Older blog entries for apenwarr (starting at number 615)

29 Feb 2012 (updated 23 Mar 2012 at 10:07 UTC) »

Another Bold iPad Prediction

Update 2012/03/09: Darn, I guessed wrong. Oh well, a 50% hit rate for a bool is pretty good, right?

...

After I was declared a "semiconductor industry veteran" based on my previous article predicting when the iPad will get a retina display, I suppose I have to try my luck again.

Today there was a press release from Apple that essentially announces a new iPad, but we don't yet know what its killer feature will be. Retina display, you think?

I don't think so. A key part of my analysis last time was that right up to the release of the iPhone 4, there had been a series of Android phones with ever-increasing pixel density around the iPhone's screen size. The iPhone 4's screen density was not at all revolutionary: it exactly coincided with the density trends based on Moore's Law. Apple was not *ahead* of technology; they were right on time. Or, the day before the iPhone 4 was released, they were actually a year or two late, because all the other phones had better screens. They were waiting until they could do a 2x density increase.

Samsung just announced new Galaxy Note and Galaxy Tab tablets at 10.1 inches, but they're only 142 dpi or so, which is "normal res," not "retina." It's slightly higher res than an iPad, but not much. That's what state of the art looks like, and a "retina" density 10 inch display isn't reasonable yet.

Since the 2x resolution increase on the iPhone was so incredibly gobsmackingly successful, it's unlikely Apple will make an increase in pixels on the iPad unless it's 2x.

However, if you predict using Moore's Law since the date of the iPhone 4 release, it looks like you *could* perhaps double the 1024x768 iPad resolution to 2048x1536... you just couldn't do it yet on a 10 inch screen. Let's do the math: the iPhone 4 came out in June 2010, about 20 months ago, which gives us a Moore's Law improvement of 2**(20/18) = 2.16. The iPhone 4 screen is 960 pixels long, and 2.16 * 960 = 2073. Startlingly close to 2048. The only catch is it would be more like 6 or 7 inches, not 10.

I'm not sure Apple would be willing to go with a "smaller, lighter, thinner, more compact" iPad - the current one is maybe just the right size - but I don't know for sure. A 7 inch tablet would be a great book reader, I suppose. So I predict it's either that, or the screen resolution doesn't change.

It's no fun unless I say it out loud. Let the games begin!

(By the way, this is personal opinion, not that of my employer. I work on projects that are not smartphone or tablet or Android development, and I have no insider information.)

(And yes, this is the same prediction I made last time, because math doesn't change. I'm just reiterating it :))

(Also, this analysis omits the possibility of using a lower-density process than the iPhone 4 uses, thus producing the same pixels at a bigger size, maybe 10 inches again. But I don't think this is going to happen; you can see people pushing for bigger and bigger high-density phones, but I haven't heard about any high-density tablets yet. Apple has been strictly a follower here; they don't invent entirely new display fabrication technologies.)

Syndicated 2012-02-29 00:00:35 (Updated 2012-03-23 10:07:39) from apenwarr - Business is Programming

6 Feb 2012 (updated 6 Feb 2012 at 03:06 UTC) »

What is the definition of success?

A product manager asked me a great question at work the other day:

    "How do we define success for our project?"

He said he had asked someone else that question, and the slightly scary answer was, "I don't know." I said that's crazy, the answer is easy. Success is getting our product working and into the hands of real users who actually want it. Right?

But a few days later, I've thought about it some more, and I don't like that definition after all. Here's my new version:

    Success is making a product better than anybody else's product, that users absolutely love, and that's able to sustain itself indefinitely.

That definition is a real challenge, something that you'd be proud to live up to. It's something that deserves to be called "success." Unfortunately, using that definition, I've never been successful (unless you count wvdial).

You might be dismayed by the first criteria. A product better than anybody else's product? It seems obvious that most products can't be the best, but I think there's more room at the top than you think. There's no single ranking system from 1 to 10. Every user judges differently, so if you satisfy one person better than any other product, then you win, in some small way. And if you can be successful once, you can expand that success a bit at a time.

Users loving your product is kind of cliche, since Apple has made that philosophy famous. But as obvious as it now is, most developers still don't aim for it. If they did, you'd know.

By the way, your product can be the best in the world without users actually loving it. That's why I listed it explicitly. Before Apple, few people loved their phones or laptops or music players, but surely one of them was still the best - the best of a bad lot. Lovability is orthogonal to usefulness.

The last point - sustaining itself indefinitely - is where I've had trouble. At NITI, we made ridiculously awesome products that were quite obviously the best out there, if I do say so myself. And our users loved the heck out of them. But in the end it didn't sustain. (IBM bought the company and eventually killed the product.) The lack of sustainability was less about the product and more about organizational issues, but that's no excuse; it just tells you that the organizational issues are part of the product, whether you like it or not.

