Lecture (presentation) notes

Introduction

- What is critical thinking?

o Critical thinking is a mode of thinking about any subject content or problem in which the thinker
improves the quality of his or her thinking by skilfully analysing assessing and reconstructing it
o is self directed, self disciplined, self monitored and self corrective thinking
o It presupposes assent to rigorous standards of excellence and mindful command of their use
o It entails effective communication and problem solving abilities as well as a commitment to
overcome our native egocentrism and sociocentrism.

- Difference between thinking and critical thinking

o Thinking: Based on an analysis of given facts we infer a conclusion
o Critical thinking: Some process, we just add doubting our thoughts to it

- Why critical thinking is important?

o the answer to our ‘manipulated’ thinking are several biases and instincts
o Topics/Occasions in which many people clearly did not think critically
 a) Brexit
 b) Elections
 c) Global Warming
 d) Covid 19 crisis

- When have you recently used your ‘critical thinking’ in relation to business?
o According to the Future of Jobs report 2020 published by the World Economic Forum, Critical
Thinking is likely to be one of the top 10 trending skills in 2025
o There is shortage of people capable of this skill
 TOP 15 skills in 2025
 Analytical thinking and innovation
 Active learning and learning strategies
 Complex problem-solving
 Critical thinking and analysis
 Creativity, originality and iniciative
 Leadership and social influence
 Technology use, monitoring and control
 Technology use design and programming
 Resilience, stress tolerance and flexibility
 Reasoning, problem-solving and ideation
 Emotional intelligence
 Troubleshooting and user experience
 Service orientation
 Systems analysis and evaluation
 Persuasion and negotiation

- Influential personas in the history of Critical Thinking

o Socrates - father of Critical Thinking
 Among the first ones to question the rules established by the religion and the church
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  Challenged the way people think by asking question
 “The only true wisdom is in knowing you know nothing”
 Was sent to exile and consequently sentenced to death for his opinions and behaviours
 Luckily, his ideas were further enhanced by Plato

o From Late history:

 Leonardo da Vinci (1452) – renaissance man
 Gallileo Gallilei (1564) - astrology
 Isaac Newton (1643) – newtons law of motion and gravity
 Benjamin Franklin (1706) – founding fathers of the US inventor, lighting rods and many
others

o Influential Personas from the Recent History

 Charles Darwin - *1809 – Evolution theory
 Josephine Cochrane - *1839 – Mechanical dishwasher
 Alexander G. Bell - *1847 – Telephone
 Thomas Edison - *1847 – Light bulb, phonograph
 Nikola Tesla - *1856 – Alternating current
 Mary Anderson - *1866 – Windshield wipers
 Marie Curie - *1867 – Radioactivity
 Albert Einstein - *1879 – Theory of Relativity
 Alexander Fleming - *1881 – Penicillin
 Richard Feynman - *1918 – Quantum Theory

o Important critical thinkers of 21st century

 Steve Jobs - *1955 – Apple
 Virginia Rometty - *1957 – Chairman of IBM (first woman who ever lead this company)
 David Karp - *1986 – Tumblr (founder and CEO)
 Jack Dorsey - *1976 – Twitter
 Larry Page - *1973 – CEO & Co-founder Google
 Pierre Omidyar - *1967 – Ebay founder and chairman
 Jeff Bezos - *1964 – Amazon
 Marc Benioff - *1964 – SalesForce
 Elon Musk - *1971 – Tesla, SpaceX
 B. Hewlett & D. Packard - *1913 & *1912 Hewlett-Packard (HP)

o Personalities contributing to the area of critical thinking

 Daniel Kahneman – thinking fast and slow
 Hans Rosling - Factfullness
 Jordan Peterson – 12 rules for life
 Malcolm Gladwell – talking to strangers

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 Deep dive into critical thinking
- Topics:
o Basics of Critical Thinking
o Daniel Kahneman’s Theory of Critical Thinking
o Cognitive Biases & Instincts
o Fake News
o 6 hats
o

- Our knowledge

- Daniel Kahneman’s theory of Critical thinking (System 1 & 2)

o Daniel Kahneman is an Israeli American psychologist and economist notable for his work on the
psychology of judgment and decision making as well as behavioral economics for which he was
awarded the 2002 Nobel Memorial Prize in Economic Sciences.

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 o System 1 - Thinking Fast ( FAST, AUTOMATIC, EMOTIONAL)
 Evolutionary trait developed to preserve survival of species
 Instinct allowing us to run before our brain detects a danger
 System 1 seeks to produce a coherent and believable story based on available information
 Works automatically and quickly with little effort or conscious control
 Using the system – short-term decisions
 Provides good answer without overloading system 2
 Fe. Choosing ice cream flavour, lipstick colour

o System 2 - Thinking Slow (SLOW, CONSCIOUS, EFFORTFUL)

 Effortful, slow and controlled way of thinking
 Requires energy and can’t work without attention, but once engaged, it has the ability to
filter thei nstincts of System 1
 Allocates attention to conscious mental activities that need s it, including complicated
calculations
 The function of System 2 is often linked to the subjective experience of agency, choice and
concentration
 Using the system – long-term decisions
 Provides more reliable, more beneficial answer
 Choosing an apartment, career decision making

- Monkey Business Illusion

o The Monkey Business Illusion is a cognitive phenomenon.
o It involves a video where viewers count passes made by people in white shirts.
o A person in a gorilla suit walks through the scene during the video.
o Many viewers miss noticing the gorilla due to their focused attention.
o The illusion demonstrates inattentional blindness.
- Whodunnit
-

- What about the result?

o A complete change of perspective? PROBABLY NOT
o But:
 Their rhetoric on the issue became softer
 They found common ground in particular areas
 They have gained an understanding of the opposite side

