Open Source for Fintech? Bad Idea

It is supposed to be obvious that open source development means safer and better software. But I don’t buy it, so let’s look into that idea more thoroughly.

Does open source mean that bugs are found easier because all kinds of intelligent people with plenty of time on their hands will find them for us? And without charging?

It doesn’t make sense in the slightest. Why would anyone spend their time, unpaid, to find bugs in software? It is a lot of work to code—good coders will work on the best projects and command some of the highest professional salaries in the world—why would they work for free if they were competent?

That question is not merely rhetorical. Why would someone not only work for free, but promote the idea of working for free?

Consider Mozilla, the “non-profit” that produces “exclusively free software”, who have received on average about 90% of their revenues from Google to keep them as their default search engine on their Firefox browser, through their for-profit subsidiary.

They pretend to act as a “public service” by promoting free software. They can do so because they have a benefactor in Google, and inherited the basis for that revenue from Netscape’s software, which itself was sold to AOL for $10 billion, just after Netscape released all the source code to the public for free (sounds like they properly ripped-off AOL). AOL discontinued supporting the Netscape browser about 9 years later, writing-off their investment.

Open source works if you have a multi-billion dollar sugar-company supporting you and inherit a $10 billion piece of code plus $2 million for nothing. They are out there promoting open source software because they get $300 million per year in revenue from code they got for free. Their programmers are paid properly, their staff and management happy and loaded, and they can prance around as everyone’s benefactors.

But what about Google’s competitors? Google doesn’t have them and doesn’t want them. What better way to further that goal than by advocating Software Serfdom.

Air is free. Yet without air, we can’t survive for more than a few minutes. It should be the biggest economy on Earth, yet no one makes money selling air.

Who else benefits when something is free? Well, governments give things away for free when they nationalize an industry, making all the participants dependents. Then they can justify raising taxes, to pay for better service, getting their money in advance, without any specific legal remedies for those who are not happy with whatever service they deliver. Just a thought.

We are also supposed to accept the idea that open source is also better because it makes software more secure. Every time the group of programmers changes and improves the software, we are to presume that all those intelligent people working for free will go out there and re-evaluate our changes, to make sure they are working and haven’t introduced new problems—again, all without cost! Open source is, on the contrary, a disincentive for software improvement.

And let’s ask about the timeliness question—when will they get the job done? Are these free, highly capable people just waiting for a new release to debug and attack to find errors at the highest priority?

Finally, does the fact of making the source code explicit to anyone and everyone make it more secure? Any crook or group of criminals operating for any motive—including the incentive of large gain by theft of funds or private data—has immediate access to it, to look for work arounds. How does that make software more secure, knowing that increases in functionality will have to change the software over time, introducing new potential problems and security concerns?

It is such an obviously bad idea to make financial-transaction software open source, that it suggests some ulterior motive is the motivation. What it is, I can’t say for sure, but open source is not a good plan for Fintech.

Look to the Past, but only for Clues to the Future

My late father was a pioneer in banking software. He founded his firm in 1968, and at one point his company had 6,000 banks using his software globally, back in the old days when there were many tens-of-thousands of them, before they were regulated out of existence. He invented something called a ‘bank-control record’, or BCR, long-forgotten, which made it possible to use the software in any bank. Seems obvious today, but back then it was a big deal. Systems had to be input into punch card readers, run with cryptic JCL, errors identified on long-printout sheets, the whole process done iteratively to debug, just so you could see it dribble out line-by-line on a CRT.

I know—l began professional programming as a kid in 1975 for his company, during summer breaks, programming with COBOL. I spent many years learning the business, seeing it through his discussions and my experiences, working in all areas of the company. I also took a job with a medium-size bank, offered to me by its president, and worked in all areas of the bank—in lending, data-processing, financial management, and even spending time as a teller—all while attending the bank’s board meetings as an observer. I was fortunate that the VP of Operations of the bank was a professor of banking for the ABA, and learned both economics and banking from both a theoretical and practical perspective.

