TIME Innovation

The End of Law School

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

These are today's best ideas

1. Is it time to start shutting down law schools?

By Natalie Kitroeff in Bloomberg Business

2. One airline wants to make food and farm waste into jet fuel.

By Jenny Che in the Huffington Post

3. Here are five reasons America should fear the rising global middle class.

By Brenda M. Seaver in the National Interest

4. Forget merely securing Bitcoin. This tech can secure and encrypt any transaction on the web.

By Morgen E. Peck in IEEE Spectrum

5. For young girls, having a working mom could unlock future success.

By Jesse Singal in the Science of Us

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Crime

Visa Nixes Cards as Payment Option for Online Sex Ads

The only way to post a sex ad on Backpage.com will be through Bitcoin

Visa has joined MasterCard and American Express in agreeing to withdraw as a payment option from the adult section of Backpage.com—meaning the digital currency Bitcoin will soon be the only way to advertise sex services on the site.

The move comes after Cook County Sheriff Tom Dart in Illinois asked the heads of Visa and MasterCard to withdraw as payment options on the adult section of the site, as part of his crusade to take down Backpage.com, which is widely criticized as a sex trafficking hub. Dart’s office says that Backpage.com has posted over 1.4 million ads for sex in April alone, and that many of the women being advertised are trafficking victims under the control of violent pimps.

Users must pay a small fee (usually $5-$17) to post an ad on the adult page, and Backpage.com earns $9 million in revenue per month from adult services ads alone, according to a spokesman for Dart’s office. The goal of the campaign is to make it harder for pimps and traffickers to place the ads, by removing the most convenient way to pay that small ad placement fee, forcing them to resort to Bitcoin. A request for comment from Backpage.com was not immediately returned.

“Backpage has significantly lowered the barrier to entry for would-be sex traffickers, giving them easy access to millions of johns while cloaking them in anonymity and putting all risk on the shoulders of their victims,” Dart said Wednesday in a statement. “Raising that barrier will lead to less would-be sex traffickers entering the business as well as less victims.”

Dart privately asked the CEOs to withdraw on Monday—MasterCard announced the change on Tuesday, and on Wednesday Visa followed suit. Visa is suspending the processing of payments, but a spokesman noted that a permanent removal would require a review of Backpage.com’s activities, which could take some time. But he also noted that Visa has rules preventing its card from being used for “illegal activity,” and cited the company’s “long history of working with law enforcement.”

American Express had already removed its card as a payment option on the adult section of the site before Dart made his request.

“I commend Visa, MasterCard and American Express for doing the right thing in defunding this criminal enterprise and joining us in the fight to seek justice for sex trafficking victims across the globe,” Dart said.

However, some advocates for sex workers say this change would make voluntary sex workers more vulnerable, not less. “Traffickers and third parties are going to be able to switch to different payment processors. Women (and men) using Backpage, especially those most vulnerable to exploitation with the greatest barriers to transition out of the adult industry, aren’t,” says Katherine Koster, a spokesperson for the Sex Workers Outreach Project. “Backpage (and other sites like Backpage) has historically been a low-barrier way to work indoors independently.” She says that the change in payment method would make it much more difficult for independent sex workers to get customers, which would make them more vulnerable to exploitation by third parties.

The move to get credit cards to withdraw from Backpage.com is part of a larger movement to get companies to do their part to stop sex trafficking. ECPAT, an international non-profit working to end child slavery and prostitution, has developed a set of guidelines for travel and hotel companies to help identify and assist victims of sex trafficking—hotel groups like Hilton and Wyndham, and airlines like Delta have already signed on and pledged to educate their staff members to be on the lookout for victims, and learn how to best help them.

TIME Money

We Still Don’t Have Safe and Reliable Money

bitcoin-world-coins
Getty Images

Zocalo Public Square is a not-for-profit Ideas Exchange that blends live events and humanities journalism.

If we're going to have fast, reliable online transactions, we need a system that actually works

They said it was imminent. They said so two decades ago. But I am still waiting for a truly fast, reliable, and safe form of money for people—all 7 billion of us. So many other things that were once unimaginable to us are now true: we can connect with anyone on the planet almost instantaneously—to talk, see each other over video, and send each other pictures of our cats and dogs, even kids. But if we want to move a penny, or 10 rupees, it is no longer a brave new world, not even close. It’s virtually impossible for someone to easily transfer money to another at a low cost, unless both parties are physically present at the same place and same time.

