither standardised nor is there a central searchable repository. The PAN is somewhat more useful because its disclosure is now mandatory in all high value monetary transactions and so it is possible to link large movements of money to specific individuals. Recently, the income tax department has mooted a proposal in which regular tax-payers, that is those with the correct tax related behaviour, would be eligible for special privileges at toll roads, airports and government offices. In a sense, this is like the reported usage of social credit in Chinese hospitals.  Aadhar -- as a unique identity -- could have been used to track a person’s behaviour across different types of platforms and processes but the Supreme Court has ruled that it can only be used for its original purpose, namely, to track disbursal of government subsidies to specific targets. Hence it appears that such pervasive surveillance may seem to be difficult in India. However with the rapid advancement of technology that can connect individuals to their actions as recorded in their digital footprint,  the possibility of perpetual and pervasive surveillance will never go away -- even if we were restrict or eliminate Aadhar. In the digital world, you can run -- or click --  but you can never ever hide!

What China is overtly doing today with their social credit mechanism is something that, in a sense, is already being done covertly by companies and governments in many other countries. Going forward, such surveillance may become as common and as acceptable as body searches at airports and car searches at hotels that we have agreed to submit to in the interests of personal safety. A powerful convergence of commercial and political interests will ensure that privacy will eventually become a myth and any attempt to push back against the use of surveillance technology and the consequent the loss of privacy will be as futile as trying to hold back the tide on the seashore. The best that we can hope for is that this loss of privacy does not lead to an automatic degradation in the quality of personal and social life.

This kind of a dystopian future is frequently envisaged cyberpunk scenarios. The NeonDystopia website describes “Cyberpunk [as] both a culture and a genre. Cyberpunk is a sub-genre of science fiction that features advanced science and technology in an urban, dystopian future.  On one side you have powerful mega-corporations and private security forces, and on the other you have the dark and gritty underworld of illegal trade, gangs, drugs, and vice.  In between all of this is politics, corruption, and social upheaval.”

Human society today is caught on the horns of a dilemma. Technology, economics and politics has created a powerful vortex that makes it very difficult to steer a course away from this cyberpunk dystopia without abandoning technology and regressing into primitive medievalism. While scientists, both physical and social, grapple with these issues, the anodyne perhaps could lie, not in Rousseau or Confucius, but in the Non-Dual Advaita of Sankara that sees a primordial unity across all sentience. Perhaps this utopian scenario would blur the borders between individual identities and lead to the irrelevance of the idea of privacy.

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this article first appeared in Swarajya

Corporate Management Practices in Public Sector Institutes

The policy of the Government to identify and support Institutes of Eminence has generated controversy because of the inclusion of the green field Jio Institute in a group that includes the IITs. Whether the inclusion of Jio is correct or not may be debated elsewhere but let us first ask whether the IITs themselves -- and similar public sector Institutes like the IIMs, IISc, IISER and others -- deserve the “eminent” tag. Within India of course, their stature and allure is beyond question but one wonders if in the land of the blind the a one-eyed man has become the king!

copyright free image from https://pxhere.com/en/photo/1448079

University rankings can of course be subjective and one may argue that our institutes serve a social purpose. However that is a fig-leaf that cannot hide the grim reality that shows up in the Times Higher Education Ranking of Engineering Schools, where IIT Bombay at rank 350+ is the highest ranked Indian school. Another, reasonably well-regarded, QS World Universities Rankings, is a little less embarrassing for India because we open our account there with IIT Delhi at 172. Let us admit that irrespective of  how much we quibble and wave our hands, our Institutes of Eminence are nowhere the top of the global pecking order.

Which is not only unfortunate but very strange as well. People from India, whether graduates from these IITs or not, are found in significant numbers in almost every school that has a rank higher than the Indian schools. This means that it is not the quality of people that is at fault but something else.

An obvious cause could be lack of money. Most top ranking schools have access to funds that are far higher than what is available to IITs, but again this is a red-herring that is often used to divert attention from deeper issues. Money is not really an issue because of two reasons. First, the primary use of money, is and should be payment to faculty and in India faculty pay is calibrated with the local economy. So faculty does not need a dollar denominated salary just as no corporate manager in India expects anything like what their equivalents get in wealthier economies. The second need for money is in laboratories and equipment. This is true for only certain areas like, say physics, astronomy or quantum computing. But today, a vast range of research in say, computer science or biotechnology can be done with investments that are almost within the affordability of individual “hackers” and certainly within the budget of most Indian universities. So lack of money is a really bad excuse for our poor rankings.

Outside academia, the situation in the corporate sector is not so pathetic. While we certainly do not have a Google, Tesla or Arm (that makes chips for most of the smartphones on the planet)  as yet, our corporates like TCS, Tata Steel, HUL, ITC, Airtel, HDFC are quite comparable to global companies that are in the same line of business. Not perhaps in absolute revenue but certainly in the kind of work they do -- excluding R&D of course -- and with the efficiency with which they operate. Which is why many of them can compete and win in global markets against global brands.

Management Structures & Systems

This means that the weakness is in the management process. Family owned Lala-ji companies cannot compete in the global market even though they may have the cheapest labour or raw materials. What we need is a professional management structures and processes and this is what is sorely missing in our Indian institutes that, despite protestations to the contrary, are lala-ji operations led by a Director and his favourite Deans. Even if we leave aside the process of appointment of a Director, which is nowhere as objective as it should be, the fact that he operates with all authority and little accountability -- except at an aggregate financial level -- means that management processes are absent. The institutes are run in an ad-hoc manner, but being a government agency, this ad-hocism is tied up in the longest and messiest red-tape of sarkari bureaucracy. So the real problem is the poor state of the underlying management and administrative mechanism. Given the rigid, anachronistic and inefficient processes under which they operate,  it is no wonder that these institutes have no chance of competing with world class institutions in other countries.

But instead of simply criticizing the administration, let us see which areas need improvement and how we could about rectifying it -

1. Human resources : We take it for granted that competent people will leave lucrative corporate careers and join public sector institutes at government salaries but in reality this never happens. As a result we have a majority of employees -- both faculty and staff -- who are there as a necessity and not out of choice! This is tragic because we would want the best people to be here. Obviously salaries cannot be hiked across the board. Instead we must have a well designed HR mechanism that seeks out competent people, induces them to join our institutes, help them manage both their careers and their personal life ( especially spouse employment in remote locations)  and ensure that they are well looked after in terms of accommodation and other perks. In parallel there must be an annual performance appraisal that rewards good work and punishes the laggards. In short we need an active HR function and a corporate style Compensation and Benefits policy that is significantly different from the take-it-or-leave-it, one-size-fits-all salary structure that is doled out by the latest Pay Commission.

2. Financial Accounting : Most public sector institutes have very weak financial management systems and there is no clarity on where the money is being spent. There is clearly no shortage of money and while there may not be blatant theft, a lot of money is diverted to unnecessary uses like civil construction that benefits contractors, not students or faculty. The large granularity at which expenses are tracked results in a lack of transparency in the usage of funds. A simple enforcement of the generally accepted accounting principles that mandate a highly granular set of cost codes and charge accounts followed by a thorough statutory audit would easily unearth vast amounts of ill-spent money that can be diverted for useful activities.

3. Procurement : While tracking money is difficult, spending money is even more so. Being government organisations, these institutes have to follow the rigid L1 tender process and there is the perpetual fear of investigations by the CAG, the CBI and the Vigilance Commission. This does not deter unscrupulous deals -- any vendor is ready to provide the three mandatory quotations -- but it introduces an intolerable delay and difficulty in any genuine procurement process. For example, attempts to buy low value products and services over the web using credit cards and then seeking reimbursements are blocked by the three quotation rule. A simplified procure-to-pay cycle that will reduce costs and yet ensure compliance with appropriate approval procedures will introduce a great deal of flexibility and efficiency in the system.

