Square’s Cash App is Banking the Unbanked
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Square’s Cash App is giving the unbanked an opportunity to participate and thrive in the US economy. 20 million people in the US are unbanked today, the highest rates of which are in southern states like Mississippi and Louisiana, as shown below. At the same time, peer-to-peer (P2P) digital wallet applications like Square’s Cash App and PayPal’s Venmo have become widely popular, having been downloaded more than 85 million times as of January 2019.
When comparing the FDIC’s unbanked rates and Google Search Trends for Square’s Cash App, the geographic overlap is striking, as shown below. The Cash App dominates in the southern states where the rates of the unbanked are highest.
Source: Google Search Trends, FDIC
The overlap between the Cash App and the unbanked probably has its roots in a feature called Direct Deposits which Square introduced in 2018. Direct Deposits give Cash App users routing and account numbers, like those for normal checking accounts, that they can pass on to their employers to facilitate direct deposits. With Cash App’s own Visa-powered debit cards, the users then can purchase goods and services anywhere where Visa is accepted - without bank accounts.
Cash App is banking the unbanked.
OpenAI’s Latest AI Breakthrough
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This week’s artificial intelligence (AI) breakthrough starts with a short fiction story:
In a shocking finding, scientist discovered a herd of unicorns living in a remote, previously unexplored valley, in the Andes Mountains. Even more surprising to the researchers was the fact that the unicorns spoke perfect English.
The scientist named the population, after their distinctive horn, Ovid’s Unicorn. These four-horned, silver-white unicorns were previously unknown to science. Now, after almost two centuries, the mystery of what sparked this odd phenomenon is finally solved.
Dr. Jorge Perez, an evolutionary biologist from the University of La Paz, and several companions, were exploring the Andes Mountains when they found a small valley, with no other animals or humans. Perez noticed that the valley had what appeared to be a natural fountain, surrounded by two peaks of rock and silver snow.
Perez and the others then ventured further into the valley. “By the time we reached the top of one peak, the water looked blue, with some crystals on top,” said Perez. Perez and his friends were astonished to see the unicorn herd. These creatures could be seen from the air without having to move too much to see them – they were so close they could touch their horns.
While examining these bizarre creatures the scientists discovered that the creatures also spoke some fairly regular English. Perez stated, “We can see, for example, that they have a common ‘language,’ something like a dialect or dialectic.”
So, why is this passage interesting? In case you didn’t guess, a neural network wrote every word after the first paragraph. Until now, neural nets could complete single sentences but could not write coherent, long passages. OpenAI’s latest GPT-2 neural net can write multi-passage texts across a wide range of domains with human-like fluidity and flair.
One of the holy grails of artificial intelligence is mastering human language. For decades, traditional AI researchers tried to teach computers language with intricate rules of grammar, sentence structure, and databases. It didn’t work.
OpenAI’s GPT-2 was fed with eight million web pages and learned English on its own, giving it the ability to read, write, answer questions, and reason. The network is so powerful that OpenAI has not released the full data set and code, fearing it might be abused by malicious actors.
The tasks beyond the reach of AI continue to shrink. Impressively, OpenAI did not invent any new technology: it simply created a much larger dataset and scaled existing technology. While deep learning skeptics have focused on the limits of scaling up data, OpenAI’s latest results suggest that those limits are nowhere near to be seen.
Is JPMCoin the New Bitcoin?
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This week, JPMorgan announced the launch of JPMCoin, the first “cryptocurrency” developed by a major U.S. bank. Several major news outlets reported it as a threat to existing cryptocurrencies, with Barron’s proclaiming “JPMCoin just killed the Bitcoin dream.” To others, news of the launch came as a surprise given CEO Jamie Dimon’s condemnation of cryptocurrencies in the past.
But is JPMCoin really a threat to bitcoin? Is it a cryptocurrency at all?
Upon closer inspection, JPMCoin is not a cryptocurrency but an internal accounting system to settle existing customer balances. According to its FAQ, “The JPM Coin isn’t money per se. It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A.” After customers deposit dollars into their accounts, dollar-pegged JPMCoins are created and, once used, destroyed. Perhaps in their most important role, JPMCoins will reduce the settlement times associated with traditional business-to business wire payments.
While JPMCoin is not a cryptocurrency like bitcoin, it could validate and stimulate interest in cryptocurrencies. As Linda Xie, partner at Scalar Capital, notes:
Source: Twitter