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Internet economics, technology and issues

Birth of the World Wide Web

Yesterday, I was interviewed for the public radio program Marketplace and as is normal, 30 minutes come down to 30 seconds. So I wanted to add some commentary to that story.

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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.

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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.

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End the redirect wrapper on links

A lot of sites, most notably search engines like Google, like to rewrite all the links on their pages. So search for this page and instead of http://ideas.4brad.com, the link Google gives you is http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=short-string&url=http%3A%2F%2Fideas.4brad.com%2F&ei=med-string&usg=huge-string&bvm=short-string or similar. (I have redacted the actual codes.)

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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.

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No, we don't want much more Fedex and UPS on Dec 24

A big story this Christmas was a huge surge in the use of rush shipping in the last 2 days before Christmas. Huge numbers of people signed up for Amazon Prime, and other merchants started discounting 2 day and overnight shipping to get those last minute sales. In turn, a lot of stuff didn't get delivered on time, making angry customers and offers of apology discounts from merchants. This was characterized as a "first world problem" by many outside the game, of course.

Having secure open wifi (Death to wifi login part 2)

In part 1 I outlined the many problems caused by wifi login pages that hijack your browser ("captive portals") and how to improve things.

Today I want to discuss the sad state of having security in WIFI in most of the setups used today.

Almost all open WIFI networks are simply "in the clear." That means, however you got on, your traffic is readable by anybody, and can be interfered with as well, since random users near you can inject fake packets or pretend to be the access point. Any security you have on such a network depends on securing your outdoing connections. The most secure way to do this is to have a VPN (virtual private network) and many corporations run these and insist their employees use them. VPNs do several things:

  • Encrypt your traffic
  • Send all the traffic through the same proxy, so sniffers can't even see who else you are talking to
  • Put you on the "inside" of corporate networks, behind firewalls. (This has its own risks.)

VPNs have downsides. They are hard to set up. If you are not using a corporate VPN, and want a decent one, you typically have to pay a 3rd party provider at least $50/year. If your VPN router is not in the same geographic region as you are, all your traffic is sent to somewhere remote first, adding latency and in some cases reducing bandwidth. Doing voice or video calls over a VPN can be quite impractical -- some VPNs are all TCP without the UDP needed for that, and extra latency is always a killer. Also, there is the risk your VPN provider could be snooping on you -- it actually can make it much easier to snoop on you (by tapping the outbound pipe of your VPN provider) than to follow you everywhere to tap where you are.

If you don't have a VPN, you want to try to use encrypted protocols for all you do. At a minimum, if you use POP/IMAP E-mail, it should be configured to only get and receive mail over TLS encrypted channels. In fact, my own IMAP server doesn't even accept connections in the clear to make sure nobody is tempted to use one. For your web traffic, use sites in https mode as much as possible, and use EFF's plugin https everywhere to make your browser switch to https wherever it can.

Canada to stop urban mail home delivery, but fails to abolish snail-mail

Here in Canada, a hot political issue (other than disgust with Rob Ford) is the recent plan by Canada Post to stop home delivery in cities. My initial reaction was, "Wow, I wish we could get that in the USA!" but it turns out all they are doing is making people go to neighbourhood mailboxes to get their mail. For many years, people in new developments have had to do this -- they install a big giant mailbox out on the street, and you get a key to get your mail. You normally don't walk further than the end of your block.

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Death to the Wifi login page (part 1)

It's the bane of the wanderer. A large fraction of open Wifi access points don't connect you to the internet, but instead want you to login somehow. They do this by redirecting (hijacking) any attempt to fetch a web page to a login or terms page, where you either have to enter credentials, or just click to say you agree to the terms of service. A few make you watch an ad. It's sometimes called a captive portal.

I'm going to contend that these hijack screens are breaking a lot of things, and probably not doing anybody -- including portal owners -- any good.

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Going beyond the vacation program with dynamic status

I'm back from Burning Man, and this year, for the first time in a while, we didn't get internet up in our camp, so I only did occasional email checks while wandering other places. And thus, of course, there are many hundred messages backed up in my box to get to. I will look at the most important but some will just be ignored or discarded.

