Tech Brew Ride Home - Fri. 05/03 - Facebook Coin Is Coming For Credit Cards

Episode Date: May 3, 2019

This Facebook cryptocurrency is real, people, Microsoft has a blockchain product as well, Verizon is looking to unload Tumblr, Softbank is considering an IPO for the vision fund and, of course, the weekend longreads suggestions. Sponsors: PixelUnion.net Instacart. Promocode RIDE at checkout. Links: Facebook Building Cryptocurrency-Based Payments System (WSJ) Project Libra: Facebook to launch stablecoin-based payments network (The Block) Report: Facebook looking to disrupt credit cards with cryptocurrency (ArsTechnica) Microsoft adds more AI, mixed-reality, IoT services to its Azure line-up (ZDNet) Microsoft launches a fully managed blockchain service (TechCrunch) Verizon Looks to Unload Tumblr Blogging Site (WSJ) SoftBank Considers IPO for $100 Billion Vision Fund (WSJ) Sonic’s live-action design upset the entire internet, so the studio is changing it (The Verge) The Weekend Longreads Suggestions: The making of Amazon Prime, the internet’s most successful and devastating membership program (ReCode) The search for the kryptonite that can stop CRISPR (MIT Technology Review) The Most Valuable Company (for Now) Is Having a Nadellaissance (Bloomberg Businessweek) Software, the Tough Tomato Principle, and the Great Weirdening of the World (Florent Crivello) The productivity pit: how Slack is ruining work (ReCode) Exclusive: The Saga Of 'Star Citizen,' A Video Game That Raised $300 Million—But May Never Be Ready To Play (Forbes) Support the show! Lose the ads! Subscribe to the premium feed RIGHT HERE in your podcast app with 3 taps! Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme right home for Friday, May 3rd, 2019. I'm Brian McCullough today. This Facebook cryptocurrency thing is real, people. Microsoft also has a blockchain product. Verizon is looking to unload Tumblr. SoftBank is considering an IPO for the Vision Fund and, of course, the weekend long read suggestions.

Here's what you miss today in the world of tech. Facebook is reportedly seeking $1 billion from financial firms and e-commerce sites to back. its new stable coin cryptocurrency as it readies its payments network and reward system to set loose on users, quoting the Wall Street Journal. Seeking total investments of about $1 billion, Facebook has talked to financial institutions including Visa, MasterCard, and Payment Processor First Data Corp, the sources said. The money would underpin the value of the coin to protect it from the wild price swings seen in Bitcoin and other cryptocurrencies, they said. Facebook is also talking to e-commerce companies and apps about accepting the coin and would seek smaller financial investments

from those partners, one of the people said, end quote. Again, if you're not aware, a stable coin is a cryptocurrency that is pegged directly to fiat currency. So one Facebook coin would always be, for example, equal to one U.S. dollar, perhaps. Talking to the likes of Visa and First Data suggests that Facebook is looking to launch a full payments network instead of just doing remittances. Quoting Mike Dudes from the block. A stable coin will exist as the currency of payments system in order to eliminate credit

card fees for merchants as well as to avoid the volatility of other cryptocurrencies like Bitcoin and Ether. The company is considering tying the coin to Facebook's core ads engine, rewarding users for viewing ads, and then purchasing goods, similar to how loyalty points rewards work, end quote. So two wrinkles here that I find interesting. First, tying the coin to the ads engine I get. Paying users for viewing ads, though, is interesting. And something that people have tried hard to do for a while, even going back to the dot-com bubble days. But again, if anyone has the scale to do it, it's Facebook. And frankly, it's audacious just to try to be one of the first to bring cryptocurrencies

mainstream. And if anyone has the scale to do that, as I said, it's probably Facebook. But also, also, the going after credit card fees is something that I had never considered and is also wildly ambitious. Quoting Ars Technica, Facebook may be looking to position its payment network as a direct rival to Visa and MasterCard. Supposedly using a blockchain network could free merchants from the two to three percent fees they must pay to accept conventional credit card payments. One of Facebook's big strategic advantages is the fact that a fair number of websites already use Facebook's APIs to allow users to log in using their Facebook credentials. It could be a straightforward matter to extend that existing infrastructure to allow users to make purchases on third-party websites

using their Facebook credentials, end quote. So again, I find this all incredibly interesting. But a note of caution from Nathaniel Popper who tweeted, quote, if Facebook is indeed aiming to eliminate credit card fees with its new crypto payment network, it raises the question of how it hopes to make money from the thing, especially if it comes alongside the company granting its users' privacy and giving up surveillance revenue, end quote. Ahead of the Build 2019 conference, Microsoft has announced Azure SQL Database Edge, which is designed to run on compute-constrained devices, as well as new AI, mixed reality, and IoT capabilities all powered by Azure.

