Tags

Where's my fast, smart, overhead scanner?

Back in 2008, I proposed the idea of a scanner club which would share high-end scanning equipment to rid of houses of the glut of paper. It’s a harder problem than it sounds. I bought a high-end Fujitsu office scanner (original price $5K, but I paid a lot less) and it’s done some things for me, but it’s still way too hard to use on general scanning problems.

I’ve bought a lot of scanners in the day. There are now lots of portable hand scanners that just scan to an SD card which I like. I also have several flatbeds and a couple of high volume sheetfeds.

In the scanner club article, I outlined a different design for how I would like a scanner to work. This design is faster and much less expensive and probably more reliable than all the other designs, yet 7 years later, nobody has built it.

The design is similar to the “document camera” family of scanners which feature a camera suspended over a flat surface, equipped with some LED lighting. Thanks to the progress in digital cameras, a fast, high resolution camera is now something you can get cheap. The $350 Hovercam Solo 8, which provides an 8 megapixel (4K) image at 30 frames per second. Soon, 4K cameras will become very cheap. You don’t need video at that resolution, and still cameras in the 20 megapixel range — which means 500 pixels/inch scanning of letter sized paper — are cheap and plentiful.

Under the camera you could put anything, but a surface of a distinct colour (like green screen) is a good idea. Anything but the same colour as your paper will do. To get extra fancy, the table could be perforated with small holes like an air hockey table, and have a small suction pump, so that paper put on it is instantly held flat, sticking slightly to the surface.

No-button scanning

The real feature I want is an ability to scan pages as fast as a human being can slap them down on the table. To scan a document, you would just take pages and quickly put them down, one after the other, as fast as you can, so long as you pause long enough for your hand to leave the view and the paper to stay still for 100 milliseconds or so.

The system will be watching with a 60 frame per second standard HD video camera (these are very cheap today.) It will watch until a new page arrives and your hand leaves. Because it will have an image of the table or papers under the new sheet, it can spot the difference. It can also spot when the image becomes still for a few frames, and when it doesn’t have your hand in it. This would trigger a high resolution still image. The LEDs would flash with that still image, which is your signal to know the image has been taken and the system is ready to drop a new page on. Every so often you would clear the stack so it doesn’t grow too high.

Alternately, you could remove pages before you add a new one. This would be slower, you would get no movement of papers under the top page. If you had the suction table, each page would be held nice and flat, with a green background around it, for a highly accurate rotation and crop in the final image. With two hands it might not be much slower to pull pages out while adding new ones.

No button is pressed between scans or even to start and finish scanning. You might have some buttons on the scanner to indicate you are clearing the stack, or to select modes (colour, black and white, line art, double sided, exposure modes etc.) Instead of buttons, you could also have little tokens you put on the surface with codes that can be read by the camera. This can include sheets of paper you print with bar codes to insert in the middle of your scanning streams.

By warning the scanner, you could also scan bound books and pamplets and even stapled documents without unstapling. You will get some small distortions but the scans will be fine if the goal is document storage rather than publishing. (You can even eliminate those distortions if you use 3D scanning techniques like structured light projection onto the pages, or having 2 cameras for stereo.)

For books, this is already worked out, and many places like the Internet Archive build special scanners that use overhead cameras for books. They have not attacked the “loose pile of paper” problem that so many of us have in our files and boxes of paper.

Why this method?

I believe this method is much faster than even high speed commercial scanners on all but the most regular of documents. You can flip pages at better than 1 per second. With small things, like business cards and photos, you can lay down multiple pages per second. That’s already the speed of typical high end office scanners. But the difference is actually far greater.

For those office scanners, you tend to need a fairly regular stack or the document feeder may mess up. Scanning a pile of different sized pages is problematic, and even general loose pages run the risk of skipping pages or other errors. As such, you always do a little bit of prep with your stacks of documents before you put them in the scanner. No button scanning will work with a random pile of cards and papers, including even folded papers. You would unfold them as you scan, but the overall process will take less time.

A scanner like this can handle almost any size and shape of paper. It could offer the option to zoom the camera out or pull it higher to scan very large pages, which the other scanners just can’t do. A lower ppi number on the larger pages, but if you can’t handle that, scan at full ppi and stitch together like you would on an older scanner.

The scans will not be as clean as a flatbed or sheetfed scanner. There will be variations in lighting and shading from curvature of the pages, along with minor distortions unless you use the suction table for all pages. A regular scanner puts a light source right on the page and full 3-colour scanning elements right next to it, it’s going to be higher quality. For publication and professional archiving, the big scanners will still win. On the other hand, this scanner could handle 3-dimensional objects and any thickness of paper.

Another thing that’s slower here is double sided pages. A few options are available here:

  • Flip every page. Have software in the scanner able to identify the act of flipping — especially easy if you have the 3D imaging with structured light.
  • Run the whole stack through again, upside-down. Runs the risk of getting out of sync. You want to be sure you tie every page with its other side.
  • Build a fancier double sided table where the surface is a sheet of glass or plexi, and there are cameras on both sides. (Flash the flash at two different times of course to avoid translucent paper.) Probably no holes in the glass for suction as those would show in the lower image.

Ideally, all of this would work without a computer, storing the images to a flash card. Fancier adjustments and OCR could be done later on the computer, as well as converting images to PDFs and breaking things up into different documents. Even better if it can work on batteries, and fold up for small storage. But frankly, I would be happy to have it always there, always on. Any paper I received in the mail would get a quick slap-down on the scanning table and the paper could go in the recycling right away.

You could also hire teens to go through your old filing cabinets and scan them. I believe this scanner design would be inexpensive, so there would be less need to share it.

Getting Fancy

As Moore’s law progresses, we can do even more. If we realize we’re taking video and have the power to process it, it becomes possible to combine all the video frames with a page in it, and produce an image that is better than any one frame, with sub-pixel resolution, and superior elimination of gradations in lighting and distortions.

As noted in the comments, it also becomes possible to do all this with what’s in a mobile phone, or any video camera with post-processing. One can even imagine:

  • Flipping through a book at high speed in front of a high-speed camera, and getting an image of the entire book in just a few seconds. Yes, some pages will get missed so you just do it again until it says it has all the pages. Update: This lab did something like this.
  • Vernor Vinge’s crazy scanner from Rainbow’s End, which sliced off the spines and blew the pages down a tube, being imaged all the way along to capture everything.
  • Using a big table and a group of people who just slap things down on the table until the computer, using a projector, shows you which things have been scanned and can be replaced. Thousands of pages could go buy in minutes.

Would Bitcoin fall off a cliff if it dropped to $100 or $150?

Bitcoin’s been on a long decline over the past year, and today is around $220 per coin. The value has always been based on speculation about Bitcoin’s future value, not its present value, so it’s been very hard to predict and investment in the coins has been risky.

Some thinking led me to a scary conclusion. Recent news has revealed that a number of “cloud mining” companies have shut down after the price drop. Let me explain why.

Over time, all bitcoin mining has been done using specialized ASIC hardware. The hardware is priced so that you can make a decent but not ridiculous profit with it. All the bitcoins mined go mostly into paying for mining hardware and electricity — much less goes into profit for the miners. In the past, the electricity was the big cost, but mining hardware got fast enough and expensive enough that most of the cost of mining has been paying off your mining hardware, with electricity dropping to being 20% or less of the cost.

In other words, most of the 3600 btc/day mining revenues of the bitcoin system have been going into the people making mining chips and rigs, but that’s another story.

