The Geek’s Reading List – Week of January 23rd 2015
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 has been a good week for tech news. The CEO of Blackberry embarrassed himself with an absurd letter to the FCC, there was a fair bit of noise on Bitcoin, none of which was particularly positive, idiots made stupid investments (including a Bitcoin investment, making a twofer) and no less than two groups announced plans to launch Low Earth Orbit Satellite Constellations to bring “Internet to the masses”. We will, no doubt, ridicule the investments and LEOSAT plans in the future after they fail. This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.
1) BlackBerry wants FCC to force app developers onto BB10
This has to be the funniest thing I’ve heard in years: setting asides the question as to whether the FCC has any authority whatsoever over software development, I want to know what sort of delusional state leads somebody to believe you could ever compel software developers to support a platform in the absence of market demand? If so, where would it end? Would developers be equally forced to support Amazon, Firefox OS, etc.? Would websites be taken down because they don’t render properly on a certain device? Blackberry shareholders, if this is the sort of thinking you expect to drive a turnaround, you might want to hedge your downside.
“With its market share continuing to flounder at levels that see it lumped with others in at least one market survey, BlackBerry CEO John Chen has written a letter to US Congress members calling for the prohibition of app developers choosing to ignore BlackBerry. “Neutrality must be mandated at the application and content layer if we truly want a free, open, and non-discriminatory internet,” Chen said in his letter. “All wireless broadband customers must have the ability to access any lawful applications and content they choose, and applications/content providers must be prohibited from discriminating based on the customer’s mobile operating system.””
2) Coinbase, a Bitcoin Start-Up, Raises $75 Million in Vote of Confidence
Apparently, this provides a market capitalization of $490 million. The total value of Bitcoin is $3.19B. Much of this is, purportedly, in the possession of one person and a considerable proportion of the rest held by criminals (notably the folks who steal Bitcoin). Ignoring the plummeting value of Bitcoin, the limited “float”, the “currency’s” association with criminals, and the questionable legal status, this values the company at 15% of the total value of the “currency”. The total money supply (M1+M2+M3) of Canada, is C$3.6 trillion while the total market cap of the “big 5” Canadian banks is around $300B, or 8.3% of the money supply. Who says people make intelligent investment decisions? Thanks to Stephen Jakob of Osprey Capital for this item.
“In total, Coinbase has collected over $105 million in venture capital. Andreessen Horowitz, which led a $25 million investment round in Coinbase in December 2013, also participated in Coinbase’s most recent fund-raising, along with existing investors Union Square Ventures and Ribbit Capital.”
3) A Startup Just Got $30 Million to Shake Up the Garbage Industry
If there was ever an industry in need of a shake up, it has to be the high margin garbage business. After all, there has to be a better way of dealing with waste than having relatively low paid, hard working men come by in a great big truck and take it away. Yes sir, this has to be the investment opportunity of a lifetime – except there are no barriers to entry, no sustainable competitive advantage, etc.. I am guessing the investors haven’t watched many seasons of the Sopranos.
“Nate Morris, CEO and co-founder of Rubicon Global, says his company is trying a different approach. It doesn’t own any landfills, or garbage trucks for that matter. Instead, its sole purpose is to help businesses cut their garbage costs and maximize the amount of waste being diverted from landfills. This strategy has earned Rubicon large contracts across the country with the likes of 7-Eleven and Wegman’s, but the company’s national footprint is set to double in the coming months. Today, Rubicon announced it has raised $30 million, which it will use to scale operations across the country and invest in new recycling technology research.”
4) Revealed: Elon Musk’s Plan to Build a Space Internet
This idea has been thought of before and was very popular during the prior dot com bubble. My rule of thumb is that, if it involves a satellite and there is any other option, it is probably a bad idea. This is because satellites take a long time and money to design and build and, in the specific case of non-geostationary satellites, the constellation has little use until the whole thing is up and running. Meanwhile, terrestrial options progress apace, and, as consequence only the company who buys the operation out of bankruptcy has any chance of making money off it. There are very rare exceptions such as satellite TV which was a regulatory arbitrage. None of this even considers the technical challenges of creating such an option at a reasonable price. There is a very low likelihood any of these proposals will ever get off the ground.