Not so, you may protest. We have Apple Pay, Paypal, Google Wallet, Mastercard, Visa, M-Pesa, Bitcoin, hundreds of alt-coins spawned by Bitcoin, all of which claim that they will dethrone good old-fashioned cash off its mantle. But not so fast. Despite all the hype around the supposedly new-fangled digital alternatives to money, these remain either expensive or inconvenient. Credit card companies charge retailers two to three percent of any transaction, which we’re all paying for in the form of higher prices, passed on by merchants. Direct withdrawals from bank accounts are cheaper, but have traditionally taken a long time to clear, sometimes as long as a day.

The drawbacks of these digital alternatives are evidenced by the resilience of cash. Eighty-five percent of all transactions globally (and 40 percent in the U.S.) are still carried out using cash, particularly transactions involving small amounts of money. There are good reasons why that is the case. Cash is convenient. Cash is private. Cash is intuitive. Cash does not incur explicit transactions costs.

And yet cash is also cumbersome to carry and store. It can be stolen and forged, remains uninvested and usually loses purchasing power over time, and most importantly, cannot be transferred easily across large distances. And so, the pressing need for a digital currency that works.

If you are a cryptocurrency enthusiast, you are probably reading this with great impatience, eager to get to the discussion of how Bitcoin and its alternatives are the answer. Cryptocurrencies, which are digital, encrypted currencies that operate independently of a central bank, are almost costless to move instantaneously, offering both privacy and security. I am also a cryptocurrency enthusiast. But I am not ready to declare victory. At least, not yet.

First, transactions using cryptocurrencies are not convenient. They are not intuitive. Just watch someone pay for coffee at a coffee shop that accepts bitcoin as payment (there are some). Only geeks are likely to find it simple and easy to use. You may protest that this is what people said about email and Internet 20 years ago and look where we are now. Perhaps so. But the transition to electronic money will not be as easy or as simple. Why? Because we are talking about money. Bitcoin’s “blockchain” technology keeps a permanent, public, and seemingly inviolable record of all transactions, which is distributed publicly across many private computer servers around the world in a decentralized fashion. It’s brilliant, elegant, and revolutionary—but also, to quote the author Nathaniel Popper, “one big hack away from total failure.”

Money attracts both fraud and regulation. And uncertainty. Financial regulators are conservative, wary of any new technology that is easy to use and accessible, unless it be proven completely fraud-proof (an impossible standard).

And so, regulators are over-zealous in clamping down on innovation. They will reflexively (and absurdly) invoke “Know your customer” (KYC) regulations and “Anti Money-Laundering” (AML) requirements every time someone proposes something new. It’s as if regulators never want to hear the benefits that might come from financial innovation, however much they might offset any potential downside. But someone who designs a faster car should not be prevented from manufacturing and selling it lest thieves use it get away after robbing a bank. We need to rely on other means of deterring crime.

When we discourage innovation and proliferation of convenient, secure, and costless digital alternatives to money for fear of money-laundering and related crime, we are continuing to disenfranchise nearly 3 billion poor people in the world who would benefit the most from the financial inclusion that frictionless digital money and payments will generate for them.

Here is a concrete example. Imagine that a woman working as a day laborer in India earns 100 rupees on a given day. She may go to a grocery store on her way back home to buy goods worth 80 rupees. If technology made it possible for her to deposit the remaining 20 rupees (which is only about 30 cents) immediately in an account that earns interest or put it immediately in an investment that is expected to grow, without incurring any transactions costs, this could transform her life. Even “small” transactions costs of 5 or 10 cents per transaction would induce her to keep the money in the form of cash, which would not only fail to grow, but may be spent in an impulse purchase by her husband or children.

Similarly, a migrant worker should be able to send money he or she earns nearly free of transaction costs to the family that may live in a different city, or even a different country. Nearly $600 billion of such remittances are currently made across borders. And they are expensive, outrageously so. Nearly 7 percent is lost in intermediation.

How about services such as the mobile phone money transfer business M-Pesa, which is ubiquitous in Kenya? Given the lack of banking alternatives that exist in many African countries, M-Pesa services have deservedly received attention and acclaim from media, policy makers, and global development advocates such as Bill Gates. But even services such as M-Pesa have high transactions costs.

Given the revolution in communication technologies, and how they’ve transformed so many non-monetary domains, it seems reasonable to demand that in the near future we do away with most everyday transactions costs, which are unnecessary. We should shoot for a one- or two-tenths of a percent as an acceptable fee, whether we are seeking to pay with our Apple Watch at the corner deli or seeking to pay for a meal in rural India.

How do we get there?

