Much of the content below is drawn from my conversations from ChatGPT. I make no apologies for that. If I’d found a person with the patience to listen and respond to all my noob-ish questions at my level of understanding, I’d quote them instead.

Preface

I must admit I have a deep rooted bias - I believe that nature poses the ultimate escape room challenge, with elegant rules and a system as consistent as consistent can be. There are underlying structures and laws are followed. Most importantly, nature doesn’t seem to be keen to break the rules it lays down - even exceptions have a logical explanation afaik. Problems coming out of human constructs (finance, law, politics etc) are certainly as complicated if not more, but they just seem too…messy in comparison. Like bugs arising out of patches made to keep the code running - you fix something and something else ends up broken. And there’s always some trying to crash the code.

Don’t get me wrong - we’ve come a long way thanks to the man-made constructs I speak of. A civilisation of billions would be impossible without the systems of finance, law and politics we have now. Yet it’s just always weird to me how the spirit behind each system seems to have been lost. WE came together to create those systems, to serve US. Over time we had to become more and more prescriptive, trying to plug all gaps, while some of US made a sport out of gaming OUR systems. What started off as OUR laws, OUR systems are now cursed as THE system, THE man. Wonder how we got there and if it was inevitable all along.

Enough with the rant. The point of this post is to share what I’ve understood about Special Relativity, in a way that someone like ME (with a basic knowledge of physics) can appreciate. Exploring such concepts beyond the formulae has always been on my bucket list. Somehow I imagined I’d do it sitting on a leather armchair in front of a fireplace, looking down from my half moon glasses. But that was probably just procrastination. So let me tell you what I found.

“Special” Relativity?

I think this version of relativity was named “special” in retrospect, after the “general” version was discovered. Either way, it’s definitely the easier one to understand. The math required is just high school level, way easier than the math for General Relativity. The tl;dr version would be something like:

1. Galileo found a way to relate laws of motion between a frame in motion and a static frame

2. Newton used these relations when he proposed his laws of mechanics

3. The relations broke down when applied to light (or electro magnetic waves in general)

4. Lorentz found some mathematical transformations that enabled us to use Newton’s equations for EM waves

5. Einstein explained the transformations in a physical sense by changing some basic assumptions about time and space.

The set of explanations is called the Special Theory of Relativity. So Einstein didn’t come up with a new theory per se, but he found a consistent framework to connect mathematics to reality. A highly counter intuitive reality however.

Now all the above in more detail, one step at a time.

1. Galileo and motion: The OG

Galileo was a weird nerd from the late Renaissance period (16th -17th century). He probably had no friends, so he came up with thought experiments like how things would work in a dark cabin inside a smoothly sailing ship. He compared that to how things work on the shore. He then thought up brilliant ways to transform positions, times, and velocities between two observers moving at a constant velocity relative to each other. Eventually he came up with the idea that if an object moves with velocity u’ in the a frame S′ moving with velocity v, then its velocity u in the ground frame S is:

That’s the Galilean transformation of velocity: velocities add in a straightforward way. Probably looks obvious now, but bear in mind that people like you and me didn’t come up with it for thousands of years. Galileo then reasoned that the laws of motion must be same in all INERTIAL (non-accelerating) frames.

Later, this principle was expressed in equations:

1. Positions transform as:

2. Velocities then naturally transform as:

3. And accelerations as :

This is Galilean relativity: space and time are absolute, velocities just add or subtract and accelerations remain the same in all INERTIAL (non-accelerating) frames

2. Newton and Galilean relativity: BFFs

Newton was born the year Galileo died. And he decided to finish what Galileo started. Newton’s laws of motion work on the assumption that Galilean relativity works. More specifically

1. Newton’s first law of mechanics says that “An object at rest or in uniform motion stays that way unless acted upon.”. In somewhat equating rest with uniform motion, it draws upon the Galilean principle that the laws of motion are same in all inertial frames.

2. Second law says F=ma. Since acceleration remains the same as seen from different inertial frames in Galilean transformation, the second law works equally well on all inertial frames.

3. Third law: If body A exerts a force on another body B, then the body B exerts an equal and opposite force on body A. Mathematically,

   For this to be true for all inertial frames, they’d have to agree on the forces. Which follows from the second law and is thus based on Galilean relativity.

To summarize: The Galilean transformations guarantee that Newton’s laws are the same in all inertial frames. This symmetry is the backbone of classical mechanics.

3. Maxwell and Electromagnetic Waves: The Misfits

In the meantime, Maxwell was working with a bunch of empirical laws in electricity & magnetism - Gauss’s law (electric charges produce fields), Ampere’s law (currents produce magnetic fields) & Faraday’s law (changing magnetic fields produce currents). He found a way to unify all of these consistently into a mathematical framework. The equations implied the existence of waves with a speed that was numerically equal to the speed to light, as measured from other experiments. So light was added to the EM wave club. Maxwell thus unified messy physics of electricity, magnetism and light into one set of equations, which looked scarier than they actually were.

But now there was a problem - light didn’t seem to obey the laws of Galilean transformation (gasp!). According to Galilean rules, if light travels at speed c, then:

• On a moving train at speed v, someone should measure it as c-v or c+v.

• But in reality, everyone measures it as c, no matter what.

This was confirmed by experiments with light in the 1800s. (Michelson–Morley, 1887)

At this point, classical mechanics had explained so many things that most were inclined to either ignore light or just make “light” of the discrepancy. (Lol!)

4. Lorentz transformations: A New Hope

But then came mathematician Hendrik Lorentz and proposed the following transformations to “fix” the issue with light and reconcile Maxwell’s equations with Newtons’:

When v is << c, the equations transform into Newton’s equations.

Now Lorentz was a big fan of the ether theory and he just thought these transformations worked because of ether (somehow). But it still left a bad taste in the mouth. Especially after Michelson–Morley failed to detect Earth’s motion through the hypothetical “ether.”

5. Einstein: The Special One

And finally came the turn of Einstein - who miraculously found the motivation to go beyond bitching about his dead end job. He saw Lorentz’s transformations, Maxwell’s equations, the idea of ether and said something on the lines of “Nope!”.

Instead of treating Maxwell’s laws as broken (and fixing them with ether-based patches), Einstein assumed they were fundamentally correct and built his theory around them. He assumed:

• Speed of light in vacuum is constant with respect to all inertial frames

• Laws of physics (not just laws of motion, as Galileo suggested) are the same in all inertial frames. Thus, for a light pulse if x= ct then for the same pulse but from the POV of a different inertial frame, x’=ct’

With a few more assumptions of…

• Linearity: Space and time are homogeneous (no preferred point), so transformations of coordinates between two inertial frames must be linear (no squares, roots, etc.)

• Symmetry: If one frame sees the other moving at +v, the second must see the first moving at -v

…he arrived at Lorentz’s transformations for x -> x’, y -> y’, z-> z’ and t -> t’.

6. The Aftermath

The math (algebra) involved in Einstein’s derivation is high school level, so you wouldn’t call him a genius for that. But it’s Einstein’s interpretation of the math that caused a panic attack among the physics community. For good reason, it was all counterintuitive. The transformations meant that:

1. A moving clock ticks slower

2. A moving rod looks shorter along it’s direction of motion

3. Two events that are simultaneous in one frame might not be simultaneous in another

4. It is physically impossible to travel faster than the speed of light

As a side result, Einstein also found that E = gamma mc^2

At rest,

Sounds pretty crazy even today, right? But it’s been confirmed over and over with multiple experiments over the years. Space and time are just not what we thought they were. They form a “spacetime fabric” that responds to mass - more on that in General relativity.

Thus Einstein made it clear that:

1. The speed of light is a fundamental constraint in nature - spacetime adjusts itself in a way to preserve that limit

2. Time is relative - there’s no one “universal time t” as Newton has proposed. In fact time for an object in space can only be defined with respect to another object and it depends on the relative velocity between the two objects.

And that, is special relativity. The fact that we still struggle to escape the concept of a universal time t speaks volumes as to how influential and pivotal Newton’s findings were and how insanely difficult it must have been for Einstein to depart from them.

That’s all for now, will try my hand at the much more involved General Theory later (maybe).

I’ve tried finding a purpose that objectively makes sense. Because having a sense of purpose, in my view, is the most amazing thing that can happen to a person. People find a sense of purpose in love, in academic pursuits, in work or in hobbies. The young tend to gravitate towards one and discount the rest. I did too. Having chosen, some change their views later in life, but many don’t. I lived through my youth firmly believing in the pursuit of one end over all others. And boy did I feel empowered! Not in a day to day sense - that was still a struggle. But I was doing something with my life, doing what I was born to do. Taking steps towards greatness. And given my destiny, a lot of it was effortless, at least much less effort that it was for others.

Until it wasn’t. As I entered a world where things needed a lot more effort from me than from my peer group, I started doubting my sense of purpose. If I was born for this, shouldn’t it be easier? Unraveling the secrets of the universe was going to be hard anyway, but understanding all that has been established already shouldn’t be that hard should it? I mean, a lot of people seem to get it already. And if I spend most of life getting to where others have already been, when do I get around to pushing boundaries? That’s not how it was supposed to happen. Was I…wrong about my destiny? Guess I was.