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- Cognitive Biases
o Effect of biases is unfortunately unavoidable. It is necessary to be aware of them - we can keep them
in mind, be aware of them and consider their influence during our decision making or discussions
with others
o 9 Common biases:
 1) Anchoring
 A cognitive bias that makes us attach to the first information available to us and
affect our decision making
 Once the anchor set is established, all further decisions, guesses negotiations are
based on it
 Examples: First selling price offered by the selling party during any negotiations,
Announcing bad good news
 2) Availability Heuristics
 A cognitive bias causing the information and events that are in our recent memory
to be perceived as more important than the other ones
 Examples: Crashing plane and subsequent fear of flying
 3) Confirmation Bias
 A Tendency to look up, prefer, and easily recall information and proofs that are in
accordance with our current beliefs opinions
 Examples: Internet Search using keywords that affirm our beliefs
 4) Sunk cost fallacy
 A tendency to invest money time energy in projects that are not likely to be
profitable in the future, only because of past investments
 Examples: Cinema Tickets for a bad movie, Continually investing in our own business
which is not and most probably will not even be profitable.
 5) Hindsight bias
 A feeling that events that took place in the past were clearly predictable
 Examples: Election results, Assessing medical malpractice
 6) Loss aversion
 A disproportionately high aversion to loss versus the joy of gaining the same value
 In other words we will regret losing a subject more than we would be pleased to
receive it
 Examples: A coin toss for a hundred dollars, Unpaid trial period (streaming services)
 7) Not Invented Here Bias
 A preference for our own ideas procedures to the ones of others
 Examples: Group work our solution to the task
 8) Planning Fallacy
 A belief that the task project activity will take us less time than it eventually will
 Examples: Practically anything which requires planning studying for an exam,
working on a project, cleaning your room, Always ask yourself Is this plan realistic?
 9) Status Quo Bias
 A preference for the things to stay the way they are
 A cognitive distortion very often hindering innovation and development
 Examples: Established procedures in a company

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- FAKE NEWS
o The dominant position of Media
o How to differ fake news from legit article?
 Headline : Quality of the headline is not assessed on how it represents the article but on the
reach it can get
 Body : Informative yet simplified Goal is to keep the reader reading
 Sources: What is the origin of the information. The most important part when we want to
assess the article.
 Author or Media background : You can chec k the authors bio to know his
reputation.
 Date of publication: Checking if the information is not outdated
 Credibility: Is the source academical ? Is the sourced cited in more media?
 Methods used : The methods used are more improtant than the results of
researches.
o Methods: fameworks to critically evaluate information
 SMELL test – use it to separate facts from fiction online. DON’T BE FOOLED
 S = Source. Who is providing info?
 M = Motivation. Why are they telling me this?
 E = Evidence. What evidence is provided for generalizations?
 L = Logic. Do the facts logically compel the conclusions?
 L = Left out. What’s missing that might change our interpretation of the info?
 CRAAP test – use it to evaluate quality and trustworthiness of the information
 C = Currency. The timeliness on information
 R = Revelance. The importance of information for your needs
 A = Authority. The source of information
 A = Accuracy. The reliability, thuthfulness and correctness of the content
 P = Purpose. The reason why the information exists.

- Objectivity does not exist.

o Subjectivity – can we avoid it?
 Owners : Employees naturally won’t go against the owners of the media. Interventions are
not needed.
 Editors : It s normal to have an opinion. Editors are responsible for the opinion of the whole
media
 Goal: We are goal oriented. The goal of media is to make money. The goal of journalist is to
make it to pay check.

- Six Thinking Hats - Edward de Bono

o Lateral thinking
 Creative problem solving
 Opposite of vertical thinking
o Six Thinking Hats
 Use of lateral thinking
 Different colors different approaches:
 Blue – MANAGING – what are we trying to achieve? Looks at whole picture
 White – INFORMATIVE – what do we know?
 Red – EMOTIVE – how de we feel about problem? Very intuitive and instinctive
 Black – PESSIMISTIC – looks for disadvantages, problems that could occur. Warns us
 Yellow – OPTIMISTIC – looks for advantages, sees the positive aspect of things
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 Green – CREATIVE – looks for new possibilities, alternatives, new ideas.

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 Leadership
- Topics:
o 7 Types of Leadership
o Critical ThinkingModule
o The Role of Leader
o Innovation Leadership
o Practical Exercise

- Leader has to be:

o Sharp
o Patient
o Kind
o Merciless (with an interest in people)

- 7 types of leadership
o Opportunist
 He wins by hook or by crook, self-centered, manipulative, strong. Excellent in emergencies
and business opportunities.
o Diplomat
 He avoids conflict, wants to be part of the team, conforms to the group, does not „rock the
boat". Brings people together
o Expert
 He rules with logic and expertise, seeks rationality and efficiency. Excellent as a solo
contributor.
o Achiever
 Executes strategic objectives, and effectively achieves the goal with the help of the team.
Excellent manager, action-oriented and goal-oriented
o Individualist
 Combines personal and corporate logic of progression, creates a unique structure to fill the
gap between stretch and performance. Excellent in business and consulting roles.
o Strategist
 Delivers organizational and personal transformation. Excellent as a transformational leader
o Alchemist
 Delivers social transformations, integrating material, spiritual and social transfigurations.
Extensive knowledge of leading transformations in the broad company level.

o
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- Critical thinking in business

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 Metaverses
Bla bla bla some romantic bs
https://www.spatial.io/s/Metaverse-Lecture-VSE-Critical-Thinking-in-Business-Futurology-
6333e9b4cd41f50001472808?share=3242795323471815159
- https://enterprisersproject.com/article/2019/10/ar-augmented-reality-explained-plain-english
- https://www.iberdrola.com/innovation/virtual-reality
- https://www.youtube.com/watch?v=yRUCU5FsvTY&ab_channel=TEDxTalks

E-comerce
- https://www.youtube.com/watch?v=nyAcQuFWRuU&t=547s&ab_channel=TEDxTalks

- Topics:
o Current trends
o Data-driven e-commerce
o Machine learning
o Predictive analytics
o Emerging technologies

- Future of e-commerce is heavily dependent on data science and analytics.

o In order for businesses to succeed in the competitive e-commerce landscape, they must leverage
data-driven insights to personalize customer experiences, optimize pricing, forecast demand, and
improve supply chain efficiency.

