Brad Templeton is Chairman Emeritus of the EFF, Singularity University founding computing faculty, software architect and internet entrepreneur, robotic car strategist, futurist lecturer, photographer and Burning Man artist.
This is an "ideas" blog rather than a "cool thing I saw today" blog. Many of the items are not topical. If you like what you read, I recommend you also browse back in the archives, starting with the best of blog section. It also has various "topic" and "tag" sections (see menu on right) and some are sub blogs like Robocars, photography and Going Green. Try my home page for more info and contact data.
Look at the skyline of any growing city, and what do you see, but a sea of construction cranes. The theory is that each crane will go away and be replaced by an architectually interesting or pleasing building, but the cycle continues and there are always cranes.
Why are there lines at airport security? I mean, we know why the lines form, when passenger load exceeds the capacity, with the bottleneck usually being the X-ray machines. The question is why this imbalance is allowed to happen?
The variable wait at airport security levies a high cost, because passengers must assume it will be long, just in case it is. That means every passenger gets there 15 or more minutes earlier than they would need to, even if there is no wait. Web sites listing wait times can help, but they can change quickly.
We've all learned a lot about what can and can't be done from the tragic story of MH 370, as well as the Air France flight lost over the Atlantic. Of course, nobody expected the real transponders to be disconnected or fail, and so it may be silly to speculate about how to avoid this situation when there already is supposed to be a system that stops aircraft from getting lost. Even so, here are some things to consider:
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.
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.
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.
One sign of how interest is building is the large reaction to some recent concept prototypes for robocars, two of which were shown in physical form at the Geneva auto show.
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.
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.
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.
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.
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?
I often see the suggestion that as Robocars get better, eventually humans will be forbidden from driving, or strongly discouraged through taxes or high insurance charges. Many people think that might happen fairly soon.
It's easy to see why, as human drivers kill 1.2 million people around the world every year, and injure many millions more. If we get a technology that does much better, would we not want to forbid the crazy risk of driving? It is one of the most dangerous things we commonly do, perhaps only second to smoking.
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.
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.)
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.
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.
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:
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.)
The Robocars world tour continues. Monday I will speak on robocars at the UAE Government conference in Dubai, where I just landed. Then it's off to talk about them at a private event in Singapore, but I'll also visit teams there. If I have time, I will check out Masdar -- what was originally going to be the first all-robocar city -- while in the UAE.
Very long-time readers of this blog will remember a proposal I made 10 years ago that cruise ship inside cabins use HDTVs with the outside view. Now a cruise ship is launching with such a system, though bigger than I proposed.
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.)
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.
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:
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.
Recently I learned from health.net, the insurer which did my individual plan, that they were canceling it. I'm one of those who lost his health plan with the switch to the ACA (Obamacare) plans, so I need to shop in the healthcare marketplace and will likely end up paying more.
What surprised me when I went to the marketplace was the math of the plans. For those who don't know, there are 4 main classes of plans (Bronze, Silver, Gold, Platinum) which are roughly the same for all insurers. There is also a 5th, "Catastrophic" plan available to under-30s and hardship cases, which is cheaper and covers even less than Bronze. Low income people get a great subsidized price in the marketplace, but people with decent incomes get no subsidy.
The 4 plans are designed so that for the average patient, they will end up paying 60% (Bronze), 70% (Silver), 80% (Gold) or 90% (Platinum) of health care costs, with the patient, on average, bearing the rest. All plans come with a "Maximum out of pocket" (MOOP) that is at most $6,350 for all plans but $4,000 (or less) for the Platinum.
Here's some analysis based on California prices and plans. The other states can vary a fair bit. Insurance is much cheaper in some regions, and there are plans that use moderately different formulae. In every state the MOOP is no more than $6,350 and the actuarial percentages are the same.