“The Space Internet venture, to which Musk hasn’t yet given a name, would be hugely ambitious. Hundreds of satellites would orbit about 750 miles above earth, much closer than traditional communications satellites in geosynchronous orbit at altitudes of up to 22,000 miles. The lower satellites would make for a speedier Internet service, with less distance for electromagnetic signals to travel. The lag in current satellite systems makes applications such as Skype, online gaming, and other cloud-based services tough to use. Musk’s service would, in theory, rival fiber optic cables on land while also making the Internet available to remote and poor regions that don’t have access.”
5) CERT warns satellites for planes, oil rigs and critical infrastructure are vulnerable
This actually relates to the prior article. Recall it takes a long time and a lot of money to design, build, and launch a satellite (at least a “real” one with some prospect of a long operating life). Meanwhile the technological context on Earth continues to evolve. As a general rule, spacecraft use “tried and true” (i.e. obsolete) technology (not science – technology) to ensure reliability. So, for example, security measures, which were state of the art (more likely 5 – 10 years behind the times) when the bird was first specified are woefully obsolete by the time it is launched and downright laughable near the end of its service life. Thanks to my friend Duncan Stewart for this article.
“The US Computer Emergency Response Team (CERT) has issued a wave of warnings regarding a multitude of flaws in satellite communications (Satcoms) systems leaving aeroplanes, ships, oil rigs and other important forms of transport and infrastructure open to attack. The CERT team issued six alerts on a variety of different Cobham and Iridium Satcoms systems, warning that the flaws could be targeted by hackers for a variety of purposes including data theft, account hijacking and even the ability to “gain full control of the satellite terminal”. The threats are taken as particularly dangerous as the CERT reported that it is “unaware of any practical solution” to the fix the flaws.”
6) Why Billions of Exoplanets Are Suddenly Looking More Habitable
We’ve got a real space theme going! A few decades ago some people actually wondered whether there were any exoplanet (planets outside our solar system) and, if so, what proportion could support “Life As We Know It”. It turns out there are a lot of exoplanets, and a fair proportion of those might be to sustain life similar to ours. Of course, any life we do encounter outside the solar system and potentially even inside it is likely to be very different from our own.
“A team of astrophysicists has announced that this thinking could be wrong—rotational lockup is not necessarily the rule for these exoplanets. As they report in the journal Science, the simple existence of an atmosphere (even one as thin as Earth’s) can keep a planet twirling and habitable. According to Jérémy Leconte, the theoretical astrophysicist at the University of Toronto who lead the team that made this discovery, the finding means that a large number of already discovered Earth-like planets might be a lot more habitable than we thought. “Planets with potential oceans could thus have a climate that is much more similar to the Earth’s than we’ve previously expected,” he says.”
7) Every State Should Make the Bold Internet Investment New York Just Did
Yes, yes they should. Unfortunately telecommunications companies in the US and Canada are extremely powerful due to a legacy of bad policy choices so one should be skeptical as to whether such initiatives such as those announced in New York will have any effect. Regardless, it does demonstrate that at least some politicians are capable of understanding the importance of the Internet to the future of their citizens.
“In order to get funding, broadband providers will have to match the state’s contribution one-to-one and provide speeds of at least 100 Mbps (unless it’s a remote, underserved area in which speeds must be at least 25 Mbps with the promise of getting to 100 Mbps). In other words, all of that money that the government squeezed out of the criminals behind the financial crisis will now be spent on spurring economic development thanks to better, faster, cheaper internet. Good news, indeed.”
8) Obama Sees Need for Encryption Backdoor
I don’t think an encryption backdoor is consistent with privacy and civil liberties. After all if the state can read your mail, examine your files, etc., then privacy and certain civil liberties do not exist, or they exist to the extent that the state allows them to exist. For example, consider the fight against slavery or even the civil rights movement. These were largely struggles against the state, churches, etc., and were vigorously opposed by those bodies, including the use of police to oppose them. Can you imagine what would have happened if Hoover’s FBI would have had unfettered access to all the communications of civil rights activists? Regardless I continue to assume such backdoors already exist.
“Although President Obama said he sees the need for law enforcement to gain access to encrypted data on a suspected terrorist’s digital device, he stopped short of calling for a law to require manufacturers to provide a so-called “backdoor” to break encryption on mobile devices. At a Jan. 16 White House joint press conference with British Prime Minister David Cameron, Obama said his administration is discussing with device manufacturers and software providers ways for authorities to gain access to the encrypted data without compromising the privacy and civil liberties of citizens.”
