Monday, January 14, 2019

A Vision for Blockchain in the Translation Industry

Happy New Year

This is yet another post on Blockchain, a guest post by Robert Etches who presents his vision of what Blockchain might be able to be in the translation industry. A vision, by definition, implies a series of possibilities, and in this case, quite revolutionary possibilities, but does not necessarily provide all the details of how and what. Of course, the way ahead is full of challenges and obstacles which are much more visible to us than the promised land, but I think it is wise to keep an open mind and watch the evolution even if we are not fully engaged or committed or in agreement. Sometimes it is simply better to wait and see than to come to any final conclusions.

It is much easier to be dismissive and skeptical of upstart claims of fundamental change than to allow for a slim but real possibility that some new phenomenon could indeed be revolutionary. I wrote previously about CEO shortsightedness and what I called Roryisms. Here is a classic one from IBM that shows how they completely missed the boat because of their hubris and old style thinking.
Gerstner is however credited with turning around a flailing mainframe business.The cost of missing the boat can be significant for some, and we need only look at relative stock price and market value improvements over time (as this is how CEO performance is generally measured) to understand how truly clueless our boy Lou and his lieutenants at IBM, in general, were when they said this. The culture created by such a mindset can last decades as we see by the evidence. Culture is one of a company’s most powerful assets right until it isn’t: the same underlying assumptions that permit an organization to scale massively constrain the ability of that same organization to change direction. More distressingly, culture prevents organizations from even knowing they need to do so.

IBM’s chairman minimized how Amazon might transform retail and internet sales all the way back in 1999.
“ is a very interesting retail concept, but wait till you see what Wal-Mart is gearing up to do,” said [IBM Chairman, Louis V. Gerstner Jr in 1999.]. Mr. Gerstner noted that last year IBM’s Internet sales were five times greater than Amazon’s. Mr. Gerstner boasted that IBM “is already generating more revenue, and certainly more profit, than all of the top Internet companies combined.”

AMZN Stock Price Appreciation of 36,921% versus IBMs 211% over 20 years

 IBM is the flat red line in the chart above. IBM looks just as bad against Microsoft, Google, Apple, Oracle, and many others who had actual innovation.

January 11, 2019
Amazon Market Value$802 Billion7.3X Higher
IBM Market Value$110 Billion

I bring attention to this, because, I also saw this week that IBM has filed more patents than any other company in the US in 2018, Samsung was second. In fact, IBM has been the top patent filer in the US for every year from 1996 to 2018. BTW they are leaders in blockchain patents as well. However, when was the last time that ANYBODY has associated IBM with innovation or technology leadership? 1980? Maybe they just have some great patent filing lawyers who understand the PTO bureaucracy and know how to get their filings pushed through. In fact, there have been some in the AI community who felt that IBM Watson was a joke and that the effort did not warrant serious credibility and respect. Oren Etzioni said this: “IBM Watson is the Donald Trump of the AI industry—outlandish claims that aren’t backed by credible data.” Trump is now a synonym for undeserved self-congratulation, fraud, and buffoonery, a symbol for marketing with false facts. IBM is also credited with refining and using something called FUD (fear, uncertainty, and doubt) as a deliberate sales and marketing misinformation tactic to keep customers from using better, more innovative but lesser-known products. We should not expect IBM to produce any breakthrough innovation in the emerging AI-first, machine learning everywhere world we see today, and most expect the company will be further marginalized in spite of all the patent filings. 

Some of you may know that IBM filed the original patents for Statistical Machine Translation, but it took Language Weaver (SDL), Google and Microsoft to really make it come to life in a useful way. IBM researchers were also largely responsible for conceiving of the BLEU score to measure MT output quality that was quite useful for SMT. However, the world has changed and BLEU is not useful with NMT. I plan to write more this year on how BLEU and all its offshoots are inadequate and often misleading in providing an accurate sense of the quality of any Neural MT system.

It is important to be realistic without denying the promise as we have seen the infamous CEOs do. Change can take time and sometimes it needs much more infrastructure than we initially imagine. McKinsey (smart people who also have an Enron and mortgage securitization promoter legacy) have also just published an opinion on this undelivered potential, which can be summarized as:
 "Conceptually, blockchain has the potential to revolutionize business processes in industries from banking and insurance to shipping and healthcare. Still, the technology has not yet seen a significant application at scale, and it faces structural challenges, including resolving the innovator’s dilemma. Some industries are already downgrading their expectations (vendors have a role to play there), and we expect further “doses of realism” as experimentation continues." 
 While I do indeed have serious doubts about the deployment of blockchain in the translation industry anytime soon, I do feel that if it happens it will be driven by dreamers, rather than by process crippled NIH pragmatists like Lou Gerstner and Rory. These men missed the obvious because they were so sure they knew all there was to know and because they were stuck in the old way of doing things.  While there is much about blockchain that is messy and convoluted, these are early days yet and the best is yet to come.