- Gartner: top priorities, technologies and challenges in retail in 2023

o 35% - Growth
o 27% - customer / user experience
o 20% - technology modernization

- Benefits of this lecture:

o Understanding the importance of data science and analytics
o Developing their skills in data science and analytics

- CE AI & Data
o We are a group of 110 data scientists, programmers, IT specialists and analysts
o From three hubs, we lead the Analytics efforts in 18 CE countries
o Great track record and cooperation with the rest of Europe (NL, FR, DE, IT, UK, etc.

- Trends that are shaping the future of retail

o Customer Centric
 Products and services are becoming fully personalized to the individual needs of a customer
 Customer recognition • Contextualization • Influenced by social media •
Convenience oriented • Customer data is collected throughout the shopping
experience
o Digitally Pervasive
 New digital technologies are opening up opportunities to engage customers at multiple
touch points
 Constant interaction with digital technologies • Augmented reality • Integration of
IOT and Computer Vision into the shopping experience • Smart shelves and digitally
enhanced inventory practices • Digital twins
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 o Experience Driven
 Customers are loyal to those retailers who offer the highest convenience in their shopping
experience
 • Seamless shopping with no need for cashiers • Smaller store formats/easier to
shop • Personalization • Engaging the customer in new and innovative ways
o Changing Store Role
 The role of physical stores is fundamentally changing but remains critical to the retail
landscape
 • Rise of “services” as a part of the store assortment • Use of the store as a shipping
competitive advantage • Partnerships and ecosystems with other companies • Rise
of marketplaces
o Optimized Operations
 Technology, analytics and AI is improving operational execution through automation
 • Sensors and CV used to improve inventory management • Robotics to optimize
labor • Blockchain to easily identify counterfeit products

- Signature issues
o 1) Rapidly changing market conditions affect channels that consumers use as well as the overall
demand. This makes forecasting and planning much harder and creates pressure on overall business
flexibility
o 2) As customers grew to expect personalized and discounted offers, many retailers face the
problem of low engagement with the customer as well as inability to maintain their trust.
o 3) Current inflation, disruptions in the supply chain and unclear economical outlook introduce a
combination of growing purchase and operational costs on one side and increased consumer price
sensitivity on the other. The sector is under pressure when it comes to maintaining their margins.
o 4) Lack of tech and analytics capabilities results in inability to derive insights from data and to
operate data-driven processes. This slows down the digital transformation and increases the
dependance on 3rd parties

- What is analytics?
o = process of collecting, analyzing, interpreting, and deriving insights from data to make informed
decisions and improve business performance.
o It involves the use of various techniques, tools, and methodologies to uncover patterns, trends, and
relationships within data sets.

- Trends in Analytics
o Cloud everything - Infrastructure. Data. Access.
o Automate – End-to-end automation of ML workflow.
o Generative AI - Hype or trend?

- Many businesses struggle to successfully utilize advanced analytics.

o Main reasons are:
 Infrastructure and data is blocking us
 Unclear expectations of what analytics can do
 No strong leader to drive the topic
 Poor capacity of the existing team
 Lack of experience with data science
 Blindless towards the actual state

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- Purple people:
o Have combination of Technical and analytical skills and Business and communication skills
 Technical and analytical
 Technical skills
• Testing and validation
 = defining, developing and implementing quality assurance practices
and procedures for technical solutions and validating hypotheses
• SQL querying
 = Querying and manipulating data to facilitate the solving of more
complex problems
• Data modelling
 = structuring data to enable the analysis of information, both
internal and external to the business
 Data analysis
• Data modelling
• Data analysis
 = valuating data using analytical and logical reasoning for the
discovery of insight, e.g. predictive modelling
• Reporting Software
 = understanding of the underlying theory and application of key
reporting software
 Business and communication
 Business acumen
• Technology alignment
 = understanding how technology can be leveraged to solve business
problems
• Macro-perspective
 = understanding of the company’s business strategy, current
business issues and priorities and current industry trends
• Business knowledge
 = understanding of business measurement of KPI and business
frameworks
 Storytelling
• Business knowledge
• Business Commentary
 Articulation of insight to explain current and forecasted trends, their
impact and opportunities for the business
• Soft skills
 = communication and interpersonal skills are necessary to articulate
insight gained from analysis

- Use-cases of e-commerce
o AI & Data Strategy
 Establish an AI strategy and roadmap to guide an organization’s AI journey to value
realization.
o Customer Data Platform
 Understand your customers with CDP. We provide best-in-class serverless architecture
combined with a proven implementation approach
o Real-time Recommendation Engine