First, financial institutions need to abandon the stupid idea that every transaction, no matter how small, must be verified. Every time I buy a cup of coffee using some form of electronic money, the retailer need not check with Visa or my bank if I have money or I am credit-worthy to be offered an implicit credit of a few dollars. Such verification should happen infrequently, only when the aggregate amount in question has reached a large predetermined amount. After all, most people have reputation capital these days; in our increasingly interconnected world, even sellers on e-Bay from far-off places like Guangzhou in China can be “trusted” given their reputation scores.

Second, the new digital money needs to feel simple, intuitive, and easy to use even in even the most illiterate parts of the world. You often hear experts advocating financial literacy and educational programs to “teach” people how to use new technology-based money. But the most effective adoptions happen when people learn by imitation. So, this electronic money must become ubiquitous. People should see it being used by rich and poor alike and in developed and developing countries in essentially similar ways. No one offered cell phone literacy classes or programs when the technology was introduced, but cell phones quickly went from being aspirational objects to being widely adopted as the costs fell sufficiently low. Now more people use cell phones than toilets in the world. In the same way, electronic money is likely to grow when middle-class consumers start using it regularly, even when transacting with the poor.

Lastly, the dream of the libertarian cryptocurrency enthusiasts that money will become totally anonymous, far from the reach of the government and inept regulators, is not practical. We want technology that empowers individuals, but we need shared institutions such as the courts and regulators that protect people and the integrity of the currency being used. After all, 7 billion people aren’t going to make the transition purely on faith.

Bhagwan Chowdhry is a professor of finance at the UCLA Anderson School of Management and the co-founder of Financial Access at Birth. More about him can be found here.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME trafficking

Mastercard Agrees to Withdraw Support from Backpage.com

American Express, Discover, MasterCard and Visa credit cards are displayed for a photograph in New York, U.S., on Tuesday, May 18, 2010. Credit-card firms caught off-guard by U.S. Senate passage of curbs on debit fees are facing what one executive sees as a "volcanic" eruption of legislation, including possible limits on interest rates. Photographer: Daniel Acker/Bloomberg via Getty Images
Bloomberg/Getty Images

As part of an effort to fight sex trafficking

Mastercard has agreed to withdraw as an ad payment option on the adult section of Backpage.com, after Cook County Sheriff Tom Dart asked credit card companies to pull support from a site that is often used for trafficking and prostitution.

The Chicago-area sheriff wrote to Mastercard CEO Ajaypal Banga on Monday requesting the change, and on Tuesday the company agreed to sever ties with the adult section of the site, citing “rules that prohibit our cards from being used for illegal or brand-damaging activities.” American Express has already withdrawn as a payment option. Requests for comment from Visa were not immediately returned.

Further details about Dart’s initiative to fight trafficking by taking on Backpage.com will be announced Wednesday.

If the Sheriff’s effort succeeds, it will become increasingly more difficult for pimps to place ads for sex. Backpage.com charges a small fee to place adult ads, which can cost anywhere from $5 to $17 and bring the website about $9 million in revenue per month, according to Dart’s office, and 1.4 million ads for sex were placed in April alone. Right now, the only way to post an ad is to pay the small fee through Visa, Mastercard or Bitcoin.

“Backpage has significantly lowered the barrier to entry for would-be sex traffickers, giving them easy access to millions of johns while cloaking them in anonymity and putting all risk on the shoulders of their victims. Raising that barrier will lead to less would-be sex traffickers entering the business as well as less victims,” said Dart in a statement.

He added that he asked Visa and Mastercard to “defund this criminal enterprise and join us in the fight to seek justice for sex trafficking victims across the globe.”

TIME legal

The Silk Road Mastermind Appealed His Life Sentence

Trial Of Online Drug Marketplace Silk Road Founder Ross Ulbricht Begins
Spencer Platt—Getty Images Max Dickstein stands with other upporters of Ross Ulbricht, the alleged creator and operator of the Silk Road underground market, in front of a Manhattan federal court house on the first day of jury selection for his trial on January 13, 2015 in New York City.

Ross Ulbricht has been sentenced to life in prison

Ross Ulbricht, convicted ringleader of the drug trafficking website Silk Road, is appealing his conviction and lifetime sentence.

The appeal was submitted to the United States District Court in Southern New York on Monday, Motherboard reports.

Ulbricht was convicted by a Manhattan federal jury in February on all seven counts, which included narcotics and money laundering conspiracies. He was sentenced to life in prison last month, though federal guidelines stated he could have served as few as twenty years.

Ulbricht’s sentencing has sparked protests from proponents of Internet freedom, Vice notes, including movie star Russell Brand, who argued that Ulbricht was merely achieving the “American Dream.”

