Saturday, February 12, 2011

An Electronic Currency

My two favorite books of all time are Daemon and Freedom written by Daniel Suarez.  These books portray a future society that is controlled by a computer daemon or background process that essentially takes over the entire world.  Its goal is not malicious, at least from my prospective, and the desired outcome is a decentralized, robust, sustainable, high-tech society.  There is a large amount of technology described in the book that is just now becoming available to consumers.  My personal favorite is a wearable augmented reality heads up display, but that is another topic.

In the books, the Darknet is the decentralized network that allows for communication and is supported by an underground economy.  While it is evident that aspects of this theoretical system are integrated into our own lives, Facebook is everywhere, these systems are still centralized.  One of the core components of the Darknet technology was there is no single point of failure.  A extended blackout on the west cost or a severe fire in Facebooks data center would take the service offline for an extended period of time.  I believe we need to transition away from centralized control and move to more distributed, robust systems, but this is also a topic for another time.

One part of this imaginary world that is central in the political and corporate opinions expressed in the books is the Darknet credits or currency.  This alternative currency is favored highly over the American dollar after hyper inflation takes hold and drives the prices of good steadily upward.  A system similar to the Darknet credit is already available in real life, it is called a Bitcoin.  Unlike standard cash, a Bitcoin is a distributed peer-to-peer network based economy that is cryptographically secure.  For the sake of my argument here, it is safe to assume that there is a limited supply of Bitcoins that are currently being created, but there is an eventual maximum, so the supply is limited.  The transactions in the system are secure and can not simply be rolled back by a bank.  The movement of funds is secure so you can not simply copy and paste digital dollars to generate more money for yourself.  It is a secure, safe, and anonymous way to move digital money.

The implications of such a system strike at the foundational structure of our society and the world economy.  Right now it is possible to exchange Bitcoins for US dollars and the exchange rate hovers around a 1-to-1 exchange.  However, if Bitcoins begin to gain wide spread adoption it is possible that this conversion rate will increase over time. An economy like this can exist as long as people are willing to use the currency in exchange for goods and services.  The gold standard was based on a scarce finite supply.  Like gold, a Bitcoin is a scarce resource that has a well defined finite supply so its value can be calculated and anticipated. Unlike a physical object, a Bitcoin can be divided as small as 0.00000001 and a total of 21,000,000 Bitcoins will be in circulation when the system is finished generating Bitcoins making the overall supply sufficient for a global economy.

The EFF now accepts donations in the form of Bitcoins.  While this is technically a trivial process, it is significant in so far as Bitcoin transactions are essentially anonymous.  With the source of the money not able to be verified, new set of problems and concerns arise.  However, Bitcoins eliminate some major problems we have with our current economy.  The biggest problem is obviously the debt.  The United States faces crushing debt and if this situation is not resolved within the short term, it will destabilize the economy.  Would the total collapse of the economy be the downfall of society as we know it?  I doubt it will come to that.  While I'm not trying to predict the coming Apocalypse, in the case of economic failure, Bitcoins are an attractive alternative to the US dollar.  While my employer is not likely going to pay me with Bitcoins and I can not yet purchase a cheeseburger with a Bitcoin, electronic currency has some major benefits over the cash and credit cards we have grown accustomed to using.

The big picture here is that the world is changing very rapidly and electronic currencies are unavoidable.  A peer-to-peer system is much more robust than a centralized system, but governments and corporations have just concern to be scared if this starts to gain wide spread adoption.  The Internet has made the world flat and a currency that is not tied to a nation state or outdated and defective financial policies is very attractive.  Maybe one day I will be able to purchase a cheeseburger off of the 0.99 Bitcoin menu, but in my mind I will be making that purchase with a Darknet credit.

Tuesday, February 8, 2011

Attending Google I/O 2011

When I first had the idea that I could attend Google I/O this year, I looked up how fast tickets sold out in 2010. It took over a month. This year, it sold out in less than an hour. What happened is Google's conference registration server (it was not actually a Google server) was overloaded with all of the people that were trying to grab one of these coveted tickets. Somehow, after a very stressful period where it seemed like I had missed the registration window, I managed to dig into my browser history and complete the registration process. One student ticket to Google I/O 2011!

I have watched almost every video from the previous two conferences so I have a fairly good idea what to expect. This conference will definitely be an awesome experience along with my first time in California. I am most excited to learn about the new developments with Android now that it is on phones, tablets, and TVs. While the tickets probably sold out so quickly because of the two free phones that attendees received last year, I'm not attending because of the possibility of free stuff. While I would be thrilled to be provided an Android tablet, especially since I can no longer afford to buy one, I'm not going to make any assumptions.

Having developed applications for Android and Google App Engine, it will be awesome to be around other developers and see what other people are doing. I may even get to meet some of the Internet celebrities that I have been following for so many years.