With the drop in price, electricity is back up to being half your cost. That puts a squeeze on the cost of mining equipment. With cloud mining, as with Amazon Web Services, you rented mining equipment and power by the hour. People who bought their mining equipment will still run it as long as the revenue is more than the operating cost. For cloud mining, you need the revenue to exceed the operating and capital cost, because the capital costs are amortized into the operating cost. While cloud mining companies could cut their fees to cut their losses, some have instead just left the business. As noted, those who bought mining equipment are running it now at less profit, but as long as the mining brings in more than the electricity cost, it’s still worth running — the mining gear is all paid for, and even though you will never make back your money, it’s worse if you shut it off.

You can get a good analysis of the cost and profitability of mining rigs at this mining calculator.

What if a panic dropped a bitcoin under $100?

It’s not out of the question that a sudden panic might drop Bitcoin quickly down to $100. It probably won’t happen, but it certainly could. At this point, with current generation mining equipment, most miners then see their revenue drop below the cost of electricity. If they are rational and strictly profit-oriented, they cry into their beer and turn off the mining rig. And the cloud miners have already done that, and some other miners have done the same sooner than they expected, and the network hashrate (the measure of how much mining power there is) has had minor sustained drops for the first time in years.

(It’s worst than this. Even at $150, all but the most recent mining rigs become unprofitable to keep turned on, and so a major drop would happen with much less of a drop needed. New mining equipment expected to ship in the next few months is profitable at even lower prices, though.)

The way Bitcoin works, when they turn off the rig, it doesn’t mean more coins for the other miners. Bitcoin sets the reward rate with a “difficulty” number that makes the Bitcoin lottery problem harder the more mining capacity is out there. Your reward rate is a strict function of the difficulty and the power of your miners.

Every 2016 blocks, the difficulty adjusts based on how much capacity seems to be mining. Under normal operations, 2016 blocks is two weeks, as long as people are mining at the rate seen in the 2 weeks prior to setting the current difficulty. If large volumes of miners shut off their rigs as non-productive, the mining rate would crash. The wait for a new difficulty could be not just two weeks if this happened at the wrong time, but 4 weeks if half the miners shut down, or 8 weeks if 3/4 of them left. In terms of the Bitcoin world, it’s effectively forever, and long before that, confidence in the coin price would probably drop further, causing more miners to shut off their rigs. Only dedicated fans willing to lose money to preserve the system would keep mining.

In such a panic, the Bitcoin Foundation and others might propose an emergency modification of the Bitcoin software base which is able to do an emergency reduction of the difficulty number. Alternately they could propose bumping the mining reward back to 50 coins instead of 25. This would still take days, which I think is too long. But if they did, it’s a sticky issue. As soon as you drop the difficulty enough, all those miners come back online, and now the difficulty is too low. To do it right, an estimate would have to be made of how much mining capacity is cost effective and set the difficulty so that only some of the miners come back online, a number tied to that difficulty. For example, one might look at the various mining rigs out there, and set the difficulty such that they are (barely) profitable while others are not. Problem is, the profitability depends on the price of a bitcoin, which will be wildly fluctuating. It’s not clear how to solve this.

If the electricity cost exceeds the reward, but you still want bitcoins for future investment, the rational thing is not to mine, but to just buy bitcoins on the exchanges and keep the price up.

What would happen after such a collapse? Could it be stopped?

The collapse would probably spread to altcoins, but some might survive and become successors to Bitcoin. In addition, there are many people devoted to Bitcoin who would continue to mine, even at a loss, to get it back on its feet. After all, the early years of Bitcoin, all mining was at a loss, though it turned into a huge bonanza later and was a wise idea in hindsight. With the large number of well funded companies in the space, we could see companies willing to maintain unprofitable mining for some time if the alternative is the destruction of the thing they’ve based their business on. They might even buy up the rigs of failed miners, or pay them to mine. Perhaps, if they are ready, they could heed the warning in this message and make contracts with enough miners to say, “we’ll pay you to keep mining if a collapse happens.”

Alternately, Bitcoin users and boosters could just start deliberately leaving large transaction fees in their transactions to make the cost of mining worthwhile again. While hard to sustain long term, it is in their interest to spend their bitcoins to keep the mining system going, since those coins probably drop immensely if it falls down. It also keeps faith in the mining system since if the coin owners ran the miners, they might corrupt the network with that much power. It should be noted that it’s always been part of the plan for Bitcoin that higher transaction fees would arise as the coinbase rewards dropped, but not this early, and because the reward dropped in btc, not dollars.

The subsidy would have to be enough to overcome losses and provide a modest or even very small profit. The network cost pays 3600 bitcoins/day in mining fees (or $360K at $100/bitcoin.) The subsidy might be more in the range of $50K or $100K per day — affordable to keep the network alive for up to 14 days to survival.

Another idea would be to develop a way to make the difficulty more dynamic, or provide some mechanism for an emergency reduction. (An emergency increase would mean something was really wrong and would probably also mean somebody had more than half the mining capacity, another must-not-happen.)

What sort of events could cause such a huge drop, to 45% of the current value? That’s not been seen in a short time, but a big political event, such as a suggestion the USA or EU might forbid or impede Bitcoin could do it. But there are many other things that can cause panic. A shutdown of exchanges (a common technique in stock market panics) would probably do little, as there are exchanges all over the world and all will not shut down. A call to miners to sacrifice might work, at least for a while, to allow time to fix the problem.

Latent mining capacity

Mining rigs are shut down all the time as non-profitable, but in the past that’s always been because newer, better rigs were out there dominating the mining space and pushing up the difficulty. It would be a new idea to have rigs shut down because the dollar price dropped. When such rigs shut down, they would not be permanently useless, and unless torn down, they would be able to restart at any time. For example, if the difficulty dropped (because they all shut down) they would all start running again, and blocks would come out faster than intended. Then, 2016 blocks later, the difficulty would be recalculated up again — and they would stop again. Miners would also start and stop based on the day’s price as well, and the price might even swing around the expected rises and drops in difficulty. This seems like it would be chaos.

Once the electricity cost dominates, the important metric in mining equipment is not gigahashes/second, but gigahashes per joule. At 10 cents/kwh, you need around 2 gigahashes/joule to beat the electricity cost with $100 bitcoins and today’s difficulty number. At today’s $220 bitcoins, 0.9 gigahash/joule will do. Most miners are under 2, but there are some that do close to 3, and there is the promise of 5. If the trends in the rest of computing are an indicator, operations per joule will eventually level off, even as transistor counts continue to increase. If that happens we will stop seeing big increases in mining power and the upward spiral would end.

Uber and Google are not breaking up quite yet

After yesterday’s story about Uber and CMU, a lot of speculation has flown that Uber will now be at odds with Google, both about building robocars and also on providing network taxi service, since another rumour said Google plans to launch an Uber like “ride share” service.

Since then, the Uber blog post and this interview with Uber folks tell a slightly different story. Uber is funding a research center at CMU, and giving lots of grants to academics. Details are not fully available, but typically this means being at an early research stage. With these research labs, academics are keen to publish all they do, so little gets done in secret. In many cases the sponsor gets a licence to the technology but it’s often not exclusive. If Uber wanted to build their own car, chances are they would do it in a more private lab.

Rumours that David Drummond would resign from the Uber board also have not panned out. Google has invested hugely in Uber (already for good return at the present valuation) and Google Maps offers you an Uber if you ask it for directions somewhere — it’s actually one of the easier interfaces for ordering one.

Rumours around Google’s efforts suggest that Big G has been testing a “ride share” app with employees and plans to launch it. Google has denied that, and says it loves Uber and Lyft. Further news revealed the rumours were about an internal carpooling system, not involving the self-driving cars. I could imagine confusion because Uber and others call themselves “ride sharing” which is a bit of a fabrication to not look like a taxi, while a carpooling app would be real ride sharing. (UberPool is real ride sharing.) Google, which has a terrible undersupply of parking is very keen on getting employees to ride its bus system and to carpool.