We all know it's getting harder and harder to deal with email backlog after travel, even connected travel. If you don't check in it gets even worse. Vacation autoreplies can help a little, but I think they are no longer enough.

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Kayak sailing "san juan islands"

Yahoo announced that in a few days they will shut down the altavista web site. This has prompted a few posts on the history of internet search, to which I will add an anecdote.

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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.

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V2V and connected car part 3: Broadcast data

Earlier in part one I examined why it's hard to make a networked technology based on random encounters. In part two I explored how V2V might be better achieved by doing things phone-to-phone.

For this third part of the series on connected cars and V2V I want to look at the potential for broadcast data and other wide area networking.

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Solving V2V Part 2: Make it Phone to Phone

Last week, I began in part 1 by examining the difficulty of creating a new network system in cars when you can only network with people you randomly encounter on the road. I contend that nobody has had success in making a new networked technology when faced with this hurdle.

This has been compounded by the fact that the radio spectrum at 5.9ghz which was intended for use in short range communications (DSRC) from cars is going to be instead released as unlicenced spectrum, like the WiFi bands. I think this is a very good thing for the world, since unlicenced spectrum has generated an unprecedented radio revolution and been hugely beneficial for everybody.

But surprisingly it might be something good for car communications too. The people in the ITS community certainly don't think so. They're shocked, and see this as a massive setback. They've invested huge amounts of efforts and careers into the DSRC and V2V concepts, and see it all as being taken away or seriously impeded. But here's why it might be the best thing to ever happen to V2V.

The innovation in mobile devices and wireless protocols of the last 1-2 decades is a shining example to all technology. Compare today's mobile handsets with 10 years ago, when the Treo was just starting to make people think about smartphones. (Go back a couple more years and there weren't any smartphones at all.) Every year there are huge strides in hardware and software, and as a result, people are happily throwing away perfectly working phones every 2 years (or less) to get the latest, even without subsidies. Compare that to the electronics in cars. There is little in your car that wasn't planned many years ago, and usually nothing changes over the 15-20 year life of the car. Car vendors are just now toying with the idea of field upgrades and over-the-air upgrades.

Car vendors love to sell you fancy electronics for your central column. They can get thousands of dollars for the packages -- packages that often don't do as much as a $300 phone and get obsolete quickly. But customers have had enough, and are now forcing the vendors to give up on owning that online experience in the car and ceding it to the phone. They're even getting ready to cede their "telematics" (things like OnStar) to customer phones.

I propose this: Move all the connected car (V2V, V2I etc.) goals into the personal mobile device. Forget about the mandate in cars.

The car mandate would have started getting deployed late in this decade. And it would have been another decade before deployment got seriously useful, and another decade until deployment was over 90%. In that period, new developments would have made all the decisions of the 2010s wrong and obsolete. In that same period, personal mobile devices would have gone through a dozen complete generations of new technology. Can there be any debate about which approach would win?

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The importance of serial media vs. sampled and Google Reader

The blogging world was stunned by the recent announcement by Google that it will be shutting down Google reader later this year. Due to my consulting relationship with Google I won't comment too much on their reasoning, though I will note that I believe it's possible the majority of regular readers of this blog, and many others, come via Google reader so this shutdown has a potential large effect here. Of particular note is Google's statement that usage of Reader has been in decline, and that social media platforms have become the way to reach readers.

The effectiveness of those platforms is strong. I have certainly noticed that when I make blog posts and put up updates about them on Google Plus and Facebook, it is common that more people will comment on the social network than comment here on the blog. It's easy, and indeed more social. People tend to comment in the community in which they encounter an article, even though in theory the most visibility should be at the root article, where people go from all origins.

However, I want to talk a bit about online publishing history, including USENET and RSS, and the importance of concepts within them. In 2004 I first commented on the idea of serial vs. browsed media, and later expanded this taxonomy to include sampled media such as Twitter and social media in the mix. I now identify the following important elements of an online medium:

  • Is it browsed, serial or to be sampled?
  • Is there a core concept of new messages vs. already-read messages?
  • If serial or sampled, is it presented in chronological order or sorted by some metric of importance?
  • Is it designed to make it easy to write and post or easy to read and consume?

