What payment methods will we use in the future? Bernhard Haslhofer, who leads a research group at the Complexity Science Hub, is involved in studying digital assets and analyzing global financial flows. At this year’s European Forum Alpbach (EFA), he co-leads a five-day seminar titled “Envisioning the Future of Money.” Here’s the expert’s interview:
Q: What is the main focus of the seminar?
BH: We are in the midst of a digital transformation that will significantly impact our concept of money and how we conduct transactions. The ultimate destination of this journey remains uncertain.
In the seminar, our aim is to spend a week with a diverse group of 30 motivated young individuals from various backgrounds to develop a vision for the future. Together, we want to imagine the potential characteristics and features that money could or should have in the future.
Q: In terms of money, where are we currently, and where are we headed?
BH: The first wave of digitalization has already passed in the Western world. ATMs and credit cards have been around since the late 1970s, well before the widespread use of the Internet and mobile phones. This model is closely tied to traditional banks or payment service providers. It functions reasonably well, enjoying a high level of trust in the population. However, it’s becoming outdated, incurring high transaction costs, and primarily serves users in industrialized countries controlled by them.
The second wave is characterized by a strong trend of digitization in emerging economies, where annual growth in cashless payments exceeds 20%. Overall, the share of cash payments has decreased by nearly 25% in the world’s major markets over the last decade.
Q: How do you assess these trends?
BH: It is important to differentiate between payment systems and money here.
In payment systems, we observe the emergence of two new trends alongside the traditional ATM and credit card systems. Firstly, there are systems like AliPay and WeChat Pay, operated by large corporations, which have become standard payment methods in China. Secondly, we are witnessing the establishment and rapid growth of open alternatives like UPI in countries like India and Brazil.
Regarding money, we often see attempts to create new currencies, but with limited success so far. With crypto assets like Bitcoin, we now know that they only partially fulfill a fundamental function of money – value transfer – due to technical shortcomings. Therefore, it wouldn’t be appropriate to call crypto assets money. Even Facebook’s attempt to create a new global currency with Libra failed due to resistance from regulators and the public.
VISA, Mastercard, and American Express
process 85% of card payments in the US
Merchants pay $120 billion per year in fees
to accept credit cards
Consumers receive $50 billion in rewards
for using credit cards
Merchants pass on fees
to retail prices for all consumers
Q: Wherever the journey goes, what do we need to consider in any case?
BH: We must ensure that we can actively shape future payment systems and currencies while safeguarding fundamental rights like data privacy. Financial transactions involve sensitive data points that reveal a lot about our lives. We need to be proactive from the start, engage deeply with this topic, and ideally design such systems ourselves.
Q: Some experts believe cash will disappear. Do you agree with this assessment?
BH: Yes, I believe it’s a natural technological evolution.
Q: If so, what does that mean for our society?
BH: Change, much like in many other aspects of life. This won’t happen overnight; it’s a gradual process advancing at different speeds. We have the advantage of observing countries like Sweden, where this process has progressed significantly since the introduction of Swish. Recent years have shown how adaptable we are and how change can open new possibilities and doors.
Q: What will replace cash?
BH: New digital tools for conducting transactions and potentially, far in the future, new forms of currencies controlled by other actors.
Q: Given that, what terms should we start to familiarize ourselves with?
BH: In the realm of crypto assets, “Decentralized Finance (DeFi)” is the most intriguing topic for me currently. It involves attempting to build partially high-risk financial products on digital assets with no intrinsic value. The complexity of these products is enormous, and right now, nobody fully understands how these products or services are interconnected, who controls them, and what risks are associated.
Q: The EU Commission currently works on the Digital Euro. Where do we stand, and what will the implications be?
BH: I believe there is much more to come. Personally, I still find the topic somewhat abstract. I’m not entirely clear on how the digital Euro will be implemented and who will benefit. Currently, I get the impression that we will continue using our familiar electronic means of payment, and we may not be greatly affected by the digital Euro. It might primarily be a technology for interbank and bank transactions.