4. Asset Management : Public sector institutes sit on vast assets but most of these are ill managed. Civil and electrical infrastructure is maintained poorly as there is no clear cut demarcation of authority or accountability. Equipment is bought and not used because of lack of training or compatibility. Non functioning equipment is not repaired or cannot be repaired because of procedural issues. Junk piles up in dusty store rooms but cannot be disposed easily because of outdated audit mechanisms. A smart and modern asset management policy will ensure that the public funds are used much more effectively.

5. Enterprise Information Architecture & Culture : It is indeed a paradox that even though these institutes are supposed to be thought leaders in technology their own usage of the same is woefully low. Other than email systems, none of the collaborative tools and practices that are used in corporates are available here. Email is for broadcast of information, not for interactive discussion. Peons still carry paper documents, through proper channel, to people across the floor and get acknowledgements of receipt in “peon books”. Tele  and video conferences are unthinkable, social media is a private matter for individuals and mail based approvals -- for even mundane matters -- are not acceptable.

Technology, or its cost, is not the bottleneck. People are simply not willing to experiment with new ways to manage accounts, handle procurement, manage assets and adopt best practices from the corporate world. This leads us back to the first point, the HR issue,  because there is no incentive to improve anything nor is there any disincentive for staying with the status quo. As long as you are in the good books of the Director and as long as the Director is in the good books of the current bureaucrats at the HRD Ministry everyone can keep milking the mammaries of the state.

Mergers and Acquisitions ?

The final need is for these institutes to scale up but thanks to Rajiv Gandhi’s ill-conceived decision to “gift” an IIT “for” Assam, we have opened the floodgates to regionalism. This has caused massive fragmentation of scarce resources -- both money and people.  By opening IITs to pander to regional sentiments we ignore the fundamental mandate of IITs to source both students and faculty at a national level. Institutes are built by accumulating talented people and not making grand buildings that only benefit contractors.  To put it simplistically, twenty professors with a thousand students in one institute is far better than to have two professors at ten institutes with a hundred students each. Even though the teacher-student ratio in both situations is 1:50, in the first case, each student gets access to all twenty specialist professors but in the second case, each students get access to only two professors who teach ten subjects each. Obviously, quality will suffer. Plus twenty professors networking with each other can achieve far better research results than two lonely professors at each location. This is the fatal flaw in our IIT system. Instead of allowing them to scale to the level of the global organisations like MIT or Oxford, our academic “world has been broken up into fragments by narrow domestic walls”. 

Since the multitude of IITs (or IIMs) cannot be shutdown we need to explore the equivalent of a Merger-and-Acquisition mechanism used in the corporate sector. Many, if not all of the new IITs, can be merged with the nearest of the “Original Five” and this will cause an immediate scale up. With collaborative technology and some travel, faculty and facilities can be readily  shared across multiple locations as in multi-location corporates. Only administrative staff would be rendered redundant and many of our Directors, and their Deans, will have go back to teaching and research jobs, which what they were supposed to be doing anyway. The program on data analytics conducted jointly by IIT-KGP, IIM-C and ISI could be a template for a more comprehensive and formal merger of, say, the IITs at Kharagpur, Bhubaneswar, Dhanbad, Patna and Guwahati into the first mega IIT. Even NIT Durgapur can be thrown into this mix.

There is a wealth of talent that is available in India but unfortunately, it is managed very poorly. That is why this talent seeks opportunities outside India or just withers away. Adoption of modern management processes will radically change the way our institutes operate and allow them to compete with global universities on equal terms.
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originally published in Swarajya

Cypher 2018 - Thought Controlled Devices

This year my talk at the Cypher 2018 event was on Thought controlled devices that I had also written about in Swarajya as well as in an earlier post in this blog. Here is the full presentation:

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In earlier editions of Cypher I had spoken about

1. How to  use R + Hadoop to solve big data problems in Retail. - Cypher 2015.
2. The How and why of Cryptocurrency - Cypher 2016
3. Practical demonstration of Quantum Computing - Cypher 2017

The Ghost and the Machine

The Ghost in the Machine is a 1967 book by the noted Hungarian born author, Arthur Koestler, about the mind-body problem that seeks to relate the intangible mind with a physical body. Half a century later, the rapid rise of artificial intelligence and the proliferation of autonomous robots, including cars, has intensified our focus in this area. Today, we seek technology that will help to connect the intangibility of knowledge, intent, desire with the physicality of a corresponding action seamlessly.

https://www.lnttechservices.com/blog/

A cursory glance at the technology landscape shows us multiple strands of enquiry. First there is vanilla artificial intelligence (AI) that is focussed on digital phenomena like image, hand-writing and voice recognition, language translation and strategy games like chess and GO. Extending this is vanilla robotics that allow us operate complicated machine tools in a range of applications ranging from heavy manufacturing to delicate surgical procedures. Both these strands tend to come together to create autonomous devices like self driving cars and data-driven decisions processes. These can, or are being designed to sense a rapidly changing environment and react in a manner that helps achieve goals initially set by human programmers and, then increasingly and somewhat disconcertingly, by these non-human devices “themselves”.

This last narrative of autonomous robots taking on an increasing role in the affairs of human society and replacing humans -- not just in low end physical work but in complex management and administrative decisions -- is causing increasing angst in the general population. From initial fears of large scale unemployment to subtle disempowerment and marginalisation of humans, popular culture is rife with fears of our robotic overlords taking over the planet. Shining a ray of hope into this otherwise dystopian darkness are two other somewhat similar streams of technology that are becoming increasingly stronger. First is bio-hacking that seeks to augment human abilities. This goes beyond the mere application of mechanical devices, like levers and pulleys to raise heavy weights or servo motors and power steering that allow humans to control big machines. Bio-hackers enhance our biological organs to allow, say, human being to sense ultra violet rays, embed RFID chips under the skin to activate doors and in extreme cases, use transcranial electrical shocks to alter the ability of the brain to respond to emergencies. What looks like the end-game in this body-enhancement process is the fourth and final strand of technology that hooks into the human brain to determine what its intentions are. Then it goes about executing or implementing these intentions using the non-human technology of far more powerful machines. Thus the ghost of an intention or desire, “residing” or originating in the brain is liberated from the restrictions imposed by the physical limitations of a biological body and is allowed to directly control and use the immense computational and electro-mechanical power of a physical machine to achieve its goals. This tight integration of the ghost and the machine, where the latter is controlled by the former through thought alone is what will possibly allow carbon based human intelligence to hold its own against the pure silicon-based artificial intelligence that threatens to swamp it. The technology of controlling machines with thought is what we explore in this article.

Controlling devices and machinery with thoughts, or rather the mind, is really not new. The concept has moved from mythology, through science fiction and has been actually realised and implemented in wheelchairs for paraplegic patients. These are unfortunate people who are paralysed from their neck downwards and there is really no cure for this condition. But in the last ten years, engineers have acquired the expertise to use electroencephalography (EEG) techniques to sense electrical signals in the brain and use this information to guide wheelchairs as per their desires and requirements. This simple google search http://bit.ly/eeg-wheelchair will show the range and diversity of products, including some do-it-yourself products for amateurs, that are readily available or can be constructed.

But to be effective, the EEG has to be unpleasantly intrusive. Initially, implants had to be inserted through holes drilled into the cranium and connected to neurons. With time and technology, this has been simplified to the point where special purpose caps with metallic probes worn tightly on the head could also be used to serve the same purpose. In fact some of these caps are also being used as input devices for video games and can be used to control the game. Nevertheless, the unwieldy nature of the interface makes it rather difficult to  use unless one was really, really desperate to use the technology as in the case of an unfortunate paraplegic. This is where the whole new technology of electromyography (EMG) has made a significant breakthrough.

The key idea behind this amazing new technique is that while the brain and the nervous system may be the origin of all our thoughts and desires, the information about the same is communicated to the external world -- and devices -- through motor control. When we speak, throat muscles move. When we type letters on a keyboard, move a pencil on paper or operate a switch, the muscles of our hands move. When we are happy or sad the muscles of our face change to reflect a smile or a frown. So the information on the intent or the desire that is lies deep inside the brain and could only be accessed with EEG implants is now accessible far more easily by something as simple as a wristband!