Favorite Super Bowl 2011 Commercials

There were two really good commercials last night. First "The Force," a Volkswagen commercial, definitely won the cute award. The combination of Star Wars, a cute kid, and cars just struck the perfect balance. Well done!

The other really good commercial was for the Xoom. Understanding the context of the 1984 Apple commercial and the mindless sheep that Apple consumers flocking together made it the perfect attack on the computing giant. I'm definitely a huge fan of Android, not only because of the operating system, but more so because of the open philosophy. The Xoom is definitely set to take the iPad 2 on in a head to head battle with consumers. The most important thing this commercial did was try to get the population to break free of the stranglehold Apple has on the consumers and the so called "cool" gadgets. For people like me who have moved past Apple, this won't make much of a difference, hopefully it made a few people take another look around before purchasing their next consumer electronics device. Big brother is watching!

The biggest failure of the night was definitely Groupon. I'm not going to embed the commercials because I'm no longer a fan of the service and actually unsubscribed before making my first purchase. Now, I understand that Groupon supports the charities that they poked fun at, but that misses the point. I'm sure the $3,000,000 that went to each of the several commercials that they paid for would be better spent directly by those charities. Lets assume Groupon spent $9,000,000 on commercials, to result in the equivalent donations assuming each person only donates $15, that would require 600,000 people to join Groupon. Clearly the benefit here is primarily for Groupon especially with an impending IPO.

The problem is more than just financial, it is rooted in human behavior. My interpretation and personal approach of philanthropic activities, such as donations, is that it is not a direct benefit to the person that is giving. I do not make micro loans on Kiva to have any direct benefit to me, it benefits others and I hope eventually the world in general by bring people out of poverty. If I received a, quite literally, free lunch every time I made a donation then it in some way lessens the donation. This is definitely not a rational approach to charity, but who ever said that humans were rational. While Groupon may have been trying to do good, they missed the fact that you shouldn't mix capitalism and charity in such a confusing way. The causes that Groupon highlighted are very serious problems that are facing the world and humanity, we should be focusing on those, not on Groupon's success as a company.

Saturday, February 5, 2011

My Brand New (Slightly Defective) Desktop Computer

My last desktop was nothing impressive. Actually, it was showing its age and I was already planning on building a new desktop in a few months. The Pentium D with only 2 GB of RAM and a modest graphics card was running along smoothly until the power supply decided to give out. After replacing the power supply, the capacitors on the motherboard decided it would be a good time to burn out.  I actually built my last desktop to be replaced, not upgraded.  So, I decided to take browse around Newegg and this is what I ended up with:

Including a new optical drive (my old DVD burner only had a PATA connection), I ended up costing around $475.95.  My goal was to say under $500 and I managed to do that while still ending up with a powerful desktop.

Two days after placing the order that Intel announced that the Sandy Bridge chipset was defective!  That explains why I can't link to my motherboard on Newegg because it was pulled down and can no longer be purchased.  The flaw only deals with 4 out of the 6 SATA ports on the board.  My computer is up and running, I'm just slightly restricted on how I can use it until there is a replacement motherboard available in April.  Serious defects aside, I'm very happy with my new desktop.

While the built in Windows 7 benchmark does not give too much context, this is definitely the fastest computer that I own, no contest.  Overall I'm very happy with my new setup and there have been no problems so far.

The biggest complaint that I currently have is my hard drive situation.  All of the data from my old desktop is sitting on a 1.5 TB drive that is about 2/3 full.  I'm using a 320 GB drive in my desktop now and have things back to a somewhat functional order.  Normally I would just add the old drive as a secondary drive, but with those dead SATA ports that would translate to no optical drive or an optical drive connected to a defective port.  Ideally I would just swap the drives, but that requires a third drive to temporarily store all of my data on during the transition.  I still haven't decided how to solve this problem.

The biggest change that resulted from my new desktop is that my Windows Media Center that uses the USB over the air TV tuner and is connected to my Xbox has moved off of one of my old laptops.  This has resulted in a few improvements, but the biggest one would be additional storage space once I figure out how to improve my hard drive situation.  The quad core i5 with 8 GB of RAM does not even notice the media center running in the background.

While I'm quite happy with my new setup, it is only the first half of my upgrade.  My current plan is, once I can afford it, to finish the upgrade.  The missing components would be a new case, a bigger power supply, and additional 8 GB of RAM, and a graphics card.  I'm not a PC gamer, but I can still appreciate some of the benefits of a high quality graphics card.  This series of updates would end up costing around $500 bring the total cost of my desktop to approximately $1000.

While I wish I could have waited a few months to upgrade my computer, it is nice to have my workspace back up and running so I can continue making progress on my thesis.  Even though I have my laptop, the power of a desktop and the large screens definitely make it easier for me to make progress.

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