That said, Google has talked about the same thing I talk about — the true goal of robocar technology being the creation of a mobility on demand taxi service, like Uber but at a much lower cost. Google has not said that they would provide that themselves, or who they would partner with if they did it. Most people have presumed it might be Uber but I don’t think that’s at all assured.

At the same time, Uber has assured its drivers they are not going away for the foreseeable future. I suspect that’s an equivocation, and just means that we can’t see very far in the future right now!

Will robocars use V2V at all?

I commonly see statements from connected car advocates that vehicle to vehicle (V2V) and vehicle to infrastructure communications are an important, even essential technology for robocar development. Readers of this blog will know I disagree strongly, and while I think I2V will be important (done primarily over the existing mobile data network) I suspect that V2V is only barely useful, with minimal value cases that have a hard time justifying its cost.

Of late, though, my forecast for V2V grows even more dismal, because I wonder if robocars will implement V2V with human-driven cars at all, even if it becomes common for ordinary cars to have the technology because of a legal mandate.

The problem is security. A robocar is a very dangerous machine. Compromised, it can cause a lot of damage, even death. As such, security will have a very strong focus in development. You don’t want anybody breaking into the computer systems or your car or anybody else’s. You really don’t want it.

One clear fact that people in security know — a very large fraction of computer security breaches caused by software faults have come from programs that receive input data from external sources, in particular when you will accept data from anybody. Internet tools are the biggest culprits, and there is a long history of buffer overflows, injection attacks and other trouble that has fallen on tools which will accept a message from just anyone. Servers (which openly accept messages from outside) are at the greatest risk, but even client tools like web browsers run into trouble because they go to vast numbers of different web sites, and it’s not hard to trick people to sending them to a random web site.

We work very hard to remove these vulnerabilities, because when you’re writing a web tool, you have no choice. You must accept input from random strangers. Holes still get found, and we pay the price.

The simplest strategy to improve your chances is to go deaf. Don’t receive inputs from outside at all. You can’t do that in most products, but if you can close off a channel without impeding functionality it’s a good approach. Generally you will do the following to be more secure:

  1. Be a client, which means you make communications requests, you do not receive them.
  2. You only connect to places you trust. You avoid allowing yourself to be directed to connect to other things
  3. You use digital signature and encryption to assure that you really are talking to your trusted server.

This doesn’t protect you perfectly. Your home server can be compromised — it often will be running in an environment not as locked down as this. In fact, if it becomes your relay for messages from outside, as it must, it has a vector for attack. Still, the extra layer adds some security.  read more »

Uber to research robocars?

Rumours reported in TechCrunch suggest Uber is opening a robocar lab in Pittsburgh and hiring up to 50 CMU folks to staff it.

Update: On the Uber blog we now see it’s more funding of research labs at CMU, on many topics

That’s a major step, if true. People have often pointed out how well Uber is poised to make use of robocar technology to bring computer summoned taxi service to the next level. If Uber did not exist, I would surely be building it to get that advantage. Many have assumed that since Google is a major investment partner in Uber that they would partner on this technology, but this suggests otherwise.

I write about Uber a lot here not just because of interest in what they do today, but because it teaches us a lot about how people will view Robocars in the future. Uber’s interface is very similar to what you might see for a robocar service, and the experience is fairly similar, just much more expensive. UberX is $1.30/mile plus 26 cents/minute with $2.20 flag drop. The Black service is $3.75/mile and 65 cents/minute with an $8 flag drop. I expect robocar tax service to be cheaper than 50 cents/mile with minimal per-minute charges. The flag drop is not yet easy to calculate. What richer people do with Uber teaches us what the whole public will do with robocars.

Uber lets you say where you are going but doesn’t demand it. That’s one thing I suspect will be different with your robotaxi, because it’s really nice if they can send you a vehicle chosen for the trip you have in mind. Ie. a small, efficient car without much range for short, single person trips. Robotaxi services will offer you the ability to not say your destination — but they will probably charge more for it, and that means most people will be willing to say their destination.

Uber does not hide their desire to get rid of all their drivers, which sounds like a strange strategy, but the truth is that cab driving is not something most people view as a career. It’s a quick source of money with no special skills, something people do until something better comes along, or in the gaps in their day to make extra cash. Unlike people losing jobs to robots on a factory line, nobody is particularly upset at the idea.

I was a robot for 3 days in London

In August, I attended the World Science Fiction Convention (WorldCon) in London. I did it while in Coeur D’Alene, Idaho by means of a remote Telepresence Robot(*). The WorldCon is half conference, half party, and I was fully involved — telepresent there for around 10 hours a day for 3 days, attending sessions, asking questions, going to parties. Back in Idaho I was speaking at a local robotics conference, but I also attended a meeting back at the office using an identical device while I was there.

After doing this, I have written up a detailed account of what it’s like to attend a conference and social event using these devices, how fun it is now, and what it means for the future.

You can read Attending the World Science Fiction convention on the other side of the world by remote telepresence robot

For those of you in the TL;DR crowd, the upshot is that it works. No, it’s not as good as being there in person. But it is a substantial fraction of the way there, and it’s going to get better. I truly feel I attended that convention, but I didn’t have spend the money and time required to travel to London, and I was able to do other things in Idaho and California at the same time.

When you see at new technology that seems not quite there yet, you have to decide — is this going to get better and explode, or is it going to fizzle. I’m voting for the improvement argument. It won’t replace being there all of the time, but it will replace being there some of the time, and thus have big effects on travel — particularly air travel — and socialization. There are also interesting consequences for the disabled, for the use of remote labour and many other things.

(*)As the maker will point out, this is not technically a robot, just a remote controlled machine. Robots have sensors and make some of their own decisions on how they move.

Even ASIC miners of Bitcoins face security threats

Last month I wrote about paradoxes involving bitcoin and other cryptocurrency mining. In particular, I pointed out that while many people are designing alternative coins so that they are hard to mine with ASICs — and thus can be more democratically mined by people’s ordinary computers or GPUs — this generates a problem. If mining is done on ordinary computers, it becomes worthwhile to break into ordinary computers and steal their resources for mining. This has been happening, even with low powered NAS box computers which nobody would ever bother to mine on if they had to pay for the computer and its electricity. The attacker pays nothing, so any mining capacity is good.

Almost any. In Bitcoin, ASIC mining is so productive that it’s largely a waste of time to mine with ordinary CPUs even if you get them for free, since there is always some minor risk in stealing computer time. While ordinary computers are very hard to secure, dedicated ASIC mining rigs are very simple special purpose computers, and you can probably secure them.

But in a recently revealed attack thieves stole bitcoins from miners by attacking not the ASIC mining rigs, but their internet connections. The rigs may be simple, but the computers they flow their data through, and the big network routers, are less so. Using BGP redirection, it is suspected, the thieves just connected the mining rigs to a different mining pool than the one they thought they joined. And so they worked away, mining hard, and sometimes winning the bitcoin lottery, not for their chosen pool, but the thieves’ pool.

It’s not hard to imagine fixes for this particular attack. Pools and rigs can authenticate more strongly, and pools can also work to keep themselves more secure.

But we are shown one of the flaws of almost all digital money systems. If your computer can make serious money just by computing, or it can spend money on your behalf without need for a 2nd factor authentication, then it becomes very worthwhile for people to compromise your system and steal your computer time or your digital money. Bitcoin makes this even worse by making transactions irrevocable and anonymous. For many uses, those are features, but they are also bugs.