CTRL-Kit is one such device. Designed by a neuroscience company CTRL-Lab that is led by former Microsoft engineer Thomas Reardon, CTRL-Kit looks like a heavy bracelet with spikes that is often worn by gangsters and their henchmen. But instead of hurting an enemy, the spikes in this bracelet press into the wearer’s skin and can pick up the electrical voltage in the motor muscles of the hand. Two simple demonstrations show the immense potential of this technology. In the first, a person starts typing on a normal keyboard and the letters appear on the screen. Then the keyboard is removed and the person is basically drumming the table with the intention to type and the letters continue to appear on the screen. Finally, even the motion of the fingers is stopped and the mere desire or intention to type a letter is picked up from the minute twitch in the muscle and reflected as a letter on the screen. In the second demo, the movement of a person’s hand is sensed and shown as a corresponding “virtual” hand on the screen. Obviously, the virtual hand on the screen can be replaced with a physical, mechanical robotic hand if necessary. Making the virtual hand replicate the movement of the human hand is not difficult. One can move a finger or make a fist and the virtual hand will do the same. The magic happens when the human does not actually move the finger but only desires or wishes to. That is when the software takes over and by, not just detecting, but interpreting the pattern of electrical voltage on the motor muscles of the wrist, it makes the virtual hand move a finger even though the human hand did not move it.

From motion to words. AlterEgo is a earphone and headset combination developed by Arnav Kapur at the MIT Media Lab that focuses on the muscles around the face and the jaw. When a person speaks, a normal microphone is designed to pick up  the physical vibrations or movements of the air or the bones but AlterEgo is different. Instead of sensing movement, it senses the voltage level in the muscles that cause movement and as a result it can pick out words that the user is silently articulating or “saying in his head”.  Even when a person is simply reading text the muscles around the head and the face have quick, imperceptible movements that “sound” out the words that he actually “hears” in his head. This process is known as sub-vocalisation and is the key with which AlterEgo unlocks what is going in and out of the brain when one is trying to speak.

Both CTRL-Kit and AlterEgo are a part of an ever expanding family of wearable devices that picks up signals emanating from the brain, either through traditional EEG or the more user friendly EMG technique and interpret them to decode what the wearer desires or intends to do or say. But this interpretation and decoding process still uses the good “old fashioned” AI techniques like artificial neural networks. Scanning through a blizzard of neurosignals, whether from EEG or EMG, and interpreting it as a specific word or movement is really no different from the kind of AI research that goes into autonomous vehicle control or face recognition and this is perhaps going to be the biggest application of AI techniques in the years ahead.

Popular perception posits AI -- and robots that it controls -- as competitors to humans and native intelligence but going forward it is more likely than not that the two will cooperate to achieve tasks that each one has difficulty in doing on its own. Structurally, or qualitatively, it is no different from a crane operator lifting a 100 tonne load or a pilot flying an aircraft at the speed of sound, but operationally there will be a far higher degree of integration between man and machine. In effect, this means that man will now be able to evolve into a superman - with enhanced physical and mental powers.

India has already missed the bus on traditional AI. Unlike Google, Facebook, Amazon or even Alibaba and Baidu, there is no Indian company that has the volume and variety of data with which it can create the kind of AI models that shock-and-awe us with their incredible sophistication. Flipkart might have succeeded but like in most Indian businesses, their owners were more interested in selling out to Walmart and enjoy their hard won cash. Now it is almost impossible, in the winner-takes-all scenario of the internet, for any new startup that is based on social data will be able to scale up to achieve anything significant. Man-machine interactions on the other hand offer a very significant but niche area where Indian entrepreneurship can still get a toe-hold by leveraging the knowledge that is latent and currently languishing in our public institutions like IITs and AIIMSs. Like TeamIndus, that made a valiant, but eventually unsuccessful, private effort to plant the tri-colour on the Moon, we need a private initiative to focus on and crack this technology. This may be the only way that India can, not just hop on to, but actually get to drive the next big technology bus.

The Ghost trapped in the biological Machine must be liberated so that the Ghost and the digital Machine, the carbon intelligence and the silicon intelligence can work together. This is how we will walk  towards a new future at the next level of the ladder of human evolution.

Kailash Manas Sarowar Summer 2018

Kailash and Manas Sarowar are words or rather destinations that send shivers of excitement through many who have grown up in an Indic environment. As the centre of the metaphysical universe and the abode of that innate quality of Goodness, that we identify with and as Shiv, it is the ultimate place of pilgrimage for anyone who lives and believes in the Sanatan Dharma of this land. But before one sets out for Kailash one must understand that this is no comfortable vacation of the kind that you enjoy in hill stations like Darjeeling, Almora or Simla. It is also not an adventure trek -- there are far more interesting and logistically friendly trekking opportunities in, say, Himachal, Ladakh or Garhwal. Kailash and Manas Sarowar is no vacation, no trek, but a place where you surrender your heart and soul at the altar of the Divine.

There are many ways to reach Manasarowar but the most popular route is through Nepal from Kathmandu. On this route, there is no need to either walk or take a pony and one can reach Manasarowar by bus. It is three days by bus from Kathmandu although there is another option of flying to Lhasa and then take a three day bus journey to Manas Sarowar. These three days on the bus allows one to acclimatize to the high altitude, and low oxygen, of the Tibet plateau so that breathing problems are minimised, though never completely eliminated. The other option of taking a helicopter flight, though shorter and more expensive, can lead to severe acclimatization issues and breathing problems. After a day spent on the shores of Manasarowar, one needs to go to Darchen, at the foot of Mount Kailash, again by bus, and then perform the three day circumambulation or parikrama of the mountain. This is a very tough trek and most pilgrims perform a symbolic parikrama around the Yamadwar -- a small passageway with a big bell -- that is starting point of the formal parikrama. Ponies are available for the parikrama but the high altitude, going up to 18,000 feet, causes intense physical distress and many pilgrims need medical evacuation from the parikrama.

In addition to the physical difficulties of reaching Manas Sarowar and Kailash there are quite a few operational challenges as well. Personal visas to enter Tibet are not issued to individuals. Pilgrims must must form groups of the same nationality and then apply for a group visa through one of the many tour operators in India or Nepal. However one needs to remembers, that despite claims to the contrary, these Indian and Nepalese tour companies can only offer services upto the Tibet border. Once  inside Tibet, one is in the hands of the local Chinese guide over whom the tour operators have little control. Hence it is quite possible that in remote regions like Saga, Manasarowar and Darchen, four to six people may have to share rooms that were promised on a twin-sharing basis and there is no scope for any argument there. Food also become a challenge because in many places Indian style food is simply not available and unless one is comfortable with pork or yak meat, one would have to have live on boiled cabbage, boiled mushrooms and rice,  which can be really awful. One would be better of carrying biscuits, dry fruits, chocolates and fruit juices, especially for lunch during the long, eight to ten hour drives bus drives through the desolate, “lunar” landscape.

The final problem is toilets -- that simply do not exist outside hotels in big cities like Lhasa or Shigatse. Most public toilets, including the ones at Manas Sarowar and Kailash are just rooms or enclosed spaces, often with no roof, with just a row of  holes in the ground through which  you drop your load. There is neither water nor toilet paper unless you carry it yourself and there is no way to flush away the sewage that simply accumulates! And of course there is no privacy -- everyone is in the same room, squatting side by side, though men and women have, thankfully, different rooms.

Given the Government of India’s focus on Swachchha Bharat, there is a good scope for our Ministry of External Affairs to explore the possibility of  extending this concept to Swachchha Manas and Swachchha Kailash. Thousands of Indian pilgrims will be benefited if one or two Dharamshalas can be built by the Indian government, even if these just provide a basic dormitory accommodation and proper Sulabh Sauchalay type toilets.