As you might expect, the Platinum costs a lot more than the Bronze. But at my age, in my early 50s, I was surprised how much more. I decided to plug in numbers for Blue Cross, which is actually slightly cheaper than many of the other plans. I actually have little information with which to compare the companies. This is quite odd -- my health insurance is going to be by biggest annual expenditure after my mortgage. More than my car -- but there's tons of information to help you choose a car. (Consumer Reports does have a comparison article on the major insurance companies before the ACA for their subscribers.)
The Platinum plan costs $350/month extra over Bronze, $4200/year. Almost as much as the MOOP. So I decided to build a spreadsheet that would show me what I would end up paying on each plan in total -- premiums plus my personal outlays. Here is the sheet for me in my early 50s:
The X axis is how much your health care actually cost, ie. what your providers were paid. The Y axis is how much you had to pay. The green line is unity, with your payout equal to the cost, as might happen in theory if you were uninsured. In theory, because in reality uninsured people pay a "list price" that is several times the cost that insurance companies negotiate. Also in theory because those uninsured must pay a tax penalty.
All the plans go up at one rate until they first hit your deductibles (Bronze/Silver) and then at a slower rate until you hit your MOOP. After the MOOP they are a flat line almost no matter what your health spending does. The Silver plan is the most complex. It has a $250 drug deductible and a $2000 general deductible and the usual $6,350 MOOP. In reality, these slopes will not be smooth lines. For example, on the silver plan if you are mostly doing doctor visits and labs, you do copays, not the deductible. If you hit something else, like MRI scans or hospitalization, you pay out the full cost until you hit the deductible. So each person's slope will be different, but these slopes are meant to represent an estimate for average patients.
The surprising thing about this chart is that the Bronze plan is pretty clearly superior. Only for a small region of costs does your outlay exceed the other plans, and never by much. However, in the most likely region for most people (modest health care) or the danger zone (lots of health care) it is quite a bit cheaper. The catastrophic plan, if you can get your hands on it over 30, is even better. It almost never does worse than the other plans.
I will note that the zone where Bronze is not the winner is around the $8,400 average cost of health care in the USA. However, what I really want to learn is the median cost, a statistic that is not readily available, or even better the median cost or distribution of costs at each age cohort. The actuaries obviously know this, and I would like pointers to a source.
Premiums are tax deductible for the self-employed, as are large medical expenses for all, but the outlays above premiums can also come from a Health Savings Account (HSA) which is a special IRA-like instrument. You put in up to around $3K each year tax-free, and can pay the costs above from it. (You also don't pay tax on appreciation of the account, and can draw out the money post-retirement at a decent rate.) If you are self-employed, depending on your tax bracket, this can seriously alter the chart and push you to a more expensive plan, because the premium money comes from pre-tax dollars and the health expenses don't, unless they are more than 10% of your total income.
The chart suggests the Bronze plan is the clear winner unless you know you will be in the $6K to $10K zone where it's a modest loser. It seems to beat the Platinum all the time (at least in this simplified model) but might have minor competition from the Silver. The Gold is essentially always worse than the Silver.
If we move to age 60, now the win for Bronze is very clear. At age 60, the $5500 extra premium for Platinum almost exceeds the MOOP on the Bronze -- the Bronze will always be cheaper. This makes no sense, and seems to be a result of the fact that the MOOP remains the same no matter how old you are (and is also the same for B/S/G/Cat.) Perhaps varying deductibles and the MOOP over time would have made more variety.
Here the Gold is clearly a loser to the Silver if you were thinking about it. Nobody in this age group should buy the Gold plan but I doubt the sites will say that. Platinum is almost as clearly a loss.
With the choice for the older person so obvious, this opens up another question, namely one of psychology. The rational thing to do is to buy the Bronze plan. But with its $5,000 deductible, you will find yourself paying out of pocket for almost all your health care except in years you need major treatments and hospitalizations.
I'm working on a new long article about advice to governments on how they should react to and encourage the development of robocars.
An interesting plan announced today has something I had not thought of: Michigan is funding the development of a fake downtown to act as a test track for robocar development. The 32 acre site will be at the University of Michigan, and is expected to open soon -- in time for the September ITS World Congress.