I tried other pursuits after that, realizing soon that I wasn’t meant to be a prodigy at any. Even hedonism took a lot of effort, surprisingly. What then? I followed the default route towards a “comfortable” life. But the problem with having unclear priorities is that others set your priorities for you - society, family, peers. The priorities thus set follow general understanding of best choices at different nodes, but they’re obviously never personalized. I believe the problem with unclear priorities is quite rampant in my generation, but ignorance being bliss is a boon for many. If that sounds like me taking the high horse, I genuinely do not know what’s better. I sometimes wonder if my life would have been better had I just continued pursuit of something I could not attain. Or attain late in life and retire into oblivion.

Anyway, I digress. I finally had the time and space to think about purpose. And build a view of the world that made sense to ME. Having explored a bit of philosophy here and there, a bit of science (I don’t believe either science or philosophy can be pursued without thought in the direction of the other), some fascinating stories of pioneers who elevated our understanding of the universe and a fair amount of THC fueled conversations, I found existentialism to be the one model that could incorporate most others. Based on my understanding of existentialism, I find a modified version of it to make the most sense. I call it the Game Model (not to be confused with the Game Theory, which involves a lot more rigor and mathematics.)

The Core Idea

The essence is this - living is akin to playing a game. It’s a form of existentialism, but it makes room for intelligent design. Do I believe in intelligent design? I suppose I do. Anything but randomness. I know I cannot justify it and if I try to I’ll end up confusing myself more. So I’ll choose ignorance (hopefully benign) in this case and just say I like it better than evolution of consciousness via pure chance. But I’m fairly liberal about what the intelligence is (could just be nature), the sentiment behind creation (probably a random experiment) and the nature of the creator’s operational involvement (likely nil). But I just feel better assuming there’s a prime mover. A few things that led to this line of thought:

1. Someone pointed out the parallels between reducing level of detail in games the more one zooms in and the increasing level of indeterminacy (Heisenberg’s Uncertainty Principle) in the physical world the more we zoom in.

2. Whatever intelligence is involved in creation, if we inherited some of it’s traits and now we create video games, it wouldn’t be surprising if similar elements are repeated.

3. I’ve always loved playing games. But games with a story arc, perhaps to cope with the realization of a missing pre-dictated story arc in my own.

MMORPG, not RPG

The game I’m talking about is more of a MMORPG than a RPG. A story where players decide what the purpose is, rather than purpose being built into the game. There would be supporting elements - resources, pre-built structures, level ups. But the game is what players make of it and the story is shaped by interactions between players. Kind of like Minecraft. Some choose to explore the rules and boundaries of the game, find hacks and push the limits of common knowledge. These are the scientists. Some choose to play alone and pass time based on whims and fancies - these are the “c’est la vie” types or the loners. Then you have the fans and cults who follow their leaders. (P.S.:I’m not quite sure how the spiritually inclined fit in, but bear with me.) But the vast majority pursue quests around structures built by others like them - the pursuit of life, liberty and happiness - in a social and economic construct. Which is fine and great even, except when it’s not.

Humans often seem to be playing multiple games at a time, with different levels of involvement. As in a game, it becomes more pleasant to play if you’re winning. I suspect there’s a lot more luck involved in winning than skill, but many like to believe otherwise. But the ever increasing cost of losing has made the games closer to hunger games (in pockets) rather than Minecraft. This’s more evident while comparing the developing world to the developed world.

Now this analogy breaks down on a number of points. But I’d argue that it’s a failure of perspective rather than the analogy. For example:

1. For most, living is not a game - it’s life and death. Well maybe it shouldn’t be. It seems one cannot continue being a player unless one plays the game the majority is playing. Is that fair? In a game context, it isn’t - even non active players have a right to play.

2. All credits and achievements are relevant WITHIN the game, everything goes out once a player exits a game. This includes the good and the bad, hence no one purpose is more valid than another. Scientific pursuit is not better than hedonistic ones, as long as both understand that they’re just different games. This does leave room for disruptive pursuits though - serial killing, corruption and the like. But in these one disrupts the game the majority is engrossed with. Is that right? Depends on who you ask I guess.

So what?

I don’t have a grand conclusion- maybe just: pick a lane, but keep perspective. Does this change the way I live or how others should live? Probably not. But this perspective gives me the will to find meaning in what I do and at the same time respect the meaning that others might derive.

More on this as I keep playing.

How does minting work?

Right, let's go through the steps in summary:

1. A smart contract is created using ERC721 or ERC1155 standard and deployed onto a blockchain. (on-chain)

2. The smart contract is executed, which creates a record on the blockchain with a unique address​. Your NFT has now been minted. (on-chain)

   1. The record includes owner (wallet address) for the NFT and the address to a metadata file​

   2. Once a NFT record is created, it cannot be changed.

3. The metadata file is usually a JSON, hosted off chain – like on HTTPS URL or a IPFS URI​. (off-chain)

   1. The metadata JSON file includes a name, description and a URI (address) to the asset.

   2. Storage on IPFS makes the metadata file immutable – usually done to ensure rarity.

4. The metadata file refers to the underlying asset, which is a file hosted on a HTTPS URL, IPFS URI or a local drive. (off-chain)

   1. The metadata file also allows custom attributes, which could define the characteristics of an image – eyes, mouth, background etc.​

And that's your NFT minted. But remember:

(Source: https://makeameme.org/meme/one-does-not-b2418a7fc8)

Too short? Fine, here's some bonus content:

• Lazy Minting:

  • A clear problem for many NFT creators was the upfront fee that they'd to pay to register their NFTs on a blockchain. Imagine paying 1000s of dollars to register your NFTs, only to find no one wants to buy them!

  • The solution came via the web 3.0 version of Just In Time manufacturing. You don't need to mint the NFTs, you can just keep everything ready for minting and mint it once there's a buyer. What's more, you can get the buyer to pay the gas fees!

  • This's a feature that's offered by trading platforms like OpenSea. Since the NFT's not on the blockchain before being sold, you can even edit details like the metadata.

• Burning a NFT:

  • What do you do when you want to put a NFT out of circulation? You burn it! Sounds a bit extreme I know, but relax - it's a misnomer.

  • Burning a NFT isn't really about destroying the record - the blockchain's supposed to be immutable (unchangeable), remember?

  • Instead, you just send the NFT to an inaccessible address - called a "eater" address or a "null" address. Technically it's just a transfer, so it costs you the gas fees you'd expect for a transfer or ownership.

  • The burn process is irreversible though. There's no owner of the null address who can transfer the NFT back to you, so once burnt the NFT is gone forever.

And that's all I can tell you for now. Next time someone points at an image and screams "NFT!", just...

(Source: https://www.keepcalmandposters.com/poster/4033213_keep_calm_and_dont_get_confused)

What're smart contracts?

Remember how uber-cool sounding NFTs turned out to be just records on a blockchain? Smart contracts are a bit underwhelming too - they're just programs running on a blockchain. If you ever started with C programming, you probably remember the "Hello World" program. That's what smart contracts are really - a slightly advanced version of your first program.

Here's what a smart contract looks like:

There are a few ways in which smart contracts differ from traditional programs though

• They're written and stored in a blockchain, for one.

• They're also written in a different language - usually in Solidity, but sometimes in Rust or Viper etc.

What're the parts of a smart contract?

Depends on the kind of smart contract (yes, there are many types). Since we're talking about NFTs here, let's talk about two specific standards - ERC721 and ERC1155. The standards simply provide a structure around how the program should be written, what all it should include and so on. Why're there two of these? Because that's how standards proliferate:

Just kidding, ERC721 & ERC1155 are legit

A ERC721 or ERC1155 smart contract would consist of two sections:

1. Functions: These perform actions like read, write, change or store data

2. Events: These log actions and notify the chain about changes

As you'd expect, the smart contract does NOT hold any data. Neither does it refer to a metadata or image file. It simply creates the NFT. So...

What happens when a smart contract is executed?

If you create a smart contract using either of these standards and run it on a blockchain, you should end up with a NFT on the same blockchain. Creating a NFT by running a smart contract is what's known as "minting" a NFT. A record is "written" onto the blockchain.

Btw, you need to pay a transaction fee known as "gas fees" when you "write" anything to a blockchain. This means you'll end up paying gas fees every time you

• Deploy a smart contract on a blockchain

• Execute the smart contract to mint a NFT

Sounds about right...

Source: https://www.atimetolaugh.org/gasprices.html

Generally, the creator of the NFT - i.e., the wallet which executed the smart contract - doubles up as the owner of the NFT created. But the default ownership can be changed by altering the smart contract. The NFT can also be sold, as in the ownership can be transferred to other addresses. But at any given point in time, there can only be one owner of a NFT.

Now that we know about NFTs & Smart Contracts, we should ask...

How does minting work?