9) Hacker Says Attacks On ‘Insecure’ Progressive Insurance Dongle In 2 Million US Cars Could Spawn Road Carnage
Forgive me for not being paranoid, but the “dongle” in question attaches to the OBD II port (http://www.obdii.com/connector.html) on the car which is usually located under the dashboard near the pedals. It is primarily there for diagnostics, however, you can do a number of things with it as the hacker has shown. The thing is, you don’t need the dongle to fiddle with OBD – you can just connect up to the OBD port and have the same effect. Of course, that just means all cars are pretty much hackable though having an insecure, two way, radio communications channel probably makes it a bit easier.
“But he hasn’t gone as far to actually mess with the controls of his Toyota. By hooking up his laptop directly to the device he says he would have been able to unlock doors, start the car and gather engine information, but he chose not to “weaponise” his exploits, he told Forbes. “Controlling it wasn’t the focus, finding out if it was possible was the focus.””
10) Microsoft to deliver free upgrades to Windows 10
This is probably a good move by Microsoft. I would imagine the overwhelming majority of Windows license sales are with new PCs or associated with corporate support subscriptions, leaving a tiny portion of actual paid for upgrades. Since Windows 7 PCs are no longer available, you would have to wear the hair shirt of Windows 8 until Windows 10 came out, then pay through the nose for an upgrade, which is scarcely a good value proposition. This provides some hope that, having experienced purgatory, after a year or so you can leave it through this free upgrade. Why anybody would subject themselves to Windows 8 for even a short period of time is another matter.
“Microsoft will offer free upgrades to Windows 10 — the next version of its operating system — first for Windows 8.1 users and then for Windows 7 users, the company announced Wednesday. In the first year the software is available, the company will upgrade any devices running Windows 8 to Windows 10 for free, according to Terry Myerson, Microsoft’s executive vice president of operating systems. The free upgrade will also apply to Windows 7 devices and Windows Phone 8.1 devices.”
11) Hands-on: Microsoft’s HoloLens is flat-out magical
Microsoft made another interesting announcement this week, unveiling its “virtual reality” headset. You might recall that a while back Facebook paid a staggering amount of money for Oculus VR, providing a demonstration of my adage that cash rich companies prefer to give money to the shareholders of other companies through stupid acquisitions rather than to their own shareholders through dividends. There are probably a number of uses for VR headsets, mostly in gaming but also in education and training. While, there are a number of companies getting in to the market, a company such as Microsoft, with significant software development expertise and a large installed base of game consoles, will probably play a major role.
“For the second time in as many months, I feel like I’ve taken a step into the world of science fiction—and for the second time in as many months, it’s Microsoft who put me there. After locking away all my recording instruments and switching to the almost prehistoric pen and paper, I had a tantalizingly brief experience of Microsoft’s HoloLens system, a headset that creates a fusion of virtual images and the real world. While production HoloLens systems will be self-contained and cord-free, the developer units we used had a large compute unit worn on a neck strap and an umbilical cord for power. Production hardware will automatically measure the interpupillary distance and calibrate itself accordingly; the dev kits need this to be measured manually and punched in. The dev kits were also heavy, unwieldy, fragile, and didn’t really fit on or around my glasses, making them uncomfortable to boot.”
12) Supreme Court Hands Trial Courts More Power In Teva Patent Case
This was reported as positive for patent licensing companies such a Wi-Lan, although it is not immediately obvious to me why that would be the case. It is true this will probably limit the availability of delaying tactics which are typically used by the alleged infringer, but it will similarly limit options if the infringer’s lawyers manage to sufficiently befuddle the trial judge, which happens more often than you would care to think. So, trials might be sped up but that is not good if you get outlawyered.
“At issue was a judge’s ruling that challengers led by Sandoz had failed to prove that Teva’s patent on the multiple-sclerosis drug Copaxone was impermissibly vague. The judge relied on expert testimony to determine that someone skilled in biochemistry would understand what the phrase “a molecular weight of 5 to 9 kilodaltons” meant. Sandoz had argued it could have three definitions, rendering the patent invalid, and the Federal Circuit agreed, after subjecting the case to de novo review. But the Supreme Court reversed, saying only questions of law, such as claim construction or the definition of the boundaries of a patent, can be subjected to such a comprehensive review. Fact questions underpinning claims construction, such as how someone skilled in the art would interpret a specific claim, may be findings of fact that are left undisturbed unless there is “clear error.””