Sustainability can be about money (if you make enough money, you can afford to pay people to maintain it indefinitely) or quality (if, like wvdial, it's so good that you don't need to maintain it) or love (if developers are willing to work for lower or zero wages). But however you aim to achieve sustainability, it matters. You can have the greatest, loveliest product in the world, but if it dies, then you've failed.

That definition of success is my new benchmark for everything I do. If I can't see a path to success, based on those three criteria, then I shouldn't be wasting my time. If you notice me wasting my time anyway, please club me over the head as a reminder.

(Also, the project should be something I actually enjoy working on. I've made that mistake too. I don't think enjoyment is necessarily part of the definition of a successful project, but a "happy life" is also a nice-to-have :))

Syndicated 2012-02-06 01:57:36 (Updated 2012-02-06 03:06:01) from apenwarr - Business is Programming

Stuff I said at Kansas City StartupWeekend that sounded smart

I rarely get the chance to try out words of wisdom on real people before I present them to you here. So when I post something, it might turn out to be a dud, or pure gold, and I never know which. Not this time! This time you get pure, unadulterated, gold-coloured brilliance.

1. People miss the point of the "minimum viable product" (MVP... no, the *other* MVP) for startups. It does *not* mean, "release the first version with less features and then add more features later." No, we want a *minimum* viable product. The absolutely smallest set of features needed in order to get useful market information. How many features is that? Usually... zero. An MVP can be just a slide presentation, a sales pitch, a web site, a Google ad, or a customer conversation. The best MVPs let you objectively measure customer response *fast* and then tweak. One quick way to start is to make a web site that *claims* to offer the product you'd eventually want to build, and then gives a signup form, and then (oops!) crashes when people try to buy it (or sign up). Then make some web ads to send people there based on certain keywords. No, *not* a page that says "Coming Soon!" and asks for an email address. You want a real, live, signup page for what looks like a real, live product. You can add the "it works" feature later. In the meantime, since your MVP is so cheap and fast to build, you can try lots of different ones, add and remove advertised features, and see how that changes user responses. Once you have some input like that, you can make something slightly less minimal. Doing an MVP this way requires incredible self-control. Most people fail.

2. Speaking of terminology, "pivot" is misused too. People seem to think pivot is a happy-sounding word for "give up and do something different." But it's not. It has a very specific meaning based on very specific imagery. If you're running down the street, you have momentum. If you then plant one foot hard in the ground in front of you and turn, you can actually redirect that momentum in a new direction. *That* is what we mean by "pivot." When you give up and start over, you lose your position and all your momentum. But when you pivot, you keep all the stuff that's working, and you keep going from where you were before, but in a new direction. You have the same team, the same money, the same corporation, the same already-built features, and (hopefully) the same users as you did before. You use what you've already have in order to head somewhere new. Most importantly, the energy lost during a pivot is proportional to the angle of your pivot. If you only rotate by a little, you only waste a bit of your momentum. If you turn around 180 degrees, then your progress so far is actually an impediment - like when you've gone way into debt working on one idea, then start to pursue a totally different one. Pivoting is the art of choosing small rotations that let you maintain most of your speed and take advantage of your current position, while still admitting you've been running in the wrong direction.

3. No startup ever actually does what they thought they would do on day 1. Everybody pivots. "Except [company x]," said one person, "They're doing exactly what they planned." "Are they profitable?" I asked. "No." "Oh, then they just haven't pivoted *yet*."

4. The definition of a market niche. This is one of the most important lessons I learned from reading "Crossing the Chasm." It has a somewhat complicated definition of a niche, but since then I've had a lot of luck just taking the gist, roughly: If you can name a conference attended by a particular group of people, that group is a market niche. If there isn't such a conference, it's almost certainly not a niche. For example, let's say you were making a web site to help people find a lawyer. "People looking for lawyers" is a market segment, right? Wrong. There's no "I'm looking for a lawyer" conference. Lawyers are probably a market segment (although arguably, not *all* types of lawyers go to the same conferences). But *everybody* needs a lawyer eventually, and that's not a niche, that's everybody. "Startups who need lawyers" (lots of startups need lawyers and go to the same conferences, eg. StartupWeekend) are a market segment, as are building contractors and organized crime lords. Maybe you can help *them* find lawyers.

5. Your competition is whatever customers would do if you didn't exist. Let's say you're making software for producing cool graphs of statistical data. There's already really powerful software that does this, but nobody in your market segment uses it for some reason; maybe it's too hard to use or too expensive. That software is your competitor, right? Wrong! That software is irrelevant. Your customers don't want it, so even if it's competing with you, it's already lost. Your customers are probably using either Microsoft Excel's horrible chart features, or giving up and just not making charts at all. So your competitors are Microsoft and apathy, respectively. Apathy is probably going to be the tougher one. To find your list of competitors, just ask yourself what options your customers think they're choosing between. Ignore everything else.