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  Reach 3-8% revenue uplift by delivering next best offer (NBO), action (NBA), content, etc.
(NBx) via scalable personalization platform.
o Natural Language Processing
 Entity modeling and labelling. Sentiment analysis of customer reviews. Third party risk
monitoring
o Pricing Analytics
 Improve your pricing strategy with our automated pricing assets. Flexible and AI & ML
capable solutions to adjust your market position.
o Geo-based Location Optimization
 Introduce your business at the right place and at the right time. Analyze your competition in
the area and act upon geospatial data.
o Basket Closure Optimization
 Understand the behavior of your customers in order to reduce basket abandonment. Trigger
personalized actions and improve engagement
o Algorithmic Supply Chain Planning
 Efficiently manage your entire supply chain with ML based demand forecasting and
inventory management in order to prevent stockouts and overstocks

- Real time personalization

o Means:
 1. Right message
 User receives an email with an image of a product they have already purchased, plus
links to several other products that would complement the one they already have.
 2. Right person
 User is instantly recognized when visiting the brand’s website. Their experience is
tailored based on a multidimensional understanding of their interests
 3. Right content
 The website homepage is customized with curated products based on user’s past
purchases as well as combinations of events coming up in their life.
 4. Right offer
 As when a user, whose propensity to buy was calculated by CDP algorithm, is
browsing, they receive an offer for free two-day shipping on products curated for
them, based on their past behaviour
 5. Right channel
 A week after they shipment arrives user receives a notification on the phone about
an in-app tool that allows her to take a photo of any item and receive
recommendations for complementing products. They test the tool and add a few
items to her favourites
 6. Right moment
 Three months later user receives an email that includes recommendations on how
to adapt a product they previously purchased to better suit their changing needs.
User clicks through … and continues the journey of deepening engagement.

- Pricing capability map = strategic tool used by businesses to analyse and visualize the relationship between
the price of a product or service and its perceived value or capabilities.
o It helps organizations understand how different offerings in their product portfolio align with
customer expectations and price points
o Unified pricing = is the standard, consistent price of a product or service over a certain period
without temporary discounts or promotions.

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o Promo pricing = involves offering temporary discounts or special offers to incentivize customers or
increase sales within a specific timeframe.
o Markdown pricing = refers to reducing the price of a product, often temporarily, to stimulate sales,
clear inventory, or maintain profitability.

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 Cryptocurrencies

- How did it get started?

o The idea of digital money wasn’t new
 Worries about complete surveillance state led to the creation of the cypherpunk movement
 Programmers rebelled using their code as a weapon
 DigiCash (1989), B-money (1998), Hashcash (2002)

o Bitcoin
 Decentralized peer to peer cryptocurrency with a finite supply
 First mentioned in 2008 in a self published white paper written by Satoshi Nakamoto
 identity of this individual (or individuals) remains unknown .

- What did Bitcoin solve?

o Replaced the trust model with cryptographic proof
 Ultimately eliminated the need of an intermediary and replaced it with a peer to peer
network
o The problem of double spending
 Recorded all transactions on a public timestamped ledger called the blockchain
 This solved the reversibility of electronic payments
o Created an apolitical alternative to fiat
 All money is traditionally tied to the action of the central banks and politics

- Characteristics of BTC
o Max supply of 21 million
 Currently ~90% of the total supply is circulating
 Market cap of Bitcoin is ~$0.85T, gold is ~12.2T (14 times more)
o ~10 minute block time
 Every 10 minutes, a bitcoin block is mined and transactions are confirmed
 Each block is limited by size (1 MB) low to keep decentralization
o Uses Proof-of-Work consensus mechanism
 Bitcoin miners are using ASIC chips and are compensated in BTC rewards
 Bitcoin miners are currently making ~$1 billion a month in 2021 made $16.8B

- Why is BTC still around?

o Good timing on launch
 The financial crisis was in full swing and peoples’ trust in banks was low
o Money is a social construct
 People in society agree to give things value
o There is a need (and demand!) for apolitical alternative to national currencies
 Imagine if you are born in Venezuela and have to deal with inflationary currency
o Predictable supply
 Everyone knows how much Bitcoin there is and how much there will be
o Highly secure
 Attacking Bitcoin is very difficult and would cause a lot of resources
o It’s internat native , decentralized and outside of the financial system
 You can send Bitcoin 24/7 and don’t have to ask anyone

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- Bitcoin on balance sheets
o MicroStrategy, a software company, was the first public co. to announce it bought a significant
amount of bitcoin as an inflation hedge
o now holds ~114 000 BTC worth ~$6.4 billion
o Square, financial services company, followed and now holds 8 027 BTC worth ~$450 million
o Tesla, 9th largest company in the world, announced it acquired 48 000 BTC. Then it sold 4 800 and
now holds 43 200 BTC worth ~$2.4 billion

o Stanley Druckenmiller (investor, hedge fund manager and philanthropist) says that:
 "Bitcoin could be an asset class that has a lot of attraction as a store of value to both millennials
and the new West Coast money. I own many more times gold than I own bitcoin, but frankly, if
the gold bet works, the bitcoin bet will probably work better because it's thinner and more
illiquid and has a lot more beta to it”

o Paul Tudor Jones (investor, hedge fund manager and philanthropist) says that:
 "The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my
bet is it will be Bitcoin."

o Ray Dalio (investor, hedge fund manager and philanthropist) says that:
 “To have invented a new type of money via a system that is programmed into a computer and
that has worked for around 10 years and is rapidly gaining popularity as both a type of money
and a storehold of wealth is an amazing accomplishment."

o Bill Miller (investor, fund manager and philanthropist) says that:

 “Bitcoin is a lot less risky at $43,000 than it was at $300. It's now established, huge amounts of
venture-capital money have gone into it, and all the big banks are getting involved. I think of
bitcoin as digital gold. The key is the demand for this particular type of protection against
financial catastrophe."

o Elon Musk (Founder and CEO of Tesla and SpaceX) says that:
 “I do at this point think Bitcoin is a good thing. I am a supporter of Bitcoin. I am late to the party
but a supporter. Bitcoin is on a verge of getting broad acceptance by traditional finance people.”

o Jack Dorsey (Founder and CEO of Twitter and Square) says that:
 "The world ultimately will have a single currency, the internet will have a single currency. I
personally believe that it will be bitcoin."

