Internet

Internet economics, technology and issues

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.

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.

Better notification by credit cards

Almost all credit cards will let you download transactions. Many will e-mail you a balance or payment reminder once a month, or a warning if your balance goes above a certain amount. And I've seen a small number that will e-mail you on every transaction.

But does anybody have a smart notification system which I can set, allowing me to be comfortable that there is no misuse of my card without filling my mailbox?

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Time for delivery companies to work weekends

This time of year I do a lot of online shopping, and my bell rings with many deliveries. But today and tomorrow, not Saturday. The post office comes Saturday but has announced it wants to stop doing that to save money. They do need to save money, but this is the wrong approach. I think the time has come for Saturday and Sunday delivery to be the norm for UPS, Fedex and the rest.

Browser support for "sessions" to make them longer

I'm actually not a fan of login and sessions on the web, and in fact prefer a more stateless concept I call authenticated actions to the more common systems of login and "identity."

But I'm not going to win the day soon on that, and I face many web sites that think I should have a login session, and that session should in fact terminate if I don't click on the browser often enough. This frequently has really annoying results -- you can be working on a complex form or other activity, then switch off briefly to other web sites or email to come back and find that "your session has expired" and you have to start from scratch.

There are times when there is an underlying reason for this. For example, when booking things like tickets, the site needs to "hold" your pending reservation until you complete it, but if you're not going to complete it, they need to return that ticket or seat to the pool for somebody else to buy. But many times sessions expire without that reason. Commonly the idea is that for security, they don't want to leave you logged on in a way that might allow somebody to come to your computer after you leave it and take over your session to do bad stuff. That is a worthwhile concept, particularly for people who will do sessions at public terminals, but it's frustrating when it happens on the computer in your house when you're alone.

Many sites also overdo it. While airlines need to cancel your pending seat requests after a while, there is no reason for them to forget everything and make you start from scratch. That's just bad web design. Other sites are happy to let you stay "logged on" for a year.

To help, it would be nice if the browser had a way of communicating things it knows about your session with the computer to trusted web sites. The browser knows if you have just switched to other windows, or even to other applications where you are using your mouse and keyboard. Fancier tools have even gone so far as to use your webcam and microphone to figure if you are still at your desk or have left the computer. And you know whether your computer is in a public space, semi-public space or entirely private space. If a browser, or browser plug-in, has a standardized way to let a site query session status, or be informed of session changes and per-machine policy, sites could be smarter about logging you out. That doesn't mean your bank still should not be paranoid if you are logged in to a session where you can spend your money, but they can be more informed about it.

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How the internet and its pricing really work

Today an op-ed by John Sununu and Harold Ford Jr. of "Broadband For America" (a group of cable companies and other ISPs which says it is really a grass-roots organization) declared that the net needs a better pricing model for what Netflix is doing. For a group of ISPs, they really seem to not understand how the internet works and how pricing works, so I felt it was worthwhile to describe how things work with a remarkably close analogy. (I have no association with Netflix, I am not even a customer, but I do stream video on the net.)

You can liken the internet to a package delivery service that works somewhat differently from traditional ones like the postal service or FedEx. The internet's pricing model is "I pay for my line to the middle, and you pay for your line to the middle and we don't account for the costs of individual traffic."

In the package model, imagine a big shipping depot. Shippers send packages to this depot, and it's the recipient's job to get the package from the depot to their house. The shippers pay for their end, you pay for your end, and both share the cost of creating the depot.

Because most people don't want to go directly to the depot to get their packages, a few "last mile" delivery companies have sprung up. For a monthly fee, they will deliver anything that shows up at the depot addressed to you directly to your house. They advertise in fact, that for the flat fee, they will deliver as many packages as show up, subject to a fairly high maximum rate per unit of time (called bandwidth in the internet world.) They promote and compete on this unlimited service.

To be efficient, the delivery companies don't run a private truck from the depot to your house all the time. Instead, they load up a truck with all the packages for your neighbourhood, and it does one delivery run. Some days you have a lot of packages and your neighbours have few. Other days you have few and they have a lot. The truck is sized to handle the high end of the total load for all the neighbours. However, it can't handle it if a large number of the neighbours all want to use a large fraction of their total load on the same day, they just didn't buy enough trucks for that, even though they advertised they were selling that.

This is not unreasonable. A majority of the businesses in the world that sell flat rate service work this way, not just internet companies. Though there are a few extra twists in this case:

  • The last mile companies have a government granted franchise. Only a couple can get permission to operate. (In reality -- only a few companies have got permission to have wires strung on poles or under the street.)
  • Some of the last mile companies also used to be your exclusive source for some goods (in this case phone service and TV) and are concerned that now there are competitors delivering those things to the customers.