Even if you've been living under a rock, I'll assume you have heard of people pouring in millions of dollars to buy colourful drawings of apes. About geeks finally getting to be friends with celebrities. About an entire section on the internet talking about NFT scams. Yada yada.

If you're looking to understand the philanthropic, economic and ideological implications of NFTs, you came to the WRONG place. Let me repeat that - that's NOT what we're going to talk about.

Instead, we'll be talking about the basics, i.e.:

• What are NFTs?

• What're smart contracts?

• How does minting work?

And that's all. If you're interested in discussing if NFTs are God's gift to mankind or another Ponzi scheme, there're a million other sites out there. I think the tech's cool, so let's just talk about...

What are NFTs?

If you think of apes, dolphins & cool avatars when you hear NFTs, you're probably not alone. Most people think of the images themselves as NFTs. Technically though, the images are just a part of the NFT - the underlying asset, if you will. Let's see how that works.

NOT a NFT

(Source: https://www.newyorker.com/culture/infinite-scroll/why-bored-ape-avatars-are-taking-over-twitter)

As a cursory search will tell you, an NFT is a Non-Fungible Token. Let's break this down:

• Non-fungible: Meaning it's unique and cannot be duplicated, further described here

• Token: Meaning it's a record on a registry, as described here

See what I mean? NFTs are, by definition, tokens! Which means they're records on a registry. Not colourful images of unicorns and apes. Well then you'd want to know...

What's the deal with NFTs & blockchains?

If NFTs are records, we need a registry to record them. Specifically, a registry that's publicly accessible, tamperproof and durable. Sounds like something you've heard of? That's right, we're talking about blockchains. And that's where NFTs live.

As a gross oversimplification, you may think of NFT as a record in a database

(Source: https://www.ictlounge.com/html/database_structures.htm)

Now if you imagine a NFT as a record in a blockchain, how do you check if the record exists? To do so, you'll need

1. The location of the record (NFT), called the "wallet address" on a blockchain

2. A record ID (the location might have several records), called the "Token ID"

As described here, these two details above are quoted whenever anyone talks about a specific NFT.

The smart contract address tells you the protocol that was used to create the NFT. But you can probably live without checking that one.

Next, let's talk about what this record includes, in our next section...

What are the parts of a NFT?

A standard NFT record would include

1. The address of the owner: Again a blockchain wallet address, doubles up as the proof of ownership

2. The address to a metadata file: Usually hosted "off-chain", more on that below

3. Transaction history related to the record (NFT)

And that's it. There's no image in the "NFT", not even a link to its location or a description of its colour. Why's that, you ask? Because it's damn expensive to write stuff onto a blockchain. To put it into perspective:

The costs to simply just store a blockbuster movie like James Cameron’s Avatar on the Ethereum blockchain would be more than the costs of making the $237 million film.

In essence, the NFT image is the third layer in the hierarchy, in the following order

1. NFT token, which points to a metadata file

2. Metadata file, which points to another location

3. The actual file, which could be an image, a tweet or anything else

Of these three, the NFT token is the only one that lives on a blockchain.

What about the metadata file?

Next we come to the interesting and often overlooked part of the NFT - the metadata file. This's simply a JSON file, which talks about

• The name of the NFT

• A description

• An address to the underlying file

• Other optional attributes

In other words, the metadata file tells you everything about the rainbow unicorn you're interested in. The file itself looks something like this:

Now where do you keep this metadata file? Not on the blockchain, unless you want to go bankrupt before selling your million dollar NFT.

Instead, we keep (host) it on a https location - like most sites on the internet. Or we could store it on a distributed storage using IPFS. IPFS is a whole different topic, so let's not get into details right now. But while we're talking metadata, here's some bonus content:

• Storing a file in IPFS means it cannot be changed, unlike in case of a https URL. So if a NFT metadata file and the underlying image URI point to a IPFS location, it is deemed to be more secure.

• In certain cases you might see that the metadata is frozen. This's a guarantee that the metadata file won't be changed later, i.e. there'll be no rug pull scam.

• For extra security, there are proposals to store a hash of the underlying image in the metadata, thereby ensuring it won't be changed later either.

And with that, we come to the final piece of the puzzle:

What about my rainbow unicorn?

The Rainbow Unicorn <3

(Source: https://factorymeme.blogspot.com/2020/07/25-unicorn-memes-clean.html)

The underlying asset is simply a file, which can be an image of a unicorn, a PDF of your sketch or anything really. It can be hosted anywhere too, even on your desktop. Of course if you're looking to sell you NFT for a few million you'll probably have to store it somewhere more secure and less susceptible to tampering (think IPFS).

Here's a great illustration of where different data points for NFT listings come from

That's all about NFTs. Now when you hear about NFTs, you might have heard of smart contracts too. So next we talk about...

What're smart contracts?

Acceptance: Ok fine, what happens now?

You go back to browsing the net. And hope that VCs become useful so that all you've learnt now is relevant.

(Source: https://dinosandcomics.com/)

But how useful can VCs be? In theory, very. The internet's pretty much the wild west at the moment. Spreading misinformation is a piece of cake. Thankfully I found this amazing solution!

VCs offer the promise to make the (digital) world a better place (just like every ride hailing and grocery delivery company). Quoting this article from Forbes:

Verifiable credentials could make it easy to spot bots, unmask trolls and trace the origins of claims...When consumers stop worrying about theft and deception, they’ll be more willing to participate in online ecosystems...When trust is rebuilt, I believe the internet can become a place of creativity instead of caution.

If you're paranoid about privacy, VCs could be your best friends. They enable selective disclosure of information, with this concept called Zero Knowledge Proof (ZKP). Which's a total misnomer btw - there's definitely >0 knowledge involved there.

Not a lot of people know what VCs are, including most who use them. Quoting the same article:

"...the verifiable credential space is very young. The W3C just came out with standards for verifiable credentials in the past year or so...So, a barrier to entry for companies in this space, including my own, will be consumer education on how to implement verifiable credentials."

Then again there are many (including my employers) who're betting big on VCs.

Personally I believe VCs are here to stay, but the idea will probably undergo a lot of evolution. As we've seen with COVID vaccine certificates, a lot of VC features are optional and might not be harnessed at scale, at least not immediately. But I think the magic'll happen once VCs are linked to biometrics, which might not be too far off!

In case you didn't notice, I have a vested interest in wanting VCs to work. But so should you - they might just make our lives easier!

Meanwhile...

(Source: https://dilbert.com/)

Depression: Help! They're too complicated!

(Source: https://dinosandcomics.com/)

Now let's address the T-Rex in the room - what the hell are VCs? How do they work?

I could tell you VCs aren't complicated - but that'd be a lie. Unless you know all about cryptography and blockchain already. I'll assume you don't (since I don't) and present an oversimplified picture.

What are VCs?

Think of all the documents you use in the physical world to prove who or are or what you did - your driving license, your passport, your employment ID, even the coveted degree your mom framed on the wall.

Now think of their digital equivalents. Images of these documents? Easy to fake - I could make myself a fake Nobel prize certificate within minutes. Your Google / Facebook ID? Doesn't work with everything (phew!). Your Linkedin testimonials? Don't even get me started!

Point is, there isn't really a good enough substitute in the digital world. Which is the reason bank applications need to be screened for document tampering and compared against multiple databases before you're cleared for an account. All this takes time, effort and money.

Enter VCs.

An analogy that's been flogged to death is the wallet analogy - you can think of a mobile app as a digital wallet and VCs as digital "identity cards" in the wallet. Just like you show an ID when requested by, say a bouncer at a club, you can show you digital ID on demand in the internet.

Who're the parties involved?

When you've been dealing with VCs for as long as two weeks, three terms you hear very often are issuer, holder (or prover) and verifier. Simply put,

• Issuer is the entity that gave you the credential (driving license, COVID vaccine certificate, Linkedin endorsement you traded with a friend)

• Holder is the person who the credential is meant for (you, your delighted friend)

• Verifier is anyone who wants to verify the certificate (traffic police, an airline, unsuspecting recruiter).

Language is important here, but you get what I mean. Look here or here for a more formal definition.

How does it all work?

Kinda like email. If you're not sure how encryption in email works, take a look at this. If you already know, let's move on.

Most of your email communication is encrypted by default. This encryption and secure transmission of data works using something called Public Key Infrastructure (PKI). VCs use the same concept of PKI to preserve privacy and security.

The only difference is, instead of checking public keys from Certificate Authorities, VCs fetch the public keys from a different trusted source - like a blockchain or a secure website. Read more details of the comparison here.

Coming back to our Issuers, Holders and Verifiers, a VC

1. Is issued by an Issuer. It contains three things:

   1. A location where the Issuer's public keys can be found. Like a URL https://... or a blockchain location (called DID).

   2. The data (or meat) of the credential - could be anything like a degree, a medical record or just kudos for being a swell guy!

   3. A digital signature of the issuer. The signature is "made" from the credential content & the issuer's public key. If either of them are changed later, you can find out from the signature.