But, sticking with the blockchain theme, Microsoft also launched Azure blockchain service, a fully managed service meant to help businesses build applications on top of the blockchain. So this is not cryptocurrency stuff, this is actual enterprise applications taking advantage of blockchain, quoting TechCrunch. The first support ledger is J.P. Morgan's Quorum. Because it's built on the popular Ethereum protocol, which has the world's largest blockchain developer community, Quorum is a natural choice. Azure CTO Mark Russanovic writes in today's announcement, quote, it integrates with a rich set of open source tools while also supporting confidential transactions, something our enterprise customers require, end quote. To launch this integration, Microsoft partnered closely with J.P. Morgan. The managed service is only one part of the package,

though. Microsoft also today launched an extension to Visual Studio Code to help developers create smart contracts. The extension allows visual studio code users to create and compile Ethereum smart contracts and deploy them either on the public chain or on a consortium network in Azure blockchain service. The code is then managed by Azure DevOps, end quote. Two quick sources say stories, and both of them from the Wall Street Journal, sources say Verizon is seeking a buyer for Tumblr as it tries to steady its Verizon Media Group. which has struggled to meet revenue targets.

Quote, it is unclear how much Verizon might get for Tumblr, a free service with more than 400 million blogs. Yahoo paid about $1.1 billion for the New York-based site in 2013 when it was among a number of fast-growing startups, such as online scrapbook Pinterest, and news aggregation and commenting site Reddit, end quote. Poor Starcrossed Tumblr.

Too good for this world, really. It was honestly a mitzvah. when Yahoo bought them a few years ago. The best case scenario landing for Tumblr at that point when VC money was running out. But then Yahoo never knew how to make money on anything, and Verizon clearly doesn't have any idea how to make money on media. I know Tumblr could thrive in a good home that understands its strengths. I just don't know who that adoptive parent could be. And sources say that SoftBank is considering an IPO for its $100 billion vision fund and is negotiating with the Sultanate of Oman for an investment of several billion dollars into the fund.

The fund's staff is hustling to keep up with the frantic pace of dealmaking by SoftBank founder and chief executive Masayoshi Son, who has invested nearly all the money that the Vision Fund took in just two years ago. Highlighting the need for new funds, Mr. Son recently returned from China, where he negotiated informal deals worth several billion dollars that the Vision Fund doesn't yet have, one of the people said. The Vision Fund had planned to invest its money over four years, some of the people said, but we'll have done so in just over two. Coming IPOs of companies it is invested in, including Uber and WeWork, will free up some money, but not enough to fund everything Mr. Son wants to buy, end quote. swear to God, we live in an era of either geniuses or madmen or charlatans or all of the above. Elon Musk is one of these figures. Masasan is another. We'll either wake up a decade from now and they'll have made all the money because they could see what we couldn't or else there'll be cautionary tales. Finding out what ends up proving to be the case is why I find folks like them

so fascinating. So yes, internet. amount has heard your criticism, that weirdly messed up CGI version of Sonic the Hedgehog that was previewed from an upcoming live action movie that got y'all all riled up this week, apparently they're going to fix it, quoting The Verge. Director Jeff Fowler tweeted today about the backlash assuring distressed fans everywhere that the criticism was heard loud and clear. Fowler confirmed that changes were coming to the design of Sonic's character. You weren't happy with the design and you went changes, Fowler tweeted.

It's going to happen. Everyone at Paramount and Sega are fully committed to making this character the best he can be. Since the trailer reveal numerous fan edits have made the rounds on Twitter, Tumblr, and Reddit, with the drawings honing in on various horrifying aspects of Sonic's newfound body, the lengthy human-looking legs. Nope. The mouthful of human teeth, double nope. Even the original Sonic the Hedgehog character designer added his thoughts to the conversation on Twitter. So far, various Sonics have a appeared. Naoto Osima tweeted, I love all Sonics. I saw a trailer of Sonic's movie. I was expecting adults to have fun too. I am worried, end quote. Well, worry no more, I guess. But worry now, I suppose, on how long these changes might delay the arrival of the actual movie.

Time for the week on Longreads suggestions. First up, you might have seen this making the rounds on Twitter all day today. In fact, by the time you hear this, It might even be the top story on tech meme over the weekend. Over at Recode, Jason Delray has an oral history of Amazon Prime, which we take for granted now as Jeff Bezos's genius brainchild, but the piece really drives home how much to what degree. No, this really was Bezos's greatest stroke of genius. It's striking to hear the people involved recall to what degree doing Prime

originally made no sense from any financial or spreadcheon. sheet or straight P&L perspective, but because Bezos was looking at all of the numbers from a slightly different perspective, he seemingly saw all along how it could make sense. It's interesting also to hear the principles recount that Prime was not the instant success we might remember it as. Actually, the addition of Prime video is what made Prime generally get traction, which was certainly surprising to me, and also surprising was how much Netflix was actually the instant. inspiration to Prime. Again, we live in this world of subscriptions and X as a service that is just a monthly line item in your household budget. It's striking to connect the dots and learn how