For the spending half, there is much effort in the community to build more secure wallets that can’t just spend your money if somebody takes over your computer. They rely on using multiple keys, and keeping at least one key in a more secure, even offline computer. Doing this is very hard, or rather doing it with a pleasant and happy user interface is super hard. If you’re going to compete with PayPal it’s a challenge. If somebody breaks into my PayPal account and transfers away the money there, I can go to PayPal and they can reverse those transactions, possibly even help track down the thieves. It’s bad news if a merchant was scammed but very good news for me.

One could design alternate currencies with chargebacks or refundability, but Bitcoin is quite deliberate in its choice not to have those. It was designed to be like cash. The issue is that while you could probably get away keeping your cash in your mattress and keeping a secure house, this is a world where somebody can build robots that can go into all the houses it can find and pull the cash out of the mattresses without anybody seeing.

The paradox of Bitcoin proof-of-work mining

Everybody knows about bitcoin, but fewer know what goes on under the hood. Bitcoin provides the world a trustable ledger for transactions without trusting any given party such as a bank or government. Everybody can agree with what’s in the ledger and what order it was put there, and that makes it possible to write transfers of title to property — in particular the virtual property called bitcoins — into the ledger and thus have a money system.

Satoshi’s great invention was a way to build this trust in a decentralized way. Because there are rewards, many people would like to be the next person to write a block of transactions to the ledger. The Bitcoin system assures that the next person to do it is chosen at random. Because the winner is chosen at random from a large pool, it becomes very difficult to corrupt the ledger. You would need 6 people, chosen at random from a large group, to all be part of your conspiracy. That’s next to impossible unless your conspiracy is so large that half the participants are in it.

How do you win this lottery to be the next randomly chosen ledger author? You need to burn computer time working on a math problem. The more computer time you burn, the more likely it is you will hit the answer. The first person to hit the answer is the next winner. This is known as “proof of work.” Technically, it isn’t proof of work, because you can, in theory, hit the answer on your first attempt, and be the winner with no work at all, but in practice, and in aggregate, this won’t happen. In effect, it’s “proof of luck,” but the more computing you throw at the problem, the more chances of winning you have. Luck is, after all, an imaginary construct.

Because those who win are rewarded with freshly minted “mined” bitcoins and transaction fees, people are ready to burn expensive computer time to make it happen. And in turn, they assure the randomness and thus keep the system going and make it trustable.

Very smart, but also very wasteful. All this computer time is burned to no other purpose. It does no useful work — and there is debate about whether it inherently can’t do useful work — and so a lot of money is spent on these lottery tickets. At first, existing computers were used, and the main cost was electricity. Over time, special purpose computers (dedicated processors or ASICs) became the only effective tools for the mining problem, and now the cost of these special processors is the main cost, and electricity the secondary one.

Money doesn’t grow on trees or in ASIC farms. The cost of mining is carried by the system. Miners get coins and will eventually sell them, wanting fiat dollars or goods and affecting the price. Markets, being what they are, over time bring closer and closer the cost of being a bitcoin miner and the reward. If the reward gets too much above the cost, people will invest in mining equipment until it normalizes. The miners get real, but not extravagant profits. (Early miners got extravagant profits not because of mining but because of the appreciation of their coins.)

What this means is that the cost of operating Bitcoin is mostly going to the companies selling ASICs, and to a lesser extent the power companies. Bitcoin has made a funnel of money — about $2M a day — that mostly goes to people making chips that do absolutely nothing and fuel is burned to calculate nothing. Yes, the miners are providing the backbone of Bitcoin, which I am not calling nothing, but they could do this with any fair, non-centralized lottery whether it burned CPU or not. If we can think of one.

(I will note that some point out that the existing fiat money system also comes with a high cost, in printing and minting and management. However, this is not a makework cost, and even if Bitcoin is already more efficient doesn’t mean there should not be effort to make it even better.)

CPU/GPU mining

Naturally, many people have been bothered by this for various reasons. A large fraction of the “alt” coins differ from Bitcoin primarily in the mining system. The first round of coins, such as Litecoin and Dogecoin, use a proof-of-work system which was much more difficult to solve with an ASIC. The theory was that this would make mining more democratic — people could do it with their own computers, buying off-the-shelf equipment. This has run into several major problems:

  • Even if you did it with your own computer, you tended to need to dedicate that computer to mining in the end if you wanted to compete
  • Because people already owned hardware, electricity became a much bigger cost component, and that waste of energy is even more troublesome than ASIC buying
  • Over time, mining for these coins moved to high-end GPU cards. This, in turn caused mining to be the main driver of demand for these GPUs, drying up the supply and jacking up the prices. In effect, the high end GPU cards became like the ASICs — specialized hardware being bought just for mining.
  • In 2014, vendors began advertising ASICs for these “ASIC proof” algorithms.
  • When mining can be done on ordinary computers, it creates a strong incentive for thieves to steal computer time from insecure computers (ie. all computers) in order to mine. Several instances of this have already become famous.

The last point is challenging. It’s almost impossible to fix. If mining can be done on ordinary computers, then they will get botted. In this case a thief will even mine at a rate that can’t pay for the electricity, because the thief is stealing your electricity too.  read more »

New regulations are banning the development of delivery robots

Many states and jurisdictions are rushing to write laws and regulations governing the testing and deployment of robocars. California is working on its new regulations right now. The first focus is on testing, which makes sense.

Unfortunately the California proposed regulations and many similar regulations contain a serious flaw:

The autonomous vehicle test driver is either in immediate physical control of the vehicle or is monitoring the vehicle’s operations and capable of taking over immediate physical control.

This is quite reasonable for testing vehicles based on modern cars, which all have steering wheels and brakes with physical connections to the steering and braking systems. But it presents a problem for testing delivery robots or deliverbots.

Delivery robots are world-changing. While they won’t and can’t carry people, they will change retailing, logistics, the supply chain, and even going to the airport in huge ways. By offering very quick delivery of every type of physical goods — less than 30 minutes — at a very low price (a few pennies a mile) and on the schedule of the recipient, they will disrupt the supply chain of everything. Others, including Amazon, are working on doing this by flying drone, but for delivery of heavier items and efficient delivery, the ground is the way to go.

While making fully unmanned vehicles is more challenging than ones supervised by their passenger, the delivery robot is a much easier problem than the self-delivering taxi for many reasons:

  • It can’t kill its cargo, and thus needs no crumple zones, airbags or other passive internal safety.
  • It still must not hurt people on the street, but its cargo is not impatient, and it can go more slowly to stay safer. It can also pull to the side frequently to let people pass if needed.
  • It doesn’t have to travel the quickest route, and so it can limit itself to low-speed streets it knows are safer.
  • It needs no windshield or wheel, and can be small, light and very inexpensive.

A typical deliverbot might look like little more than a suitcase sized box on 3 or 4 wheels. It would have sensors, of course, but little more inside than batteries and a small electric motor. It probably will be covered in padding or pre-inflated airbags, to assure it does the least damage possible if it does hit somebody or something. At a weight of under 100lbs, with a speed of only 25 km/h and balloon padding all around, it probably couldn’t kill you even if it hit you head on (though that would still hurt quite a bit.)

The point is that this is an easier problem, and so we might see development of it before we see full-on taxis for people.

But the regulations do not allow it to be tested. The smaller ones could not fit a human, and even if you could get a small human inside, they would not have the passive safety systems in place for that person — something you want even more in a test vehicle. They would need to add physical steering and braking systems which would not be present in the full drive-by-wire deployment vehicle. Testing on real roads is vital for self-driving systems. Test tracks will only show you a tiny fraction of the problem.

One way to test the deliverbot would be to follow it in a chase car. The chase car would observe all operations, and have a redundant, reliable radio link to allow a person in the chase car to take direct control of any steering or brakes, bypassing the autonomous drive system. This would still be drive-by-wire(less) though, not physical control.