2. Is issued to a holder / prover. Holder is the one trying to make a "claim" called a Verifiable Presentation (VP).

   1. The claim might contain all or some of the information in the credential. For example, if the credential is an MBA, you can generate a VP saying you're a MBA without exposing your grades, specialization or college. Unless you REALLY want to (looking at you, IIM people).

   2. This's an example of zero-knowledge proof. Sharing only essential information, nothing more, nothing less. Apparently it's got some people quite stoked.

3. Is verified by a Verifier

   1. Verifier looks at a claim presented by a Holder, checks the following

      1. If the holder is the right one

      2. If the issuer is the right / acceptable one

      3. If the claim is NOT revoked

The VP creation and verification usually happens via a QR code in a few secs.

Here's what the flow looks:

(Source: https://tykn.tech/verifiable-credentials/)

And that's it. That's how VCs & VPs work! Simple!

Ok maybe I skipped a few details. So here's some more for our eagle-eyed viewers:

• How does holder H know that a credential came from Issuer I?

• By looking at the signature in the credential. How does that work? Again, math!

• How does Verifier V know the credential came from Issuer I?

• Same, by looking at the signature in the credential?

• How does Verifier V know the credential belongs to holder H?

• Generally by checking the details in the credential, in case of a vaccination certificate for example. Alternatively, the holder H could "sign" the VP using her private key. When Verifier V is able to decrypt the VP using H's public keys (assuming they're shared), V knows the VP came from H.

• How does Holder H know Verifier V is the one requesting the check?

• Paranoid, are we? Good! Anyway this's easy too - holder H uses Verifier V's public keys to encrypt the VP. Now only verifier V can decrypt it using their private key.

Now we know what VCs are and how they work. So we move on to...

Acceptance: Ok fine, what happens now?

Bargaining: Maybe they're just a fad.

If they're a fad, it's a(nother) fad drawing some serious bucks! VCs are closely related to the concept of digital identity and the space has exploded with startups like ID.me, Alloy & Incode drawing interest from across the globe.

Of course there's always dumb money - investment's not always a great indicator of future potential. If it was, I wouldn't be writing posts like these.

A better indication is current and future adoption. Here comes another aspect where the pandemic has turned things around, but this time for the better. A big pain point for countries has been around verifying vaccine certificates. The fact that fake test certificates are available at less than the cost of a taxi ride to a center had caused many a country to think twice before reopening their borders. The fear was that the same could happen with vaccination certificates.

Or so most countries thought. The US turned out to be much more trusting, as was pointed out in this skit and the folllowing meme around CDC cards:

(Source: https://ifunny.co/picture/me-presenting-my-covid-vaccine-card-memes-KEhrEsTZ8)

But most others including EU, India & Singapore used VCs. The EU DCCs, DIVOC certs and W3C vaccine certs issued by these and many other countries are nothing but VCs!

There's a minor difference though (they're not decentralized as VCs ideally should be) and it hasn't solved the problem of fake certificates completely. But the basic VC properties of tamper proofing, machine readability & issuer check are preserved - making this an unprecedented validation at scale for VCs!

COVID's not entirely gone, but the logical extension for tech like EU DCCs would be to support medical records beyond COVID. And then there's the metaverse trying to make all physical interactions passé. Coupled with the fact that other industries (finance, gaming) have probably taken notice of the tech and it's capabilities, it's hard to imagine VCs going away anytime soon.

So VCs might be more than a fad. But that acknowledgement merely pushed me into...

Depression: Help! They're too complicated!

Anger: Useless heap of esoteric mumbo jumbo!

Sir Tim Berners-Lee's one of the good guys in my book - he refused to patent the first browser and server after creating them in 1989. So when he's talks about the web going bad, and the internet becoming a place you cannot trust, I listen.

But then again, that's just another visionary lamenting on the loss of idealism. Doesn't mean trust on the internet affects you or me, does it?

Having recently moved countries, I can say it does. Here are some of things I had to deal with while moving:

1. Verifying educational qualifications: Thanks to fake certificates being a dozen a dime in developing countries, degrees to be attested by ministries that have a million better things to do. Finally you end up with a process that takes weeks and creates a bunch of well-fed intermediary agents.

2. Accessing medical records: Ditto for medical records. Most recent examples are COVID tests, where country A re-tests citizens of country B when they arrive from A to B. Fraud test certificates are even easier to get than fraud degrees (I'm told).

3. Creating a bank account: The "easy" online process asks for a bunch of documents, declarations and certificates. My Employment Pass was in process and I was staying in a temporary accommodation, neither of which helped. After 3 branch visits to resolve circular dependencies, the bank finally took mercy and let me open an account.

4. Applying for credit cards: Repeat 3 above, but now with a different bank.

Why are these processes so tedious? Do banks love making customers jump through hoops to create an account? Probably, but that's not the (only) reason. The reason is simple - because you cannot trust things on the net. Remember what Lincoln said?

(Source: https://www.one.org/us/blog/why-you-shouldnt-always-trust-social-media-for-your-world-news-and-views/)

A certificate image can be easily doctored, medical records can be faked, files can be altered. Most of the processes I listed out above have been hardened over the ages, with built in redundancies. The system has become more resilient at the cost of convenience.

But is the compromise necessary? Is there no way to combine convenience with security?

With VCs, there might be, thanks to cryptography & some complex math. Even if you're not be a bitcoin fan, you better believe in cryptography - it's what keeps secure web browsing, ATM withdrawals and email running!

VCs are machine readable by design - information can be combined into a single QR code. They also allow you to confirm the "issuer" of a VC - as in the entity that certified the "claim". For example, if the US govt issued you a driver's license as a VC, an agency in Singapore can check the authenticity of that VC in seconds, without going back to ask the US Govt. or looking for attestations. More on this later.

So trust on the internet does affect you and me. If VCs can solve it, they'd be more than esoteric mumbo jumbo. But then again...

Bargaining: Maybe they're just a fad.

VCs and me

Around Jan 2021, while the world was learning zoom etiquettes and living with foggy specs over masks, I was exposed to the world of VCs. Not (evil?) Venture Capitals, but Verifiable Credentials.

As usual, I started by consulting my trusted friend Wikipedia, and found...

"Verifiable credentials (VCs) are an open standard for digital credentials. They can represent information found in physical credentials, such as a passport or a license, as well as new things that have no physical equivalent, such as ownership of a bank account."

Sounded amazing! And quite unnecessary. I was managing quite fine with a JPEG of my passport page, thank you. But I was in discussions for a role at a firm that deals with VCs (Affinidi), so I needed to find out more.

The 5 stages of research

I found a couple of other links that were more idiot-proof to my liking, especially the one from Affinidi. As a skeptic with a byte sized ego, I went through the 5 stages of grief while conducting my research

• Denial: No one cares about VCs!

• Anger: Just a heap of esoteric mumbo jumbo!

• Bargaining: Maybe they're just a fad.

• Depression: Help! They're too complicated!

• Acceptance: Ok fine, what happens now?

Looking back, I realize that I could / should do my bit to guide other lost souls who embark on a similar journey. So here's my story, starting with...

Denial: No one cares about VCs!

I'd never heard of VCs, neither had any of my friends. Given the elite circles I move in, I was inclined to dismiss as irrelevant.

(Source: https://www.gocomics.com/calvinandhobbes)

But I decided to give it a chance.

Turns out the idea of Verifiable Credentials IS relatively recent (ha!) - it was recommended by this organization called W3C in Nov 2019 in the form of a geek-friendly data model. The recommendation was sufficiently long and comprehensive to scare any noobs away and leave the deserving ones to explore.

But the recommending organization W3C itself was 27 years old (as of 2022), established by none other than Sir Tim Berners-Lee (of created the internet fame). Long story short, the mission of W3C is to standardize things (protocols) about the internet, so that it's easy to build and access things on the web. Their whole point is the network effect: more the people who use the web, the more useful it'll be.

So when I found that W3C was talking VCs, it seemed like my time might not be entirely wasted. Then when I found that entities like the IBM, Microsoft, Linux Foundation Public Health & Salesforce are talking about VCs, I had to admit there might be something to it.

While questioning the eliteness of my circles, I moved on to...

Anger: Useless heap of esoteric mumbo jumbo!

What's the deal with TLS?

So you chose the red pill. Well you've been warned!

Remember everything I told you about Alice, Bob & Eve? This's the part where it all breaks down. Heartbreaking, I know. Just when it seemed like there might be a twist...

(Source: https://www.reddit.com/r/ProgrammerHumor/comments/8v3mqy/is_this_cryptography_meme_relatable_to_programmers/)

The ugly truth is that servers don't care about Alice, Bob or Eve; they just want to talk to their mail clients. When the mail client XYZ says realBob@xyzmail.com is Bob, the servers assume it's true. What the servers do question is if the mail client claiming to be XYZ is, in fact, XYZ.

So to answer question 3 from the last section (the one you conveniently forgot), Alice doesn't need to know Bob's public key. Instead, we operate with a chain of trust like the following:

1. Alice and her mail client ABC trust each other

2. Mail client ABC and server group S trust each other

3. Server group S and mail client XYZ trust each other

4. Mail client XYZ and Bob trust each other

And that's how Alice, mail client ABC, server group S, mail client XYZ and Bob all come to trust each other. And vice versa.