Highway from Kolkata to Lhasa

The Belt and Road Initiative, China’s quaintly named initiative to redraw trading routes around the world may have many shortcomings but if adopted intelligently can certainly usher in a new age of economic prosperity in Eastern India. China has a huge East-West spread and its western part, the Tibet Autonomous Region, while rich in resources has no access to the sea. Russia’s Siberian treasure house, which is similarly landlocked will gradually get opened up as the Arctic polar cap melts and the Arctic ocean becomes navigable but there is no such hope for Tibet. China knows this and also knows the importance of a route to the sea, which is why it is investing so heavily into its all-weather ally, Pakistan. The Karakoram Highway, the China Pakistan Economic Corridor and the Gwadar Port are all pieces of the puzzle that China is trying to put together at great cost. But the cost is not much as in money as in the the way it is forcing a great power like China to accept the dictates of Islamist terrorists like Masood Azhar. China knows that it cannot push a trade route through Pakistan without the blessings of the Islamists and even as it surely knows the terrible price that the Islamists will extract through the Uighur militancy in the far western Chinese province of Xinjiang. China is caught between the need to pander to the devil of Islamist terror and the need of a deep sea port to relieve the claustrophobia in landlocked Tibet. Is there an alternative? That is what we explore in this article.

The nineteenth century saw the British empire locked in the Great Game with imperial Russia as both jostled for influence across the vast spaces of Central Asia. As a part of this international political maneuvering, Lord Curzon, the then Viceroy of India decided to send a British Mission under Col Younghusband to Lhasa in Tibet. This departed from Calcutta in 1903, crossed over from Sikkim to Tibet at Nathu La and after many wars and other adventures later came back, apparently victorious, in 1904. The political outcome of this British Mission to Tibet is no more of any relevance in the twenty first century but the fact that army of 3000 people along with another 5000 odd camp followers could actually cross the highest mountain barrier twice should be an eye opener to anyone who dreams of trans-Himalayan trade routes.

Not having access to the vast resources of the British Empire, but seeking to recreate Younghusband’s route and relive his adventure, this author fired up Google Maps to see if there exists a motorable route that could take one from Kolkata to Lhasa. A straightforward request for directions obviously returns a negative and Google admits that it cannot find a route from Kolkata to Lhasa. But a little tinkering with the map reveals a few interesting facts. First, there is obviously a motorable road that connects Nathu La to Gangtok in Sikkim, then through NH10 to the highway network in India and eventually to Kolkata about 800 km and 20 hours away. Second, the border post of Nathu La abuts the Chumbi Valley, just next to the Doklam Plateau of Tibet where the Indian army has been in confrontation with Chinese army over the construction of a motorable road, but if we ignore this confrontation then there exists a motorable road on the Chinese side. Third, this Chinese highway, S204, that currently terminates at Yadong is a part of the Chinese highway network and connects Yadong to Lhasa which is about 400 km or 10 hours away. Finally, the distance between Nathu La, the last motorable point on the Indian side and Yadong, the first motorable point on the Chinese side is, as per Google Maps and “as the crow flies”, a miniscule 15 kms. These four facts put together mean that the 1200 km road from Kolkata to Lhasa is almost ready except for a 15 km ( or say 30 km, since we cannot fly like a crow!) stretch between Nathu La in Sikkim and Yadong in Tibet! [ See map  on next page]

From this perspective, should we in India object to China building a road in Doklam or should we encourage them to do so? And create a great highway that connects Lhasa to Kolkata …

The benefits of such a highway are obvious. For the Chinese it means an immediate access not just to India, but through the Kolkata-Haldia dock system to the main shipping lines that connect Europe and Africa to the far East. For Bengal and Kolkata this could a veritable blood transfusion for the rejuvenation of its ailing and anemic economic landscape, because Ray, Rabindranath & Rossogolla notwithstanding, maritime trade has always been the lifeblood of Kolkata and South Bengal.

Long, long ago, long before Kolkata or even Bengal existed, this part of the country was known for its maritime trade. Both Faxian and Xuanzang (whom our old history books would refer to as Fa-Hien and Hiuen Tsang) who came to India from China during the time of Harshavardhan have left glowing reports about the great port of Tamralipta, which is identified with modern Tamluk in East Midnapur, on what is now known as the Rupnarayan river. With the siltation of the Rupnarayan, the port shifted to Satgaon, modern Saptagram, located on the Saraswati channel that broke off from the current Hooghly river channel at Tribeni and flowed through Singur - the tragic location of the aborted Tata Nano factory. Singur is perhaps where Bijoya Singha had set sail from to reach, occupy and rule Sinhala or modern Sri Lanka. Subsequently, with the closure of the Saraswati channel, the Ganga waters switched back to what is now known as the Hooghly river and the British set up their trading post first in Hooghly, on the west bank,  and when this was devastated by a cyclone they moved to Calcutta -- and the rest as they say is history. The KG -- King George’s -- dock system of Calcutta became the heart of the vibrant economy of Bengal and eastern India till it received a body blow during the Partition of India. Calcutta’s  pre-eminence as a centre of trade and industry survived for another quarter of a century till it was finally done in by the Communists who not only killed all industry but also devastated its educational institutions leading to a near complete exodus of intellectual capital. Commerce in Calcutta, now called Kolkata, is now dominated by an industrious tribe of up-country traders and in a fortuitus turn of events, it is these people who are best placed to leverage a new trade route if it were to open up between Kolkata and Lhasa.

Some may be apprehensive that a highway like this would facilitate a Chinese military attack on India. These is unlikely in the 21st century. If the Lhasa-Kolkata highway were indeed to open up as a new “Silk Route”, the biggest beneficiary would be trade but there could be a positive strategic dimension as well. If China sees this as a safe and secure route for its products to reach the sea, then its dependence on Pakistan will reduce and it will have the freedom to take a more honest view of the Islamist mischief that is being spawned at its western edge. A strong and powerful flow of money across the Himalayan border will automatically lead to a reduction of military hostility across the same because the interests of the trading community will have a moderating effect on the militarist nationalism of fringe groups.  Chinese angst over the its current border along the McMahon Line in Arunachal may also be assuaged and its leadership would not lose face over its inability to occupy what they believe is Southern Tibet.

Would it lead to a increase in Chinese exports to India and have a negative impact on the balance of trade between the two countries? This is also unlikely. While trade is certainly facilitated by the ease of movement and cost of transport, the real driver for trade is the topology of demand and supply and this will certainly not be impacted. The Kolkata-Lhasa highway may impact traffic on other, longer, sea based routes, but its impact on the overall volume may not be significant. On the other hand, given the lack of agricultural land in Tibet, there may be a market for the reverse flow of food products and fresh vegetables and this may give a fresh impetus to agricultural income in eastern India. Vegetable farmers in Bengal and Bihar may see a huge new market opening up through Nathu La.

What would it take to make this trade route operational? First of course, the section from Nathu La to Yadong must be completed and we can rest assured that the formidable Chinese border management machinery can make it happen in a short time. We are not aware of the condition of roads in Tibet but certainly the existing motorable roads in Sikkim and Bengal needs to be strengthened and widened. Between the Border Roads Organisation (BRO) and the National Highway Authority of India (NHAI) this, in principle, should not be a problem. The only big problem could be land acquisition in North Bengal which is why it is important to have to alternate routes -- the shorter route through Malda and Murshidabad and the other slightly longer route that swings past Sahibganj and Dumka in Jharkhand before coming back through Birbhum. In fact an inland port at Siliguri, which is already a big trading hub, would make matters much easier.

If and when the governments of India and China agree to rebuild and rejuvenate this ancient trade route it would be entirely appropriate to honour it with the names of  Xuanxang, the Chinese pilgrim, who came to the court of Harshavardhan in the 7th century and Atīśa Dīpaṃkara Śrījñāna the famous Buddhist scholar from Bengal whose visit to Tibet in the 11th century is one of the greatest Buddhist legends of Tibet.