MONEY financial advice

NatureBox CEO’s Biggest Money Mistake

Gautam Gupta, CEO of healthy snack company NatureBox, shares his advice for entrepreneurs—and his biggest money mistake.

TIME Innovation

How Technology Can Help Shame Water Wasters in California

These are today's best ideas

1. To fight water waste, apps are helping Californians “droughtshame” their neighbors.

By Sam Sanders at NPR

2. Punish NFL teams when they sign domestic abusers.

By Nancy Armour in USA Today

3. Bitcoin might be a massive game-changer in the half trillion dollar remittances market.

By Florian Graillot at TechCrunch

4. Want to defeat ISIS? Break up Iraq.

By David Apgar in the Globalist

5. Crowdsourcing help for depression could save lives.

By Larry Hardesty at the MIT News Office

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Bitcoin

New York Stock Exchange Gives Bitcoin Some Mainstream Love

People attend a Bitcoin conference on at the Javits Center April 7, 2014 in New York City.
Andrew Burton—Getty Images

The digital currency takes another step toward the mainstream

The New York Stock Exchange premiered a bitcoin index on Tuesday, giving an important endorsement to the digital currency that could help give it more mainstream credibility.

NYSE President Thomas Farley couched the announcement in terms of meeting customer demand.

“Bitcoin values are quickly becoming a data point that our customers want to follow as they consider transacting, trading or investing with this emerging asset class,” he said in a statement from the NYSE’s parent company, Intercontinental Exchange. “We are pleased to bring transparency to this market.”

The new index tracks the price of one bitcoin in U.S. dollars by looking at transactions processed through various bitcoin exchanges. The NYSE was quick to point out that it will only track only bitcoin exchanges that “have been evaluated and meet NYSE’s quality standards.”


Last year, Mt. Gox, the leading bitcoin exchange, imploded and lost hundreds of millions of dollars worth of its customers’ holdings. Since then, the price of the digital money has dropped precipitously—to around $230 today. At its height in 2013, bitcoin traded at more than $1,200 per unit.

Initially, the NYSE bitcoin index is getting its data from Coinbase, a bitcoin wallet startup that NYSE invested in at the beginning of the year.

Other financial stalwarts are getting in on the bitcoin act, too. The Nasdaq stock exchange, Goldman Sachs, and former U.S. Treasury Secretary Larry Summers have become involving in some way with the cryptocurrency through investments in bitcoin-related startups, taking board seats in those companies and using some of its underlying technology.

Farley, for his part, is not ruffled by the possibility that bitcoin could fail to meet the promises of techno-utopians. “We’re willing to make some investments and even take on some risk earlier in the lifecycle of a new technology than some of our competitors,” he told Mashable. “The benefit is when we get it right, we get it real right. When we get it wrong, the idea is to get to that answer as quickly as possible and move on.”

Business Insider reported that this is just the beginning for NYSE’s bitcoin program. “This is just the first of many bitcoin-based indexes that the NYSE plans to launch,” the site said, citing an exchange spokesperson. “Details about further indexes have yet to be released.”

TIME robotics

A Drug-Buying Robot Has Been Freed From Police Custody

!Mediengrupppe Bitnik Items purchased on the darknet by the Random Darknet Shopper

The bot, programmed to buy illegal goods online, was part of an art exhibition

A robot programmed to buy drugs from illegal online markets has been freed by Swiss police. The shopping bot, called the “Random Darknet Shopper,” was created last fall by a Swiss art group called !Mediengruppe Bitnik to purchase illicit goods online using a weekly allowance of $100 worth of Bitcoin. The various items the bot bought at random, including counterfeit sneakers and ecstasy, would be delivered to the art group’s gallery for an exhibition.

Swiss police captured the robot back in January and confiscated its purchases. However, last week, the art group announced that the police had returned Random Darknet Shopper as well as all of the goods it bought, except for the ecstasy. A Swiss police official told CNBC that the makers of the robot wouldn’t be charged for programming the robot to buy illegal items.

“This is a great day for the bot, for us and for freedom of art!” the art group wrote in a blog post.

[CNBC]

TIME Innovation

Five Best Ideas of the Day: April 15

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. The U.S. is safer than we’ve been in generations. So why do we see threats around every corner?

By Stephen Kinzer in the Boston Globe

2. Is college worth it? There’s a checklist for that.

By Brandon Busteed at Gallup

3. Life is teaching your kid the value of white lies.

By Melissa Dahl in the Science of Us

4. The secret to success for unregulated currencies like Bitcoin might be more regulation.

By Larry Greenemeier in Scientific American

5. Scotland’s new drunk-driving law works so well, it’s hurting their economy.

By Chris Green in the Independent

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

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