The mail clients trust Alice & Bob because they logged in with some authentication (password, biometrics etc.). Bob and Alice trust the mail application because of the URL address they came to (www.gmail.com, not www.fakegmail.com).

The trust between mail clients and server groups though, is enabled via third party agencies called Certificate Authorities and the Transport Layer Security (TLS) we'd mentioned earlier.

The idea behind TLS is to establish a secure connection between two parties, such as server group S and mail applications ABC or XYZ. Secure as in making sure:

• Mail client ABC / XYZ is what it claims to be

• Server S is what it claims to be

• No one else can listen to a conversation between ABC / XYZ and S

A secure connection is established via a process called a TLS handshake. Once established, any following data exchange is assumed to be secure. The handshake works via a framework called Public Key Infrastructure (PKI), which's one word away and heavily reliant on Public Key Cryptography (PKC).

TLS Handshake

If I were to oversimplify the TLS handshake, it'd be something like this:

• Client ABC initiates contact with server, establishes some rules of engagement for the conversation to follow.

• Server S responds with its digital certificate and few other details. The certificate includes a public key K, is issued by a Certificate Authority (CA) and confirms that the public key K belongs to server S.

• Client ABC checks if the certificate is valid (involves checking the digital signature with the CA's public key) to confirm that public key K belongs to server S.

• But now client ABC, as paranoid as it is, needs to make sure it's talking to server S and not another server that got hold of S's certificate. To do so, it presents a challenge - it encrypts something using the public key K from the certificate and asks the server to decrypt using its private key.

• If server S is able to decrypt the message, it means it has the private key corresponding to public key K. Which means it is... <drumroll> the real slim server S!

• And that's just half of it. Server S is equally paranoid, so it mets out the same treatment to client ABC. By the end of it, both of them are sure they're who they claim to be (phew!)

To be more scary and precise, the exchange looks like this:

(Source: https://www.ibm.com/docs/en/ibm-mq/7.5?topic=ssl-overview-tls-handshake)

Now that client ABC and S can talk, ABC sends the mail to S.

Next, client XYZ goes through the same process while trying to fetch the mail from server S.

Sounds like an overkill doesn't it? But better safe than sorry...

(Source: https://medium.com/@agu3rra/tls-handshake-a-secretive-way-to-say-hello-9c72f8b97ca3)

You might have noticed that a lot of steps above bank on trusting CAs. Since we've been sufficiently paranoid to trust no one else so far, you might wonder...

What's so special about Certificate Authorities (CAs)?

Why do we trust a certificate from a Certificate Authority (CA)?

Well we don't really have a choice. I mean, you have to start somewhere and CA's act as the first link in the chain. CA's certify other entities (Intermediate CAs), which certify other entities (Servers). There are different validation levels and related (elaborate) certification processes, but that's a story for another time.

While we put our trust in CAs as a source, validating identity remains one of the biggest problems on the internet...

(Source: https://xkcd.com/1121/)

...in most situations.

And here ends the story. But with that epic conclusion, we also come to the most important question of them all:

Why did I tell you all this, really?

To get you warmed up for my next post on Verifiable Credentials (VCs). And because this's way too long to cover there.

Does encryption stop here?

You probably guessed it, since there's a post now. But I'll say it anyway - no, it doesn't. While you might blow the trumpets and hit the sack for now, you'll eventually come back to ask:

1. How does Alice know the mail's from Bob (realBob@xyzmail.com) and not from jealous Eve (trustmeIamBob@xyzmail.com)?

2. How does Alice know that Bob's message wasn't altered? Her public key is public, remember? Eve can't read Bob's message, but can't she replace it with another of her own?

3. How do Bob and Alice know each others' public keys?

Answers to 1 & 2 lie in a concept called digital signature. Not to be confused with pompous signature lines on emails.

Digital signatures use the concept of PKC again. But in reverse order to the section below:

(Source: https://www.preveil.com/blog/encrypted-email/)

Idea's simple, just remember

• Anything encrypted with Bob's private key can be decrypted by Bob's public key only.

• So any message that can be decrypted with Bob's public key must've been encrypted by Bob's private key.

• Assuming only Bob has access to his private key, the message must have come from Bob.

So Bob can simply re-encrypt the encrypted message (6ekd890optak1 above) with Bob's private key. That's right, two encryption layers for the price of one!

Alice then uses Bob's public key to confirm it's from Bob and everyone lives happily ever after! Similarly, Bob can check if the response he got came from Alice, as illustrated below.

(Source: https://en.wikipedia.org/wiki/Digital_signature)

As promised, what I've explained is in fact an oversimplified picture. The concept is the same, but modern day digital signatures work a bit differently. They convert the message into a hash, which can be compared later to ensure the message hasn't been altered. I'm going to skip that part because

• Apparently the idea can work without hashing

• I don't want you staying up late reading this

• I need ideas for later posts

Great, now we know how it all works! If all you wanted was to know how encryption works in principle, you should stop here. If you want to know what happens in reality, read on.

Next, we move on to tying up some loose ends in the next post.

The idea of encryption is simple - a message can be converted into a secret code no one can read, unless they know how to decode it (like Robert Langdon). Thanks to technology, cracking most modern day encryption is almost impossible.

(Source: https://xkcd.com/538/)

So how did I get interested in encryption? Well I was trying to find out about Verifiable Credentials (VCs) and found that VC encryption is quite similar to Email encryption. Which's great, except I knew nothing about Email encryption.

I did eventually find out a few things, most notably that it's a rabbit hole. So it's only fair that I share my notes around encryption here and shorten the introduction for a few other non-techies. Here're the parts we're gonna talk about:

• What's new with Email?

• How do Emails work?

• Why encrypt Emails?

• How does this encryption work?

• How're Emails encrypted?

• Does encryption stop here?

• What's the deal with TLS?

• What's so special about Certificate Authorities (CAs)?

• Why did I tell you all this, really?

Let's start with...

What's new with Email?

Not much really, they've been around for a while. The point of this article is to talk about encryption, so I'm going to skip the history lesson. Tl;dr being they ruled the world before their cooler instant messaging cousins came along. But not everyone's moved to Slack and / or Telegram - I still use Email and I bet a lot of other people do.

Feel free to imagine three paragraphs here about how useful Email is, how it has changed our lives, made us better people, blah blah. Meanwhile, I'll move on and talk about...

How do emails work?

For most of us, sending an Email seems like a simple two step process:

Reality, however, is a tad different:

In reality, sending your message off into the network cloud is a bit like sending Little Red Riding Hood into the deep dark woods. You never know what might happen.

I'm not going to talk more about how the workings of email here, largely because it'll look like a copied assignment from here and here.

But now that you know your email bounces around before reaching it's destination, the answer to...

Why encrypt Emails?

Why encrypt Emails?

Think of all the parties your email goes through. Imagine what'd happen if all of them could see the content of your mails. Maybe there'd be complete transparency, no misunderstandings and ensuing world peace. That's about as likely as Unicorn Jedi warriors saving earth from an alien invasion. More likely, Big Tech would know even more about you than it does today.

(Source: https://caglecartoons.com/)

Luckily, some smart people saw (some of) this coming and started encrypting emails (and other messages) in transit a decade ago, meaning nosy intermediaries who forward your mails couldn't see what goes in them. This's called Transport Level Encryption, which's done via Transport Layer Security (TLS). It doesn't stop your email application (aka client) from reading your messages though. Gmail and most other email clients have TLS turned on by default in 2022. Caveat: TLS only works if both the sender('s mail client) and the recipient('s mail client) both use TLS.

A more complete alternative is End -to-end Encryption (E2EE) where only the sender and the receiver can read the content, not even the client. Whatsapp claims to do it for all conversations. Gmail's "thinking" about doing it, but I wouldn't hold my breath.

That being the why, let's come to...

How does this encryption work?

Finally, we come to the point! Thank you!

There are different types of encryption, but they fall into two broad categories: symmetric and asymmetric.

• Symmetric encryption's your good old fashioned idea of locking content with one key and sharing (a copy of) the key.

• Asymmetric encryption's basically mathematical magic, that allows you to lock content with one key and open it with another (!). More on that in a bit.

(Source: https://victoria.dev/blog/what-is-tls-transport-layer-security-encryption-explained-in-plain-english/)

Oh wait, what's this "key" you ask? Just think of it as a scary looking random piece of string you can ignore for now. Something like this:

Now one of the most popular forms of asymmetric encryption on the net is PKC (Public Key Cryptography). PKC's used to encrypt emails in transit, so that's what we'll talk about here.

PKC is a form of asymmetric encryption, as in it uses different keys to encrypt (lock) and decrypt (unlock). PKC involves the use of a "key-pair":

• One's called a private key, which is the little secret you (or your email client) keep to yourself, just like your teenage DMs.

• Then there's a partner public key, which you can (and should) share with the world, like your fake LinkedIn endorsements.