To get the ball rolling on the Dīpaṃkara-Xuanzang Transhimalayan Expressway, the first and easiest thing would be to organise a Kolkata to Nathu La car and truck rally. This will not only fire up the excitement and enthusiasm with all stakeholders but will also help us understand the operational challenges involved, at least in the first 800 kms. Will the different chambers of commerce that are headquartered in Kolkata take up this challenge?

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this article was first published in Swarajya

Facts, Fakes, Fantasy & Physics

The world as a product of information

image credit : https://pixabay.com/en/fantasy-eyes-forest-aesthetic-face-2824304/

With social media spewing facts like a firehose, the world today is in danger of drowning in a pool of information. Or as the cynic would say, in a cesspool of fake news because, as anyone who has been on Facebook would know, most what is peddled as news is really alt-news, an euphemism for propaganda and misinformation.

In an earlier era of the internet, spam had similarly threatened to undermine the utility of email. Even today, 60% of all mail sent through the internet is spam but thanks to intelligent spam filters, most are trapped and never reach the main inbox. Unfortunately, similar filters for fake news are not yet available and so our social media timelines are cluttered with material deliberately placed to confuse us or to convince us of things that we would not otherwise agree with. IRA, the St. Petersburg, Russia, based Internet Research Agency, a “troll farm”, is one such organisation consisting of hundreds of staff who post a barrage of fake news and pictures on Facebook, Twitter, Instagram and it is alleged that their activity was a significant factor in Hillary’s loss to Trump in the US presidential elections.

But fake news is really not a new, social media driven phenomenon. Jacob Soll writing in the PoliticoMagazine (https://goo.gl/8RkWey) gives  an excellent account of how fake news has plagued society since the Middle Ages. In fact, behind every news story is a story of why and how that news has become a story. So is the case with our history, where at least three generations of Indian students are convinced that it was M/s Gandhi, Nehru & Co (P) Ltd alone that fought for and secured freedom for India from British rule.

Facts

“Opinions are free but facts are sacred” is a cliche that is often quoted by the erudite to justify their own opinions that are ostensibly backed by sacred facts! But are facts really sacred? Or to rephrase the question, are the sacred facts  accessible? And so by extension, if the sacred facts are not accessible, then does it at all matter whether the accessible facts are sacred or not? This leads us off on a tangent where we wonder how could it be that the sacred facts are not accessible? Can we not see, touch, feel and experience the reality around us?

The answer to this question takes us back to 1922 when Walter Lippmann’s classic book “Public Opinion”  begins with the famous phrase, “The world outside and the pictures in our heads”. Lippmann describes a remote, South Sea Island colony consisting of British, French and German citizens who for nearly six weeks in 1914, until the mail steamer arrived, were not aware that their countries were at war with each other. Lippmann argues that, by extension, even for people in Europe that period of illusion would have existed, even though it may have been shortened to, say, six days or six hours or six minutes. Which means that for an individual, what matters is not the state of the world but the information about that state that is available with him. Public Opinion is considered a seminal text in media sciences, political science and social psychology because it articulates man’s inability to interpret the world : "The real environment is altogether too big, too complex, and too fleeting for direct acquaintance between people and their environment. People construct a pseudo-environment that is a subjective, biased, and necessarily abridged mental image of the world, and to a degree, everyone's pseudo-environment is a fiction. People live in the same world, but they think and feel in different ones."

Without having direct access to any “sacred” facts -- that is, the actual state of the world -- one has to depend on information about the world, with which to craft a “free” opinion about a world that is now represented only by information. Obviously, there is no way for anyone to guarantee that the information is undistorted! One could of course seek information through multiple channels and compare. Unfortunately there is no absolute measure of intrinsic credibility -- no channel is guaranteed to be more accurate than another, and even if there was one, there is no guarantee that multiple channels will not collude with each other to portray a single, but erroneous, view of the world. Conspiracy theorists who claim that the moon landing never happened, harp on this fact because we know that none of us were there on the moon to actually see Neil Armstrong take that famous step! One may of course argue that such a large scale collusion is not possible in the modern world because there are so many channels of communication but if we think closely it has become even more easy today. If Google, Facebook and Twitter were to act in concert, or are forced to do so, then a for a very large part of the population that has stopped watching TV or reading newspapers, information about certain events can be wiped clean from the public consciousness. With a little more effort, TV channels and newspapers can also be made to fall in line … and after that even if someone were to actually travel all the way from Washington to Calcutta and shout at the top of his voice that one Hillary Clinton is actually the President of the United States, he will be laughed at even though he may be the only one who has the “facts”. Is such large scale collusion possible? It may seems unlikely but there are examples of authoritarian regimes that have indeed managed to eliminate information about some events, like Tiananmen Square, from everywhere except the memories of those were present there.

Fantasy

But just as one can eliminate some information from all information channels one could of course also introduce information about a “non-existent” state of the world and create a whole new artificial world -- as is done in role playing games like Warcraft, or platforms like Second Life. In all these cases, computer software is used to generate information about fantasy locations populated by ultra-realistic or utterly fantastic creatures and transmit this information to willing humans through traditional channels like computer screens, new channels like virtual reality headsets and in some case through direct implants into the human nervous system. Those who play these “games” are now tethered to a different “reality” -- that strictly speaking does not exist for those who are not playing the “game” -- through a channel of  pure information. Whether that alternate reality does or does not exist is no more relevant. The only thing that matters is that information that represents that reality is available to the sentient consciousness for whom it is no less real than the other, traditional “reality” that the rest of us are accustomed to! This is no different from Walter Lippmann’s prophetic statement about  “The world outside and the pictures in our heads”.

 But of course the game player can unplug himself from the “other” reality and come back to the “real” reality -- or, on second thoughts, can he?  Could it be like the Chinese monk who had a very vivid dream of being butterfly and after waking up was left wondering whether he really was a monk dreaming that he had been a butterfly or a butterfly currently dreaming that he was a monk? Could it be like Neo in the Matrix who understood the difference between reality and the illusion of the Matrix to which he had been physically hooked to as a child? Or in the grand Indic tradition of Sankara’s Advaita Vedanta you would easily see the world of sensory phenomena as an illusory Maya, a projection of an underlying Consciousness.

COULD IT BE that the information about the state of the world is the actual or “real” reality and the not the world itself? Could the world be a by-product of information?

There are two ways of addressing this question. The easy-to-understand approach is the Simulation Hypothesis that claims that the world that we see around us is virtual world created on a Matrix like machine that is operated by higher order civilisation. Way back in 2006, the author had created a movie called “Are you real” that explored this idea (http://bit.ly/areyoureal2006 ) but the concept has been supported by many more, well known people like Nick Bostrom, professor of Philosophy at Oxford university and of late by Elon Musk. The only difficulty in this approach is that since the higher order civilisation could, in turn,  be a simulation being run by an even higher order civilisation, there could be no logical end to this recursive cycle.

This problem is eliminated if the physical world itself is viewed as computational device where every fundamental constituent carries information in addition to the usual payload of mass-energy, charge and other properties. This implies that the laws of physics are an expression of the software logic, or algorithm, that causes changes to the information just as they do in a classical computer. So information becomes as integral a part of universe as its mass-energy.

Physics

But the real insight into the true value of information is even deeper. We know that biological phenomena are a manifestation of the information stored in the DNA molecule. Classical mechanics of Newton defined the physical world as a manifestation of mass, position and velocity of particles. Quantum mechanics of Schrodinger and Heisenberg defined the physical world as a manifestation of probabilities. Einstein, who was never comfortable with probabilities, defined the physical world of mass as a manifestation of the geometry, or curvature of space-time. Information enters into these equations through the concept of entropy, a measure physical disorder. This physical entropy is closely related to the entropy identified by Shannon, in his classical information theory, where he shows that information about an event is, at its most general level, a function of the probability of the event.  This theory was subsequently generalised into quantum information theory and used by Richard Feynman to postulate the quantum computer. In fact, Feynman was the first to suggest that the physical world was a gigantic quantum computer that was actually calculating the positions and velocities and positions of all particles! Quantum computers have already been fabricated and anyone can use the IBM Quantum Experience machine for free by visiting https://goo.gl/6YjU5D .