The bank control record by father came up with was, on many accounts, the beginning of the packaged-software industry. For nearly 4-decades his company, the Kirchman Corporation, produced the software that ran banks. If you put your money in one of them, your funds probably were processed through his company’s software. There were many competitors that came and went, but today the company he founded is still running under the direction of the NYSE-listed firm he sold it to.

But his was not an open-source world. The paradigm was still around; in fact his company provided source code so that customers could modify it if they wanted. But only for an extra fee, and certainly not made available to the general public. The members of his company’s team worked with the regulators to make sure the systems were keeping up with banking regulations, and literally had to have a group devoted to that task, out of a company of ~400 employees at its most. Today’s world of open-source cryptocurrency has no regulators, as his firm had none when it was founded.

So we must ask ‘Is it possible that open source is not the panacea that we assume?’ Perhaps a successful platform will require a more sophisticated business and software development model in order to deliver the secure, industrial-strength solutions for cryptocurrency transactions that people will eventually depend upon for their survival and prosperity. Maybe that business model has already demonstrated its effectiveness for secure transactions, back in the 1960’s.

Worldfree’s Advantages

I caught the A.I. bug in the 1980s, returning to Cornell University for graduate studies, where my thesis was A.I. applications in engineering design. While studying I realized that without a science of knowledge—called epistemology—we could never expect successful artificial intelligence technology, just as we did not have the Industrial Revolution until we had a science of physics.

So I made that commitment, because I wanted it that badly. It took me more than 15 years to develop a broad-based new theory of knowledge, including new theories of

  • deduction (the first since Aristotle)
  • induction (a basis for a science of innovation)
  • validation (a much improved scientific method that works in the humanities)
  • lexicology (a theory of definitions),

and other perspectives necessary to understand the nature of knowledge, as distinct from opinion. This is the questions the ancient Greek philosophers were asking, and is the same question that we all ask when we get on the internet today—how can we distinguish between knowledge and invalid opinion—the central challenge of epistemology and the drive behind the development of the new science of knowledge.

After raising capital on my own I founded Worldfree in 1998 to apply this new theory of knowledge to the problem of artificial intelligence. I formed a team of computer scientists and knowledge engineers from MIT, Stanford, Carnegie Mellon, Cornell, Caltech and elsewhere to develop software that could reason from natural language—my new science worked!

We delivered our advanced technology to clients such as Litton Aerospace (now owned by Northrup Grumman), Baxter Healthcare and Proctor & Gamble, where we beat out Autonomy for a big contract. Our technology gave direct answers to questions from unstructured text, from live internet/network documents.

“PC Week Labs’ tests found that Worldfree’s Best of Comdex finalist KnowAll worked well, delivering succinct answers to questions”, PC Week, 1999

Today, companies like Amazon, Google and Apple answer questions directly, which is critically necessary for tomorrow’s computer-voice interface, but by first structuring the text. They have not advanced to the point that Worldfree achieved nearly 20 years ago.

Natural Language Processing (NLP) is the challenge of understanding syntax, or the grammatical structure of sentences, which is not mature, as the quote below states. Natural Language Understanding, or (NLU), occurs when semantic understanding is incorporated. So these two technologies, NLP and NLU, are prior and necessary before any reasoning can occur.

“…right now, Natural Language Processing is kind of sad because we are just at the surface.” , Jonathan Mugan, PhD., CEO DeepGrammar, September, 2017

Note the date above, 2017.

Again, first you understand syntax and identify words (NLP), then you understand the meanings of the words and what is asserted (NLU). This is the same way people understand language. NLU is considered the “hot” technology of today, but Worldfree accomplished NLP, NLU and Natural Language Reasoning (NLR) with a product released in 1999. When IDC, a major North American market analyst firm, said that

“Worldfree technology is 18-months to 2 years ahead of the competition”,  IDC, September, 2000

they were referring to our ability to parse language syntax (just NLP), which was the best in the business at ~30%. That is the only part of the technology that they understood, because Worldfree was far ahead of the rest of the market place in technologies whose need was yet to be recognized.