These keys are not picked at random, they're generated as a pair by algorithms.

Now here's the magic bit - if a message is encrypted using a public key from a pair, it can only be decrypted using the corresponding private key. And vice versa.

Let me repeat that, in case you haven't heard it before:

If a message is encrypted using a public key from a pair, it can only be decrypted using the corresponding private key. And vice versa.

Public and private keys essentially act like complementary keys to a safe. Neither is useful alone, but together they can unlock the safe. Why? Because math!

Sounds a little weird the first time, but you get used to it. You'll have to either trust the math, work it out yourself or wait for me to oversimplify it in a later post.

Assuming it works, let's come to...

How're Emails Encrypted?

When someone sends you a mail with a service like Gmail in 2022:

1. The mail application encrypts the mail using the public key of the recipient.

2. The carrier in between (your snoopy internet service provider) forwards your mail along without being able to read the encrypted details.

3. When the recipient application gets your mail, it decrypts the message using the recipients private key.

(Source: https://www.preveil.com/blog/encrypted-email/)

If you're wondering what the servers do, you can think of them as forwarding agents who know the right way to send and receive mails. If you want more, knock yourself out.

And that's it - Bob and Alice can talk away without the nosy servers knowing what they're talking about! Cheers all around, let's go home!

But wait...

Does encryption stop here?

More on that in the next post!

There's a lot of optimism in the ME travel industry, supported by early signs of recovery. As people adjust to the new reality in incremental steps, the aviation ecosystem will look to find profitability while balancing convenience and safety.

Neeraj Goswami, associate director of Air Business at Cleartrip, explained that airlines have been carrying fewer passengers per plane than before in order to adhere to social distancing norms. This has resulted in them charging a higher ticket price per passenger.

"There are also additional costs of airport procedures that airlines have had to pass on to customers, so ticket prices have unfortunately gone up as a result," he said. "There is also a huge pent-up demand with limited supply now, so airlines can afford to sustain high prices without adversely affecting flight loads."

Over the next few months, as more capacity comes in, the current level of prices would cause demand to lag behind supply, he said. "Hence, prices will fall and airlines will find other pockets of efficiency to maintain margins. Price wars that were common on certain routes will become less frequent. We think prices will go down over the next 3-4 months, but they'll probably stay higher than they were 12-18 months ago."

Domestic aviation markets have been the first to rebound, but the early interest for international travel has been encouraging. Searches will change into conversions as the aviation ecosystem begins to operate with more certainty and uniformity. Sooner or later we'll all adapt, as we always have.

Neeraj Goswami, associate director of air business at Cleartrip, noted that there is a lot of uncertainty regarding international travel at the moment with respect to entry norms, medical facilities at destinations, and the possibility of lockdowns.

"It is understandable that travellers would have reservations around vacationing overseas. But, on the bright side, local and domestic travel has blossomed; we've seen it in Saudi Arabia where domestic travel has taken off, and in the UAE where staycations are selling like hot cakes. Tourism departments are doing a great job in creating visibility around local attractions. We see a good chunk of travellers opting to alter their plans rather than to shelve them for later," he said.

He predicted that over the next few months, airport procedures and entry norms will become more uniform. Incremental changes in lifestyle and an increase in air traffic will reinforce people's comfort with the safety of the aviation ecosystem, and they'll start planning international trips again, he explained.

"We expect to see some changes in choice of destinations as travellers might avoid traditional hotspots in favour of more offbeat locations. But we expect international travel to be well on it's way to recovery by the end of this quarter," he said.

Image sources:

1. https://viewsplash.wordpress.com/

2. Pinterest

The Middle East has come a long way - from being a cash economy to being a hub for fintech innovation, in the space of 10 years. The scene's heating up with global and local ecommerce giants doing everything it takes to expand the online market. Ancillary benefits for everyone else in the online space.

The UAE is seeing a boom in online payments as the landscape becomes ever-more tech literate. With growing numbers of digital natives, improved security, smart government initiatives and more, things are changing, and fast.

Buyers have more confidence in online payment methods, spurring an e-commerce boom in the region. Regional payment methods have played a pivotal role. The convenience is obvious; security concerns have been allayed as regulations have become more stringent. Government reforms have also had a big part to play in increasing the adoption of online payment methods, the likes of Smart Dubai slowly funneling everything into one, streamlined system. While cash on delivery and bank transfer are still used quite frequently, they are fast being replaced by credit cards and net banking.

Payment gateways are supporting e-commerce companies in enhancing reporting and personalization while adhering to data privacy regulations

With the increase in scale, the region has also become more lucrative for cybercrimes, so understandably, security has become a prime concern as the relative cost of fraud has increased. Technology has had to stay one step ahead of the criminals. A high penetration of expats has mandated the provision of multiple currencies and payment modes by gateways (MIGS, CyberSource) and aggregators (Checkout, Payfort). Tokenization has also been a key development, especially for low-value high-frequency transactions such as food delivery. The risk of higher chargeback on unsecured transactions or one-click transactions has been more than countered by a surge in customer interest and purchase.

Visa and Mastercard still rule the roost, but alternative payment methods from beyond are seeping into the region. Alipay & WePay are already very popular in luxury retail, Rupay has just been announced and will cost 10-15% that of Visa and Mastercard, both for the acquirer and the merchant. In the long term, cryptocurrency could be a major disrupter.

Local payment methods will continuously improve. KNET has just upgraded to a newer version and it is clear that OmanNet and Fawry should follow suit. Closed-loop wallets will be opened up to third parties soon, which should drive standardization in the overall digital wallet ecosystem.

This has had a powerful impact on the business of travel. As with all e-commerce sectors, increasing comfort and security in online payments is an essential element in pushing the offline to online transition. Offering a wide range of payment methods across a big basket of currencies is now a must. Tokenization is good to offer, but online travel agencies have had to balance the higher risk due to higher ticket sizes. The popularity of virtual payment modes for supplier payment (virtual cards, B2B wallets) is on the rise as the end supplier is protected from all risk.

The future is digital. As banks close down branches, and the next generation sets future trends, this is clear. Demand for both regional (KNET, OmanNet, Fawry) and international payment methods (Applepay, PayPal) have increased and KNET already accounts for around 70% of online transactions in Kuwait. The adoption of open digital wallets (Applepay, Googlepay, Samsungpay) is on the rise and almost every e-commerce company either has a closed-loop wallet or will be having one soon. So, where next? Keep up, or be left behind.

Image source: xkcd.com

Unless you've been living under a rock with no wifi, chances are you've heard of these three terms in numerous interviews, articles and conferences.

Unfortunately, a lot of us (especially ones who're not directly working with product, data science or engineering) can do little more than vehemently agree each time someone says AI, Blockchain and IoT will change the world. Finding out more seems complicated, but if you dumb things down a lot, grasping the basic concepts doesn't require a PhD.

Artificial Intelligence (AI)

Let's start with Artificial Intelligence. AI deals with simulation of intelligent behavior in computers using mathematical or logical thinking. Put simply, it seeks to mimic human behavior. Examples of AI applications are all around you - voice assistants who try to mimic an assistant, driverless cars that mimic a chauffer and Netflix recommendations that mimic a friend who wants to turn you into a depressed couch potato.

Machine Learning (ML) and AI are used interchangeably by many. But ML is a special application of AI that gives systems the ability to automatically learn and improve from experience without being explicitly programmed. It works using huge volumes of data and progressively trains the machine into recognizing patterns.

You feed sets of inputs into a machine and let it figure out the process to get to a desired output. If correct outputs for a set of training inputs is provided, it's called supervised learning - it makes it easier for the machine to train itself. Once trained, the machine can give you the correct output for a new set of inputs.

Otherwise, you may simply ask the machine to keep learning on it's own, unsupervised. The second approach is usually used for grouping data points or to detect anomalies.

An associated term is Neural Networks. Without pretending I know much more, I can tell you that these are just mathematical functions that feed off each other, i.e. the output for one function becomes the input for another and so on. Deep learning is a specific case of ML that uses layers of Artificial Neural Networks.

Deep learning is smarter in a way, because different layers start specializing on their own over iterations and begin to extract different features. For example, you could use deep learning to extract different features from concert videos: faces, lighting, sounds, etc.

The current state of AI is reasonably advanced: we have audio assistants, self driving cars and bots playing chess. But the holy grail is to replicate the human brain.

While the advantages are numerous, an AI is only as good as the data training it. And if the data set has human biases, they creep into the AI system as well.

Case in point: Propublica, a nonprofit news organisation, had critically analysed risk assessment software powered by AI known as COMPAS. COMPAS has being used to forecast which criminals are most likely to reoffend. Guided by these risk assessments, judges in courtrooms throughout the United States would generate conclusions on the future of defendants and convicts, determining everything from bail amounts to sentences.

In short, as smart as AI is today, it's still not smart enough to correct for human stupidity.

Given the exponential boom in AI tech, how long before the machines take over you ask? Well don't hold your breath. The type of AI we have now is weak AI, also known as Narrow AI. This is because it focuses on a single task and is developed to a point in which it can perform this task better than humans.