The problem arises because new services like Netflix suddenly have created a lot more demand to ship packages. More than the last mile companies counted on. They're seeing the truck fill up and need to run more trucks. But they proudly advertised unlimited deliveries from the depot to their customers. So now, in the op-ed, they're asking that companies like Netflix, in addition to paying the cost of shipping to the depot, pay some of the cost for delivery from the depot to the customer. If they did this, companies would pass this cost on to the customer, even though the customer already paid for that last mile delivery.

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Time for the fourth screen -- the always on wall computer

In media today, it's common to talk about three screens: Desktop, mobile and TV. Many people watch TV on the first two now, and tools like Google TV and the old WebTV try to bring interactive, internet style content to the TV. People like to call the desktop the "lean forward" screen where you use a keyboard and have lots of interactivity, while the TV is the "lean back" couch-potato screen. The tablet is also distinguishing itself a bit from the small screen normally found in mobile.

More and more people also find great value in having an always-on screen where they can go to quickly ask questions or do tasks like E-mail.

I forecast we will soon see the development of a "fourth screen" which is a mostly-always-on wall panel meant to be used with almost no interaction at all. It's not a thing to stare at like the TV (though it could turn into one) nor a thing to do interactive web sessions on. The goal is to have minimal UI and be a little bit psychic about what to show.

One could start by showing stuff that's always of use. The current weather forecast, for example, and selected unusual headlines. Whether each member of the household has new mail, and if it makes sense from a privacy standpoint, possibly summaries of that mail. Likewise the most recent status from feeds on twitter or Facebook or other streams. One could easily fill a screen with these things so you need a particularly good filter to find what's relevant. Upcoming calendar events (with warnings) also make sense.

Some things would show only when important. For example, when getting ready to go out, I almost always want to see the traffic map. Or rather, I want to see it if it has traffic jams on it, no need to show it when it's green -- if it's not showing I know all is good. I may not need to see the weather if it's forecast sunny either. Or if it's raining right now. But if it's clear now and going to rain later I want to see that. Many city transit systems have a site that tracks when the next bus or train will come to my stop -- I want to see that, and perhaps at morning commute time even get an audio alert if something unusual is up or if I need to leave right now to catch the street car. A view from the security camera at the door should only show if somebody is at the door.

There are so many things I want to see that we will need some UI for the less popular ones. But it should be a simple UI, with no need to find a remote (though if I have a remote -- any remote -- it should be able to use it.) Speech commands would be good to temporarily see other screens and modes. A webcam (and eventually Kinect style sensor) for gestural UI would be nice, letting me swipe or wave to get other screens.

Ride-sharing apps instead of Bus Rapid Transit?

You may have heard of Bus Rapid Transit -- a system to give a bus line a private or semi-private right-of-way, along with bus stops that are more akin to stations than bus shelters (with ticket-taking machines and loading platforms for multiple doors.) The idea is to make bus transit competitive with light-rail (LRT) in terms of speed and convenience. Aside from getting caught in slow traffic, buses also are slow to board. BRT is hoped to be vastly less expensive than light rail -- which is not hard because LRT (which means light capacity rail, not lightweight rail) has gotten up to $80 to $100M per mile. When BRT runs down the middle of regular roads, it gets signal timing assistance to help it have fewer stops. It's the "hot new thing" in transit. Some cities even give it bits of underground or elevated ROW (the Boston Silver Line) and others just want to wall off the center of a road to make an express bus corridor. Sometimes BRT gets its own highway lane or shares a special carpool lane.

At the same time just about anybody who has looked at transit and the internet has noticed that as the buses go down the street, they travel with tons of cars carrying only one person and lots of empty seats. Many have wondered, "how could we use those empty private car seats to carry the transit load?" There are a number of ride-sharing and carpooling apps on web sites and on smartphones, but success has been modest. Drivers tend to not want to take the time to declare their route, and if money is offered, it's usually not enough to counter the inconvenience. Some apps are based on social networks so friends can give rides to friends -- great when it works but not something you can easily do on demand.

But one place I've seen a lot of success at this is the casual carpooling system found in a number of cities. Here it's very popular to cross the Oakland-SF Bay Bridge, which has a $6 toll to cross into SF. It used to be free for 3-person carpools, now it's $2.50, but the carpools also get a faster lane for access to the highly congested bridge both going in and out of SF.

