When it’s over, it’s over. Perhaps you heard your best friend utter this phrase after a bad break-up. It’s true, most things that end, end for good. Except in this case, when it comes to the retail business.

We have seen a record number of retailers declare bankruptcy this year. Beloved teen retailers like Wet Seal have closed down their stores and malls have become ghost towns.

Reuters estimates that nineteen major retail chains have already shut down for good. While you may not miss the tight, neon dresses sold at Bebe, closures of all of these retailers result in a tremendous loss of jobs.

And it is not only job losses from the store in your hometown, often it is hundreds of locations across the nation.

For most of these retailers, bankruptcy was the definitive end to the business. After filing, most companies choose to close all locations and liquidate the assets. This is the most common path to take, until now.

Even with the surge of bankruptcy, those behind the business are finding alternative paths to keep the business alive.

Behind the scenes, there are three core groups invested in every business: the company’s creditors, vendors, and landlords. All of these groups have a vested interest in keeping the company alive even if they are in debt.

The most recent trend for bankrupt businesses has been to keep stores open and negotiate debt loans rather than shutting down everything. The truth is that a lot of these businesses still attract customers and have a large cash flow, even if they are technically bankrupt.

For instance, Toys ‘R’ Us manages to take in $800 million each year on average which makes it a viable business. Of course, they are $5 billion in debt, but with an extension and restructuring of their business, they could one day turn a profit. However, this will only happen if they are given the chance to keep their doors open.

There are other options to lending helping hands to bankrupt businesses. After the popular teen retailer Rue21 declared bankruptcy landlords agreed to reduce their rents 20% on average. Though these situations are not ideal, this mentality gives businesses a life beyond bankruptcy and save thousands of jobs in the process.

Who pirates the pirates?

Well, pirates, naturally. Piracy is a fractal. There is nothing so small that someone won’t strap on an eyepatch, grab a parrot and snag themselves an unlawful piece.

Such is the swashbuckling tale recently broken on Reddit about Pirate Bay, which is borrowing visitors’ CPU cycles to mine cryptocurrency.

TRANSLATION, PLEASE?

To translate that from Internet to English, “mining” cryptocurrency means volunteering your computer to verify blockchain transactions. We’ve covered blockchain in depth before, but the short version is it’s a particular security protocol that encrypts tokens representing money.

When you join a cryptocurrency exchange, you use that exchange’s blockchain to encrypt your stuff.

Some members of an exchange volunteer their computers to verify that transactions have taken place. Then they’re encrypted, never to be futzed with again. Those members get paid for their trouble with fractions of coins from the exchange.

The volunteers don’t actually do anything. The verification and encryption are automatic. That’s the point of cryptocurrency: no flighty or nefarious humans are involved in the bookkeeping. It’s all about the robots. That said, somebody owns the robots, and robot time is worth money. Therefore, miners.

SIXTEEN COINS – WHAT DO YOU GET?

“Miners,” in common currency dork parlance, are folks who invest in verifying transactions on a large scale, turning those fractions of coins into meaningful profit. It’s a smart way to make consistent money.

One big caveat: you need serious computing power to do it enough to matter.

Lifewire estimates an upfront cost of $3000 to $5000 to get real money out of the process. That said, their estimate also says 50 dollars a day in profit, which means over the course of a year you’re talking 3 to 5 times the money you put in. Ain’t chump change.

YAR

Which brings us to Pirate Bay. Pirate Bay is, as I’m sure the pure and innocent readers of American Genius would have no reason to know, a torrent site where various forms of media may be secured for free by nefarious means.

You’re shocked, I’m sure. Not everybody is, it turns out: as of this article, it’s the 88th most popular website on Earth. 25th in Canada! Canadians, man. They’re tricksy.

So, unsurprisingly, is Pirate Bay.

To state the obvious, swiping media and giving it away is not a working business strategy. Robin Hood did not have a positive P&L ratio. Typically – I’m told, I of course would have no way of knowing this myself – torrent sites support themselves through ad revenue. That wasn’t cutting it for Pirate Bay, plus they just wanted to get rid of the ads for an improved user experience, so they experimented.

Their first scheme was borrowing users’ CPUs while they were on the website, using unused processor cycles to mine cryptocurrency.