Q: Central banks or finance ministries – whose roles will change in the future?
BH: That depends on the direction future forms of money and payment services take. Global corporations might resume their efforts to create their own global currencies. If this model prevails, central banks and political decisions may play a less ordered role. Such a development, which I see as somewhat dystopian – due to the loss of currency sovereignty – would have significant consequences for nation-states.
However, currently, we see globally that central banks, in collaboration with the banking sector, can play a very active and influential role. The National Payments Association in India, which is behind the Unified Payment Interface, or current developments in Sweden, are very inspiring, in my opinion.
Scientific conferences are expensive, so not everyone can attend. This is devastating, as they are an essential part of academic life. At conferences, researchers can expose their work and gain collaborators. Early career researchers often meet others working on a similar topic for the first time. At a later career stage, a conference is critical to forming links for finding a new job or a grant application.
Costs exceed salary
But those who want to attend conferences usually have to be able to afford long journeys, accommodation in costly cities, and conference fees. For researchers in low and middle-income countries, this is often more than challenging. For example, postdoctoral researchers in Colombia will rarely find support from their institution to attend an international conference. Instead, they would have to spend more than two months of salary, making it nearly impossible for them. The same is true, if not worst, for other parts of the world. Budget is therefore one of the main reasons why many conferences lack diversity.
Introducing the Open Arms grant
During NetSci2023, the largest international conference in network science held in Vienna this year, we observed what happens in most academic events. In addition to the fees, there are many other costs (e.g., applying for visas). So, few researchers from low- or middle-income countries could apply.
As an initiative to revert this, we started the Open Arms Grant (learn more). Our principle is that budget should never be why a researcher is left outside an academic event. Thanks to the grant, ten people from low and middle-income countries were able to present their research.
4 key learnings for future conferences
1 | Full travel grants or fee waivers?
Some conferences offer some support, like fee waivers or discounts. They are great for promoting the conference within the local community but not for international participants on a tight budget, as most costs (travel, accommodation, visas, and insurance) are still incurred. Again, take the example of postdoctoral researchers in Colombia. A researcher who has to spend almost two months’ salary attending an international conference would not really be helped by either a fee waiver or a discount. Instead, offering fewer grants covering all costs reaches people unable to attend that (or any other) conference.
2 | Use the budget wisely
There are many expenses in conferences that may be avoided. The cost of welcoming people with a printed mug and a pen inside some tote bag is sufficient to cover the travel costs of a handful of applicants. Nobody needs a baseball hat or a printed t-shirt to remind you that you attended a conference in 2017. A printed program or a booklet is unnecessary. Giving participants a new mousepad, a USB memory stick or a notebook should be forbidden at this stage.
That “stuff we all get” is known as SWAG, an industry worth billions of dollars but producing mostly plastic pollution. Those products are propaganda that will end up in the trash in a few months. Umbrellas, power banks, or keychains are just a waste of budget. Welcoming conference attendees with food and drink may be pretty expensive. The conference budget stretches quite a long way once the minor costs are avoided.
3 | A network that grows
Most conferences are not isolated, one-off events but happen yearly. Once a conference started offering travel grants, a network of researchers from low and middle-income countries was formed. Past awardees are the best way to link with new applicants and ensure that new generations will keep applying.
Being a researcher in a low-income country means swimming against the current every day of your life. Your lab has insufficient space or materials, cannot pay for a software license or the fee to publish in some journals, and will rarely pay to access an article. You must compete with many researchers for the few open positions and grants awarded. Primarily you will be working on a language where you are not a native speaker, which impacts most stages of your career. You rarely get to a conference, so fewer doors are open in your academic progression. You need to get visas and permissions for the few times that you get to travel.
Therefore, the new Open Arms initiative aims at increasing the participation of people from low and middle-income countries.