Bonus: When presenting at a StartupWeekend-type conference... remember that the judges see a lot of businesses, and they're expecting you to have a business plan (or at least an idea of your target market and where you'll get revenue from). However, like I said in #3 above, no startup ever actually does what they originally set out to do. The judges all know that too. So your business plan is kind of a farce, and they know it, but if you don't have one, you look unprepared. So I suggest this: have a "grand scheme" and an "ideal first customer." Present them both, and where revenue comes from in both cases. Admit outright that your grand scheme will probably turn out to be wrong, and your real first customer might not be exactly like your ideal one. Basically, prove that you care about business, but you know you have to be flexible, and you're not scared of it. For a team two days into a new startup, that's all anyone can hope for.

Syndicated 2011-11-08 10:03:37 from apenwarr - Business is Programming

Avery @ StartupWeekend Kansas City, Nov 12-13

I'm planning to hang out next weekend at StartupWeekend Kansas City. I won't be starting any startups this time around, but if you're a faithful reader of my diary that hasn't unsubscribed out of boredom and you live in Kansas, let me know and maybe we can say hello while I'm in town.

Kansas City, by the way, is the site of the first major installation of Google Fiber, a project that I've been occasionally contributing to in my copious spare time.

My wife hastens to point out that it is not, however, the setting of The Wizard of Oz. Who knew Kansas City was in Missouri?

Syndicated 2011-11-04 13:49:46 from apenwarr - Business is Programming

2 Nov 2011 (updated 5 Nov 2011 at 01:01 UTC) »

bup.options

optspec = """
bup save [-tc] [-n name] <filenames...>
--
r,remote=  hostname:/path/to/repo of remote repository
t,tree     output a tree id
c,commit   output a commit id
n,name=    name of backup set to update (if any)
d,date=    date for the commit (seconds since the epoch)
v,verbose  increase log output (can be used more than once)
q,quiet    don't show progress meter
smaller=   only back up files smaller than n bytes
bwlimit=   maximum bytes/sec to transmit to server
f,indexfile=  the name of the index file (normally BUP_DIR/bupindex)
strip      strips the path to every filename given
strip-path= path-prefix to be stripped when saving
graft=     a graft point *old_path*=*new_path* (can be used more than once)
"""
o = options.Options(optspec)
(opt, flags, extra) = o.parse(sys.argv[1:])

I'm proud of many of the design decisions in bup, but so far the one with the most widespread reusability has been the standalone command-line argument parsing module, options.py (aka bup.options). The above looks like a typical program --help usage message, right? Sure. But it's not just that: it's also the code that tells the options.py how to parse your command line!

As with most of the best things I've done lately, this was not my idea. I blatantly stole the optspec format from git's little known "git rev-parse --parseopt" feature. The reimplementation in python is my own doing and includes some extra bits like [default] values in square brackets and the "--no-" prefix for disabling stuff, plus it wordwraps the help output to fit your screen. And it all fits in 233 lines of code.

I really love the idea of an input file that's machine-readable, but really looks like what a human expects to see. There's just something elegant about it. And it's *much* more elegant than what you see with most option parsing libraries, where you have to make a separate function call or data structure by hand to represent each and every option. Tons of extra punctuation, tons of boilerplate, every time you want to write a new quick command-line tool. Yuck.

options.py (and the git code it's blatantly stolen from) is designed for people who are tired of boilerplate. It parses your argv and gives you three things: opt, a magic (I'll get to that) dictionary of options; flags, a sequence of (flag,parameter) tuples; and extra, a list of non-flag parameters.

So let's say I used the optspec that started this post, and gave it a command line like "-tcn foo -vv --smaller=10000 hello --bwlimit 10k". flags would contain a list like -t, -c, -n foo, -v, -v, --smaller 10000, --bwlimit 10k. extra would contain just ["hello"]. And opt would be a dictionary that can be accessed like opt.tree (1 because -t was given), opt.commit (1 because -c was given), opt.verbose (2 because -v was given twice), opt.name ('foo' because '-n foo' was given and the 'name' option in optspec ends in an =, which means it takes a parameter), and so on.

The "magic" of the opt dictionary relates to synonyms: for example, the same option might have both short and long forms, or even multiple long forms, or a --no-whatever form. opt contains them all. If you say --no-whatever, it sets opt.no_whatever to 1 and opt.whatever to None. If you have an optspec like "w,whatever,thingy" and specify --thingy --whatever, then opt.w, opt.whatever, and opt.thingy are all 2 (because the synonyms occurred twice). Because python is great, 2 means true, so there's no reason to *not* just make all flags counters.

