The Geek’s Reading List – Week of April 18th 2014
Another bad week for tech news, probably due to the Easter holidays.
I have been part of the technology industry for a third of a century now. For 13 years I was an electronics designer and software developer: I designed early generation PCs, mobile phones (including cell phones) and a number of embedded systems which are still in use today. I then became a sell-side research analyst for the next 20 years, where I was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best in the world, and won a number of awards for stock-picking and estimating.
I started writing the Geek’s Reading List about 10 years ago. In addition to the company specific research notes I was publishing almost every day, it was a weekly list of articles I found interesting – usually provocative, new, and counter-consensus. The sorts of things I wasn’t seeing being written anywhere else
They were not intended, at the time, to be taken as investment advice, nor should they today. That being said, investors need to understand crucial trends and developments in the industries in which they invest. Therefore, I believe these comments may actually help investors with a longer time horizon. Not to mention they might come in handy for consumers, CEOs, IT managers … or just about anybody, come to think of it. Technology isn’t just a niche area of interest to geeks these days: it impacts almost every part of our economy. I guess, in a way, we are all geeks now. Or at least need to act like it some of the time!
Please feel free to pass this newsletter on. Of course, if you find any articles you think should be included please send them on to me. Or feel free to email me to discuss any of these topics in more depth: the sentence or two I write before each topic is usually only a fraction of my highly opinionated views on the subject!
This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
1. Bitcoin Mining Boom Sputters as Prospectors Face Losses
A few weeks ago we covered a guy who had set up a large Bitcoin mining operation where he charged rent plus a percentage of Bitcoin mined, which we thought was pretty good evidence that the market value of a Bitcoin (I’m thinking Bitcon might be a better label) was less than the expense which went into creating it. Here is further evidence. Of course, I think Bitcoin’s value is only in fleecing the gullible.
“The bitcoin mining rush is sputtering. Speculators, known as miners, use powerful computers to solve complex software problems and verify transactions to unlock new bitcoins. They’re finding that the enterprise isn’t as profitable as it once was.”
2. Dangerous GU10 LED Spot Light is Cheap and Bright but could kill you
I thought this video was well done, even though it might be hard to follow if you don’t understand electricity. Long story short, this (presumably) non-UL/CSA approved LED light is so badly designed it could kill you. Never buy anything which can plug into a household power unless you know it is UL or CSA approved and you know the people you are buying it from are not pirating that approval.
3. TurboTax Maker Linked to ‘Grassroots’ Campaign Against Free, Simple Tax Filing
Well here is a shocker: a corporation which profits off an inefficient government system is lobbying the government to keep that system inefficient. If you think about it there is no reason the government can’t do most of your taxes for you and offer a system which allows you to make corrections (i.e. medical expenses, etc.) saving everybody except the parasitic tax companies a lot of money and, in particular, heartache.
“Over the last year, a rabbi, a state NAACP official, a small town mayor and other community leaders wrote op-eds and letters to Congress with remarkably similar language on a remarkably obscure topic. Each railed against a long-standing proposal that would give taxpayers the option to use pre-filled tax returns. They warned that the program would be a conflict of interest for the IRS and would especially hurt low-income people, who wouldn’t have the resources to fight inaccurate returns.”
4. The inventor of everything
It is a pity these sorts of articles aren’t written more often, instead of the fawning hero worship garbage we see 99.99% of the time. The vision of the genius cranking out rocket engine designs, novel energy systems, revolutionizing production, etc., is a fabrication of the ignorant and the media, even when that individual is rich. Fortunately there are always lots of gullible investors out there or investors who simply don’t care whether it is a scam so long as they can flip the shares.
“I’m here to meet Mike Cheiky, the founder of Cool Planet and a prolific inventor and entrepreneur. In 1975, he started Ohio Scientific, one of the earliest personal-computing companies. He followed that with a string of startups whose innovations included biofuels, touchscreens, batteries, voice recognition, and fuel injectors. Cheiky’s ventures have always done well raising money. Two weeks ago Cool Planet announced a $100 million round of funding from names like Google Ventures, British Petroleum, General Electric, and ConocoPhillips. All told, his last three companies — Cool Planet, Zpower, and Transonic — have raised at least $300 million from some of the biggest players in Silicon Valley.”
5. Does Musk’s Gigafactory Make Sense?
Well, let’s see: we are gonna make a factory, preferably on the taxpayer’s dime, that will make 20x the current market need for said batteries. Better yet, the factory is going to be vertically integrated despite decades of business experience which shows that specialization and not verticalization is the way to optimize production. So, yeah, it makes perfect sense provided you are Tesla and the taxpayer will foot the bill.
“Tesla sold 23,000 cars last year. The gigafactory, which would start production in 2017, would by 2020 make enough batteries for 500,000 electric cars. (It would produce enough batteries annually to store 35 gigawatt hours of electricity, hence the name). Second, battery companies normally announce factories only after they’re funded and a site is selected. And they typically scale up gradually. Why announce plans to build such an enormous factory —especially when electric car sales so far come nowhere close to justifying it?”