- Other crypto assets:

o With Bitcoin’s success and a lot of people getting rich, new cryptocurrencies (also called altcoins)
started popping up in bunches
o Most of them lazy efforts that were promising to be a better Bitcoin - cheaper, faster, less wasteful
o There are now ~23k tokens and market cap of $1.2T
o Bitcoin and Ethereum alone are ~70% of the total market cap, top 100 coins 94%

- Largest share of cryptocurrencies have:

o 1) Bitcoin (50,7%)
o 2) Ethereum (20,8%)
o 3) BNB (5%)
o 4) XRP
o 5) Cardano

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- Types of assets:
o Store of Value
 f.e. Bitcoin
o Layer 1s
 Layer 1 is the base blockchain
 Provides consensus and security
 Ex: Ethereum, Solana, Avalanche, etc.
 Blockchain trilemma
 Decentralized
 Secure
 Scalable
o Layer 2s
 Solutions created to help scale by processing transactions off of the L1 while still maintaining
the same security as the underlying L1
 A layer 2 communicates with the base layer by submitting bundles of transactions
 L1 handles security, data availability, and decentralization
 L2 handles scaling
 Types of L2s
 Optimistic Rollups → ex.: Optimism and Arbitrum
 ZK-Rollups → ex.: zkSync and Starknet

o DeFi tokens (Governance tokens)

 Ex: Uniswap, Aave, Synthetix, Maker, Compound, etc

o Exchange tokens
 BNB, FTT, OKB, LEO

o Web3 and Metaverse

 Web3 is a buzzword for services built on blockchains that generally use tokens to
decentralize
 Tokens are used to incentivize users to contribute to the protocol (for example
provide storage on their computer)
 They are also freely traded on cryptocurrency exchanges → every user can own a
piece of the infrastructure but also buyers fund the protocol
 Key principals → ownership, compatibility and decentralization
 Often criticized for enabling pay-to-play and financializing the internet



 Problems with Web3:
 Everything is financialized and requires value to be created for token holders
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 o Token that’s just a governance token and doesn’t have any revenue
component will likely not have any value long term
 Tokens are often used to incentivize activity → if there is not much demand to buy
the token but people keep receiving tokens for free, the price will perpetually go
down
o If it’s too easy to “yield farm,” and make money, agnostic players will sell
 Scalability
 Accessibility
 Environmental concerns → PoW vs. PoS

 Difference between Web3 and Crypto:

 All web3 is crypto but not all crypto is Web3
 The goals of web3 is about rebuilding apps and games that we have today to
become more decentralized (censorship resistant) and adding a shared ownership
component
 What is not Web3 → stablecoins (USDC, USDT, etc.), meme tokens (DOGE, SHIB),
exchange tokens (BNB, FTT, etc.) and payment/nonsense tokens (XRP)

o Meme tokens
 Token designs:
 Purely governance tokens
o Governance can vote on anything → even adding revenue sharing or utility
components
 Revenue/dividend tokens
o Revenue sharing tokens → token holders make ETH/stablecoins from
protocol revenue
o Burn-based tokens → some portion of the protocol revenue is burned
(similar to stock BB)
 Utility tokens
o You can’t use the service unless you have a token → almost like subscription
but effectively token gating

o Stablecoins
 Stablecoins are cryptocurrencies that claim to be backed by fiat currencies—dollars, pounds,
shekels, rubles, etc. The idea is that, unlike cryptocurrencies like Bitcoin, stablecoins' prices
remain steady, in accordance with whichever fiat currency backs them.
 Ex: Tehter, USDC, etc.

o NFTs (= Non-fungible tokens)

 PFP
 CryptoPunks
 Bored Ape Yacht Club
 Generative Art
 Art Blocks
 Games
 Axie Infinity
 Collectibles
 NBA Top Shot
 Sorare

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- Market structure:
o These components together form the cryptocurrency market structure, offering different trading
instruments to cater to various trading strategies, risk profiles, and investment objectives. Spot
trading provides direct ownership, futures trading offers exposure to price movements, and options
trading provides flexibility and risk management capabilities.
o Spot Trading:
 Immediate purchase or sale of cryptocurrencies at the current market price.
 Involves direct transactions between buyers and sellers or through cryptocurrency
exchanges.
 Used for investment purposes and facilitating transactions.
o Futures Trading:
 Involves entering into contracts to buy or sell cryptocurrencies at a predetermined price and
date in the future.
 Speculators and hedgers use futures contracts to speculate on price movements without
owning the underlying asset.
 Allows for leverage, amplifying potential gains or losses.
 Used for risk management and gaining exposure to cryptocurrency markets.
o Options Trading:
 Provides the right, but not the obligation, to buy or sell cryptocurrencies at a specified price
within a predetermined time period.
 Traders have the flexibility to choose whether to exercise the option or let it expire.
 Used for speculation, risk management, or generating income from premium collection.

o Most profitable crypto companies

 Exchanges (FTX, Binance, Coinbase)
 Lenders (Genesis, Nexo)
 Wallets (Metamask, Phantom)
 Market makers (Wintermute, Alameda)
 Node providers (Alchemy)
 Staking validators (Kraken, Coinbase)
 NFT Marketplaces (OpenSea, Magic Eden)
 Mining equipment (Bitmain, MicroBT)
 Data companies (Dune Analytics, Nansen)
 Stablecoin issuers (Circle, Paxos)
 Compliance (Chainalysis)
 Custody (Fireblocks, Anchorage)
 Payment providers (MoonPay)
 Token dev (Solana, Starkware)

 Highest valuation
 Binance → $100B+
 Coinbase → ~$15B
 Bitmain → $15B
 Blockchain.com → $14B

- Crypto cycles
o 2011–2012
 312,000% increase
 93% drop

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 o 2012–2013
 13,000% increase
 80% drop
o 2013
 2,200% increase
 86% drop
o 2015–2017
 11,000% increase
 85% drop

- What is Fiat to Crypto?

o “Fiat to crypto” means buying cryptocurrency with fiat money … so, for example, buying Bitcoin with
USD. The reason this is even a thing is because a few years ago, many online trading platforms only
allowed you to trade crypto for crypto.