Today, with Deep Learning, that has gone to ~90% recognition of syntax (NLP). The neural network recognition is much more powerful than our syntax recognition technology back then, but this is available without cost to Worldfree now. In addition to NLP processing of syntax, we also used NLU to understand the meanings of words, which is called semantics, using my new lexicological theory. Again, that was available and sold on the market in 1999.

“In my opinion, Worldfree’s technology is unique and a genuine advance in the Artificial Intelligence field. Worldfree technology allows computers to reason from natural language in real time…”, John J. Rosati, UCLA Cognitive Science Advisory Council, (now a Venture Partner with Triangle Venture Capital Group, Germany), June, 2001

But we don’t understand language just to have understanding. Knowledge has no value unless it is applied, and that demands reasoning—the use of deduction to apply general concepts to particular instances. Worldfree is still the only firm doing this on a general basis, and with a unified epistemological theory.

Eventually, IBM evaluated Worldfree’s team and technology and offered to acquire the firm, but I didn’t sell. Much like my father, who I thought was crazy not to sell to AT&T in the mid-1980s, when they offered to buy his firm (he sold it later), I let go a great opportunity with IBM. There is more than money involved when you have spent your life trying to accomplish something and begin to see its success.

But today, with deep learning tech developed by Google and others, which plays the pre-conceptual, pattern recognition role, Worldfree is back, but with a software technology that spans both crypto-banking and genuine artificial intelligence—reasoning from conceptual knowledge.

Our new Nodechain™ technology is more secure, scalable and advanced than today’s blockchains, which are certainly an innovation. But it is normal for the first demonstration of a radical new technology to go through a maturation process, and blockchain systems have shown many problems that have to be overcome before they can meet the opportunity as a global transaction platform for 8 billion people. I know, because I developed a brand new technology in A.I., which has been undergoing a similar transition to offer new and unheard of opportunities for advancing human cognitive skills and overcoming knowledge access challenges, while helping you to just do good business.

Worldfree will offer a powerful, intelligent, private and secure Atomic Central Bank™ software system, accessed through your mobile and vehicle smartphones. You will face every task, no matter where you are with the world’s most effective and intelligent “team” of highly secure software completely devoted to your needs—with full awareness of your strengths, goals, and limitations. This information needs to be your own, and defended with your life, because it is the competitive advantage you survive by.

The computing industry started in the 1950s with the Numerical Processing (NP) Age in the computer industry (in fact, my father’s first job out of college was with Sperry Rand, selling the UNIVAC, the world’s first commercial computer). Then, after symbolizing letters using ASCII code, we began the Information Technology (IT) Age, which has been with us for 4 decades. Now, with Worldfree technology, we process ideas, rather than information. We utilize ideas as the basic data structure and use my new theory of deduction to reason from them to answer questions, but to think about the answers first—to answer them succinctly, but to utilize natural language knowledge to improve its interaction with its private owner.

You will need an Atomic Central Bank™ ally, controlled by the Digital Prerogativeoffered by cryptocurrencies, for the exciting world of financial independence and intellectual efficacy that genuinely intelligent computing will bring. We are at the beginning of the Knowledge Technology (KT) Age, when all people will begin to have opportunities to develop their entrepreneurial skills and compete for global orders with the old, mega-corporate system.

Worldfree’s new A.I. crypto-platform is accessed through rational, natural-language dialogue interface, and in addition will provide powerful, analytic tools to sophisticated, yet easy to use and understand accounting, transaction and investment software, all interfaced to the cryptocurrency world. It will redefine the crypto-world with the ability to reason from ideas developed from unstructured text, to apply knowledge that it reads in the service of members of the Worldfree Network community. It uses a powerful semantic technology that has already been developed on a new syntactic model, both utilising a unified theory of knowledge, that enables reasoning from knowledge to assist you in the gargantuan task when the whole world’s knowledge is now at your fingertips.