BROTHER, CAN YOU SPARE A CRYPTODIME?

The rollout was flawed. In fact the rollout was nonexistent: the only reason anybody even knew it was happening was somebody effed up the miner script and it started taking 100 percent of users’ CPU cycles as long as they were on the page. Oops.

But fair dues, Pirate Bay did exactly what tech folks should do when caught with their digital drawers down.

They fessed up in an official statement that explained their intent, addressed the problem people were complaining about, and invited further input. That’s more than can be said for, say, Uber.

More to the point, if the cryptocurrency mining plan goes forward, Pirate Bay will be providing a service to consumers in exchange for compensation at stated rates. The fact that it all comes in a novel form – the service is peer-to-peer, based on a model of free sharing; the compensation is provided voluntarily by people who aren’t receiving the services; the rates are measured in CPU cycles rather than money – doesn’t change the fact that fundamentally, “service to consumer for compensation” equals “business plan.”

For another time

Whether it’s a workable business plan or not is a question for Future Matt. Present Matt just has a question: if it does work, if Pirate Bay becomes a self-supporting enterprise trading encrypted, peer-to-peer money for an encrypted, peer-to-peer service, what then? At what point does it become more reasonable, and for that matter more ethical, to accept peer-to-peer transaction as a real thing and regulate it accordingly, as opposed to banning it outright?

Ask Piet Heyn. Better yet, order a mojito and run it past Captain Morgan. (It’s better because you get a mojito.) Back in the days of real pirates, when you wanted to rein them in, you just legalized them. If Pirate Bay establishes a legitimate revenue stream, that may well be the smart next step.

#PirateBay

More crypto news

So here’s the deal. Right now, as I type, a startup is using AI for distributed investment of cryptocurrency.

As is perhaps obvious, that’s relevant to my interests. If they worked in tea and death metal TokenAI would have Matt Salter bingo.

TOKEN OF ALL TRADES

TokenAI wants, more or less, to be the implementation of every potential gamechanger in real estate concocted in the past 5 years. Their pitch is straightforward, at least by the standards of real estate finance: over the last few years tech-savvy Wall Street types have traded in their standard indexes for AI tools – used here in the narrow sense of complex algorithms that self-improve – that identify the best bets in a given market. As is the nature of tech solutions, those algorithms have gotten smart and available enough that anybody can get and use them. They just have to be made available.

If TokenAI were just the first crew to make those tools available on the open market, that would be worth an article.

They aren’t. They’re pitching those tools to consumers in the form of a cryptocurrency exchange. TokenAI won’t just use robots to find you investment opportunities. They’ll convert the money you want to invest into imaginatively named Total Market Tokens, transferable into any of the many forms of cryptocurrency and as secure as money currently gets. Better still, your investment gives you voting rights on what gets invested where.

Barring a core administration team to swap hard drives and buy coffee, TokenAI’s business model is democratic: decisions get made on the basis that everybody with TMTs is a shareholder, with a proportionate vote on what gets done.

POWER TO THE PEOPLE (ALSO ROBOTS)

That’s the point where TokenAI stops being a clever but frankly predetermined outcome of the way online business is evolving. It’s easy to take that way, as an equation of “crypto + distributed risk + AI = X.” Their model presents a vital subtraction: they remove executive action. Decision making is democratic. Implementation is AI. No director or board thereof need apply.

To state the obvious, that’s new. To get less obvious, what matters is that it’s new. The idea that any group controlling a non-negligible amount of capital could roll without an executive team – I’d say it would have been crazy talk 5 years ago, but let’s level. To a good approximation of the entire business world, that’s crazy talk now.

But it’s possible. Whether it’s probable, or profitable, is an open question. At the moment, TokenAI is a website and a whitepaper, but they go live in October. As of next month, there will be smart people putting work and money behind the idea that you can invest, intelligently, without human input telling you how, where and why, because AI.

Changing the game

“Investment banker” is not traditionally included on lists of jobs in danger of being automated. TokenAI says otherwise.

If they’re even a little bit right, what exactly isn’t on that list? I mean, they already got me. Just what can you do that AI can’t?

#TokenAI