But the real clincher is the hypothesis -- though not yet fully vetted in peer-reviewed journals -- that information is not a representation of reality but is the reality itself! The fact that the real world was not built with elementary particles like protons and electrons or from forces and fields but from information is an idea that was best articulated by physicist John Wheeler. He coined  phrase “It for Bit” -- that is, matter is created from information -- which has now been modified as IfQ or “It from Qubit”, the quantum bit. This concept is explained by Moscowitz in the Scientific American, ( https://goo.gl/8cGg7z ) where she says space-time is created with tiny chunks of information. She quotes Vijay Balasubramanian from the University of Pennsylvania who explains that this approach “marries together two traditionally different fields (that describe) : (i) how information is stored in quantum things and (ii) how information is stored in space and time.”  It is information that provides the crucial missing link between the probabilities of quantum mechanics and the geometry of Relativity through the purported equivalence of Shannon’s entropy, which is a function of probabilities, and the physical entropy, which is a function of the geometry within which it is constrained.

From a layman’s perspective, if we view the world as a “game” being simulated on a computer then we will expect that at the “bottom” of it all there must be a hardware -- the “bare metal” of physical reality --  on which the game software is running. As a thought experiment we could miniaturise ourselves to go down and locate that single electron that stores a quantum bit of information used by the simulation software. But when we locate it, we do so only by using the information that moves from that electron to our sensory organs -- which is just another way of saying that information is the only reality, not the electron. In fact, who are “we” to sense the information? The observers are also pieces of information -- whose existence lies in the recursive self-awareness of the same information -- that manifests itself as consciousness.

The fact that information is the new reality is borne out at a superficial level by the way the contours of our knowledge of the world are shaped by the information that we get through the internet and social media. But what is really remarkable is that, at a far deeper level, this is a  view that is shared by many physicists who also believe that it is information that actually defines world that we see around us.

This is but a modern echo of Sankara’s aphorism - Brahma Satya, Jagat Mithya. The eternal and immutable Brahman is the only and ultimate reality and the world that we see around us is an illusion caused by imperfect knowledge and information. Fake News indeed!

Cryptocurrency for Direct Benefit Transfer

The astonishing rise, and fall, in the price of Bitcoin has suddenly made everyone -- other than geeks who have been at it since 2009 -- sit up and take notice of an extraordinary new phenomenon called cryptocurrency. We call it a phenomenon because while it certainly carries value, it is not linked to any traditional investment product like equity, debt, commodity or real estate. What is even more mysterious is that the value is recorded in a database called the blockchain, a shared ledger that resides simultaneously across multiple computers that are operated by unknown, unregulated entities.

image from techbullion.com

Bitcoin is to the transfer of value what the internet is to the transfer of information - made it possible to effect transfers easily, anonymously and most importantly without the intermediation of any central authority. This makes both technologies a favourite with libertarians and an anathema to despotic and autocratic governments. But while most governments, barring a few, have reluctantly reconciled themselves to the free flow of information, the transfer of value is, in general, being opposed tooth and nail by central bankers who see themselves becoming as irrelevant as the telegraph and postal service. Hence a barrage of FUD -- fear, uncertainty and doubt -- has been unleashed stating that Bitcoin is being used by criminals, terrorists and tax-dodgers to undermine social order and so must be stamped out ruthlessly! Adding to this general hostility is of course the unstated jealousy of all those who are rueing the fact that they did not acquire Bitcoins when the price was only a few dollars!

The Government is on record, through the Finance Minister’s budget speech, with its view that crypto-assets must be ruthlessly blocked. This is grossly erroneous. All technology -- from nuclear power through genetic engineering to artificial intelligence -- is inherently double-edged and can be used for good or evil. Just as the commercial benefits of the internet far outweigh the nuisance of its misuse by criminals and terrorist, cryptocurrency can be used very beneficially in social and governmental work and in this article we show how it can be used for direct benefit transfer (DBT).

The public distribution system in India is riddled with inefficiency that results in a massive leakage of both money and goods. Government spends money but the poor people do not benefit. A DBT mechanism is perhaps the only way to control the problem but implementing this is not easy. The current mechanism of using bank accounts linked to biometric based Aadhaar cards is of course one way but tokens based on cryptocurrency technology could be an alternative that is a cheaper, simpler and more transparent.

But first, what is Bitcoin?

A Bitcoin is a unit of value, like an equity share of a company, that can be owned and transferred. It resides in an account in a ledger, like a dematerialised share in a demat account with NSDL. The account number, the public key of the account, is known to all and so anyone can send or deposit demat shares into this account. However to sell or transfer shares out of this account, the anonymous account holder must use a password, a private key that only he knows, to create and publish an outbound transaction pointing to another account identified by its public key. In cryptocurrency jargon, an account is called a wallet and the ledger is called the blockchain. A wallet is defined by a {public-key : private-key} pair consisting of two very large numbers that have special cryptographic properties. But what is really novel is that the blockchain ledger, the record of all transactions, is not maintained by or at any one institution, like the NSDL for equity shares, but jointly by all participants in the network. Everyone has a copy of the blockchain-ledger that has a record of all coin transfers and so everyone can both verify and confirm each transaction before they accept it in their own copy. An invalid transaction can pass into the blockchain-ledger if and only if, it is accepted by more than 50% of the network and this has never happened since 2009.

Verification means that a payment transaction is valid -- the total value of all inbound or credit transactions to a wallet less value of all outbound or debit transactions is more than or equal to the current outbound debit transaction. Confirmation means that there is no double spend and the same set of unspent, inbound, credit transactions (“UTXO” or unspent transactions outputs) are not being used to create more than one outbound payment transactions. Since everyone has access to all transactions, anyone can perform the verification and confirmation. This leads to a problem of sequencing. If A has Rs 1000 in his account but writes two cheques of Rs 800 and Rs 900 to B and C, either -- but not both -- cheques will be honoured by the bank, depending on which is presented first. However when there are multiple agencies that are verifying and confirming transactions, there is distinct possibility of an inconsistency in the shared ledger depending upon the transaction that each agency sees first. To overcome this, all cryptocurrencies implement a consensus process. In a zero-trust environment, the consensus is achieved through a proof-of-work algorithm that is based on brute computing power -- it is as if the first banker who completes a 10 km run will be allowed to update the shared ledger! But since this consensus is essential for the success of the process there is a reward for demonstrating that power. “Miners”, that is those who verify and confirm transaction  by running full node blockchain software on a powerful computer, are rewarded with newly created coins that are added to their wallet when they have verified and confirmed a new block of transactions -- that is then added to the blockchain. However the reward is not given to any miner who performs the verification and confirmation but to the one specific miner who, in addition to the verification and confirmation, also solves a difficult mathematical puzzle first, like the first banker who runs 10 km!

The payment, or output  transaction that deposits a newly created coin into a successful miner’s wallet is called a coinbase transaction. It is different from all other transactions because it is not backed by any previous input transaction. Hence the analogy of mining, as if a coin was dug out of the ground and not received from anyone else, whereas all other coins would have to be received from someone before they can be sent to someone else. However a better analogy would be to view Bitcoin, as sweat equity that is given, in lieu of salary, to the accountants in a bank for checking and approving all transactions. The brilliance of “Satoshi Nakamoto”, who designed bitcoin, was in equating the sweat equity of the bank to the assets that are managed by the bank and initiating a self-sustaining network that is working flawlessly since 2009. The magic mathematics of cryptography ensures that this decentralised autonomous organisation (DAO) runs without any formal management and yet has achieved a market capitalisation of over US$ 70 billion.

