It can be argued that money has been digital for a long time. The credit card, of course, is digital currency, and there are parts of the world—Scandinavia, for example—where consumers use credit cards for nearly every transaction, big or small, not bothering to carry cash at all. And innovations like Apple Pay mean you don’t even have to show your credit card. You can present your phone instead, which is linked to your credit card account. But perhaps the most controversial digital iteration is cryptocurrency, a digital currency that can be transferred directly from one “wallet” to another without ever going through a bank. What you get in lieu of paper money is a highly complex mathematical code. Your computer receives the code, solves the problem, and releases the sum from the “block chain,” a digital vault where the cryptocurrency is stored.
After a few hits and misses, Bitcoin and Dogecoin, the two major players in the cryptocurrency realm, have rendered their codes increasingly uncrackable. And Silicon Valley startup Coinbase has launched the first major exchange for online currency. Persistent hackers, however, have been able to decipher the encrypted strings of text used by less rigorous cryptocurrencies. Given that hackers—who are intent on proving that cryptocurrencies will never be fully secure—are continually finding vulnerabilities in the system, we asked MIT Sloan finance faculty whether this form of digital currency has a future.
One of the hallmarks of system dynamics is its extraordinary flexibility as a problem-solving tool. Healthcare, education, poverty—MIT Sloan Fellows alumni have a history of applying system dynamics with marked success to a wide range of challenges. Now Graham Rong, SF ’06, has added thwarting counterfeiters to the list.
In a recent MIT Sloan Global Entrepreneurship Lab (G-Lab) project, Rong, Senior Industrial Liaison Officer at MIT, sat down to talk counterfeiting with a leading European company specializing in security products. The company wanted to produce a system for identifying counterfeit auto parts, a formidable global problem. In fact, loss from fraud in the auto parts industry exceeds $2B a year—not surprising when you realize that automotive manufacturers produce somewhere in the range of 200,000 different parts and that nearly 10 percent are being counterfeited.
Xoli Kakana, SF ’08, founded ICT-Works in 1999 with two outsized goals—to use technology to tackle tough challenges facing her native South Africa and to prove that women are major players in the technology realm. Her vision was inspired by a strong sense of responsibility for redressing the inequities of apartheid and was supported by her forward-thinking mom, who used her own pension payout to fund her daughter’s startup.
Kakana recruited like-minded codirectors with complementary skills—Margaret Sibiya and Sindile Ncala—making ICT-Works the first wholly black-women-owned and managed information and communications technology company in South Africa. ICT-Works now holds multi-million-dollar contracts and employs more than 100 people. The company has raised the standard of IT and telecom services in South Africa, and that success means that Kakana and her team can offer robust opportunities to women aiming to build careers in the technology sector.