When combined with many other Weak AI systems, Strong AI can be created. This second category of AI refers to the systems that are usually depicted in the movies. Strong AI refers to machines being able to think and perform tasks on their own, similar to a human. But as of now, it's a theoretical concept.

One of the most common applications of AI we find around us is in IoT.

Internet of Things (IoT)

Let's start by defining IoT. An IoT system essentially collects a lot of data through different devices , analyzes it and directs actions across the network ecosystem. It connects any device with an on and off switch to the Internet.

IoT devices are almost always special purpose devices and not just computers. This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of.

The %age of IoT devices is expected to double within the next 5 years.

This growth has been made possible by an ever increasing availability of internet bandwidth.

IoT systems always use some form of AI or ML. Some basic uses of IoT have started in travel. The Kayak Alexa skill can provide information such as where users can go for $300, hotels in Barcelona and a flight’s expected arrival time. Bookings still happen via mobile or desktop. But most travelers use it for weather information at their destinations (60%) and traffic updates (54%).

Smarter devices, better algorithms & faster internet - what could go wrong?

Security and data privacy are big issues that are often brought up. With billions of devices being connected together, what can people do to make sure that their information stays secure? An IoT toaster would probably not be the most secure device around, but what if someone hacks into it and then gets control of the entire house network - the heating, electricity, car?

On the supplier side, the issue is to figure out a way to store, track, analyze and make sense of the vast amounts of data that will be generated.

Speaking of security, there's a candidate that claims it can keep all data secure. Everywhere. And forever.

Blockchain

We've all heard of blockchain, but few know what it is or how it works.

In simple terms, blockchain is a shared database managed across a network. The data is encrypted and resistant to tampering. Every "block" in the chain has a unique digital signature assigned based on the data in the block. The signature is included in the data for the next block. Any change in data for the first block changes the signature and "de-links" from the next block, which has the original signature. Everyone connected to the blockchain has a copy of the entries. The data is encrypted but the entries are visible.

In theory, a blockchain can be altered but for a large blockchain like bitcoin, the cost of computing power required would be greater than the gains from hacking the chain. Basic concepts of trust & immutability apply to a truly decentralized system – a public blockchain. Private & permissioned blockchains don’t offer a fundamental shift, since control is still confined to a few.

Blockchain technology has the potential to revolutionize travel, by

• Making it easy to enter the market: Capital guarantees will not be required. With lower barriers to entry, the airline industry will in theory become more innovative and competitive, and therefore better for customers too.

• Improving fraud detection & cash flows: The IATA says that the airline industry loses as much as $1 billion per year due to fraud, plus many more billions on the costs of collecting payment. Blockchain would heavily reduce those payment acceptance costs and all but eliminate fraud. Introduction of smart contracts could automate settlements.

• Reducing costs: Without intermediaries, travel industry players can make more money, and offer cheaper tickets and services to their customers too. True only for public blockchains. Permissioned & private ones would still cost fees.

But the same characteristics that make blockchain such a powerful tool also pose some challenges:

• Scalability & speed: A test was done with four airports and one airline and up to 2 million changes recorded. The technology was considered immature for various reasons including ‘user friendliness’ and scalability. There is a lot of redundancy and junk data generated in the airline industry – storing each one of them is not essential and might hamper scalability and add to the cost. Purely decentralized Blockchains often have a structure that hinders them from achieving high transaction speed levels. the founder of Ethereum recently announced some tweaks (i.e. sharding and plasma) that are envisaged to boost the performance. Those tweaks could allow Ethereum to reach close to 100-150 transactions per second. To put that in perspective; Visa handles 24,000 transactions per second.

• Revenue Management: Winding tree operates with a completely transparent ledger. Okay for hotels, but for flight seats which are perishable inventory, transparency can complicate revenue management.

• Privacy concerns: GDPR people must be able to demand that their personal data is rectified or deleted. A blockchain on the other hand is a growing, shared record of past activities. A blockchain is distributed across many computers. And a key factor for its reliability is that this chain of blocks (essentially transactions) is in practice unchangeable. Not exactly two ambitions which match very well.

On top of that, there's the risk of volatility in cost. Winding Tree will offer a decentralized alternative to GDS and OTA distribution claiming to reduce cost of distribution and allow more flexibility. So, while a main attraction factor is that there is no fee charged to the supplier in order to provide their offer to the market place. The problem is that you are dependent and these fees are not ‘regulated’ and could theoretically end up higher than todays’ transaction fees – and once you are hooked in, it’s always hard to get out again – at a minimum you spend all your integration efforts for nothing.

For reference, the graph below shows the transaction fees for bitcoin mining over the last 12 months.

Superintelligence

(Adapted from a brilliant article here)

While all these technologies seem fabulous and futuristic, it's not easy to imagine they'll be commonplace in a few years and our lives will be changed forever. The Skynet doomsday scenario seems quite far away too, since it requires "Superintelligence" - an AI that has surpassed human intelligence and then goes on to further improve exponentially.

But historical trends suggest that the technology evolution trend has far outpaced any form of biological evolution.

At the moment, our internalized definition of intelligence intuitively makes us feel that AI has a long way to go before it can get anywhere near human intelligence. And that's a fair notion - we're still very far from having Strong AI. But we also think that once we have an AI that's close to primate level of intelligence, it'll still be far away from being as smart of the smartest humans.

But fact is that most processes we take for granted (combinations such as learning to cycle, swim AND whistle) are incredibly complicated to replicate through a common code base. But once these problems are solved and a machine is able to learn basic functions on it's own, learning the rest will be a piece of cake for the AI. From the AI's POV, the information we've stored through structured record keeping is nothing compared to the information stored in our genes. Which means, once an AI approaches anywhere near primate intelligence, it'll be smarter than the smartest person in no time.

On the bright side, if / when this happens...

...we'll at least know what to expect.

I'll be discussing a few topics where multiple viewpoints exist. I'm neither an expert nor do I expect to change any views through this post. But I do hope some of the information below is useful in future discussions.

The story of disruptions in flight distribution, as it goes, is essentially the story of airlines trying to get away from GDS.

The story of Global Distribution Systems (GDS) is in itself a fascinating one. There are three Major GDSes - Amadeus, Sabre and Travelport. All three were started by airlines. When it started in 1976, Sabre debuted terminals designed for travel agents to remotely access airline reservation databases without needing to call in. This was revolutionary at the time.

Over the years, GDSes have made air bookings accessible to many and increased flight loads for airlines. In North America & Europe, majority of air tickets listed and sold go through GDSes. The race on for China & Africa is still on.

Familiarity breeds contempt. And the entire industry became too familiar with GDSes before long...

GDSes' fall from grace started as airline yields fell due to increasing fuel prices and LCCs introducing lower unbundled fares.

Ancillary revenue was being driven by unbundling and could be pushed through personalization, but GDSes were offering little support with either. GDSes have provided stability but not flexibility.

Finally, airlines felt they'd had enough and decided to make a system of the airlines, by the airlines and for the airlines.

With a clever play on words, IATA decided to call it New Distribution Capability (NDC) - a name that was sure to age well.

New Distribution Capability (NDC)

NDC is a set of technology standards, which will give airlines the ability to distribute all their content directly to third parties. It was announced by IATA in 2012, when XML was still new. First guidelines came out in 2015.

NDC came with a promise of greater control, unbundling of ancillaries to increase revenues & personalization. Secondary considerations were reduction in distribution cost and lower barriers for entry.

IATA made a leaderboard of 21 airlines who committed to a goal of generating 20% indirect bookings via NDC by 2020. Strong pushes started in 2017 from Lufthansa, British Airways, AF/KLM through surcharge on GDS, NDC only fares, segment incentives for NDC etc.

But in July 2019, the number of airlines on Level 3 or above (Offer and Order) has actually decreased from 36 to 34. This includes the leaderboard airlines. This change reflects two things:

• IATA has been fairly strict about imposing the latest standards

• Airlines outside the leaderboard have been somewhat sluggish with their efforts

Concerns around NDC still exist. A few have relatively straightforward solutions, like:

o Non – uniformity: Different airlines have come up with their own flavor of NDCs. USP of uniformity isn’t working with different versions & levels

o Missing processes: Guidelines for some processes are missing

o Tech burden: Can airlines support the tech burden, especially smaller airlines & agents

While solutions to others will require more thought

o Caching & Interlining: GDSes used to do this earlier, who’s going to do it now?

o Fragmentation: Increasing complexity an increase confusion among customers and also give more power to middlemen

o Revenue distribution: GDSes are fast becoming the primary enablers for NDC. So how does revenue distribution work out? Especially with more players coming in who help airlines implement NDC?

NDC as an idea is progress that cannot be stopped, but the implementation needs to be better. GDSes will be the primary enablers of NDC, since it won’t be feasible to maintain 500 integrations / contracts. If driving ancillary uptake and getting access to more info is the problem, GDSes might figure out a better tech solution.

