When the tide goes out: big questions for crypto in 2019 – Gary Gensler

MIT Sloan School of Management Senior Lecturer, Senior Advisor MIT Media Lab, Gary Gensler

From CoinDesk

After this year’s wild market ride and so many failed projects, what might Satoshi Nakamoto’s innovative “Bitcoin: A Peer-to-Peer Electronic Cash System” mean for money and finance in 2019 and beyond?

Satoshi’s innovation – the use of append-only timestamped logs, secured by cryptography, amongst multiple parties, forming consensus on a shared ledger – needs to be taken seriously. The resulting blockchains of data can form widely verifiable peer-to-peer databases.

For any chance of a lasting role in the long evolution of money, though, blockchain applications and crypto assets have to deliver real economic results for users. And while bringing the crypto finance markets within public policy norms is critical, the greatest challenge remains the seriousness of commercial use cases.

A bunch of hype masquerading as fact won’t do it.

What We’ve Learned

Blockchain technology and crypto tokens provide an alternative means to move value on the Internet without relying upon a central intermediary. They promise the potential to lower verification and networking costs, ranging from censorship, privacy, reconciliation and settlement costs to the costs of jump starting and maintaining a network.

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Viewpoint: holiday shopping was biggest in years, but not every retailer should celebrate – Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From Boston Business Journal 

The numbers are in and it’s official: The 2018 holiday shopping season was one of the strongest in years.

Total US retail sales jumped 5.1 percent this November and December from the previous year, according to data from Mastercard SpendingPulse, which tracks both online and in-store spending. American shoppers spent over $850 billion this season.

Not all retailers are rejoicing, however. While total sales were higher than years past, much of that growth is attributable to the rise of ecommerce. According to Mastercard, online sales rose 19 percent from 2017. Department stores, on the other hand, saw a 1 percent decline in sales from a year ago. This follows two years with growth below 2 percent.

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Righting GM’s ship will take more than plant closures – Steve Spear

Steve Spear, Senior Lecturer, MIT Sloan School of Management and Engineering Systems Division

From The Hill

General Motors (GM) shutting five factories and cutting 14,000 jobs reflects poorly on a legacy approach to managing. Big shots making transactional decisions — buy or sell this, open or close that, hire or fire them.

What is required is a dynamic approach of building capabilities to be agile and resilient, learning quickly how to bring value into the marketplace with speed and responsiveness.

CEO Mary Barra’s announcement set off a firestorm of criticism and praise. President Trump led the barrage, saying the company was making a “big mistake” and that GM “ought to stop making cars in China and make them here.”

Furthermore, he took Barra to task, saying he was “disappointed” in her. Similar outrage was voiced by those advocating for the clock-punching working class.

But other commentators praised her “hard decisions” in the face of declining demand. The stock market agreed, with GM’s shares rising 7 percent.

Apparently, if you’re do something poorly and you promise to do less, then your valuation increases. It’s like relatives who are lousy cooks. If they say, “I’m not preparing the next holiday meal,” you cheer.

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Why do people fall for fake news? – David Rand, Gordon Pennycook

Associate Professor of Management Science and Brain and Cognitive Sciences, MIT Sloan School of Management

From The New York Times 

What makes people susceptible to fake news and other forms of strategic misinformation? And what, if anything, can be done about it?

These questions have become more urgent in recent years, not least because of revelations about the Russian campaign to influence the 2016 United States presidential election by disseminating propaganda through social media platforms. In general, our political culture seems to be increasingly populated by people who espouse outlandish or demonstrably false claims that often align with their political ideology.

The good news is that psychologists and other social scientists are working hard to understand what prevents people from seeing through propaganda. The bad news is that there is not yet a consensus on the answer. Much of the debate among researchers falls into two opposing camps. One group claims that our ability to reason is hijacked by our partisan convictions: that is, we’re prone to rationalization. The other group — to which the two of us belong — claims that the problem is that we often fail to exercise our critical faculties: that is, we’re mentally lazy.

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What countries and companies can do when trade and cybersecurity overlap – Stuart Madnick, Simon Johnson, Keman Huang

MIT Sloan Professor Stuart Madnick

MIT Sloan Professor Stuart Madnick

MIT Sloan Professor Simon Johnson

Postdoctoral Associate, Keman Huang

From Harvard Business Review 

Cybersecurity as a key issue for trade policy is a relatively new development. In the last few years there have been a number of news reports about various governments’ incorporating spyware, malware, or similar programs into computer-based products that are exported around the world. The governments typically have worked with private companies in their countries to do it. In the internet-of-things era, almost all products can be connected to the internet, and most of them can also be used for spying and other malicious activities. Furthermore, since data is considered a critical asset, services, from international banking to payment systems to consumer websites, are part of this too.

In late 2016 and 2017, for example, the voice-activated My Friend Cayla doll made headlines for its technology, which could be used to collect information on children or anyone in the room. In 2017 Germany banned the doll, alleging that it contained a surveillance device that violated the country’s privacy regulations. Another famous example is the 2010 Stuxnet attack on the Natanz nuclear enrichment facility in Iran. It was accomplished by planting malware, including Stuxnet, into industrial control systems that were shipped to Iran, resulting in the destruction of many centrifuges.

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