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 Quantum Computing
https://www.youtube.com/watch?v=QuR969uMICM

- Why quantum now?

o Motivation
 Moore's Law no longer applies – supercomputers are only getting bigger, not faster. At the
same time, the economic and social challenges are becoming ever more pressing. Averting
climate catastrophe, for example, requires new approaches for photosynthesis (CETCH),
crop (C3/C4) and batteries.
o How Quantum Computing Works
 Quantum computers inherently operate in parallel – and each additional qubit doubles their
capabilities. However, the development of adapted algorithms requires new thinking and an
understanding of stochastic systems and probabilistic computing.
o Quantum and Cyber Security
 Quantum computers will soon break the cryptographic techniques currently used on the
Web, such as the asymmetric ciphers used in online banking when agreeing on session keys
(DHM) or creating digital signatures (RSA/ECDSA) . On the other hand, Quantum also
provides the basis for tamper-resistant communication (QKD).

- 1) Motivation.
o Why we urgently need quantum computing?
 Improved nitrogen-fixation process for creating ammonia-based fertilizer
 New catalysts to make CO2 conversion into hydrocarbons more efficient and selective
 Better financial models to improve stability, predictability and growth of world economies
 New classes of antibiotics to counter the emergence of multidrug-resistant bacterial strains

o Don‘t underestimate large dimensions and exponential growth – big natural numbers

o Moore' s Law runs out of steam

 Ever smaller structures
 Transistors below 7 nm technology are strongly affected by the tunnel effect at the
gate structures.
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  If only very few atoms form a gate, then statistical averaging is missing, quantum
mechanical effects prevail.
 We should not fear quantum mechanical effects, but rather use them – in quantum
technology devices


o Current supercomputers – IBM Summit

 [1] https://www.ibm.com/thought-leadership/summit-supercomputer/
 [2] https://setiathome.berkeley.edu/cpu_list.php
 Oak Ridge National Laboratory, Tennessee US Department of Energy
 148 Petaflops calculations per second, (≈148.000 PCs with Intel® Core™ i9-9900K,
100 Gigaflops [2])
 9.216 IBM Power 9 processors
 27.648 NVIDIA GPUs (Tesla Volta V100)
 10 PB (= 10.000.000 GB) RAM, 250 PB (= 250.000 TB) File System
 10 MW power consumption, corresponds to about 68.000 single-person households
(1.300 kWh p.a.)

o Simulating pharmaceuticals
 Though it’s impossible to completely represent the molecular configuration of PenG on
today’s most powerful supercomputers, but we could represent it using log21086 ≥ 285.6
logical qubits.

o Why quantum now?

 “I’m not happy with all the analyses that go with just the classical theory, because nature
isn’t classical, dammit, and if you want to make a simulation of nature, you’d better make it
quantum mechanical …” Richard P. Feynman Department of Physics, California Institute of
Technology

o Computational Complexity

o Sequential Combinatorics – Life is too short…

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 

o Motivation, summarized
 Problem complexity
 Conventional HPC cannot solve NP problems efficiently, even with a multiplication of
computational capacity.
 Giant state spaces
 Conventional HPC cannot solve NP problems efficiently, even with a multiplication of
computational capacity.
 Energy consumption
 Quantum computers produce more results per unit of energy used compared to
conventional High-Performance Computing.
 Model training effort
 ML applications, e.g. Deep Learning solutions, require high training efforts. Hybrid
algorithms using quantum computers can provide dramatic improvements here.

- 2) Applications: Where Quantum Computing is being used

o Focus of current Quantum applications
 Stimulate quantum systems
 Quantum chemistry, Material science, High energy physics
 Mashine learning
 Better model training, Pattern recognition, Fraud detection
 Optimization and Monte Carlo
 Portfolio optimization, Risk analysis, Loans & credit scoring, Monte Carlo-like
applications

- How Quantum Computer works - Computing with qubits requires and rewards new thinking
o A digital computer works with Bits
 Bits and associated arithmetic units are realized with transistor circuits, modern CPUs
contain billions of them.
 A bit is a controllable classical object that is the unit of information
 A classical logic circuit is a set of gate operations on bits and is the unit of computation

o A quantum computer works with Qubits

 Qubits have superposed states and can be entangled. They can be controlled by means of
interference.