6. SSD vs. HDD Pricing: Seven Myths That Need Correcting
A particularly badly written, though exhaustive, look at pricing of SSDs and HDDs for enterprise use. I don’t completely disagree with the conclusions – after all, tape backup is still used – however the laptop market will almost completely switch to SSDs within the next year or two which lead to financial ruin for HDD manufacturers and impact their respective abilities to meet cost goals and launch new products. HDDs will end not with a bang, but with a whimper.
“This month I am going to take a look at SSD vs. HDD pricing. In my opinion, the claims by some vendors are over the top; their assertions about SSD pricing and density and HDD pricing and density simply do not match the market realities. It is time expose the real data.”
7. Preventing Heat From Going to Waste
This is my silly energy story of the week. Not that thermoelectric systems have no use, but that they are not a very good way to make electricity from a cost or efficiency perspective. While heat may be ‘wasted’ you are not likely to extract anywhere near enough power to pay for the system even if the system was very cheap. Note how a “… ZT of 3 that most researchers consider the minimum for widespread applications” is not referenced or explained.
“Fossil fuels power modern society by generating heat, but much of that heat is wasted. Researchers have tried to reclaim some of it with semiconductor devices called thermoelectrics, which convert the heat into power. But they remain too inefficient and expensive to be useful beyond a handful of niche applications. Now, scientists in Illinois report that they have used a cheap, well-known material to create the most heat-hungry thermoelectric so far.”
8. 44 Percent of Twitter Accounts Have Never Tweeted
I confess to not understanding Twitter: I see no value in adding noise to my day even when said noise originates from a celebrity, or more likely a firm engaged by said celebrity to generate noise. All things considered, when you have a business largely valued on a poorly defined metric such as ‘users’ it is a fair assumption that metric will be gamed to the extent possible by the company.
“According to the site, approximately 44 percent of Twitter’s 947 million accounts or so have never sent a single tweet. Of the number that have — approximately 550 million — just under half of these accounts are reported to have sent their last tweet more than one year ago (43 percent). Only 126 million have sent any kind of tweet at any point in the past 30 days.”
9. Does Heartbleed Disprove ‘Open Source is Safer’?
The only thing Heartbleed shows is that Open Source is no perfect and this experience makes it more likely, in my opinion, that critical applications will likely be more carefully audited in the future. After all the world’s largest software company sees fit to regularly download security patches onto my laptop and they aren’t doing that because closed software is particularly secure.
“As security expert Bruce Schneier wrote, “‘Catastrophic’ is the right word. On the scale of 1 to 10, this is an 11.” Almost as devastating, however, is the blow Heartbleed has dealt to the image of free and open source software (FOSS). In the self-mythology of FOSS, bugs like Heartbleed aren’t supposed to happen when the source code is freely available and being worked with daily.”
10. We need phones that help us stop killing each other while distracted
I agree with the general thrust of the article, however, it would be very hard to design a phone which would not be useable by a driver while the car is in motion and fully functional by a passenger. Since I see several drivers a day with a phone pressed to their ears despite the large penalties in Ontario, it is quite clear that sanctions don’t work either.
“We U.S. drivers, for the most part, like our cars, our smartphones, and our freedom of choice. We also truly dislike boredom. This leads to some of us, too many of us, being injured or dying, because we are far too confident we can handle our familiar phones while driving. That is why we have not demanded that our phones offer us a smart way to let us drive and ignore all the things they beg us to do. Nothing—not research, statistics, stories, or fancier car systems—can seem to stop us.”
11. A Mathematical Proof That The Universe Could Have Formed Spontaneously From Nothing
I don’t understand the summary so I rather doubt I would understand the full paper either. Nonetheless, the conclusion has to be fairly obvious unless the cosmos is eternal, which it very well might be. Of course, time sprang into existence with the universe, so even the idea of eternity has to be a flexible on. People interested in the idea of a universe from nothing might want to read Lawrence Krause’s book “A Universe From Nothing.”
“Cosmologists assume that natural quantum fluctuations allowed the Big Bang to happen spontaneously. Now they have a mathematical proof.”
12. It’s Time to Encrypt the Entire Internet
If you thought the web was secure before the Heartbleed bug, you haven’t been paying attention – the Snowdon/NSA revelations show how insecure all systems are and you can be sure that if the NSA can exploit backdoors, etc., so can anybody else. Nonetheless, an encrypted web would probably keep most teenage hackers at bay.
“The Heartbleed bug crushed our faith in the secure web, but a world without the encryption software that Heartbleed exploited would be even worse. In fact, it’s time for the web to take a good hard look at a new idea: encryption everywhere.”
13. You don’t have to be a conspiracy theorist to find Google alarming
A worthwhile, though short, read. The problem is that people value pictures of cats more than they value their own privacy and governments clearly like the idea of an Orwellian surveillance state which requires the collusion of companies like Google.
“Google doesn’t need us. But we need Google. We are afraid of Google. I must state this very clearly and frankly, because few of my colleagues dare do so publicly. And as the biggest among the small, perhaps it is also up to us to be the first to speak out in this debate. You yourself speak of the new power of the creators, owners, and users.”