These regulations also affect testing of full drive-by-wire vehicles. Many hybrid and electric cars today are mostly drive-by-wire in ordinary operations, and the new Infiniti Q50 features the first steer-by-wire. However the Q50 has a clutch which, in the event of system failure, reconnects the steering column and the wheels physically, and the hybrids, even though they do DBW regenerative braking for the first part of the brake pedal, if you press all the way down you get a physical hydraulic connection to the brakes. A full DBW car, one without any steering wheel like the Induct Navia, can’t be tested on regular roads under these regulations. You could put a DBW steering wheel in the Navia for testing but it would not be physical.

Many interesting new designs must be DBW. Things like independent control of the wheels (as on the Nissan Pivo) and steering through differential electric motor torque can’t be done through physical control. We don’t want to ban testing of these vehicles.

Yes, teams can test regular cars and then move their systems down to the deliverbots. This bars the deliverbots from coming first, even though they are easier, and allows only the developers of passenger vehicles to get in the game.

So let’s modify these regulations to either exempt vehicles which can’t safely carry a person, or which are fully drive-by-wire, and just demand a highly reliable DBW system the safety driver can use.

The endgame for Bitcoin

Bitcoin is hot-hot-hot, but today I want to talk about how it ends. Earlier, I predicted a variety of possible fates for Bitcoin ranging from taking over the entire M1 money supply to complete collapse, but the most probable one, in my view, is that Bitcoin is eventually supplanted by one or more successor digital currencies which win in the marketplace. I think that successor will also itself be supplanted, and that this might continue for some time. I want to talk about not just why that might happen, but also how it may take place.

Nobody thinks Bitcoin is perfect, and no digital currency (DigiC) is likely to satisfy everybody. Some of the flaws are seen as flaws by most people, but many of its facets are seen as features by some, and flaws by others. The anonymity of addresses, the public nature of the transactions, the irrevocable transactions, the fixed supply, the mining system, the resistance to control by governments — there are parties that love these and hate these.

Bitcoin’s most remarkable achievement, so far, is the demonstration that a digital currency with no intrinsic value or backer/market maker can work and get a serious valuation. Bitcoin argues — and for now demonstrates — that you can have a money that people will accept only because they know they can get others to accept it with no reliance on a government’s credit or the useful physical properties of a metal. The price of a bitcoin today is pretty clearly the result of speculative bubble investment, but that it sustains a price at all is a revelation.

Bitcoins have their value because they are scarce. That scarcity is written into the code — in the regulated speed of mining, and in the fixed limit on coins. There will only be so many bitcoins, and this gives you confidence in their value, unlike say, Zimbabwe 100 trillion dollar notes. This fixed limit is often criticised because it will be strongly deflationary over time, and some more traditional economic theory feels there are serious problems with a deflationary currency. People resist spending it because holding it is better than spending it, among other things.

Altcoins

While bitcoins have this scarcity, digital currencies as a group do not. You can always create another digital currency. And many people have. While Bitcoin is the largest, there are many “altcoins,” a few of which (such as Ripple, Litecoin and even the satirical currency Dogecoin) have serious total market capitalizations of tens or hundreds of millions of dollars(1). Some of these altcoins are simply Bitcoin or minor modifications of the Bitcoin protocol with a different blockchain or group of participants, others have more serious differences, such as alternate forms of mining. Ripple is considerably different. New Altcoins will emerge from time to time, presumably forever.

What makes one digital coin better than another? Obviously a crucial element is who will accept the coin in exchange for goods, services or other types of currency. The leading coin (Bitcoin) is accepted at more stores which gives it a competitive advantage.

If one is using digital currency simply as a medium — changing dollars to bitcoins to immediately buy something with bitcoins at a store, then it doesn’t matter a great deal which DigiC you use, or what its price is, as long as it is not extremely volatile. (You may be interested in other attributes, like speed of transaction and revocation, along with security, ease of use and other factors.) If you wish to hold the DigC you care about appreciation, inflation and deflation, as well as the risk of collapse. These factors are affected as well by the “cost” of the DigiC.

The cost of a digital currency

I will advance that every currency has a cost which affects its value. For fiat currency like dollars, all new dollars go to the government, and every newly printed dollar devalues all the other dollars, and overprinting creates clear inflation.  read more »

Commentary on California's robocar regulations workshop

Tuesday, the California DMV held a workshop on how they will write regulations for the operation of robocars in California. They already have done meetings on testing, but the real meat of things will be in the operation. It was in Sacramento, so I decided to just watch the video feed. (Sadly, remote participants got almost no opportunity to provide feedback to the workshop, so it looks like it’s 5 hours of driving if you want to really be heard, at least in this context.)

The event was led by Brian Soublet, assistant chief counsel, and next to him was Bernard Soriano, the deputy director. I think Mr. Soublet did a very good job of understanding many of the issues and leading the discussion. I am also impressed at the efforts Mr. Soriano has made to engage the online community to participate. Because Sacramento is a trek for most interested parties, it means the room will be dominated by those paid to go, and online engagement is a good way to broaden the input received.

As I wrote in my article on advice to governments I believe the best course is to have a light hand today while the technology is still in flux. While it isn’t easy to write regulations, it’s harder to undo them. There are many problems to be solved, but we really should see first whether the engineers who are working day-in and day-out to solve them can do that job before asking policymakers to force a solution. It’s not the role of the government to forbid theoretical risks in advance, but rather to correct demonstrated harms and demonstrated unacceptable risks once it’s clear they can’t be solved on the ground.

With that in mind, here’s some commentary on matters that came up during the session.

How do the police pull over a car?

Well, the law already requires that vehicles pull over when told to by police, as well as pull to the right when any emergency vehicle is passing. With no further action, all car developers will work out ways to notice this — microphones which know the sound of the sirens, cameras which can see the flashing lights.

Developers might ask for a way to make this problem easier. Perhaps a special sound the police car could make (by holding a smartphone up to their PA microphone for example.) Perhaps the police just reading the licence plate to dispatch and dispatch using an interface provided by the car vendor. Perhaps a radio protocol that can be loaded into an officer’s phone. Or something else — this is not yet the time to solve it.

It should be noted that this should be an extremely unlikely event. The officer is not going to pull over the car to have a chat. Rather, they would only want the car to stop because it is driving in an unsafe manner and putting people at risk. This is not impossible, but teams will work so hard on testing their cars that the probability that a police officer would be the first to discover a bug which makes the car drive illegally is very, very low. In fact, not to diminish the police or represent the developers as perfect, but the odds are much greater that the officer is in error. Still, the ability should be there.  read more »

A Critique of the NHTSA "Levels" for robocars

Last year, the NHTSA released a document defining “levels” from 0 to 4 for self-driving technology. People are eager for taxonomy that lets them talk about the technology, so it’s no surprise that use of the levels has caught on.

The problem is that they are misleading and probably won’t match the actual progress of technology. That would be tolerable if it weren’t for the fact that NHTSA itself made recommendations to states about how the levels should be treated in law, and states and others are already using the vocabulary in discussing regulations. Most disturbingly, NHTSA recommendations suggested states hold off on “level 4” in writing regulations for robocars — effectively banning them until the long process of un-banning them can be done. There is a great danger the levels will turn into an official roadmap.

Because of this, it’s worth understanding how the levels are already incorrect in the light of current and soon-to-be-released technology, and how they’re likely to be a bad roadmap for the future.

Read A Critique of the NHTSA and SAE “Levels” for robocars.