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  A qubit’s state is a superposition of the basic states |0⟩ and |1⟩: a |0⟩ + b |1⟩ This
means that a single qubit can represent many values at the same time (but not all
solutions to a problem).
 When we measure a qubit, it becomes 0 or 1 based on probability.

o A Qubit can contain an infinite amount of information

 Difference between Digital and Quantum computer
 Digital computer:
o 1 state at a time
o Bits are independent on each other
o
 Quantum computer
o Many states at a time
o Qubits can be combined state together (“entangled”)

o Pillars of Quantum mechanics

 Pauli exclusion principle
 It was formulated in 1925 by Wolfgang Pauli for the quantum-theoretical
explanation of the structure of atoms. In its modern formulation, the Pauli principle
states that the wave function of a quantum system is antisymmetric with respect to
the interchange of identical fermions.
 Uncertainty principle
 It was formulated by Werner Heisenberg in 1927 and can be regarded as an
expression of the wave character of matter. It is considered the basis of the
Copenhagen interpretation of quantum mechanics.
 Wave-particle duality
 Objects of quantum physics must be ascribed equally the properties of classical
waves as those of classical particles.

o 2 major principles don’t apply anymore!

 Digital computer
 Realism
o The state of every bit is deterministic at any time, can be measured and
measurement doesn’t change the state of the bit
 Locality
o Changing the state of one bit leaves all other bits in the same state as before
 Quantum computer
 Constraint realism
o in general measuring a Qubit changes its state
 Constraint locality
o changing the state of one Qubit might also change the state of one or more
other Qubits
o A Different paradigm
 Programming a quantum computer is not about writing software that behaves as the
problem to be solved requires in terms of mapping input data to output data
 Quantum Computing is a tool for statistical modeling
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  We use mathematical models and probalistic assumptions to make predictions
about the solution
 Probability is related to experiments
 We run shots on your Quantum circuits and evaluate the Qubit measurements
statistically.

o SUDOKU
 To check a 2x2 Sudoku a digital Computer needs 16 computations

- Bringing all possible states in Superposition a Quantum Computer only needs a single computation to check
all 16 possibilities at once.
- The Quantum Computer finds the correct solutions of the Sudoku as the states that are hit the most often
time.
- The goal of a Quantum algorithm is to have the final Qubit measurement combination corresponding to the
correct answers showing the highest probabilities.
- The number of computations in the Quantum approach is constant in the size of the Sudoku

- Building Software Blocks of Quantum Algorithms

o DC – Performance is described by number of CPU cores, cycle time, size of RAM etc.
o QC – Quantum Volume (QV) depending on width, depth and error rates of circuits

- Approaches on the way to the mega Qubit machine

o Superconducting (SQUID)
 Pro: Macroscopic, Very large experience, Fast operations
 Cons: Low coherence time, Low fidelity, Needs to be cooled down
o Neutral/Cold Atoms
 Pro: Good coherence, Interchangeable topology, Room temperature
 Cons: Experimental technology
o Trapped Ions
 Pro: Very long coherence, Promising fidelity, Room temperature
 Cons: Slow operations, Many lasers needed (but there is MAGIC)
o Photonics
 Pro: Good scalability, Room temperature
 Cons: Single photon source still a challenge
o Diamond Vacancies
 Pro: Good coherence time, Room temperature
 Cons: Fidelity, Difficult to entangle
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- On different quantum computers the same code translates into different circuits

- SQUIDs – Quantum Computers from IBM, Google, Rigetti

o Qubits rely on electrical current crossing rings of superconducting material.

- How to implement and run it? Do it the Qiskit way!

- Optimizing in Real Time

o Challenges in modern logistics
 Meeting deadlines while keeping resource efficiency in rapidly changing traffic situations
often requires dynamic rescheduling
 Solving the resulting optimization tasks on conventional computers costs a lot of time and
energy
 The classical optimization approach often finds only local optimum
o The Digital Annealer solution
 The Fujitsu Digital Annealer can solve many complex optimization tasks in real time
 Often finds solutions close to the global optimum
 Deloitte guides you in the use of this new technology!

- Quantum & Cyber security : Quantum technology can both threaten and promote information security

o Information Security Today

 CAIN principle
 Secure element: Smartcard, eSIM/iSIM, TPM, HSM

o But how is this related to Quantum Computing?

 CAIN is essentially based on three cryptographic methods: Hash functions, Symmetric
encryption, and Digital signature algorithms

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 


o Diffie-Hellman-Merkle (DHM) – Key Exchange for TLS

 DHM enables the agreement of a shared secret over a public, insecure communication
channel such as the Web. The algorithm is the backbone of our digital economy!


o Eve’s Challenge – Discrete Logarithm Problem

 Eve wants to determine the secret symmetric key K from the known and eavesdropped
values p, g, A and B


o Digital Signature – Creating Trust in Cyberspace

 The combination of hash function and asymmetric encryption in a PKI infrastructure makes it
possible to verify the authenticity of data. Another indispensable pillar of the digital
economy.
 Attack surface exploitable for Mallory
o E1 – Modify the document D in your favor, while keeping the fingerprint
(“Hash puzzle”)
o E2 – Modify the document D in your favor, and sign it with your own private
key, overwriting Alice's public key with yours.

 How Quantum comes into play

o To avoid exploitation, Alice encrypts D with Bob's public key kpub,B before
sending.
o Security of RSA is based on infeasibility of factorization of large prime
numbers. Possible in a few years for quantum computers...


o The Factorization Threat?

 Shor's algorithm uses the Quantum Fourier Transform (QFT) to efficiently solve a problem
for which no classical polynomial-time algorithms are known.