Prime basically got us to this reality. Next, I've done a couple long reads around CRISPR, the gene editing technology that could do a ton of amazing things like wipe out, say, the type of mosquito that carries malaria. But implicit in all of the stories around CRISPR is the idea. that CRISPR could be the new nuclear bomb, the new potentially world-ending weapon of mass destruction. Quote, but if scientists learn to deliver gene editors inside people's bodies, what's to stop a madman, terrorist, or state from employing CRISPR to cause harm? People imagine personalized attacks that would strike only at certain ethnic groups or super soldiers edited to feel no pain. Doadna was well familiar with the dilemma. In her book, A Crack in Creation, she wrote that she

feared gene editing could come to the world's attention as atomic power did in a mushroom cloud. Could I and other concerned scientists save CRISPR from itself before a cataclysm occurred, she asked, end quote. That Dualdna quoted here is the UC Berkeley biochemist who was one of the co-inventors of CRISPR, but is now one of hundreds of scientists around the world that are racing to develop some sort of fail-safe for CRISPR, some sort of antidote that could be inserted to prevent the worst-case scenarios. It wasn't that long ago that it would be common to speak of Microsoft's lost decade, and their seeming irrelevance in the tech world at the start of this decade.

Well, the second half of the decade has been a remarkable story of turnaround for Microsoft and a turnaround engineered largely by Sacha Nadella. I know that I've shared Nadella profiles before, but this one from Bloomberg gets deeper into the details of how he actually made the transformation happen at Microsoft. Quote, Nadella's game plan was to reorient Microsoft around Azure, the nascent business he'd been working on since 2011, which would turn the company from a provider of boxed software, which many users simply pirated, to a global computing engine that would rent out its processing power and online storage to businesses.

Microsoft was already at least four years behind Amazon's cloud business, which had annual revenue of $4.6 billion. Nadella understood that any serious shift in emphasis would mean taking a crickety. at bat to the Windows division. But getting resources from other parts of Microsoft was like pulling fingernails, recalls Scott Guthrie, an executive vice president who took over the cloud unit when Nadella became CEO. He recounts a meeting where the cloud team agreed with Nadella's strategy, but then realized that as much as 90% of the unit's headcount was focused on big Windows-centric businesses. Classic innovators dilemma, Guthrie says. I had leaders under me who managed multi-billion dollar P&Ls, and it's tough when you say, you're now going to manage a

$4 million P&L, end quote. Florent Covello has an interesting piece up that wants to update the famous Marshall McLuhan, quote, The Medium is the Message for the Modern Era, quote, In the beginning, new form factors fit existing workflows. Then workflows fit the new form factors. This is a powerful effect, and I find it strange that there is no name for it apart from the misunderstood, the medium is the message. So I'll just go ahead and call it the tough tomato principle.

We make tools so they accommodate the world until the world remolds itself so it accommodates our tools. Once you're aware of the phenomenon, you start seeing it everywhere. Restaurants and museums optimizing for their Instagram ability. Game developers for their game's Twitch Spectator experience. Online articles for search engines and social media and even hotels for Google Maps discoverability. I could go on and on, end quote. Really thought-provoking essay that will get you thinking about technology as a medium in a new way. Next, along with open floor plans, what is a greater whipping boy for the frustrations of the

modern tech workforce than Slack? Rani Mala at Recode has a deep dive looking at how modern team and collaborative software like Slack, teams, and workspace are maybe not making us more productive after all, which was kind of what they were built for in the first place, right? And finally, have you heard the sad, sorry saga of Star Citizen? Legendary game designer Chris Roberts, raised $300 million to design and build out an epic sci-fi fantasy game called Star Citizen. $242 million of that money raised was contributed by around a million video game fans. Such was Roberts' reputation as the genius behind Wing Commander, making Star Citizen the biggest crowdfunded project ever.

And the game was going to be huge also, immersive, a vast playable universe of 100 star systems. One little issue, though, as far as far as, Forbes looks at in great detail. Will we actually ever be able to play Star Citizen? Quote, rough playable modes, alphas, not betas, are used to raise hopes and illustrate work being done. And Roberts has enticed gamers with a steady stream of hype, including promising a vast playable universe with 100 star systems. But most of the money is gone, and the game is still far from finished. At the end of 2017, for example, Roberts was down to just $14 million in the bank.

He has since raised more money, but those 100 star systems, he has not completed a single one. So far, he has two mostly finished planets, nine moons, and an asteroid. This is not fraud. Roberts really is working on a game, but it is incompetence and mismanagement on a galactic scale. The heedless waste is fueled by easy money raised through crowdfunding, a Wild West territory nearly free of regulators and rules, end quote. So, yeah, hubris bit me in the butt a bit yesterday. In the exact same episode, I teased you all for not catching my verbal slip-up on the day of the week on Wednesday's episode.

For a time on yesterday's episode, if you downloaded it right away, the segments were out of order. My apologies for that. If you actually re-download it, I fixed it within an hour or two. So if you give it a listen and it's out of order, just delete, re-download it. and everything will be fine. Also, quick note, no weekend bonus episodes this weekend as I'm taking another weekend off. But don't worry, more weekend episodes coming next weekend. And so, speaking of weekends, please enjoy yours. Talk to you on Monday.