The AI department at Edinburgh University and the Edinburgh College of Art have a combined project involving mobile phones, image recognition, an element of gaming/geocaching and some pretty cool looking invisible graffiti. The project website tells of a project that sounds like lots of fun in the way that they are mixing it all together and I feel is really motivated by a deep down want to graffiti on a big scale!
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In a similar way the Murmur project brings gives an audio tour of Leith either online or at these locations. When you follow the map you will find a green ear sign attached to the lamppost with a local phone number - call it up to hear a location specific historical fact. Both projects are adding something extra to Edinburgh without being invasive; making great use of existing mobile phones features without needing them to do loads of processing. I think that the idea of Murmur could be put to great use across the wider city as a kind of giant tour guide that would be able to give a personalised tour of the city without time or route constrains.