 Factorization of 2048 bit RSA integers in 8 hours requires 20 million noisy qubits.

o Post-Quantum Cryptography – NIST Finalists
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  The National Institute of Standards and Technology has been running a competition since
2016 to find quantum-safe successors to current algorithms for key agreement and digital
signatures – Now we have 4 algorithms standardized (*), one for key agreement, three for
signatures

o Post-Quantum Cryptography – Lattice Algorithms

 Schemes based on hard-to-solve lattice problems are the big winners of the NIST
competition. But they pose major challenges, especially to embedded systems with a small
footprint!


o Embedded System Architecture

 Embedded Systems have a long life – it can take up to 40 years from the start of the design
to the decommissioning of the last one produced!
 A special Computer Controlling a Mechatronic Device, e.g. an Aircraft Engine, a Coffee
Machine, an Industrial AGV:
 Can read sensors, command actuators
 Easy to be networked (WiFi / Cellular)
 Real time operating system
 Support of strong cryptography
 Over the air updates
 Temporary unlockable features

o Quantum Key Distribution (QKD) – The BB84 Protocol

 In 1984, Charles Bennett of IBM and Gilles Brassard of the University of Montreal published
a protocol that is now known as BB84. It allows Alice and Bob to generate a sequence of
random bits.

o To cope with the Challenge

 Determine your Attack Surface
 Regularly determine your attack surface and the related assault vectors. Keep an
inventory of all hardware and software components involved. Track the associated
information channels.
 Implement Agile Cryptography
 Be able to quickly update or replace currently used algorithms and cryptographic
assets (keys, certificates). Keep your build/test/deploy infrastructure functional!
Consider switching to QUIC.
 Go for Free and Open Source
 Free and open-source hardware and software is indispensable. The possibility of
public testing reduces the risk of backdoors and increases the quality of the
implementation.
 Take Advantage of Quantum
 Quantum technology is already helping to implement information security, for
example in the generation of high-quality keys. And QKD will find its way into the
industry.

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 Artificial Intelligence

- Talking about AI we need to start with the old Greeks (water engine)
o Steam engine,
- What is AI?
o AI = Artificial Intelligence.
o refers to the development of computer systems or machines that can perform tasks that typically
require human intelligence.
o AI aims to replicate or simulate intelligent behavior, enabling machines to understand, learn,
reason, and make decisions.

- Narrow AI, Expanded AI, General AI

o Narrow AI (=) Weak AI) is designed for specific tasks
 Designed for specific tasks or functions within a limited scope.
 Focused on excelling at a particular task.
 Lacks general intelligence or understanding.
 Examples: Voice assistants (Siri, Alexa), image recognition software, recommendation
algorithms.
o Expanded AI refers to higher intelligence beyond specific tasks (though not yet achieved)
 Possesses higher intelligence and capabilities beyond specific tasks.
 Aims to understand and perform any intellectual task a human can do.
 Can reason, learn, adapt, and apply knowledge across domains.
 True Expanded AI or AGI does not currently exist and is a subject of ongoing research.
o General AI represents the highest level of AI that can match or surpass human intelligence across
various domains.
 Exhibits the ability to understand, learn, and perform any intellectual task a human can do.
 Possesses a broad range of cognitive abilities, including reasoning, problem-solving,
creativity, and self-awareness.
 Can handle new and unfamiliar situations beyond its initial training.
 Achieving true General AI is a significant scientific and technological challenge, under active
exploration.

Logic and Language – Semantic Analysis for Forensic Investigations

- semantics = meanings behind the world

- Forensic Linguistics
o branch of applied linguistics
o application of linguistics knowledge, methods and insights to the forensic context of law, language,
crime investigation, trial and judicial procedure
o history in Czech Republic:
 department of criminalistics in Prague – 60s (in Germany – 70s)

- Forensic analysis is used for author identification – psychological profiling

o Threat letters
o Informing letters
o Blackmailing letters
o Law documents intervention
o sexual harassment
o plagiarism
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- Identification attributes
o Gender, Age, social/local origin, level of education, level of aggression/adaptability, relationship to
authorities, physical/mental handicap

- Authorship identification
o count of functional (conjunctions, articles, prepositions) x content words (nouns, versbs, adverbs)
o word and sentence length average
o average syllables per word
o article frequency
o type-token ratio
o punctuation
o idiolect, frequent words, hapaxes
o overall grammar

- sentiment analysis
o character and frequency of evaluative expressions (primarily the negative ones) has a crucial
influence on hate speech and its author detection (even when having just a short reference text at
our disposal)

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Compulsory readings notes

Deep dive into critical thinking – Kahneman – thinking fast and slow ( chapters 1, 2)
-
Part 1: Two Systems: Chapter 1: The Characters of the Story

- System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control.
- System 2 allocates attention to the effortful mental activities that demand it, including complex
computations. The operations of System 2 are often associated with the subjective experience of agency,
choice, and concentration.
- I describe System 1 as effortlessly originating impressions and feelings that are the main sources of the
explicit beliefs and deliberate choices of System 2. The automatic operations of System 1 generate
surprisingly complex patterns of ideas, but only the slower System 2 can construct thoughts in an orderly
series of steps.
In rough order of complexity, here are some examples of the automatic activities that are attributed to System 1:

- Detect that one object is more distant than another.

- Orient to the source of a sudden sound

The highly diverse operations of System 2 have one feature in common: they require attention and are disrupted
when attention is drawn away. Here are some examples:

- Focus on the voice of a particular person in a crowded and noisy room.

- Count the occurrences of the letter a in a page of text.
- Check the validity of a complex logical argument.
- It is the mark of effortful activities that they interfere with each other, which is why it is difficult or
impossible to conduct several at once.
- The gorilla study illustrates two important facts about our minds: we can be blind to the obvious, and we are
also blind to our blindness.
- One of the tasks of System 2 is to overcome the impulses of System 1. In other words, System 2 is in charge
of self-control.
- The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder
to avoid significant mistakes when the stakes are high.

Chapter 2: Attention and Effort

- People, when engaged in a mental sprint, become effectively blind.
- As you become skilled in a task, its demand for energy diminishes. Talent has similar effects.
- One of the significant discoveries of cognitive psychologists in recent decades is that switching from one task
to another is effortful, especially under time pressure.

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