Blockchain will change the way we trust in business.

Commerce relies on financial institutions serving as third parties to process electronic payments. A financial institution holds certain identifiable information about the transactors and decides whether or not each party can be “trusted” to complete the transaction. The cost of mediation is passed to the transactors as “transaction costs.” Because there is a cost for each transaction to the financial institution, transaction sizes must meet a minimum size requirement in order for the financial institution to accept its role as mediator for the transaction. A certain percentage of fraud is accepted as unavoidable.

To verify “trust” in a transaction between two parties, blockchain services like Bitcoin create a “public ledger” (aka the blockchain) that is distributed on the network nodes (computers or devices) of participants. This creates a system where all transactions are publicly announced, and all participants must agree on a single history of the order in which the transactions were received.

Traditional banking achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. This method is precluded by announcing transaction details publicly. Privacy can be maintained despite public announcement of all transactions. To verify an identity, participants “sign” a transaction with a digital signature and an “asymmetric key system.” A digital signature is meant to prove a message came from a particular sender; neither can anyone impersonate the sender nor can the sender deny having sent the message. When making an electronic purchase, the receiver is able to prove who requested the purchase. - Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System

With a symmetric key system, Alice first puts the secret message in a box, and locks the box using a padlock to which she has a key. She then sends the box to Bob through regular mail. When Bob receives the box, he uses an identical copy of Alice's key (which he has somehow obtained previously, maybe by a face-to-face meeting) to open the box, and reads the message. Bob can then use the same padlock to send his secret reply.

In an asymmetric key system, Bob and Alice have separate padlocks. First, Alice asks Bob to send his open padlock to her through regular mail, keeping his key to himself. When Alice receives it she uses it to lock a box containing her message, and sends the locked box to Bob. Bob can then unlock the box with his key and read the message from Alice. To reply, Bob must similarly get Alice's open padlock to lock the box before sending it back to her. The critical advantage in an asymmetric key system is that Bob and Alice never need to send a copy of their keys to each other. This prevents a third party – perhaps, in this example, a corrupt postal worker who opens unlocked boxes – from copying a key while it is in transit, allowing the third party to spy on all future messages sent between Alice and Bob. Alice and Bob need not trust the postal service as much. In addition, if Bob were careless and allowed someone else to copy his key, Alice's messages to Bob would be compromised, but Alice's messages to other people would remain secret, since the other people would be providing different padlocks for Alice to use. - Wikipedia

The first transaction in a block (1 megabyte of data) is a special transaction that creates a new coin owned by the creator of the block. There is no central authority that issues new coins. The steady addition of a constant amount of new coins is analogous to gold miners expending resources to add gold into circulation. “Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.” The number of new bitcoins created each year is automatically halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins in existence.

Currently, the blockchain is being used to create a currency called Bitcoin that removes banking intermediaries and allows borderless and governmentally-autonomous commerce. However, this technology can be applied to any industry that relies on intermediaries to validate identities and establish trust. Medicine and finance are two industries that are ripe for this technology, as they rely on a number of intermediaries for transactions, and fraud is prevalent.

In summary, the blockchain creates a system for electronic transactions that doesn’t rely on trust. Using the “assymmetic key system,” transactors verify identities electronically, essentially eliminating the need for transaction intermediaries to verify the transactors. All transactions on the blockchain are publicly visible and verified through a distributed network. Invalid blocks are rejected by the network, diminishing the ability to commit fraud.

Leave Us Alone Kwame Kilpatrick!

Kwame Kilpatrick has released the trailer to his upcoming movie.  This is just what we need here in Detroit... More Kwame (heavy sarcasm).  Entitled "The Real Kwame Kilpatrick," the movie is supposed to be about the softer side of our former mayor.  So are we supposed to take this scripted, directed, and edited film as truth?  Are we supposed to now believe this person who has repeatedly lied, broken the law, cheated on his wife, and who is suspected of being involved in the disappearance of Tamara Greene? I'm not so sure I will believe what Kwame has to say this time.

Enough is enough.  This film is sure to portray Kwame as a victim of society... Detroit society.  My hope is that this film flops.  I hoped his book would flop, and I hope Kwame flops, forever.  He is much like former Lions GM, Matt Millen, who took a bad product and made it worse.  Detroit was better off without Kwame, and we are still recovering from the damage he caused.  I wish he would disappear from headlines and stop these lame attempts at regaining his fame.  Here is the trailer to his upcoming film, "The Real Kwame Kilpatrick."  Do you believe this liar, cheat, and criminal has a "real" side to him?

Gas Prices Spiking in Detroit

As I drove down Woodward Avenue this morning on my way to work, I noticed I was a little low on gas.  I pass three gas stations on the way to my office in downtown Birmingham, and I saw an ugly sight.  Gas prices are very close to $4.00 per gallon, so I decided that my quarter tank was going to have to last at least one more day.  While I'm betting on the price going down, they will probably end up going up, and my gamble will end up costing me a few more dollars at the pump.
In fact, the price of gas has gone up 25 cents in the past week, and is expected to continue its rise over $4.00 per gallon in the near future. Although it seems high to us here in Michigan, we are still below the national average.. but only by $0.01 according to www.gasbuddy.com.





Gas rarely gets to be this high this early in the year, and as we all know in Michigan, gas prices peak in the summer months.  Hopefully we don't hit prices as high as we did in 2011, but with the price of oil steadily rising, who knows.