The real Bitcoin Satoshi Nakamoto

The latest Bitcoin bombshell — distracting us even from the Mt.Gox failure — was the Newsweek cover story — their first printed issue since 2012 — declaring they had found the mythical creator of Bitcoin, known under the pseudonym of Satoshi Nakamoto, and he was a guy from near L.A. in his 60s whose real birth name was actually Satoshi Nakamoto.

Now known as Dorian S. Nakamoto, I’ll refer to him as DSN to distinguish him from BCSN — the Bitcoin creator Satoshi Nakamoto, though of course the question is whether DSN == BCSN. DSN denies he is BCSN and says his quotes suggesting that were answers to other questions, at least in his mind.

The second surprise was a web posting from BCSN, the first in years, simply saying he is not DSN. This posting is confusing, because a little thought shows it reveals no information on that subject. If DSN is BCSN, then of course both are denying it. More to the point, BCSN is clearly somebody well versed in game theory and trust calculus, and knows very well that the denial does not add reliable information on this.

BCSN’s post does tell us one big thing though — that BCSN is still alive, around, and even willing to comment if the issue is as big as this one. Many speculated that his silence meant he was gone, and also that he had lost his estimated million bitcoins.

The Bitcoin community was quite skeptical of the Newsweek claim. One very justified reason for this skepticism is that aside from the two key disputed quotes, the article’s arguments that it has found BCSN read like nonsense to the average nerd.

DSN might be BCSN, the article reasons, because he is a nerdy engineer with good technical skills, a background working at various tech companies and government projects, is aloof from his family and neighbours, and enjoys a technical hobby such as collecting model trains, even machining his own parts. “Smart, intelligent, mathematics, engineering, computers. You name it, he can do it,” says DSN’s brother. He’s a little bit libertarian, looks scruffy and is reportedly a bit of an asshole.

Aha, links Leah McGrath Goodman of Newsweek — this “suggested I was on the right track.”

What she doesn’t realize perhaps is that I literally know hundreds people who fit that description. It’s a profile that is actually more likely to be true than not among wide swaths of the nerd community.

Goodman’s logic reads to us like somebody saying, “I was on the track of the Zodiac killer, whom we know to be from San Francisco. I identified a suspect named John Zodiac who is a quiet loner, and is known to like the San Francisco Giants and burritos in the Mission district. I’m on the right track!”

There is only one thing in the Newsweek article that was worthy of attention. With police he summoned ready to usher Goodman away from his house, he tells her

“I am no longer involved in that and I cannot discuss it. It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”

In the context of Bitcoin, that’s indeed proof enough. The police officers present have confirmed he did say something like this. DSN insists he felt he was being asked about his past classified work on government projects. He says he had not even heard about Bitcoin until this matter came up.

Various online forces have come up with other arguments against the match. DSN’s known writings seem fairly different from the writings of BCSN, though Goodman finds a few commonalities, including hints that BCSN is perhaps older (like DSN.)

But most of all, BCSN is known as a scrupulous protector of his or her or their own identity. BCSN made meticulous use of online identity hiding techniques to avoid being tracked, and has never spent any of the huge cache of bitcoins mined in the early days, possibly to avoid the risk of detection. This is so completely at odds with the idea of doing it all under his real name that after a perfunctory search in the early days, most people who fancied themselves Satoshi-finding detectives rarely bothered to look at people whose real name was Satoshi Nakamoto. Common wisdom, in fact, was that he/she probably wasn’t even Japanese. Certainly not somebody with no history in the cryptography or digital money communities.

But what if it is him?

While currently the tide seems to be to discredit the Newsweek story, a second question has been raised — is it good or bad if BCSN is unmasked, and if it is this guy?  read more »

More about stolen bitcoins

Yesterday, I wrote about stolen bitcoins and the issues around a database of stolen coins. The issue is very complex, so today I will add some follow-up issues.

When stolen property changes hands (innocently) the law says that nobody in the chain had authority to transfer title to that property. Let’s assume that the law accepts bitcoins as property, and bitcoin transactions as denoting transfer of title, (as well as possession/control) to it. So with a stolen bitcoin, the final recipient is required on the law to return possession of the coin to its rightful owner, the victim of the theft. However, that recipient is also now entitled to demand back whatever they paid for the bitcoin, and so on down the line, all the way to the thief. With anonymous transactions, that’s a tall order, though most real world transactions are not that anonymous.

This is complicated by the fact that almost all Bitcoin transactions mix coins together. A Bitcoin “wallet” doesn’t hold bitcoins, rather it holds addresses which were the outputs of earlier transactions, and those outputs were amounts of bitcoin. When you want to do a new transaction, you do two things:

  1. You gather together enough addresses in your wallet which hold outputs of prior transactions, which together add up to as much as you plan to spend, and almost always a bit more.
  2. You write a transaction that lists all those old outputs as “inputs” and then has a series of outputs, which are the addresses of the recipients of the transaction.

There are typically 3 (or more) outputs on a transaction:

  1. The person you’re paying. The output is set to be the amount you’re paying
  2. Yourself. The output is the “change” from the transaction since the inputs probably didn’t add up exactly to the amount you’re paying.
  3. Any amount left over — normally small and sometimes zero — which does not have a specific output, but is given as a transaction fee to the miner who put your transaction into the Bitcoin ledger (blockchain.)

They can be more complex, but the vast majority work like this. While normally you pay the “change” back to yourself, the address for the change can be any new random address, and nothing in the ledger connects it to you.

So as you can see, a transaction might combine a ton of inputs, some of which are clean, untainted coins, some of which are tainted, and some of which are mixed. After coins have been through a lot of transactions, the mix can be very complex. Not so complex as the computers can’t deal with it and calculate a precise fraction of the total coin that was tainted, but much too complex for humans to wish to worry about.

A thief will want to mix up their coins as quickly as possible, and there are a variety of ways to do that.

Right now, the people who bought coins at Mt.Gox (or those who sent them there to buy other currency) are the main victims of this heist. They thought they had a balance there, and its gone. Many of them bought these coins at lower prices, and so their loss is not nearly as high as the total suggests, but they are deservedly upset.

Unfortunately, if the law does right by them and recovers their stolen property, it is likely that might come from the whole Bitcoin owning and using community, because of the fact that everybody in the chain is liable. Of particular concern are the merchants who are taking bitcoin on their web sites. Let’s speculate on the typical path of a stolen coin that’s been around for a while:

  • It left Mt.Gox for cash, sold by the thief, and a speculator simply held onto the coins. That’s the “easy” one, the person who now has stolen coins has to find the thief and get their money back. Not too likely, but legally clear.
  • It left Mt.Gox and was used in a series of transactions, ending up with one where somebody bought an item from a web store using bitcoin.
  • With almost all stores, the merchant system takes all bitcoin received and sells it for dollars that day. Somebody else — usually a bitcoin speculator — paid dollars for that bitcoin that day, and the chain continues.

There is the potential here for a lot of hassle. The store learns they sold partially tainted bitcoins. The speculator wants and is entitled to getting a portion of her money back, and the store is an easy target to go after. The store now has to go after their customer for the missing money. The store also probably knows who their customer is. The customer may have less knowledge of where her bitcoins came from.

This is a huge hassle for the store, and might very well lead to stores reversing their decisions to accept bitcoin. If 6% of all bitcoins are stolen, as the Mt.Gox heist alleges, most transactions are tainted. 6% is an amount worth recovering for many, and it’s probably all the profit at a typical web store. Worse, the number of stolen coins may be closer to 15% of all the circulating bitcoins, certainly something worth recovering on many transactions.

The “sinking taint” approach

Previously, I suggested a rule. The rule was that if a transaction merges various inputs which are variously reported as stolen (tainted) and not, then the total percentage be calculated, and the first outputs receive all the tainting, and the latter outputs (including the transaction fee, last of all) be marked clear. One of the outputs would remain partial unless the transaction was designed to avoid this. There is no inherent rule that the “change” comes last, it is just a custom, and it would probably be reversed, so that as much of the tainted fraction remains in the change as possible, and the paid amount is as clean as possible. Recipients would want to insist on that.