If you write the optspec to have an option called "no-hacky", then that means the default is opt.hacky==1, and opt.no_hacky==None. If the user specifies --no-hacky, then opt.no_hacky==1 and opt.hacky==None. Seems needlessly confusing? I don't think so: I think it actually reduces confusion. The reason is it helps you write your conditions without having double negatives. "hacky" is a positive term; an option --hacky isn't confusing, you would expect it to make your program hacky. But if the default should be hacky - and let's face it, that's often true - then you want to let the user turn it off. You could have an option --perfectly-sane that's turned off by default, but that's a bit unnatural and overstates it a bit. So we write the option as --no-hacky, which is perfectly clear to users, but write the *program* to look at opt.hacky, which keeps your code straightforward and away from double negatives, while letting you use the word that naturally describes what you're doing. And all this is implicit. It's obvious to a human what --no-hacky means, and obvious to a programmer what opt.hacky means, and that's all that matters.

What about --verbose (-v) versus --quiet (-q)? No problem! "-vvv -qq" means opt.verbose==3 and opt.quiet==2. The total verbosity is just always "(opt.verbose or 0) - (opt.quiet or 0)". (If an option isn't specified, it's "None" rather than 0, so you can tell the difference with options that take arguments. That's why we need the "or 0" trick to convert None to 0.)

Sometimes you want to provide the same option more than once and not just have it override or count previous instances. For example, if you want to have --include and --exclude options, you might want each --include to extend, rather than overwrite, the previous one. That's where the flags list comes from; it contains all the stuff in opt, but it stays in sequence, so you can do your own tricks. And you can keep using opt for all the options that don't need this special behaviour, resorting to the flags array only where needed. See a flag you don't recognize? Just ignore it, it's in opt anyway.

Options that *don't* show up in the optspec will give a KeyError when you try to look them up in opt, whether they're set or not. So given the --no-hacky option above, if you tried to look for opt.hackyy (typo!) it would crash when you try checking for the option, not just silently always return False or something.

Oh yeah, and *of course* options.py handles clusters of short options (-abcd means -a -b -c -d), equals or space (--name=this is the same as --name this), doubledash to end option parsing (-x -- -y doesn't parse the -y as an option), and smooshing of arguments into short options (-xynfoo means -x -y -n foo, if -n takes an argument and -x and -y don't).

Best of all, though, it just makes your programs more beautiful. It's carefully designed to not rely on any other source files. Please steal it for your own programs with the joy of copy-and-paste (leaving the copyright notice please) and make the world a better place!

Update 2011/11/04: The license has been updated from LGPL (like the rest of bup) to 2-clause BSD (options.py only), in order to ease copy-and-pasting into any project you want. Thanks to the people who suggested this.

Syndicated 2011-11-02 03:10:37 (Updated 2011-11-05 01:01:59) from apenwarr - Business is Programming

Vortex Update: 7 months later

Previously I wrote about my upcoming trip through the Vortex. It's no longer upcoming and I'm still on the other side, so I'm severely biased and you can't trust anything I say about it. But I thought I'd give a quick status update on my stated goals from last time:

  • Work on customer-facing real technology products. Success. Not released yet, but you'll see.
  • Help solve some serious internet-wide problems, like traffic shaping, etc. Yes, a bit, on my 20% project for now. You'll see that too. :) Must try harder.
  • Keep coding, maybe manage a small team. Yes, with more of the latter and less of the former, but the ratio is under my control.
  • Keep working on my open source projects. Sort of. Spreading myself so thin with cool projects that these are suffering, but that's nobody's fault but mine.
  • Eat a *lot* of free food. Yes, though in fact I've lost weight, giving lie to the so called "Google 20."
  • Avoid the traps of long release cycles and ignoring customer feedback. Total fail. The mechanics of this (totally under my control, but with lots of pressure to do it "wrong") are kind of interesting and I might be able to post about it later. For now let's just admit that I wanted to say my team had a product out by now (at least in public invite-only testing), and we don't, and that's mostly my fault.
  • Avoid switching my entire life to Google products. Partial success, I have an Apple TV instead. But they gave me a free Android phone that (as far as I can tell) has actual garbage collection freezes *while I'm typing on the virtual keyboard*. So... fail.
  • Produce more valuable software, including revenue, inside Google than I would have by starting a(nother) startup. Won't know until we release something.
Conclusion: mixed results. But the good news is that where things aren't as good as I'd like, the root cause can be traced to me. Does that sound like a bad thing? No! It's pretty much the ideal case when it comes to motivating me to learn fast and produce more. I'm working on the right stuff in the right ways, and the environment is well configured for me to do some amazing work. There is effectively no management interference (or input) at all. I just need to correct some of my own methodological flaws, especially trimming and prioritizing what I work on.

More later.

Syndicated 2011-10-16 07:12:00 from apenwarr - Business is Programming

16 Oct 2011 (updated 19 Oct 2011 at 02:02 UTC) »

Slides from my PyCodeConf presentation

Many thanks to Github and friends for hosting PyCodeConf in Miami this year. Normally I don't like conferences, and I imagined I wouldn't like Miami either but I was proven completely wrong on both counts. Call it low expectations, but hey, they delivered!