13) Uh oh: Wi-Fi exposure may be worse for kids than we thought
Ah, leave it to a journalist to stoke hysteria regarding the horrors of electromagnetic RADIATION! Long story short, if so, then what? The power output from a WiFi device is trivial and the only thing it can do to a human is warm something up a tiny bit. The wavelengths involved are no more capable of causing a mutation than a piece of down is capable of penetrating armor plate. Besides which, every cubic millimeter of the universe has been bathed in EM radiation for billions of years and life persists. Get over it.
“The International Agency for Research on Cancer’s (IRIC) website is, for many hypochondriacs, a bit of a nightmare. The agency actually catalogs carcinogenic items, substances and sources that we encounter in everyday life. The freakiest cancer-causing forces are radiofrequency electromagnetic fields (RF/EMF) that come from radios, televisions, microwaves, cell phones and, most alarmingly, devices that use Wi-Fi. A new article published in the Journal of Microscopy and Ultrastructure called “Why children absorb more microwave radiation than adults: The consequences” analyzed previously published peer-reviewed studies on RF/EMF and found that not only are children much more susceptible to certain kinds of radiation, but that our current exposure limits may be inadequate.”
14) Drug-laden drone crashes near US-Mexico border
You have to credit criminals: they are pretty early adopters of most technologies. The great thing with drones is that they are easy to fly and very hard for law enforcement to detect or intercept (note that the same is not true for military drones, which are sitting ducks if the people you are ‘liberating’ have any military capacity whatsoever). Unfortunately, drones have limited range and very low cargo capacity as this shows. I am rather surprised they didn’t stick with large model airplanes which have most of the advantages and much greater cargo capacity.
“Police in a Mexican border city said Wednesday that a drone overloaded with illicit methamphetamine crashed into a supermarket parking lot. Tijuana police spokesman Jorge Morrua said authorities were alerted after the drone fell Tuesday night near the San Ysidro crossing at Mexico’s border with California. Six packets of the drug, weighing more than six pounds, were taped to the six-propeller remote-controlled aircraft. Morrua said authorities are investigating where the flight originated and who was controlling it. He said it was not the first time they had seen drones used for smuggling drugs across the border. Other innovative efforts have included catapults, ultralight aircraft and tunnels.”
15) Diabetic Perth boy Xavier Hames first patient in world fitted with artificial pancreas
Aussie medical researchers have made a number of breakthroughs including discovering that ulcers are caused by bacteria and thus curable, but also developing CPAP, a treatment for sleep apnea, a silent killer. This sounds like a potential breakthrough, especially for hard to manage cases. Given the pace of progress, you can easily imagine that, in the not so distant future, such devices will be fully implantable and a ubiquitous treatment for diabetes.
“Xavier Hames suffers from type 1 diabetes and is at constant risk of hypoglycaemia – when low glucose levels can result in seizures, coma or death. But in a world-first, a pancreas-like pump that can identify when sugar levels are dangerously low and halt the release of insulin, has changed that. Professor Tim Jones, from Perth’s Princess Margaret Hospital, said the device would make life a lot easier for the parents of type 1 diabetes sufferers, especially at night time when the risk of hypoglycaemia is higher.”
16) Bubble-Propelled Microbots Zoom Around Inside Live Mice
Medical microbots are a potentially useful tool even if the plot of Fantastic Voyage (http://en.wikipedia.org/wiki/Fantastic_Voyage) never plays out. The ideal is to create targeted delivery systems for certain drugs which may be toxic or otherwise harmful to normal tissue. For example you might deliver a poison to a tumor via microbots and kill the tumor without harming the rest of the body. By necessity, such a system would almost certainly be mechanically simple and controlled externally, obviating the need for Rachel Welch and her strategically ripped shirt.
“Last year, in a lab in sunny San Diego, researchers fed a dozen mice a small drop each of a very special liquid. Inside the drops, invisible to the naked eye, were thousands of tube-shaped, microscopic motors. The motors made their way to the mice’s stomachs, embedded in their stomach linings, and released their tiny payloads: nano-size flakes of gold. The research represented a major step toward putting microbots to work in human medicine, where they could one day ferry drugs efficiently into specific organs or even specific cells.”