This allows the creation of a special transaction that people could do with themselves on discovering they have coin that is reported stolen. The transaction would split the coin precisely into one or more purely tainted outputs, and one or more fully clean outputs. Recipients would likely refuse bitcoin with any taint on it at all, and so holders of bitcoin would be forced to do these dividing transactions. (They might have to do them again if new theft reports come on coin that they own.) People would end up doing various combinations of these transactions to protect their privacy and not publicly correlate all their coin.

Tainted transaction fees?

The above system makes the transaction fee clean if any of the coin in the transaction is clean. If this is not done, miners might not accept such transactions. On the other hand, there is an argument that it would be good if miners refused even partially tainted transactions, other than the ones above used to divide the stolen coins from the clean. There would need to be a rule that allows a transaction to be declared a splitting transaction which pays its fees from the clean part. In this case, as soon as coins had any taint at all, they would become unspendable in the legit markets and it would be necessary to split them. They would still be spendable with people who did not accept this system, or in some underground markets, but they would probably convert to other currencies at a discount.

This works better if there is agreement on the database of tainted coins, but that’s unlikely. As such, miners would decide what databases to use. Anything in the database used by a significant portion of the miners would make those coins difficult to spend and thus prime for splitting. However, if they are clean in the view of a significant fraction of the miners, they will enter the blockchain eventually.

This is a lot of complexity, much more than anybody in the Bitcoin community wants. The issue is that if the law gets involved, there is a world of pain in store for the system, and merchants, if a large fraction of all circulating coins are reported as stolen in a police report, even a Japanese police report.

What if somebody steals a bitcoin?

Bitcoin has seen a lot of chaos in the last few months, including being banned in several countries, the fall of the Silk Road, and biggest of all, the collapse of Mt. Gox, which was for much of Bitcoin’s early history, the largest (and only major) exchange between regular currencies and bitcoins. Most early “investors” in bitcoin bought there, and if they didn’t move their coins out, they now greatly regret it.

I’ve been quite impressed by the ability of the bitcoin system to withstand these problems. Each has caused major “sell” days but it has bounced back each time. This is impressive because nothing underlies bitcoins other than the expectation that you will be able to use them into the future and that others will take them.

It is claimed (though doubted by some) that most of Mt.Gox’s bitcoins — 750,000 of them or over $400M — were stolen in some way, either through thieves exploiting a bug or some other means. If true, this is one of the largest heists in history. There are several other stories of theft out there as well. Because bitcoin transactions can’t be reversed, and there is no central organization to complain to, theft is a real issue for bitcoin. If you leave your bitcoin keys on your networked devices, and people get in, they can transfer all your coins away, and there is no recourse.

Or is there?

If you sell something and are paid in stolen money, there is bad news for you, the recipient of the money. If this is discovered, the original owner gets the money back. You are out of luck for having received stolen property. You might even be suspected of being involved, but even if you are entirely innocent, you still lose.

All bitcoin transactions are public, but the identities of the parties are obscured. If your bitcoins are stolen, you can stand up and declare they were stolen. More than that, unless the thief wiped all your backups, you can 99.9% prove that you were, at least in the past, the owner of the allegedly stolen coins. Should society accept bitcoins as money or property, you would be able to file a police report on the theft, and identify the exact coin fragments stolen, and prove they were yours, once. We would even know “where” they are today, or see every time they are spent and know who they went to, or rather, know the random number address that owns them now in the bitcoin system. You still own them, under the law, but in the system they are at some other address.

That random address is not inherently linked to this un-owner, but as the coins are spent and re-spent, they will probably find their way to a non-anonymous party, like a retailer, from whom you could claim them back. Retailers, exchanges and other legitimate parties would not want this, they don’t want to take stolen coins and lose their money. (Clever recipients generate a new address for every transaction, but others use publicly known addresses.)

Tainted coin database?

It’s possible, not even that difficult, to create a database of “tainted” coins. If such a database existed, people accepting coins could check if the source transaction coins are in that database. If there, they might reject the coins or even report the sender. I say “reject” because you normally don’t know what coins you are getting until the transaction is published, and if the other party publishes it, the coins are now yours. You can refuse to do your end of the transaction (ie. not hand over the purchased goods) or even publish a transaction “refunding” the coins back to the sender. It’s also possible to imagine that the miners could refuse to enter a transaction involving tainted coins into the blockchain. (For one thing, if the coins are stolen, they won’t get their transaction fees.) However, as long as some miner comes along willing to enter it, it will be recorded, though other miners could refuse to accept that block as legit.  read more »

What governments should do to help and regulate robocars

In my recent travels, I have often been asked what various government entities can and should do related to the regulation of robocars. Some of them want to consider how to protect public safety. Most of them, however, want to know what they can do to prepare their region for the arrival of these cars, and ideally to become one of the leading centres in the development of the vehicles. The car industry is about to be disrupted, and most of the old players may not make it through to the new world. The ground transportation industry is so huge (I estimate around $7 trillion globally) that many regions depend on it as a large component of their economy. For some places it’s vital.

But there are many more questions than that, so I’ve prepared an essay covering a wide variety of ways in which policymakers and robocars will interact.

Read: Governments, The Law and Robocars

US push to mandate V2V radios -- is it a good choice?

It was revealed earlier this month that NHTSA wishes to mandate vehicle to vehicle radios in all cars. I have written extensively on the issues around this and regular readers will know I am a skeptic of this plan. This is not to say that I don’t think that V2V would not be useful for robocars and regular cars. Rather, I believe that its benefits are marginal when it comes to the real problems, and for the amount of money that must be spent, there are better ways to spend it. In addition, I think that similar technology can and will evolve organically, without a government mandate, or with a very minimal one. Indeed, I think that technology produced without a mandate or pre-set standards will actually be superior, cheaper and be deployed far more quickly than the proposed approach.

The new radio protocol, known as DSRC, is a point-to-point wifi style radio protocol for cars and roadside equipment. There are many applications. Some are “V2V” which means cars report what they are doing to other cars. This includes reporting one’s position tracklog and speed, as well as events like hitting the brakes or flashing a turn signal. Cars can use this to track where other cars are, and warn of potential collisions, even with cars you can’t see directly. Infrastructure can use it to measure traffic.

The second class of applications are “V2I” which means a car talks to the road. This can be used to know traffic light states and timings, get warnings of construction zones and hazards, implement tolling and congestion charging, and measure traffic.

This will be accomplished by installing a V2V module in every new car which includes the radio, a connection to car information and GPS data. This needs to be tamper-proof, sealed equipment and must have digital certificates to prove to other cars it is authentic and generated only by authorized equipment.

Robocars will of course use it. Any extra data is good, and the cost of integrating this into a robocar is comparatively small. The questions revolve around its use in ordinary cars. Robocars, however, can never rely on it. They must be be fully safe enough based on just their sensors, since you can’t expect every car, child or deer to have a transponder, ever.

One issue of concern is the timeline for this technology, which will look something like this:

  1. If they’re lucky, NHTSA will get this mandate in 2015, and stop the FCC from reclaiming the currently allocated spectrum.
  2. Car designers will start designing the tech into new models, however they will not ship until the 2019 or 2020 model years.
  3. By 2022, the 2015 designed technology will be seriously obsolete, and new standards will be written, which will ship in 2027.
  4. New cars will come equipped with the technology. About 12 million new cars are sold per year.
  5. By 2030, about half of all cars have the technology, and so it works in 25% of accidents. 3/4 of those will have the obsolete 2015 technology or need a field-upgrade. The rest will have soon to be obsolete 2022 technology. Most cars also have forward collision warning by this point, so V2V is only providing extra information in a tiny fraction of the 25% of accidents.
  6. By 2040 almost all cars have the technology, though most will have older versions. Still, 5-10% of cars do not have the technology unless a mandate demands retrofit. Some cars have the equipment but it is broken.