I quite like the way my presentation turned out. It has real actual facts (tm) including two benchmarks where Java loses to python in literally every possible way. This isn't that surprising - since I hate java, I like python, and I wrote the benchmarks - but my angst was somewhat increased since I had been actually trying on purpose to make a biased benchmark that Java would pass in order to make myself appear more well-balanced... and I completely failed. I was not able to make java appear better than python in any way, be it startup time, memory usage, code execution time, library power, or source code readability. This is surely some kind of perverse marketing gimmick: since it's actually literally impossible to make a benchmark that makes java look good, then everyone who publishes java benchmarks automatically looks biased, so java lovers can discount the opinion of the "haters." Insidious.

But enough with the conspiracy theories. Here are Avery's slides from pycodeconf in pdf form including some detailed speaker notes. I thought about giving them to you in Google Docs format, but naturally Docs is totally incapable of showing speaker notes by default, so forget it. Just open the pdf already. I put a lot of work into the notes so you wouldn't have to try to learn from my (rather sparse) slides.

Oh yeah, what's it actually about? My experiences writing fast code (like bup and sshuttle) in python. And how it's possible. And how not to do it.

One audience member said, "I thought about 40% of it was really insightful. The other 60% I had no idea what you were talking about." I consider that a rave review, I think.

Update 2011/10/18: They posted an audio recording of my talk. Also check out the other recorded talks and slides.

Syndicated 2011-10-16 03:28:29 (Updated 2011-10-19 02:02:13) from apenwarr - Business is Programming

18 more tidbits of randomness

Five years after my last post about the Montreal Fringe Festival, a lot of things have changed, but a lot of things are just how they were before. Have I changed in five years? At least in one way: this year, I don't feel any pressure to tell you what this has to do with programming :)

And so, 18 tidbits of randomness, in chronological order this time:

Karaoke gone pro. Hypnotic failure modes (and some success).

A tough time in Texas, and a fine time on Mars. Men re: men; poet re: angry poet. Proof that scriptwriting has gotten better over time, and proof that lack of writing can lead to self-incrimination.

New York style neuroses; Shakespeare style collaboration; Montreal style relationships.

Choose pretty much just the one adventure, or see work experience as an adventure, or grab your bicycle and have an actual adventure, or let someone who should know tell you about cosmic adventure.

Bunnies - exactly as advertised, but so much better than it sounds.

Angsty, but fruitless.

Radio, but visible.

And don't forget: 7 years of afterparties.

I only saw 18 shows this year, but it only took three days.

This year's record-breaking density has been made possible by Bixi.

(Previously.)

Syndicated 2011-06-23 02:01:28 from apenwarr - Business is Programming

9 May 2011 (updated 9 May 2011 at 03:03 UTC) »

Why bitcoin will fail

    Reading about bitcoin. Thought about writing a blog rant, but "OMG they're all totally crazy" wasn't long enough, so here we are. Filler.

        -- Me on twitter

    I now have had my foggy crystal ball for quite a long time. Its predictions are invariably gloomy and usually correct, but I am quite used to that and they won't keep me from giving you a few suggestions, even if it is merely an exercise in futility whose only effect is to make you feel guilty.

        -- E.W. Dijkstra

I'm in the "commerce" group at work, and I've done quite a bit of work in the world of banking, so it seemed vaguely relevant when I ran into the technical paper about bitcoin (Google it) and its associated various web sites. This led to my above, admittedly rather smarmy, twitter post...

...and then someone, yes, inevitably, asked me for clarification.

See, a bitcoin rant is almost too over-the-top for me. Asking why I think bitcoin won't work is like asking why the sky isn't red. I mean, wait, you think it *is* red? You actually took that seriously? Oh boy. Where do I even start?

But just for you, because I know all the valued subscribers to this diary have been deprived of my ranting lately, I will expand on it a little.

Just one more side note. Most of the time, I try to give projects the benefit of the doubt. If they don't affect me, then it's really no matter to me if they succeed or fail. I might keep an eye on them to see if my prediction (usually failure) comes true or not, and try to learn from the result. But I don't actively *want* projects to fail. I would much rather they succeed.

In this case as well, I don't really care. I don't own any bitcoins. I don't particularly want to. If one day I have to own some for some reason, I will buy them at the market rate and get screwed, just as I do today with U.S. and Canadian dollars.

Since I don't actually care, I had a bit of trouble motivating myself to write more than 140 characters about it. I wasn't going to bother. So, um, thanks to my followers on twitter for providing the motivation.

So here we go:

FAIL #1: If you like bitcoin, then you must think the gold standard was a good idea.