Almost all the casual carpool pickup spots coming in are at BART (subway) stations, which are both easy for everybody to get to, and which allow those who can't get a carpool to just take the train. There is some irony that it means that the carpools mostly take people who would have ridden BART trains, not people who would have driven, the official purpose of carpool subsidies. In the reverse direction the carpools are far fewer with no toll to be saved, but you do get a better onramp.

People drive the casual carpools because they get something big for for it -- saving over $1,000/year, and hopefully a shorter line to the bridge. This is the key factor to success in ride share. The riders are saving a similar amount of money in BART tickets, even more if they skipped driving.

Let's consider what would happen if you put in the dedicated lane for BRT, but instead of buses created an internet mediated carpooling system. Drivers could enter the dedicated lane only if:

  • They declared their exit in advance to the app on their phone, and it's far enough away to be useful to riders.
  • They agree to pick up riders that their phone commands them to.
  • They optionally get a background check that they pay for so they can be bonded in some way to do this. (Only the score of the background check is recorded, not the details.)

Riders would declare their own need for a ride, and to what location, on their own phones, or on screens mounted at "stops" (or possibly in nearby businesses like coffee shops.) When a rider is matched to a car, the rider will be informed and get to see the approach of their ride on the map, as well as a picture of the car and plate number. The driver will be signaled and told by voice command where to go and who to pick up. I suggest calling this Carpool-Rapid-Transit or CRT.

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Banks: Give me two passwords

Passwords are in the news thanks to Gawker media, who had their database of userids, emails and passwords hacked and published on the web. A big part of the fault is Gawker's, who was saving user passwords (so it could email them) and thus was vulnerable. As I have written before, you should be very critical of any site that is able to email you your password if you forget it.

Some of the advice in the wake of this to users has been to not use the same password on multiple sites, and that's not at all practical in today's world. I have passwords for many hundreds of sites. Most of them are like gawker -- accounts I was forced to create just to leave a comment on a message board. I use the same password for these "junk accounts." It's just not a big issue if somebody is able to leave a comment on a blog with my name, since my name was never verified in the first place. A different password for each site just isn't something people can manage. There are password managers that try to solve this, creating different passwords for each site and remembering them, but these systems often have problems when roaming from computer to computer, or trying out new web browsers, or when sites change their login pages.

The long term solution is not passwords at all, it's digital signature (though that has all the problems listed above) and it's not to even have logins at all, but instead use authenticated actions so we are neither creating accounts to do simple actions nor using a federated identity monopoly (like Facebook Connect). This is better than OpenID too.

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Better meeting-room-to-many video conference calls

Yesterday we had a meeting using some videoconferencing. In a situation I find fairly common, the setup was a meeting room with many people, and then a small number of people calling in remotely. In spite of this being a fairly common situation, I have had trouble finding conferencing systems that do this particular task very well. I have not been looking in the high-priced end but I believe the more modestly priced tools should be able to focus on this and make it work. Yesterday we used Oovoo, one of the few multi-part conference systems to support PC and Mac, with some good but many bad results.

The common answer, namely a speakerphone on the meeting room table and a conference bridge system, is pretty unsatisfactory, though the technology is stable enough that it is easy to get going. The remote people are never really part of the meeting. It's harder for them to engage in random banter, and the call fidelity is usually low and never better than PSTN phone quality. They usually have trouble hearing some of the people in the meeting room, though fancier systems with remote microphones help a bit with that.

The audio level

The next step up is a higher quality audio call. For this Skype is an excellent and free solution. The additional audio quality offers a closer sense of being in the room, and better hearing in both directions. It comes with a downside in that tools like Skype often pick up ambient noise in the room (mostly with remote callers) including clacking of keyboards, random background noises and bleeps and bloops of software using the speakers of the computer. While Skype has very good echo cancellation for those who wish to use it in speakerphone mode, I still strongly recommend the use of headsets by those calling in remotely, and even the judicious use of muting. There's a lot more Skype and others could do in this department, but a headset is a real winner, and they are cheap.

Most of these notes also apply to video calling which of course includes audio.

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Towards a more secure web, and better TLS

Today an interesting paper (written with the assistance of the EFF) was released. The authors have found evidence that governments are compromising trusted "certificate authorities" by issuing warrants to them, compelling them to create a false certificate for a site whose encrypted traffic they want to snoop on.

Will search engines focus on the negative?

I'm at DLD in Munich, and going to Davos tomorrow. While at DLD I made a brief mention during a panel on identity and tracking of my concept of the privacy dangers of the AIs of the future, which are able to extract things from recorded data (like faces) that we can't do today.

I mentioned a new idea, however, which is a search engine which focuses on the negative, because though advanced algorithms it can tell the difference between positive and negative content.

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