But why should these “sweat equity” shares of a non-existent bank, the actual Bitcoins, be each worth thousands of dollars today? Many people, who are not miners, buy these coins from the miners for investment or payment purposes and this demand is pushing up the market price.  Bitcoin can be purchased at many cryptocurrency exchanges with fiat currency like US$ or INR ₹. After KYC compliance, these exchanges will convert fiat currency into cryptocurrency and vice versa at market driven prices. Hence, Bitcoin is both a currency that is extremely useful as a payment mechanism because transfers are simple, fast and anonymous and is also a commodity that has appreciated in value and hence worth investing in.

For DBT let us define a new blockchain based cryptocurrency token ( lets call it the cowrie) and peg it to the Indian rupee. So anyone can use a cowrie in lieu of a rupee to pay for goods and services provided the seller is willing to accept the same. This is neither illegal, nor anything new because we already have loyalty points from retailers, credit cards and even meal-companies like Sodexho, that are freely tradeable in lieu of cash at selected stores. Moreover, since the value of the cowrie is pegged to the rupee, there is no question of trading, capital gains and taxation.

Cowries, like any other cryptocurrencies, can easily be stored in mobile wallets and freely transmitted from one wallet to another without the fear of double-spend. They can also be freely exchanged for fiat currency like rupee through cryptocurrency exchanges that follow normal KYC guidelines applicable to banks or at banks themselves.

As an example, let us focus on the public distribution of rice at ₹ 2/kg. Assuming that the government gives 2 kg per week per person when the prevailing market price for similar quality of rice is ₹ 25, the subsidy works out to ₹ (25-2) x 2 x 4 = ₹ 184 per person per month. Let us assume that the government selects 1 crore people who will get this ₹ 2/kg subsidised rice. This means that the government intends to spend ₹184 crores every month for this subsidy. A government agency, say the NPCI,  builds a cowrie wallet and floats an Initial Coin Offering (ICO) that is subscribed to by the government. Government pays ₹184 crores to NCPI and NPCI “pre-mines” ( or creates) 184 crore cowries and transfers them to the Government’s cowrie wallet.

The cowrie wallet is available as a free and open-source software that anyone can download and install on their mobile phones. However those who are entitled to receive the subsidy will have to register their cowrie wallet public addresses with the government disbursement agency with proper identification as would be the case if they were to apply for a ration card. Any shopkeeper who wants to sell rice must also install a cowrie wallet on their phones or computers.

At the beginning of the month, government will transmit 184 cowries to each registered wallet. Recipients, who are entitled to the subsidy, can now go to any rice shop and buy rice by transferring cowries to the shopkeepers wallet and paying the rest in cash at ₹ 2/kg. The shopkeeper can either keep the cowries for future use or exchange them for rupees at a cryptocurrency exchange. The exchange operator can also either keep the cowries for future use or trade them with NPCI in exchange for rupees and NPCI will extinguish them by dumping them into a one-way, black-hole wallet from where they cannot be spent any more.

The cowries are freely transferable. Recipients who are not interested in buying rice can use the same cowries to buy wheat, or daal or school exercise books from the same store using the cowries. Or they might transfer it to the wallets of their friends and relatives and even perfect strangers as gifts or in lieu of other goods and services. Transfer of cowries is governed by the same verification / confirmation mechanism common to all cryptocurrencies and those who validate transactions could be rewarded with newly “mined” cowries as an incentive. However if miners are registered and hence trustworthy, then the computationally expensive proof of work processes can be replaced with simpler consensus mechanisms.

All this can be done using standard cryptocurrency software except that instead of using anonymous public addresses, we can ensure that all public addresses are tagged to a government identity document so that there is perfect transparency on the blockchain about who is getting how many cowries and how these are flowing through the system. However, private addresses are secret to the wallet owner so that only he can spend from the wallet. In principle, even a liquor store can accept cowries, but the blockchain database can be used to track this if it happens too regularly and we wish to question the spender!

One of the attractive benefits of this mechanism is that multiple subsidies can be routed through this mechanism. For example, subsidies on diverse goods and services, like kerosene oil and school tuition, that are delivered through different channels, can be routed through the same wallet. Family wallets can hold cowries for all members. Multi-signature wallets can be coded so that the male member cannot spend the cowries without the consent of the female member and vice versa. Smart contracts can be developed so that not all the cowries can be spent immediately and there will be “timed release”. Smart contracts can also be created to make sure that cowries are spent only at specified points or on specified goods and services. All this is technically possible but initially it may be prudent to keep matters simple so that people first understand how cryptocurrency works.

To continue with the subsidy, Government must continue pay ₹184 crore to NPCI every month to buy 184 crore cowries that NPCI must “mine” and push them into the respective wallets. The exact amount will of course change depending on the kind and level of subsidy that government wants to disburse in each specific month.

Cryptocurrency is an amazing technology that could revolutionise payment systems. Instead of trying to throttle it, it is better that government finds creative ways to use it to discharge its obligations towards its citizens. DBT could be the first of many applications. Who ever has advised the Government that “blockchain is good but cryptocurrency is bad” fails to understand that cryptocurrency is the most natural and popular use of blockchain technology. It is as if we are saying that TCP/IP technology that runs the Internet is good but we should not use it for http applications like websites because websites can peddle pornography. Instead we must use TCP/IP only for FTP, SMTP, NNTP, ICMP, SIP and other “useful” things … Without websites, the benefit of the internet will be restricted to laboratories and not be accessible on our laptops, phones and in our lives. So is the case of cryptocurrency and the blockchain.

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This article originally published in Swarajya, the magazine that reads India right.

Aadhaar - way forward

Like demonetisation and GST, Aadhaar has been in the news for both good and bad reasons. On one hand we have heard how crores of rupees in non-entitled subsidy have been saved by the government but then on the other hand we have had horror stories of destitutes being deprived of entitlements because of the lack of an Aadhaar identity. In general, those who believe in the current prime minister are bullish about Aadhaar but they forget that many of them had opposed the same on the grounds of privacy when it was proposed by the previous government. What is missing in all such discourse is a clear understanding of how Aadhaar operates and how it could fail.

image from techniknow

Ever since it was freely and finally admitted that 90% of all money that the Central government transmits to citizens as subsidies is stolen by middlemen there has been a demand for a direct benefit transfer (DBT) mechanism. One obvious mechanism is through bank accounts : Instead of selling 3 kg of rice to Ram once a week at Rs 2/kg, make him buy the same rice at Rs 20/kg from the market but send the difference, Rs (20-2) x 3 x 4 = Rs 216, to Ram’s bank account every month so that he does not have to spend any more than Rs 2/kg. But since there are a thousands of people who call themselves as Ram, we would need to connect “our” Ram’s bank account to “our” Ram’s hungry body using a marker that is unique to “our” Ram, namely his fingerprints and iris scan. This is the genesis of the Aadhaar database and the Aadhaar number.

But this simple concept has been criticised for three major reasons - namely privacy, potential for misuse and operational inefficiency. Before we examine these in greater detail, let us look at how the database is created and used.

To create a new Aadhaar number for a new registrant, we need the (a) biometrics - iris scan and all 10 fingerprints (b) name, gender, date of birth, address and (c)  optionally a cellphone number and email address. Since the biometrics is the only data that is guaranteed to be unique for each person, a de-duplication exercise is carried out to check if another Aadhaar number has already been generated for the same set of biometrics, to ensure that no one body gets attached to two or more Aadhaar numbers.

To confirm a person’s identity using Aadhaar before he is allowed to avail of any benefit or service, a verifier has to transmit the person’s Aadhaar number to UIDAI along with either biometric data ( as in the case of banks or phone companies) or name and date of birth (as is the case of some mutual funds). In either case, UIDAI replies either with (a) a binary YES / NO that confirms or denies the association of the Aadhaar number with the accompanying data or with (b) a more detailed extract from the Aadhaar database that includes photograph but specifically excludes the “core” biometric information. In some less critical situations, for example, where a physical copy of Aadhaar needs to be downloaded, the optional phone number or email address is used to send a one-time-password to establish an association between the Aadhaar number and the phone/email and hence by extension to the name of the person. In this must be clearly understood, and communicated to all, that the physical possession of Aadhaar card -- that can be manufactured by anyone with a computer and a printer -- is no proof of anything at all and should never  be used for any kind of verification.