The gold standard, for those who don't know, was the (now thoroughly discredited) idea that for every dollar you print, you need to have an appropriate amount of gold stored away somewhere that someone, someday, theoretically, could demand to get back in exchange for your worthless piece of paper. If you honestly believe that abandoning the gold standard was a bad idea - and there are indeed people who believe this - then you might as well stop reading now. Wiser men than I have explained in excruciating detail why you're an idiot. This article will not convince you, it will just make you angry.

Still with me?

Okay, just for background, for people who don't already have a pre-formed opinion, the gold standard is a bad idea for several reasons. Here are some of them:

In order to create currency, you have to do a bunch of pointless busywork. Originally, that meant mining for gold, so you could take this gold (obtained at great expense) and hide it in a fortress where nobody would ever see or feel or admire it. In all of history, it is extremely doubtful that anybody has *ever* walked into a U.S. government office and demanded their gold in exchange for dollars. That's because:

Gold is a stupid inconvenient currency that's worse than paper. Go up to the street vendor selling a hot dog, and try to get him to give you a hot dog in exchange for the equivalent value in gold dust. (That's really not very much dust.) See what happens. Gold is the universal currency, is it? The thing that anybody would and will take, any time, throughout history? No. It's heavy, messy, hard to measure, and I can't get my ATM to withdraw or deposit it. If I want 1000x as much gold as one gold nugget, I can't just get a $1000 bill; I have to get a gold nugget 1000x as big and heavy. Who wants this?

Believing in the gold standard is disbelieving in capitalism. The magic of capitalism is entirely contained in the following two words: MAKING MONEY. Have you ever thought about those two words? What's interesting about them is they don't seem to make any sense. When I go into the office and do work, am I literally "making" money? Why do they call it that? Well, as a matter of fact, you *are* literally making money. You are a machine: you eat food and breathe air and magically, you produce outputs that can be sold for much more money than the cost of the food and air. You produced actual value, and that value can be measured, and that measurement is called money. You made money. Out of nothing. *That* is capitalism. (Compare with digging up useless coloured rocks and then hiding them in a fortress so nobody can see them. Those people make the economy go round?)

If the gold standard worked, the 1930s depression wouldn't have happened, and we couldn't have recovered, period, from the recent banking crisis.

Back in the 1930s, the U.S. still had gold-backed currency. Why was there a depression? Because people stopped producing valuable stuff. The amount of money was constant; the gold didn't disappear. But somehow, suddenly people didn't have enough food or housing. Why? Because they refused to produce unless they got paid for it. When they didn't get paid, they couldn't spend that money, and so they couldn't pay for other things, and so other people refused to produce since they wouldn't get paid either, and so on in a giant cycle. The money was there, but it stopped moving.

How did the depression get resolved? In short, people started doing stuff (especially a big war) whether they could afford it or not. It turned out that all those idle people could be productive if they had a good reason. Gold turned out not to be a good enough reason.

Relatedly, the U.S. survived the 2008 banking crisis - which had a legitimate opportunity to convert itself into another depression - by spending its way out. As it happens, the U.S. was able to spend money it didn't actually have. Why? Because they don't care about the gold standard. If they had had a constant amount of gold, then they would not have been able to spend more than they had, and so people wouldn't have been paid, and those people would have refused to produce, and they wouldn't be able to buy things, so more people would refuse to produce... and we're back to square one.

Motivation is everything. Gold is nothing.

Which leads us to the last, most important reason to abandon the gold standard:

The ability of governments to print (and destroy) money is a key tool in economic management.

The Federal Reserve (and other related institutions in each country, like the Bank of Canada) has the right to print money. It largely does this through a pretty blunt mechanism, the interest rate. I won't go into a lot of detail - look up "federal funds rate" if you want to learn more. But in short, when they lower the rate, banks are willing to "borrow more money" from the federal reserve (which they then lend to you, and so on). When the federal funds rate is high, banks need to give back this money, so they don't give out as many loans, and so on.

What is this money that the federal reserve "lends" to banks? It's fictional. Bits in a computer database. No fancy encryption. They just manufacture it on the spot, as needed. And when it's returned, they make it disappear.

    Update 2011/05/08: Some gold standard supporters will tell you that in fact, this ability to print money is what causes hyperinflation, which causes economic collapse. But no, the causality doesn't work like that. Hyperinflation occurs when government nutbars try to stop an economic collapse by wildly printing money. No economic system can protect you when nutbars are in charge. But yes, the early symptoms of failure will look somewhat different.

The Federal Reserve uses this control to speed up or slow down the economy and try to reduce fluctuations. The results aren't always perfect (humans aren't very good at acting like math equations) but it's actually not too bad overall.

If governments can't control the money supply, then they can't set interest rates. If they can't set interest rates, they can't control the economy, and if nobody is controlling the economy, then the economy will act like any uncontrolled complex system: it'll go crazy.

(Incidentally, this is also why it's important that the Federal Reserve not be controlled directly by politicians. Find me a politician who will say anything other than, "OH YEAH! MAKE THAT ECONOMY GO FASTER!" at election time.)