17) Ancient Scrolls Blackened by Vesuvius Are Readable at Last
Ancient texts are very rare and mostly exist as copies of copies of copies. Ancient scrolls even more so but they are bound to be a few hundred generations of copies closer to the original than what we have now. These were preserved by the respective eruptions but were turned to charcoal, and reading charred ink on a charcoal scroll is not as easy as you would think, even if you could manage to unroll them without destroying them. This emerging technique has the potential of allowing us to read those scrolls and is a very exciting development.
“The 79 A.D. eruption of Mount Vesuvius is most famous for burying Pompeii, spectacularly preserving many artifacts—and residents—in that once bustling town south of Naples. The tumbling clouds of ash also entombed the nearby resort of Herculaneum, which is filled with its own wonders. During excavations there in 1752, diggers found a villa containing bundles of rolled scrolls, carbonized by the intense heat of the pyroclastic flows and preserved under layers of cement-like rock. Further digs showed that the scrolls were part of an extensive library, earning the structure the name Villa of the Papyri. Blackened and warped by the volcanic event, the roughly 1,800 scrolls found so far have been a challenge to read. Some could be mechanically unrolled, but hundreds remain too fragile to make the attempt, looking like nothing more than clubs of charcoal. Now, more than 200 years later, archaeologists examining two of the scrolls have found a way to peer inside them with x-rays and read text that has been lost since antiquity.”
18) Amid Bitcoin’s Bloodbath, Silence From Silicon Valley Press
The Silicon Valley press is like any other media in the world: not altogether interested in analysis so much as writing stuff. Setting aside mostly everything we know about Bitcoin – in particular that the only successful business model has been to steal Bitcoin from fools and convert them to real money – rich folk got interested and that is pretty much all you need to know. Because, if rich folk got interested, by golly it has to be a good thing. Now that rich folk who got interested in Bitcoin are, collectively, having their clocks cleaned financially, the narrative doesn’t fit so we’ll move on to fawning articles about disrupting the garbage business (see Item 3).
“So anyway, here’s where it gets interesting. On Tuesday, the price of one Bitcoin dropped 16% and then another 22% on Wednesday. This is a big deal. Why? Because barely six months ago, in July of 2014, the Feds auctioned off 29,656 of these seized Bitcoins. The winner, beating out 44 other bidders? Silicon Valley icon Tim Draper – he of the venture firm Draper Fisher Jurvetson and the Six Californias initiative and the Draper University of Heroes. The amount of the winning bid was private, but the Bitcoin price was $570 before the auction started and $650 right after. This was covered extensively by the Silicon Valley digerati, Pando Daily, Techcrunch, Re/Code, etc. And in the mainstream media as well. … So Tim Draper invests some $18 million in about 32,000 Bitcoin and today (wait for it…) they’re worth a whopping $6.7 million, losing 63% in six months.”
19) Apple bows to Chinese demand for iPhone security audit
It is hard to see what the point of this is for either party. On the one hand, many backdoors are incredibly obscure and highly unlikely to be uncovered by a security audit (for example, exploiting non-randomness in a random number generator). On the other hand, once the audit is done, Apple can simply include a backdoor into the next software update. On the other other hand a lot of your data is stored on cloud services which you can pretty much assume are an open book to anybody, as numerous celebrities recently discovered.
“Apple has accepted Chinese demands for a full security inspection of its products to ensure that it can continue selling its hardware in the country. According to reports in the Beijing News, chief executive Tim Cook agreed that China’s State Internet Information Office could run security audits on the iPhone, iPad and Mac. Although all of Apple’s devices are manufactured in China, the hardware and software is designed in the US, leading to concern in the Chinese government that they could covertly spy on citizens.”
20) The Paradoxes That Threaten To Tear Modern Cosmology Apart
I have no idea whether the issues discussed by this article (or the associated scientific paper) are real or the ravings of some whackaloon(s). Nevertheless, it might provide some fodder for dinner conversation unless you happen to have an astrophysicist over for dinner.
“These calculations suggest that the energy density of the vacuum is huge, of the order of 10^94 g/cm^3. This energy, being equivalent to mass, ought to have a gravitational effect on the universe. Cosmologists have looked for this gravitational effect and calculated its value from their observations (they call it the cosmological constant). These calculations suggest that the energy density of the vacuum is about 10^-29 g/cm3. Those numbers are difficult to reconcile. Indeed, they differ by 120 orders of magnitude. How and why this discrepancy arises is not known and is the cause of much bemused embarrassment among cosmologists.”