14. The dismal state of SATCOM security
The interesting thing about space systems is that they tend to be well behind the curve in terms of technology. It takes a long time to finance, design, build, test, and launch a satellite and the costs are such that you can’t risk using start of the art systems. So, by the time you start using the thing your systems are already out of date by a decade or so. Meanwhile, terrestrial capabilities continue apace, meaning ‘secure’ 10 years ago is not secure today. I don’t know about the idea of removing firmware updates, etc., from public view: rule 1 of security is to assume the attacker has access to things like this.
“Satellite Communications (SATCOM) play a vital role in the global telecommunications system, but the security of the devices used leaves much to be desired, says Ruben Santamarta, principal security consultant with IOActive.”
15. The internet of things is great for chipmakers and a challenge for Intel
As devoid of value any market research is, prediction of the number of unit sales of processors is particularly meaningless. If you look at HIS’s chart unit sales only double from 2014 to 2017. The very nature of IoT systems on a chip is that it is a brutally competitive market and therefore price per unit will likely drop by more than 50% over the same period. In other words, expect revenue to actually decline as units double. As for Intel, well, they have no place in the IoT, except, perhaps, in servers.
“(HIS) calls this market “sensor hubs,” and defines it as any processor that takes in and compute sensor data to avoid using a device’s application processor (if it’s a phone) or microcontroller if it’s a smaller device. It estimates that worldwide shipments of sensor hubs in 2014 will reach a projected 658.4 million units. From then until 2017, the market is pegged to increase 1,300 percent to shipments of 1.3 billion units (see chart below).”
16. CTIA and Participating Wireless Companies Announce the “Smartphone Anti-Theft Voluntary Commitment”
It is kinda funny they should claim they have the safety and security of wireless users as a top priority since this has been possible since the first mobile phones were developed and the industry has pretty much fought tooth and nail against it since then.
“The safety and security of wireless users remain the wireless industry’s top priority, and is why this commitment will continue to protect consumers while recognizing the companies’ need to retain flexibility so they may constantly innovate, which is key to stopping smartphone theft.”
17. Bend It, Charge It, Dunk It: Graphene, the Material of Tomorrow
This is a pretty good overview of the potential of graphene. One correction though: graphene is anything but inexpensive. It is staggeringly expensive, even though the raw material, carbon, is virtually free. The challenge is to figure out how to make it in industrial quantities at a price which makes these experimental results viable commercial products.
“I just want to say one word to you. Just one word. No, fans of “The Graduate,” the word isn’t “plastics.” It’s “graphene.” Graphene is the strongest, thinnest material known to exist. A form of carbon, it can conduct electricity and heat better than anything else. And get ready for this: It is not only the hardest material in the world, but also one of the most pliable.”
18. Here’s why it took 2 years for anyone to notice the Heartbleed bug
Yet another article on the Heartbleed bug but still worth a read. I repeat that security bugs are also common in proprietary software however they tend to be quietly fixed. Indeed, worms and viruses mostly exploit said bugs so every time you hear of one you are really learning about a bug. Heartbleed will probably result in a more formal process for signing off critical open source contributions.
“What caused the Heartbleed Bug that endangered the privacy of millions of web users this week? On one level, it looks like a simple case of human error. A software developer from Germany contributed code to the popular OpenSSL software that made a basic, but easy-to-overlook mistake. The OpenSSL developer who approved the change didn’t notice the issue either, and (if the NSA is telling the truth) neither did anyone else for more than 2 years.”
19. Awesome FingerReader Gadget Lets the Blind Read Printed Text
Given the very low cost of cameras and the advance state of Optical Character Recognition, it is rather surprising nobody has done this before. Still it is a good idea and it is easy to see how the device to be reduced in size to a ring or something along those lines.
“FingerReader is the name of a wearable gadget that could help visually impaired people read printed text in books and even on electronic devices, thus opening up additional possibilities to them. Developed by MIT researchers, FingerReader wants to help the blind access more resources than what’s already available in Braille format. TechCrunch reports that, according to a recent study from the Royal National Institute of the Blind in Britain cited by one of the researchers, in 2011 only 7% of books are available in large print, unabridged audio, and Braille.”
20. First potentially habitable Earth-sized planet confirmed: It may have liquid water
This is, of course, big news, though it was entirely expected: there is no reason to believe rocky planets within a certain arbitrary orbital radius are particularly rare, even though they might be hard to spot. No doubt an inventory of such planets will be created over the years and an imaging system developed to observe them directly. It is a pity all media reports used the “artist’s rendering” of the planet since it is impossible observe with existing systems, and, though liquid water is possible there is yet no evidence it actually exists on this planet.
“The first Earth-sized exoplanet orbiting within the habitable zone of another star has been confirmed by observations with both the W. M. Keck Observatory and the Gemini Observatory. The initial discovery, made by NASA’s Kepler Space Telescope, is one of a handful of smaller planets found by Kepler and verified using large ground-based telescopes. It also confirms that Earth-sized planets do exist in the habitable zone of other stars.”