4 | Science for all
Diversity is not a slogan. It is a survival mechanism. Social systems, like biological systems, need diversity to be resilient and thrive. We don’t have representation of scientists from the middle east and Africa because they simply can not afford to do science. For example, the average salary of an Egyptian professor with more than 15 years of professional experience is $550 — a systemic problem because talented scientists also exist in countries with difficulties. By offering fair opportunities to attend conferences, we help connect scientists to their fields and reduce systemic inequalities.
With simple budgeting constraints, resetting our priorities, and proper allocation of resources, we can recreate the Open Arms grant in more conferences and make science accessible for all!
Four intense days of conversation and interchange in Vienna. Around 850 scientists from all over the world attended NetSci 2023 from July 10 to 14 to discuss emerging topics in network science. This year’s edition was organized by the Complexity Science Hub (CSH) and the Central European University (CEU).
At the University of Vienna campus, in the heart of the Austrian capital, participants enjoyed a full program. This included expert talks, parallel sessions, satellites, panel discussions, lightning talks, poster sessions, and an international school.
During the conference, the seven keynote speakers provided insight into the interdisciplinary nature of network science research across physics, computer science, biology, the social sciences, and economics, among others.
The audience kept its eyes focused on Shlomo Havlin from Bar-Ilan University and an external faculty member at CSH; Mirta Galesic, a professor at the Santa Fe Institute and a resident scientist at CSH; Kathleen Carley, from Carnegie Mellon University; Renaud Lambiotte, from the University of Oxford; Natasa Przulj, from the Barcelona Supercomputing Cluster; Marta Sales-Pardo, from Rovira i Virgili University; and Vito Latora, from Queen Mary University of London and external faculty member at CSH.
The satellite and parallel sessions also covered a variety of topics, ranging from epidemic control to economic complexity and network inequality. Additionally, the program included panel discussions about academic writing, mental health and parenthood in academia. And for the first time, the flagship conference of the Network Science Society provided free childcare. This allowed working parents to fully engage at NetSci2023 without worrying about their little ones.
NetSci 2023 also featured a great deal of social gathering, which culminated in a gala dinner held at Vienna City Hall. We are already looking forward to NetSci 2024 in Québec City!
President of the Complexity Science Hub
Tiziana Di Matteo
Maria del Rio Chanona
The Austria Wirtschaftsservice (aws) is supporting Iknaio with 700,000 euros.
This will allow the company to expand its services and advance tackling cybercrime.
Iknaio, a spin-off of the Complexity Science Hub, was founded two years ago. Since then, its mission has been to support security companies and government agencies with crypto asset forensics to make the overall handling of cryptocurrencies more secure.
“The role of science is to create breakthroughs. Through the cooperation of innovative startups like Iknaio and researchers of the Complexity Science Hub, we can achieve such in the field of crypto-crime,” says Stefan Thurner, President of the Complexity Science Hub.
NEW METHODS NEEDED TO UNDERSTAND DEFI
Bernhard Haslhofer, head of the Cryptofinance research group at the Complexity Science Hub, explains, “Decentralized Finance” (DeFi) stands for an entirely new type of complex financial services that are currently not adequately understood by decision-makers. Scientific research is needed to develop new methods to help us understand these services. With the spin-off Iknaio, we can bring these methods to product maturity and commercialize them to be used in practice eventually.”
AUTOMATING FORENSICS AND COMPLIANCE WORKFLOWS
Iknaio Cryptoasset Analytics GmbH focuses on automating forensics and compliance workflows within an organization. This reduces the workload of the customer’s forensic specialists and, at the same time, builds up a valuable database for further investigations. Their service complements the services of other companies in this field and helps to increase the efficiency and effectiveness of the entire industry.
With expertise, innovative technology, and strong partnerships, Iknaio is well-equipped to take a leading position in Europe and offer high-quality crypto asset analytics services to customers from various industries. The company is committed to meeting the increasing demands of the crypto asset market. Here, they want to make a decisive contribution to curbing criminal activities in cryptocurrencies.
The strong partnership between Complexity Science Hub and Iknaio ensures the continuous scientific development of novel methods and tools, which will undoubtedly be needed in the future.