Because of the quadratic network effect, in 2030 when half of cars have the technology, only 25% of car interactions will be make use of it, since both cars must have it. (The number is, to be fair, somewhat higher as new cars drive more than old cars.)  read more »

Satoshi, is now the time to consider donating lots of bitcoin to charity?

I don’t know who the person or people are who, under the name Satoshi Nakamoto, created the Bitcoin system. The creator(s) want to keep their privacy, and given the ideology behind Bitcoin, that’s not too surprising.

There can only be 21 million bitcoins. It is commonly speculated that Satoshi did much of the early mining, and owns between 1 million and 1.5 million unspent bitcoins. Today, thanks in part to a speculative bubble, bitcoins are selling for $800, and have been north of $1,000. In other words, Satoshi has near a billion dollars worth of bitcoin. Many feel that this is not an unreasonable thing, that a great reward should go to Satoshi for creating such a useful system.

For Satoshi, the problem is that it’s very difficult to spend more than a small portion of this block, possibly ever. Bitcoin addresses are generally anonymous, but all transactions are public. Things are a bit different for the first million bitcoins, which went only to the earliest adopters. People know those addresses, and the ones that remain unspent are commonly believed to be Satoshi’s. If Satoshi starts spending them in any serious volume, it will be noticed and will be news.

The fate of Bitcoin

Whether Bitcoin becomes a stable currency in the future or not, today few would deny it is not stable, and undergoing speculative bubbles. Some think that because nothing backs the value of bitcoins, it will never become stable, but others are optimistic. Regardless of that, today the value of a bitcoin is fragile. The news that “Satoshi is selling his bitcoins!” would trigger panic selling, and that’s bad news in any bubble.

If Satoshi could sell, it is hard to work out exactly when the time to sell would be. Bitcoin has several possible long term fates:

  1. It could become the world’s dominant form of money. If it replaced all of the “M1” money supply in the world (cash and very liquid deposits) a bitcoin could be worth $1 million each!
  2. It could compete with other currencies (digital and fiat) for that role. If it captured 1% of world money supply, it might be $10,000 a coin. While there is a limit on the number of bitcoins, the limit on the number of cryptocurrencies is unknown, and as bitcoin prices and fees increase, competition is to be expected.
  3. It could be replaced by one or more successors of superior design, with some ability to exchange during a modest window, and then drifting down to minimal value
  4. It could collapse entirely and quickly in the face of government opposition, competition and other factors during its bubble phase.

My personal prediction is #3 — that several successor currencies will arise which fix issues with Bitcoin, with exchange possible for a while. However, just as bitcoins had their sudden rushes and bubbles, so will this exchange rate, and as momentum moves into this currency it could move very fast. Unlike exchanges that trade bitcoins for dollars, inter-cryptocurrency exchanges will be fast (though the settlement times of the currencies will slow things down.) It could be even worse if the word got out that “Satoshi is trading his coins for [Foo]Coin” as that could cause complete collapse of Bitcoin.

Perhaps he could move some coins through randomizing services that scramble the identity association, but moving the early coins to such a system would be seen as selling them.  read more »

Oh Hugo Awards, where have you gone?

I follow the Hugo awards closely, and 20 years ago published the 1993 Hugo and Nebula Anthology which was probably the largest anthology of currently released fiction ever published at the time.

The Hugo awards are voted by around 1,000 fans who attend the World SF Convention, so they have their biases, but over time almost all the greats have been recognized. In addition, until the year 2000, in the best novel Hugo, considered the most important, the winner was always science fiction, not fantasy even though both and more were eligible. That shifted, and from 2001 to 2012, there have been 6 Fantasy winners, one Alternate History, and 5+1 SF. (2010 featured a tie between bad-science SF in the Windup Girl and genre-bending political science fiction in The City & The City.)

That’s not the only change to concern me. A few times my own pick for the best has not even been nominated. While that obviously shows a shift between my taste and the rest of the fans, I think I can point to reasons why it’s not just that.

The 2013 nominees I find not particularly inspiring. And to me, that’s not a good sign. I believe that the Hugo award winning novel should say to history, “This is an example of the best that our era could produce.” If it’s not such an example, I think “No Award” should win. (No Award is a candidate on each ballot, but it never comes remotely close to winning, and hasn’t ever for novels. In the 70s, it deservedly won a few times for movies. SF movies in the mid and early 70s were largely dreck.)

What is great SF? I’ve written on it before, but here’s an improvement of my definition. Great SF should change how you see the future/science/technology. Indeed, perhaps all great literature should change how you view the thing that is the subject matter of the literature, be it love, suffering, politics or anything else. That’s one reason why I have the preference for SF over Fantasy in this award. Fantasy has a much harder time attaining that goal.

I should note that I consider these books below as worth reading. My criticism is around whether they meet the standard for greatness that a Hugo candidate should have.

2312 by Kim Stanley Robinson

This is the best of the bunch, and it does an interesting exploration into the relationship of human and AI, and as in all of Stan’s fiction, the environment. His rolling city on Mercury is a wonder. The setup is great but the pace is as glacial as the slowly rolling city and the result is good, but not at the level of greatness I require here.  read more »

A Bitcoin Analogy

Bitcoin is having its first “15 minutes” with the recent bubble and crash, but Bitcoin is pretty hard to understand, so I’ve produced this analogy to give people a deeper understanding of what’s going on.

It begins with a group of folks who take a different view on several attributes of conventional “fiat” money. It’s not backed by any physical commodity, just faith in the government and central bank which issues it. In fact, it’s really backed by the fact that other people believe it’s valuable, and you can trade reliably with them using it. You can’t go to the US treasury with your dollars and get very much directly, though you must pay your US tax bill with them. If a “fiat” currency faces trouble, you are depending on the strength of the backing government to do “stuff” to prevent that collapse. Central banks in turn get a lot of control over the currency, and in particular they can print more of it any time they think the market will stomach such printing — and sometimes even when it can’t — and they can regulate commerce and invade privacy on large transactions. Their ability to set interest rates and print more money is both a bug (that has sometimes caused horrible inflation) and a feature, as that inflation can be brought under control and deflation can be prevented.

The creators of Bitcoin wanted to build a system without many of these flaws of fiat money, without central control, without anybody who could control the currency or print it as they wish. They wanted an anonymous, privacy protecting currency. In addition, they knew an open digital currency would be very efficient, with transactions costing effectively nothing — which is a pretty big deal when you see Visa and Mastercard able to sustain taking 2% of transactions, and banks taking a smaller but still real cut.

With those goals in mind, they considered the fact that even the fiat currencies largely have value because everybody agrees they have value, and the value of the government backing is at the very least, debatable. They suggested that one might make a currency whose only value came from that group consensus and its useful technical features. That’s still a very debatable topic, but for now there are enough people willing to support it that the experiment is underway. Most are aware there is considerable risk.

Update: I’ve grown less fond of this analogy and am working up a superior one, closer to the reality but still easy to understand.

Wordcoin

Bitcoins — the digital money that has value only because enough people agree it does — are themselves just very large special numbers. To explain this I am going to lay out an imperfect analogy using words and describe “wordcoin” as it might exist in the pre-computer era. The goal is to help the less technical understand some of the mechanisms of a digital crypto-based currency, and thus be better able to join the debate about them.  read more »