...

Okay, so, back to bitcoin. Bitcoin is exactly like the gold standard, only digital:

  • "Mining" (they even borrowed the word!) bitcoins is pointless busywork that produces nothing of real value.
  • Bitcoins are less convenient than paper currency.
  • Bitcoin denies the truth of capitalism, that it's about *value*, not about money, by preventing the money supply from expanding when the economy does.
  • Bitcoin allows for random unrecoverable effects like the 1930s depression.
  • Bitcoin removes government control over the economy, which means there is *no* control over the economy.
By comparison, look at our current currencies:

  • Generating money is essentially free (most money isn't even paper, but printing the paper is pretty cheap too).
  • Current currency is very convenient and has many convenient forms.
  • When more valuable stuff is created, more money appears without having to mine for unrelated crap first.
  • Current currency allowed us to spend out of a depression caused by the banking crisis.
  • The current system allows the government to reduce economic fluctuations.
FAIL #2: Even if it was a good idea, governments would squash it.

In the previous section, it might have sounded like I think governments are altruistic peace-loving tea-drinking hippie commies.

I don't actually think that. (I think the government of British Columbia might be like that, which explains why they don't get any work done, but that's another story.)

The truth is that governments are power structures. Governments control ("govern") things. And while the economy - like any complex engineering construction - needs to have controls on it, some of the controls end up going too far, and all of them end up being manipulated by people in power.

One of the lures of bitcoin is the idea of taking power away from the people in power. Admit it. That's one of the reasons why you like it.

Well, word to the wise: if there's one thing the people in power already know, it's that money is power. It's not like you're going to catch them by surprise here. They don't have to be the smartest cookies in the jar to figure that part out.

Digital money is *not* like pirating digital music and movies. The government sort of cares about those, but let's be serious: pirating a few movies will not topple the U.S. government. Losing control of money will.

Governments have big weapons and propaganda machines and actual secret agents and citizens who believe that keeping the economy under control is a good idea. If you threaten the currency, you are threatening the entire power structure of the civilized world. You are, quite literally, an enemy of the state. You are attempting to build nuclear weapons in your bedroom. Or at least they'll see it that way.

Do you think you'll get away with it because your monopoly money is made of bits instead of paper? I don't.

The only reason you'd get away with it is if you're too small to matter. Which is certainly the current situation.

FAIL #3: The whole technological basis is flawed.

Bitcoin is, fundamentally, a cryptosystem. Some people argue that it's "as strong as SHA256" and that "if someone could break SHA256, then banks would be in trouble as it is."

Wrong on both counts.

First of all, I admit, I don't totally understand the bitcoin algorithms and systems. I don't really need to. I understand only this: the road to crypto hell is paved with the bones of people who thought that a good cryptosystem can be designed by combining proven algorithms in unproven ways. SHA256 may be the strongest part of bitcoin, but a cryptosystem is only as strong as its weakest link.

You want to replace the world economy with a hard-to-guess math formula? Where's your peer review? Where are the hordes of cryptographers who have spent 30+ years trying to break your algorithm and failed? Come talk to me in 30 years. Meanwhile, it's safe to assume that bitcoin has serious flaws that will allow people to manufacture money, duplicate coins, or otherwise make fake transactions. In that way, it's just like real dollars.

But what's *not* like real dollars is the cost of failure. With real dollars, when people figure out how to make counterfeit bills, we find those people and throw them in jail, and eventually we replace our bills with newer-style ones that are more resistant to failure. And the counterfeiters are limited by how many fake bills their printing press can produce.

With bitcoin, a single failure of the cryptosystem could result in an utter collapse of the entire financial network. Unlimited inflation. Fake transactions. People not getting paid when they thought they were getting paid. And the perpetrators of the attack would make so much money, so fast, that they could apply their fraud at Internet Scale on Internet Time.

(Ha, and don't even talk to me about how your world-changing financial system would of course also be protected by anti-fraud laws so we could still punish people for faking it. If we still need the government, what is the point of your currency again?)

The current financial system is slow, and tedious, and old, and in many ways actually broken or flawed. But one thing we know is that it's *resilient*. One single mathematical error will not send the whole thing into a tailspin. With bitcoin, it will.

And no, a break in SHA256 would not break the current financial system or ruin any banks. How could it? What would even be the mechanism for such an attack? How would it make the paper bills in my pocket stop working for buying hot dogs? Can't we just hunt down and arrest the people who forged the fake transactions?

FAIL #4: It doesn't work offline.

Stupid, crappy, printed paper money is old fashioned and flawed, but you know what? It actually works offline, because the easily-forged piece of paper is just barely hard enough to forge that normal people won't try to forge it. It's the original peer-to-peer financial network, although there's a "central coordinator" somewhere issuing tokens.