Complexity science met digital humanism for the first time worldwide at the Complexity Science Hub (CSH) from May 15 to 17.
At the heart of the workshop: a roadmap for how complexity science can concretely promote digital humanism. “The goal is to use complexity science and computer modeling to ensure that the protection and freedom of every human being remains the highest good of our society – even and especially in times of digitalization,” explains CSH researcher Fariba Karimi.
How to counteract nudging
When digital technologies can be used by technology companies and authoritarian governments, for example, to undermine the private rights of individuals, people are no longer adequately protected. Through subtle but effective digital manipulation, or “nudging,” people can be influenced in ways that are not easily visible – often against their own best interests. Stefan Thurner, president of the Complexity Science Hub, comments, “It’s critical to recognize the issues involved, understand their interactions, and develop digital methods to counteract these tendencies.”
Complexity research meets digital humanism
Complexity research focuses on the analysis and design of complex systems such as transportation networks or financial systems, taking into account their impact on people and society. Digital humanism ensures that technologies and digital systems are developed and used in ways that are consistent with core human values such as freedom, well-being, dignity and autonomy, as well as human rights and democracy. The goal of the roadmap is to identify ways in which solutions can be created by combining technical and social innovation to firmly embed key aspects of Digital Humanism.
The Complexity Science Hub’s research aims to develop methods to ensure the protection of individual rights in a digitized world. Among others, the CSH is here supported by the City of Vienna in order to further advance the research focus. This workshop is part of the WWTF-funded project “Roadmap for Digital Humanism in Complexity Science”.
More information: https://vis.csh.ac.at/cs-meets-dh/
We are looking forward to a joint workshop between the Complexity Science Hub (CSH) and the University of Natural Resources and Life Sciences (BOKU) tomorrow. Scientists from both institutions will have the opportunity to explore possible avenues of collaboration.
The primary goal of this workshop is to facilitate a comprehensive exchange of knowledge and ideas between BOKU and the Complexity Science Hub. In this way, we aim to inform BOKU faculty about the CSH, including our partner institutions, goals, research areas, programs, and more. Likewise, this workshop provides a valuable platform for the Complexity Science Hub to share insights into the exciting research being conducted at BOKU.
Our commitment to interdisciplinary research and innovation is closely related to BOKU’s expertise in natural resources, life sciences and sustainability. By bringing together researchers from different disciplines, we aim to foster collaboration that addresses complex challenges and makes a significant impact.
We thank all participants and look forward to a fruitful workshop that will open doors to new collaborations, generate innovative research ideas, and further strengthen the scientific community.
Christian Obinger (BOKU, VR for Research and Innovation)
Stefan Thurner (President and CSH Faculty)
15:40 – 17:00 Ideas for Collaboration
- Helmut Haberl and Dominik Wiedenhofer (Institute of Social Ecology) with Stefan Thurner (CSH):
Ongoing collaboration on Social Metabolism
- Matthias Raddant (UWK & CSH):
Mapping global phosphorus flows
- Ulrich Morawetz (Institute of Sustainable Economic Development):
- Frank Neffke (CSH):
Economic development in and across cities
- Brady Mattsson (Institute of Wildlife Biology and Game Management):
Conflicts in Wildlife Management
- Amelie Desvars-Larrive (VetMed & CSH):
Veterinary epidemiology and One Health approach
- Karolina Taczanowska (Institute of Landscape Development, Recreation and Conservation Planning):
- Emma Izquierdo-Verdiguier (Institute of Geomatics):
- Raphael Preto-Curiel (CSH):
- Johannes Stangl (CSH):
Green Stress Testing
17:00 – 18:00 Discussion in small groups
Open end with snacks, BOKU beer and wine
“History is not just one damn thing after another,” British historian Arnold Toynbee once quipped in response to a critic. For a long time, Toynbee’s opinion was in the minority. Historians and philosophers vehemently insisted that a science of history was impossible. I hope that End Times will convince you that this view is wrong. A science of history is not only possible, it is useful: it helps us anticipate how the collective choices we make in the present can bring us a better future.