Another dreamer, Chris Dixon has an even greater vision on Blockchain when he recently said:
The idea that an internet service could have an associated coin or token may be a novel concept, but the blockchain and cryptocurrencies can do for cloud-based services what open source did for software. It took twenty years for open source software to supplant proprietary software, and it could take just as long for open services to supplant proprietary services. But the benefits of such a shift will be immense. Instead of placing our trust in corporations, we can place our trust in community-owned and -operated software, transforming the internet’s governing principle from “don’t be evil” back to “can’t be evil.”


2018 was a kick-off year for language blockchain enthusiasts. At least five projects were launched[1], there was genuine interest expressed by the industry media, and two webinars and one conference provided a stage for discussion on the subject[2]. Then it all went very quiet. So, what’s happened since? And where are we today?

Subscribers to Slator’s latest megatrends[3] can read that it’s same same in the language game for 2019: NMT, M&A, CAT, TMS, unit rates … how we love those acronyms!

On the world stage, people could only shake their heads in disbelief regarding the meteoritic rise of the value of cryptocurrencies in 2017. However, in 2018 those same people relished a healthy dish of schadenfreude as exchange rates plummeted and the old order was restored with dollars (Trump), roubles (Putin), and pound sterling (Brexit) back in vogue.

In other words, for the language industry and indeed for the world at large, “better the devil(s) we know” appears to be the order of the day.

There is nothing surprising in this. Despite all the “out of your comfort zone” pep talks by those Cassandras of Change[4], the language industry continues to respect the status quo, grow and make money[5]. Why alter a winning formula? And certainly, why even consider introducing a business model that expects translators to work for tokens?! Hello, crazy people!!!

But maybe, just maybe, there was method in Hamlet’s madness[6] and Apple was right when they praised the crazy ones[7]?

Let’s take a closer look at the wonderful world of blockchain and token economics, and how they are going to change the language industry … also the language industry.


Pinning down the goal posts

Because they keep moving! Don’t take my word for it. Here’s what those respected people at Gartner wrote in their blockchain-based transformation report[8] in March 2018:


While blockchain holds long-term promise in transforming business and society, there is little evidence in short-term reality.


Opportunities and Challenges

  • Blockchain technologies offer new ways to exchange value, represent digital assets and implement trust mechanisms, but successful enterprise production examples remain rare.
  • Technology leaders are intrigued by the capabilities of blockchain, but they are unclear exactly where business value can be achieved in the enterprise context.
  • Most enterprise blockchain experiments are an attempt to improve today's business process, but in most of those cases, blockchain is no better than proven enterprise technologies. These centralized renovations distract enterprises from other innovative possibilities offered by blockchain.
And now here’s a second overview, also from Gartner, this time their blockchain spectrum report[9] from October 2018:


Opportunities and Challenges

  • Blockchain technologies offer capabilities that range from incremental improvements to operational models to radical alterations to business models.
  • The impact of blockchain’s trust mechanisms and interaction paradigms extends beyond today’s business and will affect the economy, society and governance.
  • Many interpretations of blockchain today suffer from an incomplete understanding of its capabilities or assume a narrow scope.
The seven-month leap from little evidence in short-term reality to will affect the economy, society and governance is akin to a rocket-propelled trip across the Grand Canyon! Little wonder that traditional businesses don’t know where to start even looking into this phenomenon, never mind taking on a new business model that basically requires emptying the building of 90% of hardware, software and, more important, people.


Why does Deloitte have 250 people working in their distributed ledger laboratories? Because when immutable distributed ledgers become a reality they will put 300,000 people out of work at the big four accountancy companies[10].

Why are at least 26 central banks looking into blockchain? Because there’s a good chance that private banks[11] will be superfluous in 10-15 years’ time and we will all have accounts with central banks.

Or there will be no banks at all …

Let’s just take a second look at that Gartner statement:

The impact of blockchain’s trust mechanisms and interaction paradigms extends beyond today’s business and will affect the economy, society and governance.

Other than basically saying blockchain will change “everything”, the sentence mentions two factors that are core to blockchain: trust and interaction.

Trust. What inspires me about blockchain is its transparency. A central tenet of blockchain is its truth gene. In a world in which even the most reliable sources of information are labeled as fake, blockchain’s traceability – its judgment in stone as to who did what, when and for whom – makes it a beacon of light.

Just think if we could utilize this capability to solve the endless quality issue? What if the client always knew who has translated what – and could even set up selection criteria based upon irrefutable proof of quality from previous assignments? It is no surprise to learn that many blockchain projects are focusing on supply chain management.

Interaction is all about peer-to-peer transactions through Ethereum smart contracts. It’s not just the central banks that will be removing the middlemen. Unequivocal trust opens the door to interact with anyone, anywhere. To a global community. These people of course speak and write in one or more of approximately 6,900 languages, so there’s a market for providing the ability for these “anyones” to speak to each other in any language. What a business opportunity! And what a wonderful world it would be!