Online media began with E-mail and the mailing list in the 60s and 70s, with the 70s seeing the expansion to online message boards including Plato, BBSs, Compuserve and USENET. E-mail is a serial medium. In a serial medium, messages have a chronological order, and there is a concept of messages that are "read" and "unread." A good serial reader, at a minimum, has a way to present only the unread messages, typically in chronological order. You can thus process messages as they came, and when you are done with them, they move out of your view.

E-mail largely is used to read messages one-at-a-time, but the online message boards, notably USENET, advanced this with the idea of move messages from read to unread in bulk. A typical USENET reader presents the subject lines of all threads with new or unread messages. The user selects which ones to read -- almost never all of them -- and after this is done, all the messages, even those that were not actually read, are marked as read and not normally shown again. While it is generally expected that you will read all the messages in your personal inbox one by one, with message streams it is expected you will only read those of particular interest, though this depends on the volume.

Echos of this can be found in older media. With the newspaper, almost nobody would read every story, though you would skim all the headlines. Once done, the newspaper was discarded, even the stories that were skipped over. Magazines were similar but being less frequent, more stories would be actually read.

USENET newsreaders were the best at handling this mode of reading. The earliest ones had keyboard interfaces that allowed touch typists to process many thousands of new items in just a few minutes, glancing over headlines, picking stories and then reading them. My favourite was TRN, based on RN by Perl creator Larry Wall and enhanced by Wayne Davison (whom I hired at ClariNet in part because of his work on that.) To my great surprise, even as the USENET readers faded, no new tool emerged capable of handling a large volume of messages as quickly.

In fact, the 1990s saw a switch for most to browsed media. Most web message boards were quite poor and slow to use, many did not even do the most fundamental thing of remembering what you had read and offering a "what's new for me?" view. In reaction to the rise of browsed media, people wishing to publish serially developed RSS. RSS was a bit of a kludge, in that your reader had to regularly poll every site to see if something was new, but outside of mailing lists, it became the most usable way to track serial feeds. In time, people also learned to like doing this online, using tools like Bloglines (which became the leader and then foolishly shut down for a few months) and Google Reader (which also became the leader and now is shutting down.) Online feed readers allow you to roam from device to device and read your feeds, and people like that.

Mesh networking when the cell network fails

Interesting article about a new plan for mesh networking Android phones if the cell network fails. I point this out because of another blog post of mine from 2005 on a related proposal from Klein Gilhousen that he was pushing after Katrina.

Don't count my old passwords as failed login attempts

Like most people, I have a lot of different passwords in my brain. While we really should have used a different system from passwords for web authentication, that's what we are stuck with now. A general good policy is to use the same password on sites you don't care much about and to use more specific passwords on sites where real harm could be done if somebody knows your password, such as your bank or email.

New panoramas of Israel, and of course a proposal for peace

I'm back from our fun "Singuarlity Week" in Tel Aviv, where we did a 2 day and 1 day Singularity University program. We judged a contest for two scholarships by Israelis for SU, and I spoke to groups like Garage Geeks, Israeli Defcon, GizaVC's monthly gathering and even went into the west bank to address the Palestinian IT Society and announce a scholarship contest for SU.

Let me make a memo on credit card purchases

Back to wishlists on credit cards: Every year, for tax time, I go over my downloaded credit card records and I classify them into categories. I could just try to divide out the business and personal expenses (which I handle by having credit cards for business only and for personal only) but I try to do a bit more categorization, and from time to time there's a reason I don't follow the strict rule about what card to use.

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Understanding when and how to be secure

Over the years I have come to the maxim that "Everything should be as secure as is easy to use, and no more secure" to steal a theme from Einstein. One of my peeves has been the many companies who, feeling that E-mail is insecure, instead send you an E-mail that tells you you have an E-mail if you would only log onto their web site (often one you rarely log into) with the password you set up 2 years ago to read it.

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