Over the past quarter-century, my colleagues and I have built out a flourishing field, known as Cliodynamics (from Clio, the muse of history, and dynamics, the science of change). We discovered that there are important recurring patterns, which can be observed throughout the sweep of human history over the past 10,000 years. Remarkably, despite the myriad of differences, at base complex human societies, on some abstract level, are organized according to the same general principles.
From the beginning, my colleagues and I in this new field focused on cycles of political integration and disintegration. This is the area where our field’s findings are arguably the most robust—and arguably the most disturbing. It became clear to us through quantitative historical analysis that complex societies everywhere are affected by recurrent and, to a certain degree, predictable waves of political instability, brought about by the same basic set of forces, operating across the thousands of years of human history. It dawned on me some years ago that, assuming the pattern held, we were heading into the teeth of another storm. In 2010, the scientific journal Nature asked specialists from different fields to look ten years into the future, and I made this case in clear terms, positing that judging from the pattern of US history, we were due for another sharp instability spike by the early 2020s.
What, then, is the model on which this forecast was based? When a state, such as the United States, has stagnating or declining real wages, a growing gap between rich and poor, overproduction of young graduates with advanced degrees, declining public trust, and exploding public debt, these seemingly disparate social indicators are actually related to each other dynamically. Historically, such developments have served as leading indicators of looming political instability. In the United States, all of these factors started to turn in an ominous direction in the 1970s. The data pointed to the years around 2020 when the confluence of these trends was expected to trigger a spike in political instability.
Sadly, nothing about my model has been disproved in the intervening years. End Times is my best effort to explain this model in accessible, which is to say non-mathematical, terms. It builds on an enormous amount of important work in a variety of different fields; I make no claims for radical originality. What I will say is that we should all take heart from the fact that societies have arrived at this same crossroads before, and while sometimes (even most of the time) the road has led to great loss of life and societal breakdown, at other times it has led to a far happier resolution for most people involved.
Is it the big companies that are decisive? No, quite the opposite, says Frank Neffke. And with that, happy WORLD CREATIVITY AND INNOVATION DAY!
At the Complexity Science Hub, the scientist investigates how regions, companies and people find new growth paths – how people change jobs or companies develop new fields of activity.
We know that innovation today is very concentrated and skewed to a select few regions. “The top ten cities in the world hold about one-third of all patents issued by the U.S. Patent and Trademark Office (USPTO),” Neffke explains. For all other regions, it’s very difficult to climb up that ranking.
Neffke and his colleagues Arnaud Dyèvre and Riccardo Crescenzi from the London School of Economics, however, have identified a group of regions that have succeeded in doing so and that seem to have suddenly gained in prominence as centers of innovation. How did the likes of Bangalore, Seoul, and Guangdong manage to rise to the top of the innovation league?
FOREIGN DIRECT INVESTMENT IS DECISIVE
In their search for causes, the researchers discovered that foreign direct investment may have played a decisive role here. Regions that attracted foreign firms managed to accelerate local innovation. To look at the causal effect of FDI, the authors compared regions that attracted foreign tech firms to regions that were very similar, but without foreign R&D investments. The regions that where foreign firms entered, on average, climbed 14 percentiles up the innovation ranks.
However, the benefits depend very much on which foreign company is doing the investing. Bigger is not always better when it comes to benefits to local tech companies. On the contrary, the researchers show that small multinationals stimulate more local innovation and growth than flagship investors, transfering more knowledge than the firms that rank among the top 5% in their technology sector. The researcher calls this knowledge transfer spillovers, the unintended learning that happens when two firms locate close to one another.
BIG COMPANIES TEND TO BE ISLANDS
“Spillovers are great when you receive them, but not when you are the source of them. The biggest companies have most to lose and least to gain from unplanned knowledge spillovers, so they do everything they can to avoid them,” Neffke says.