Cryptocurrencies and blockchain: peas and carrots

You’ve gotta love Forest Gump – especially now we know Jenny grew up to become Claire Underwood[12] 😊

Just as Jenny and Forest went together like peas and carrots, so do tokens and blockchain.

Unfortunately, this is where many jump off the train. One thing is accepting the relevance of some weird ledger technology that is tipped to become the new infrastructure for the Internet, another is trading in hard-won Venezuelan dollars for some sort of virtual mumbo jumbo!
  1. All fiat currencies are a matter of trust. None is backed by anything more than our trust in a national government behaving responsibly. In 2019 that is quite a scary thought – choose your own example of lemming-like politicians.
  2. All currencies (fiat or crypto) are worth what the market believes them to be worth. In ancient times a fancy shell from some far-off palmy beach was highly valued in the cold Viking north. Today not so. At its inception, bitcoin was worth nothing. Zero. Zip. Today[13] 1 BTC = €3,508.74. Because people say so.
Today, there is absolutely no reason why a currency cannot be minted by, well, anyone. There is indeed a school of thought that believes there will be thousands of cryptocurrencies in the non-too distant future. If we look at our own industry, we have long claimed that translation memories and termbases have a value. Why can that value not be measured in a currency unique to us and with an intrinsic value that we all respect and which is not subject to the whims of short-term political aspirations? Why can’t linguistic assets be priced in a Language Coin?

Much has already been written about the concept of a token economy, though little better than the following:

An effective token strategy is one where the exchange of a token within a particular economy impacts human economic behavior by aligning user incentives with those of the wider Community.[14]

Think about this in the context of the language industry. What if the creation and QA of linguistic assets were tied to their own token? What if you – a private company, a linguist, an LSP, an NGO, an intranational organization – were paid in this token for your data and that the value of this data grew and grew year on year as it was shared and leveraged as part of a larger whole – the Language Community[15]. What if linguists were judged by their peers and their reputations were set in stone? What if everyone was free to charge whatever hourly fees they choose, and that word rates and CAT discounts were a relic of the past?

This is why blockchain feeds the token economy and why the token needs blockchain. Peas and carrots!

To end with the words of another Cassandra – a trendy one at that: Max Tegmark:
If you hear a scenario about the world in 2050 and it sounds like science fiction, it is probably wrong; but if you hear a scenario about the world in 2050 and it does not sound like science fiction, it is certainly wrong.[16]

The pace of change will continue to accelerate exponentially, and I believe blockchain will be one of the main drivers.

Already in 10-15 years, there will be some household (corporate) names and technologies that do not exist or have only just started today. And by 2050 the entire finance, food, and transport sectors (to name the obvious) will be ‘blockchained’ beyond recognition.

At Exfluency, we see multilingual communication as an obvious area where a token economy and blockchain will also come out on top; I’m sure that other entrepreneurs in a myriad of other sectors are coming to similar conclusions. It’s going to be exciting!

Robert Etches
CEO, Exfluency
January 2019

[1] Exfluency, LIC, OHT, TAIA, TranslateMe
[2] TAUS Vancouver, and GALA and TAUS webinars
[4] Britta Aagaard & Robert Etches, This changes everything, GALA Sevilla 2015; Katerina Pastra
Krzystof Zdanowski, Yannis Evangelou & Robert Etches, Innovation workshop, NTIF 2017; Peggy Peng & Robert Etches, The Blockchain Conversation, TAUS 2018, Jochen Hummel, Sunsetting CAT, NTIF 2018.
[5] I am painfully aware that not everyone in the food chain is making money …
[6] Hamlet, II.ii.202-203

[10] P.221 The Truth Machine, by Paul Vigna and Michael J. Casey
[11] Ibid. pp163-167

[13] 9 January 2019
[14] P.69 The Truth Machine
[15] See Aagaard & Etches This changes everything for the sociological and economic importance of communities, the circular society, and the sharing society.
[16] Life 3.0 by Max Tegmark


CEO, Exfluency

A dynamic actor in the language industry for 30 years, Robert Etches has worked with every aspect of it, achieving notable success as CIO at TextMinded from 2012 to 2017. Always active in the community, Robert was a co-founder of the Word Management Group, the TextMinded Group, and the Nordic CAT Group. He served four years on the board of GALA (two as chairman) and four on the board of LT-Innovate. In a fast-changing world, Robert believes there has never been a greater need to implement innovative initiatives. This has naturally led to his involvement in his most innovative challenge to date: As CEO of Exfluency, he is responsible for combining blockchain and language technology to create a linguistic ledger capable of generating new opportunities for freelancers, LSPs, corporations, NGOs and intergovernmental institutions alike.