Now let us look at privacy and potential for misuse, the two major concerns.

The basic data that is stored is quite primitive. Name, gender, date of birth and address is already available with the government in Voter cards and Election rolls but the optional phone number and email is an addition. Frankly, phone/email is a better way of contacting a person in the 21st century so there is no ideological difficulty in storing that information. The real, new addition is the biometric but that is a part of the original design to prevent duplication. So prima facie, there is no real privacy concern unless there is misuse and this misuse can be of two types -  first deliberate misuse by the government and second, illegitimate misuse by hackers.

By requiring individuals to link Aadhaar numbers to bank accounts and cellphones, government gets an easy way to discover who owns and operates which bank accounts and telephone numbers. But this demand is nothing new? Under anti money laundering schemes, the banks are in any case required to use stringent KYC processes to know their customers. Similarly, because of terrorist and other security concerns, telephone companies are forced to use similar stringent KYC processes. Whether such intrusive knowledge is necessary is irrelevant to the Aadhaar debate. If we have accepted KYC processes in banks and telephones, then there is no additional loss of privacy in linking bank accounts and telephone numbers to Aadhaar and thus simplify traceability. Hence the claim that Aadhaar represents a new mechanism to misuse private information is baseless.

Moreover, insinuations that Aadhaar can be used by the government to surreptitiously know bank balances from linked accounts or to surreptitiously listen in to private telephone conversations on linked phones are so ludicrous and absurd that there are not even worth contradicting.

However, this does not mean that any government agency -- from the municipality crematorium to the motor vehicles department -- or even private agencies like hospitals and airlines should start demanding Aadhaar for rendering services. Rules framed under the Aadhaar Act 2016 should stipulate which all public services require Aadhaar and this information must be made available on the UIDAI website.

What happens when things go wrong? There is no point in claiming that the Aadhaar database is “totally secure and hacker proof”. No computer system ever is. So what we should plan for is to estimate the damage to the registrant if the data is compromised. Let us examine what could happen if the Aadhaar database is hacked and the information falls into the hands of unauthorised people, or if the government goes rogue and starts using the information in a manner not envisaged under the Aadhaar act? Consider various scenarios …

What all can a criminal do with the text information about a person that is stolen from the Aadhaar database? Neither can he open a new bank account, nor get a new telephone SIM as both require a biometric validation. At best he can attempt to get phone-banking access to a bank account by quoting the date of birth, but knowing this, no sensible bank should ever accept DoB as a verification question.

Can he take a loan and wreck the Aadhaar registrants credit rating? This is unlikely unless there is collusion with the employees of the bank to which the registrants loan is linked, but they have the number anyway - so there is no incremental exposure. Can the phone number be used to access bank accounts through UPI apps or digital wallets? This is theoretically possible if someone clones your SIM but if we want to guard against this then we should not share our phone numbers with anyone at all. In fact, the worst case scenario is a barrage of spam or crank calls. But then again, this is already an issue with many of us and not really an Aadhaar specific abomination.

Can the picture of the registrant can be misused? The government, or a criminal, can use a public image of an individual, say in a newspaper or on social media, and use face recognition technology to identify him. This may, in principle,  be used to identify either real criminals or persons hostile to the government but the possibility of its effective use is pretty low. Hence the threat is quite far fetched.

Finally, the biometrics. In principle, this should never reach anyone outside UIDAI but what if it does? There do exist locks and access control devices that use biometrics like fingerprint and iris scans to grant access to assets that could range from nuclear weapons to even iPhones and these may, in principle, get compromised. But the process of transferring the data from digital format to the access control device is, to say the least, very complicated. Readers may recall the movie Angels and Demons where a dead scientist’s eye was gouged out and used to open a vault protected by a retinal scanner to understand how complex the process is and even then, it has been proven that this is simply impossible. Retinal scanners need a living eye to focus on a point and hence cannot be fooled by a static image of the iris pattern. Similarly, while it may be possible in-principle, to steal one’s fingerprint images and use them at a crime site to implicate the owner, the physical challenges of actually doing so are very high that the probability of its occurrence is quite low.

So net-net, a hack of the Aadhaar database could of course result in a flood of spam on your phone and email box but all the other scenarios described have a very low probability of causing actual damage. In fact, many of the conveniences that we use -- passport, air travel, cellphone, online banking, Gmail -- have greater probability of causing damage to our privacy and in a throwback to Heisenberg's Uncertainty Principle, let us accept that it is impossible to maximise both privacy and convenience at the same time. One must always trade-off any one against the other. Unless  you are like Richard Stallman -- the open source guru and privacy fanatic, who does not use cellphones, credit cards, hotel wifi, Google search engine, Facebook and many other conveniences of daily life in his quest for total privacy -- a lot information about you is already in the public domain and Aadhaar will hardly add anything more to that. Hence Aadhaar being a threat to privacy is more of a urban myth or an attempt at scare mongering. The recent hack or unauthorised access of the Aadhaar database, as reported in The Tribune must be seen in this context.

But even if the threat of privacy recedes, Aadhaar faces the one big challenge that hobbles and frustrates all bold policy initiatives in India -- the threat of a poor implementation. Like demonetisation, GST or even more prosaic projects like building roads and highways, the Aadhaar project is full of operational pitfalls. First there was an immense shortage of biometric equipment and trained staff and it was quite difficult to get an Aadhaar number to begin with. Then there were significant process issues that were not thought through adequately. For example, what to do about people with age, medical or disability related problems that do not allow biometrics to be captured easily? Some of these problems have been highlighted both in mainstream media as well as on social media and remedial action has been taken as an afterthought but much more detailed level planning needs to be done to handle genuine exceptions to the regular processes.

What is immediately needed however is to flood the country with low-cost, but high-reliability biometric devices that can communicate seamlessly with the Aadhaar database and allow instant confirmation of a person’s Aadhaar number and hence his identity. Unless the Supreme Court puts a roadblock to many of the ambitious Aadhaar based projects that the government has in mind -- particularly in the area of digital payments and smartphone wallets --  we will see an exponential increase in the number of verifications. Without a quick and reliable verification mechanism, these projects will falter and Aadhaar will be blamed for this.

Finally, the Aadhaar database should not become a single point of failure for the nation. What this means is that even if the database is hacked-into and corrupted, no critical operations like banking, stock market or PDS should come to halt and cripple the nation. Critical systems should be loosely coupled to the central database and there should be adequate workarounds that allows bypass but with clear audit trails.

In 1985, when the author arrived in the United States for his PhD program, he realised to his chagrin there was no way that he could register at the university or open a bank account without a Social Security Number (SSN), that he as a foreign national did not have. But this scenario had been anticipated and the University had been authorised to allot a temporary SSN to new foreign students that could be used in lieu of the actual one for upto six weeks. The real SSN was of course allotted by the social security administration after a thorough verification of immigration credentials which took about four weeks and all that the author had to do after that was to go back to each organisation and have his temporary SSN replaced by the real one.

The Aadhaar implementation should focus on processes, not technology that keeps changing by the hour. If the various processes that use Aadhaar are thought through and planned as beautifully as the example given above, Aadhaar will surely become a very useful tool for governance in India. While it is far from being fault free, a lot of “criticism” of Aadhaar is due to the fact that, as reported in the Economic Times (January 5, 2018),  it is killing lakhs of non-existent, ghost teachers, ration card holders, students and other beneficiaries in whose name tax-payer’s money was being stolen from the public exchequer. That is why Aadhaar must continue.

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this article originally appeared in Swarajya