That’s why tech industry giants tend to create more of an “island existence” when they invest abroad than others in the industry. For example, they are more likely to bring their own inventors to a new location and hire fewer inventors from local companies. Similarly, they are less likely to exchange inventors with local firms or to enter into local research collaborations. This suggests that policy makers may benefit from focusing less on the big names in tech and more on smaller tech firms that are more likely to engage and share knowledge in the local economy.
LOOK INTO THE FUTURE
In a new study, Neffke and a group of colleagues are now examining how the U.S. went from an agricultural economy to the frontier in technology and innovation. “This is a story that goes well beyond technological change and the work by a small number of famous inventors like Edison and the Wright brothers” Neffke explains. The researchers will show exactly what this consists of in their upcoming publication.
In 2019, the population grew by about 79 million people, while at the same time we produced 83 million cars. In Las Vegas, for example, 32% of the central part of the city is dedicated to car parking. Cities like Mexico City rely on pedestrian overpasses so that cars do not have to stop.
But what about Vienna, a city that has been awarded the world’s most liveable city several times? Here, too, we treat cars like royalty. Rarely do pedestrians have a similarly long green phase at the intersection as car drivers. And sometimes it’s downright stressful to reach the other side of the road in time. Driving a car is comfortable, driving a car is fast. “As long as that is the case, it will be difficult to get people to choose sustainable mobility,” explains Prieto-Curiel.
What is sustainable mobility?
Everyone has their daily journeys to make. The number of these journeys is roughly the same in different parts of the world in a normal week. However, there are forms of mobility that are more sustainable than others. “We currently know of only two sustainable types of mobility: active mobility such as cycling or walking, and a well-planned public transport network,” explains Prieto-Curiel.
For all these reasons, cars should not be the means of choice for getting around in cities. Nevertheless, the car is still on the rise. For example, in the US, you basically need a car to transport one person. In order to make sustainable forms of mobility more convenient and thus more attractive, the infrastructure must be expanded accordingly.
Therefore, the workshop “Sustainable Mobility: Data, Networks and Complexity” brought together researchers and policy makers from Vienna and Copenhagen to discuss strategies to make roads safer for cyclists and reduce car dependency.
THE WORKSHOP AT A GLANCE:
What are the challenges to expanding Vienna’s cycling infrastructure?
Mobilitätsagentur Wien director Martin Blum shared some insights about the current situation in Vienna as well as strategies policymakers should keep in mind when expanding Vienna’s cycle paths. Vienna currently has around 1,600 km of cycling infrastructure. 50 new projects, 80 per cent of which are cycle paths or streets, are intended to make cycling even more attractive.
An open-source tool to access Vienna’s bike infrastructure data quality
Anastassia Vybornova, from IT University of Copenhagen, demonstrated how to use BikeDNA, an open-source tool for bicycle infrastructure data assessment. She will also present an assessment of bicycle infrastructure data quality for data both from OpenStreetMap and from the City of Vienna’s Open Government Data.
How cities should plan cycle networks?
Michael Szell from IT University of Copenhagen showed how cities should plan cycle paths optimally. He simulated the cycle paths of 62 cities around the world – including Vienna – and found that it’s not how long the network is, but how you grow it.
How can cities achieve sustainable mobility?
Complexity Science Hub researcher Rafael Prieto-Curiel presented opportunities to achieve more sustainable mobility for different types of cities — including Vienna.
A new tool for observing mobility in cities
Anita Graser, from AIT, discussed MovingPandas, a Python library for movement data analysis that provides mobility data processing and analysis tools for analytics and data science workflows.
How far is the mobility revolution in Vienna?
Ulrich Leth, from TU Wien, presented the existing gaps between the targets for a sustainable mobility in Vienna and the actual development, which is due to a mix of hesitant policy, insufficient measures, and a lack of resources.
Upscaling the transformation of public space in Austria
Barbara Laa, from TU Wien, discussed how to transform public spaces to create a sustainable and resilient transport system. Streets must give way to pedestrians, cyclists, public transport, and green infrastructure.