At the end of all this, if NDC is successful in just spurring GDSes into action, even that would be a worthwhile outcome.

Let's start off by talking the way we feel about it. For most of us, the internet is simply an essential like food, water and shelter. There's a running joke that people would care more about trees if they doubled up as wifi routers.

We're spending more and more time on the net. Digitization is not coming, it's here in every industry. We all need to be prepared, which means getting the basics sorted out - having an optimized PWA platform, getting those ML algorithms in place, getting AI to help with recommendations & remarketing, etc.

And things can go pretty bad if we're not prepared...

The demise of Thomas Cook led to massive job losses beyond the company itself - it's said 500 Spanish hotels shut down after it's closure. There were of course other reasons to blame - a Europe-wide heatwave reduced holiday demand sharply, uncertainty around Brexit leading to a drop in sterling’s buying power. But lack of a proper IT & digital strategy was a key factor leading to it's fall.

Whatever I've talked about so far's pretty basic knowledge. So the question is:

Well, social commerce, for one.

Social Commerce

Penetration of social media in GCC countries is among the highest in the world.

Every channel is distinct and complexity crops up as new channels come in such as TikTok, Twitch etc. The audience profile varies widely across platforms as well.

Social media strategy, therefore, also needs to be distinct by platform.

Due to the complexity, it takes a significant amount of time and effort to draw engagement on social media. With increasing costs, it has become more and more expensive to just ask for an engagement and no transaction, especially for relatively mature brands.

Some companies have done this quite admirably. A great example is the Look & Book feature by easyJet. It allows users to search the brand’s app using Instagram photos. Users can upload a screenshot of a destination, and the app will then use image-recognition technology to determine where it is, along with options for Easyjet flights

But social commerce is not just about social networks. Messaging apps crossed networks in popularity way back in 2015. The reasons for these are hardly surprising: given our ever decreasing attention span, 87% of customers now expect a response to brand enquiries within 24 hours and 20% within an hour. In terms of responses, a chat message is less urgent requires less attention than a phone call. Customers can respond immediately or leave it till later.

Expedia & Booking.com have already started to experiment with FB chatbots. Etihad Airways has launched a new service to get responses on WhatsApp for premium guests. The service is being handled manually, which is sub-optimal, but it’s a start. There are still many challenges with chatbots – they're not robust and can sometimes increase frustration. Evolution of NLP technology can drive chatbot adoption in the future.

Unfortunately, there's a dark side to social media as well. Frequent use of social media has been linked to increased depression. Technology has a negative impact on self-esteem due to constant comparisons.

Users are therefore shifting from always on to more conscious, intentional use. Instagram lets you monitor the time you spend on it, for instance. With a drop in the avg. time spent on the internet, content quality becomes more important.

So it'd be reasonable to expect that engagement and transactions through social commerce will plateau at some point. So what would be the next frontier?

A likely candidate is the internet of things.

Internet of Things (IoT)

An IoT device collects a lot of data through different devices , analyzes it and directs actions across the network ecosystem. IoT is basically about connecting any device with an on and off switch to the Internet. IoT devices are almost always special purpose devices and not just computers. This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of.

The %age of connected device is expected to double over the next 5 years.

And the growth in IoT penetration has been fueled by increasing availability of internet bandwidth.

Basic uses have started in travel. The Kayak Alexa skill can provide information such as where users can go for $300, hotels in Barcelona and a flight’s expected arrival time. Bookings still happen via mobile or desktop. But it will need a lot of getting used to - currently most travelers use it for weather information at their destinations (60%) and traffic updates (54%).

Now that we've got smarter devices, faster internet and better algorithms, what could go wrong? Well security for one - with billions of devices being connected together, what can people do to make sure that their information stays secure?

From a manufacturers' POV, they need to figure out a way to store, track, analyze and make sense of the vast amounts of data that will be generated.

But the biggest fear is of course the possibility of us inadvertently ending up with a Skynet. We got quite a scare when Facebook AIs started talking to each other in terms humans couldn't understand. All things considered, we're still pretty far from Skynet, but IoT applications will definitely increase in the next few years.

Now let's say you've reached out to customers through social media and IoT and even nudged them to transact. But you find that they still don't. What could be the missing element?

It could be the case that they don't trust you. And who can blame them?

Trust

We know that data is the most valuable commodity in the world right now. Tech companies' valuations have left other sectors far behind.

But corporations’ attitude towards data security has been rather lax, to say the least.

Marriott’s Starwood properties had its central reservation database hacked, including five million unencrypted passport numbers and eight million credit card records. The breach dated back to 2014 but was not discovered until November 2018. The breach affected about 30 million residents of the European Union. British Airways data breach & $230 million fine: 500,000 customers had their credit cards skimmed over a three-week period between August and September 2018.

Incidents like these don't inspire a lot of confidence.

But we might have a savior in...Blockchain!

Now what is a blockchain? In layman (my) terms, it is a shared database managed across a network. The data is encrypted and resistant to tampering. Everyone connected to the blockchain has a copy of it. The data is encrypted but the entries are visible.

Every block has a unique digital signature assigned based on the data in the block. The signature is included in the data for the next block. Any change in data for the first block changes the signature and “de-links” from the next block, which has the original signature.

In theory, a blockchain can be altered but for a large blockchain like bitcoin, the cost of computing power required would be greater than the gains from hacking the chain.

There are few problems with blockchain though. For the layman, it's really complicated to understand and hence harder to trust.

And potential data breach is not the only reason customers view you with suspicion every time you ask for their email address. The damage done by episodes such as Cambridge Analytica is still fresh is memory.

Moral from these stories: Be careful about what you see / hear / tell on the internet.

But that's not great for business. Companies need potential customers to trust them if they're going to make any money. How can they generate that? One method is to use User Generated Content (UGC).

Consumers are turning to their friends and family for destination recommendations - 84% of millennials think UGC affects their purchase decisions. It's evident from FB & Intstagram stories that consumers are even fine with lo-fi content on stories, trading traditional video production for quick content created and consumed entirely on mobile. In fact many feel they have a responsibility to share their experiences around products.

And why are these behaviour trends among millenials important? Because they have most of the money.

A great example of a successful UGC campaign in the region is the #fakeit campaign carried out by Cleartrip. It's enagagement rates were 10x compared to other campaigns and it resulted in a 100% increase in searches. It also fetched us an award for best social media strategy.

But one still needs to be careful with UGC. In the past, brands that haven’t monitored user submissions closely have faced PR nightmares sparked by internet trolls. To tackle fake reviews, TripAdvisor has developed its own fraud detection technology in addition to putting in place “hundreds of content specialists working 24/7 all over the world” operating in every language the site supports.

Now let's sat you've reached out to customers, made transactions easy, established trust and acquired a lot of data.

Then we come back to the quintessential question:

The answer's quite obvious now:

Personalization

Personalization means tailoring offerings according to need. In an airline context, a move towards personalization was announced by IATA in 2012. It was an XML based technology, which was new at the time, so they named it New Distribution Capability (NDC).

Airlines are offering a wide variety of products and services on their websites to appeal to the business traveler – early boarding, preferred seating, a day pass for an airline lounge and so on. But TMCs using GDSs may not be aware of the full range of airline products on offer, and airlines cannot customize the offer based on who is making the request.

NDC enables unbundling of services based on who’s making the request – a flexibility not currently offered by GDSes. It is a set of technology standards, which will give airlines the ability to distribute all their content directly to third parties.

After initial resistance, GDSes have come around and started supporting NDC. This's great because it's impractical for agents to do 500 NDC integrations for 500 airlines.

But NDC isn't a done deal yet. There are still problems like:

o Different airlines have come up with their own flavor of NDCs

o Operational risks – Compatibility, comparability of fares, guidelines not clear for all functions

o Technological risks – Can airlines support the tech burden, especially smaller airlines & agents

o Commercial – Brings in more middlemen b/w airline & GDS, how do financials work, who bears the cost of transformation

It is clear that there will be updates to the current version of NDC. GDSes are multi-billion dollar tech companies, so they're not going away any time soon. And it's likely that GDSes will turn out to the best enablers for NDC.

And these are the four major trends disrupting flight bookings globally today.

Further details at Where is the centre of the universe?.

To summarize:

The fact that the universe is expanding uniformly would not rule out the possibility that there is some denser, hotter place that might be called the centre, but careful studies of the distribution and motion of galaxies confirm that it is homogeneous on the largest scales we can see, with no sign of a special point to call the centre.

As for the balloon analogy:

A good way to help visualize the expanding universe is to compare space with the surface of an expanding balloon.

When thinking about the balloon analogy you must remember that. . .

• The 2-dimensional surface of the balloon is analogous to the 3 dimensions of space.

• The 3-dimensional space in which the balloon is embedded is not analogous to any higher dimensional physical space.

• The centre of the balloon does not correspond to anything physical.

• The universe may be finite in size and growing like the surface of an expanding balloon, but it could also be infinite.

• Galaxies move apart like points on the expanding balloon, but the galaxies themselves do not expand because they are gravitationally bound.