As soon as you go electronic, forgery becomes trivial to do on a massive scale, so offline just isn't an option. Yes, there are "offline" mechanical paper-based credit card readers, but they aren't anonymous: they have your name and card number. If you bounce too many transactions from one of those, someone will be sent to hunt you down. The risk is contained.

There is no way to make bitcoin even remotely safe offline. There is no fallback mechanism except exchanging your bitcoins for cash. But if you're going to rely on a paper currency anyway, what is bitcoin buying you? It's just yet another way to spend money. As a person currently suffering through managing U.S. versus Canadian dollars, I can tell you, exchange rates are just not worth the hassle.

...

Summary

1. Like the gold standard, a successful bitcoin would send our economy back into the dark ages.

2. Even if it became popular, governments would squash it because of #1 and because they like being in power.

3. A single mathematical or other error in the cryptosystem would cause instant, unresolvable, worldwide hyperinflation. After hundreds of years of analysis, there are no known flaws in the current financial system that could lead to that. (Other than the known causes of hyperinflation of course, ie. total gross mismanagement of the entire country.)

4. It's not even useful except as an online-only addition to normal currency, and my normal currency already works fine online.

The sky is JUST NOT RED, dammit.

Tell me again why you think it is?

...

Update 2011/05/08: Counterpoint!

An anonymous (really, they anonymized their return address) reader replies with the following. I'll just reprint it in full because it's awesome. There's nothing quite like just letting an unelected representative of a movement embarrass himself. Oh Internet, how I love you.

    Was that for real? I'm not sure if your stupid or just trolling.

    The US dollar has lost 97% of it's value since leaving the gold standard.

    Germans in the Weimer republic had to buy their sausage with wheelbarrows full of paper currency. Too long ago for you? Mid-90's Yugoslavia, samething.

    "Believing in the gold standard is disbelieving in capitalism" and how do you think capitalism came about?

    "If the gold standard worked, the 1930s depression wouldn't have happened, and we couldn't have recovered, period, from the recent banking crisis."

    You really don't know history.

    "The ability of governments to print (and destroy) money is a key tool in economic management."

    REALLY? Then why did the Soviet Union fail? They should have been the richest country in the world if your statement was true.

    "What is this money that the federal reserve "lends" to banks? It's fictional. Bits in a computer database. No fancy encryption. They just manufacture it on the spot, as needed. And when it's returned, they make it disappear."

    Loaned with interest. How does the interest disappear when more money is owed then exists?

    I wouldn't be surprised if you said somewhere else that current debts are managable.

    "If governments can't control the money supply, then they can't set interest rates. If they can't set interest rates, they can't control the economy, and if nobody is controlling the economy, then the economy will act like any uncontrolled complex system: it'll go crazy."

    From, "disbelieving in capitalism"" to that? See also; Soviet Union.

    I don't use BitCoin (yet) but your reasoning there is even more pathetic.

    No reply because your the stupidest person I've seen this week and that's saying something.

For the record, I'm stupid *and* trolling. That's why it was hard to tell.

Syndicated 2011-05-08 23:48:33 (Updated 2011-05-09 03:03:32) from apenwarr - Business is Programming

26 Apr 2011 (updated 2 May 2011 at 22:06 UTC) »

Avery, sshuttle, and bup at LinuxFest Northwest (Bellingham, WA) April 30

Where: LinuxFest Northwest conference (Bellingham, WA)
When: 1:30-3:30 on Saturday, April 30 (conf runs all weekend)
Price: FREE!

You might think that now that I live in New York, I would stop doing presentations on the West coast. But no. Ironically, right after moving to New York, I'll have done three separate presentations (four, if you count this one as two) on the West coast in a single calendar month.

In this particular case, it's because I proposed my talks back when I lived in BC, when Bellingham was a convenient one-hour drive from Vancouver's ferry terminal. Now it's a day-long trip across the continent (and twice across the US/Canada border). But oh well, it should be fun.

Also, I foolishly took someone's advice from a Perl conference one time (was it Damian Conway?) and proposed *two* talks, under the theory that if you propose two talks, you double your chances that the conference admins might find one of them interesting, but of course nobody would be crazy enough to give you *two* time slots. Clearly this theory is crap, because this is the second time I've tried it out, and in both cases *both* of my talks have been selected. Thanks a lot.

The good news is that at least they're in consecutive time slots. So while I'll be hoarse by the end, I only have to psych myself up once.

Bellingham is convenient to reach from Vancouver, Seattle, and Portland, among other places, and the conference is free, so take your chance to come see it! If you like open source, it promises to be... filled with open source.

Um, and I promise to start writing something other than my presentation schedule in this space again soon. I realize how annoying it is when a blog diary turns into a glorified presentation schedule. I'm working on it.

Update 2011/05/02: By popular request, my slides from the conference:

Enjoy.

Syndicated 2011-04-26 03:02:29 (Updated 2011-05-02 22:06:06) from apenwarr - Business is Programming

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