If you have any ideas on how to conserve gas, or how to maximize your mileage after filling up, please share!

What it takes to be in the top 1% in Detroit

Here in Michigan, we were hit pretty hard by the Great Recession.  We had some dark times, and it feels as if we hit rock bottom.The unemployment levels are much higher here than in the rest of the country, and there seemed to be a large wealth gap between those at the top and those at the bottom.  While poverty levels in Detroit have fallen even lower, so have the income levels of those at the top.  In Detroit, to be in the top 1%, you don't have to make an extraordinary income.  In fact, according to US Census Bureau data, you have to earn $341,700 to be in that category.

While it seems we have hit hard times, I believe that things are turning around in Detroit. These statistics are from 2010, and I would be interested to know what the trends are today.  While it only takes a short time for things to go to hell in a hand basket, a turnaround will take some time.  But I believe Detroit is headed in the right direction. As business returns to Detroit, watch for the entire national economy to turn around.  The Big Three are posting big profits, hiring new employees, and pumping out tons of new vehicles.  Have you seen any signs of a turnaround? Or do you think things are looking grim still in Detroit?

Detroit Red Wings to Break the Record Tonight!

The Detroit Red Wings are on the verge of making history tonight at Joe Louis Arena.  If they get a Valentine's day win against the Dallas Stars, they will be the only team EVER to win 21 straight games at home.  It's not every day that a record like this is broken, but somehow, the Wings are not receiving the recognition they deserve.  ESPN has decided to pay them no attention not only on their home page, but on their NHL page as well! This is arguably the biggest story in pro sports right now, and it's being swept under the rug by Linsanity and other minor stories.  Here is a snapshot of ESPN's top NHL headlines:

I happened to attend the Wings game this Sunday, and it was refreshing to see that Detroit fans know what is at stake. The Joe was as loud as I have ever heard it, and after the Wings scored the go ahead goal in the third period of a great hockey game, the roof almost blew off.  I applaud you, Detroit fans, for backing your team so well when the rest of the world doesn't seem to care.  I guarantee the Dallas Stars don't want to be on the losing end of this game.  They don't have much of a choice though, because the Red Wings are as hot as they have ever been, and they're doing this without their starting goalie, who has been injured for the past few games.

 

It's Halftime in America

It's Halftime in America - Detroit almost lost everything, but we all pulled together. Now the Motor City is fighting again

During the Superbowl this past Sunday, a commercial aired and has been the topic of controversy in the past few days.  It seems that the commercial has sparked some political debate.  Karl Rove, on an interview with Fox News stated, "I was, frankly, offended by it...I'm a huge fan of Clint Eastwood, I thought it was an extremely well done ad, but this is a sign of what happens when you have Chicago-style politics, and the president of the United States and his political minions are, in essence, using our tax dollars to buy corporate advertising."  In other words, Rove believes that Chrysler is echoing the argument that the Obama administration brought the auto industry back from a brush with death. 

Eastwood has his own version of the story.  In a subsequent interview with Fox News, he said, "There is no spin in that ad. On this I am certain. I am certainly not politically affiliated with Mr. Obama. It was meant to be a message about just job growth and the spirit of America. I think all politicians will agree with it. It thought the spirit was OK."   Eastwood also spoke out against the auto bailouts.

Personally, I like Clint Eastwood, and if there was political undertones to this commercial, I believe he wouldn't do the commercial.  But it's not what I think that matters.  What do you think Detroit?

Here is the commercial for your viewing pleasure...

Who will bring the next championship to Detroit?

A Detroit free press article recently posted a question to Detroit sports fans:
Who will bring the next championship to Detroit... The Wings, Lions, or Tigers?
Obviously the Pistons are not part of this question as their descent into obscurity continues to frustrate local basketball fans.
Here is my take on the question:

Let's start with the Tigers. Having acquired one of the most coveted young players in the game, the Tigers are making a push to win it all this year. Mike Illich is another year older and he can't afford to take his time. Word has it that he overruled Dave Dombrowski's decision and paid top dollar for Prince Fielder, son of the Tiger legend Cecil. Prince will play first base, which means that annual all-star Miguel Cabrera must slim down and move to third, a position he hasn't played in years. I'm not so sure that Miguel has the ability to make a diving snag, pop up, and make a throw to first before the runner is called safe. This means more base runners for opponents, and in turn, more runs scored. The Tigers will not win a championship in the near future.
On to the Red Wings.
If there's one thing we know about the Wings, it's that they will always have a great season and easily make the playoffs. Once there, winning has been a problem of late. With a roster composed of seasoned veterans, the Wings seem to slow down in the playoffs. Too often do the names of Helm and Abdelkater show up on the stat sheet while Datsyuk, Zetterberg, and Lidstrom are scarce. The Wings will not win the next championship in Detroit.
So we're left with the Lions.
The Lions have a solid core of young players who are easily mentioned with the best players at their respective positions.  From Stafford, Calvin Johnson, to Cliff Avril, the Lions have built a young team with plenty of talent that is hungry to win.  Furthermore, these young players have not been starters for very long, and have yet to reach their full potential. They have a great coach in Jim Schwartz, who leads his team with enthusiasm and a "never back down" attitude, evidenced by his ferocious fist pumps and his willingness to throw down with other coaches.  I expect great things from the Lions, and they will bring a Superbowl victory to Detroit for the first time ever.