The Geek’s Reading List – Week of January 29th 2016
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 12 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.
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1) Telecommunications industry leaders embrace OCP
I’ve mentioned the Open Compute Platform in the past. OCP is a consortium which makes available turn-key enterprise-class hardware designs for manufacture in an open source model. As the article notes this means the stuff can be made by white box vendors (i.e. Foxconn) at very low margins. It remains to be seen whether AT&T et als’ participation is lip service to get better pricing from the likes of Cisco or whether they actually intend to use OCP type hardware. Either way there should be pressure on the traditionally high margins of network equipment vendors.
““AT&T will virtualize 75% of its network functions by 2020, and to do that, we need to move to a model of sophisticated software running on commodity hardware,” said Andre Fuetsch, Senior Vice President of Architecture and Design at AT&T. “We’re becoming a software and networking company. As a result, our central offices are going to look a lot more like data centers as we evolve our networking infrastructure. The Open Compute Project is innovating rapidly in this area, and we’re thrilled to be collaborating with the community of engineers and developers that are driving the evolution. We look forward to our vendors and other industry players supporting this initiative, as well.””
2) A Tesla in Every Garage? Not So Fast
I recently read that Ontario is going to spend $20M building EV charging stations http://www.cbc.ca/news/canada/toronto/ontario-electric-vehicle-charging-stations-1.3355595. Why tax dollars should go to subsidizing rich people’s heavily subsidized and yet still very expensive sports cars is not clear to me. Perhaps all the poor are well fed and clothed. The EV business is exclusively political with no reasonable prospects for success once the copious subsidies are removed. Real car companies like Nissan and GM can afford to lose money on every EV sale but Tesla can only afford to do that as long as gullible investors are willing to give it money. There are no battery innovations on the horizon which support the idea that battery prices will drop significantly. It is just a matter of time before the whole thing comes unraveled.
“What is certain is that even the best batteries will wear out long before the electric motors they serve. Which means that battery-powered EVs have hefty replacement costs that consumers may or may not even realize, let alone be willing to pay. Consider as well that carmakers typically do not produce their own advanced battery cells (although a few, like Tesla and BMW, do assemble such cells into battery packs). Auto executives no doubt loathe the idea of creating an electric fleet whose chief component is made not by them but by dedicated manufacturers like LG Chem or Panasonic. In the world of vertically disintegrated manufacturing, parts suppliers get paid first.
3) Will Machines Eliminate Us?
There is a whole lot of jibber jabber associated with Artificial Intelligence lately with various non-experts opining on the risks of super intelligent machines. Part of the problem is that the term, AI, means different things to different people. To researchers it does not actually mean creating machines which think, any more than a calculator thinks about its calculations. Unfortunately, in a billionaire obsessed world, the musings of a rich non-expert are considered newsworthy while the actual knowledge of an expert is rarely even sought out.
“Yoshua Bengio leads one of the world’s preëminent research groups developing a powerful AI technique known as deep learning. The startling capabilities that deep learning has given computers in recent years, from human-level voice recognition and image classification to basic conversational skills, have prompted warnings about the progress AI is making toward matching, or perhaps surpassing, human intelligence. Prominent figures such as Stephen Hawking and Elon Musk have even cautioned that artificial intelligence could pose an existential threat to humanity. Musk and others are investing millions of dollars in researching the potential dangers of AI, as well as possible solutions. But the direst statements sound overblown to many of the people who are actually developing the technology. Bengio, a professor of computer science at the University of Montreal, put things in perspective in an interview with MIT Technology Review …”
4) Down The Hype Cycle: A 3D Printer In Every Home?
This is a good post-mortem on the hype surrounding 3D printing though I suspect that techcrunch had a hand in generating that hype as well. The problem is that low cost 3D printers aren’t that cheap and aren’t that good. You can make poor quality small plastic things but that’s about it. Most people don’t really need many poor quality small plastic things and if they did they wouldn’t make them themselves. Nonetheless, the opportunities in manufacturing and medical applications are massive.
“Despite all of its possibilities, hitting “print” on a 3D printer is a lot more involved than just loading the paper tray and hitting a green button. Preparing and finishing a 3D printed object can be an arduous process. For those who regularly use a 3D printer and take the process in stride, these are usually small issues. But for those who aren’t ready to take on the challenge, it can make an otherwise pleasurable experience turn sour, fast. In short, “ease of use” is still a thing. In addition to the operational difficulties involved with owning and maintaining a 3D printer, there are still too few 3D printing applications for the average person to justify the cost of purchasing a $1,000-$4,000 machine. Unless you’re already using a 3D printer in your line of work or hobby, or regularly spend thousands of dollars a year on small plastic parts, the time and costs involved with 3D printer ownership are just not worth it.”
5) Russian student develops method for FDM 3D printing of artificial bones
Lots of bone used in surgery are grafts, from cadavers, or in many cases 3D printed from titanium. Apparently, previous methods for 3D printing bones results in a weak material which wasn’t really suitable. This researcher came up with a biocompatible material that is also strong. Of course we’ll have to wait to for the results of tests with animals and then people to see how it works out, but it does look promising.
“This method allows for a number of attractive features within the 3D printable biomaterial. As mentioned above, the 3D printed bones are sufficiently strong, yet maintain a porous structure that facilitates ‘osseointegration’—that is, the ability for natural bone to grow throughout the implant. The 3D printed biomaterial is also biocompatible and biodegradable, meaning that it will not be rejected, and once its job is complete, it can fully disintegrate into the body leaving no trace behind. Another major advantage of 3D printed artificial bones is their affordability. According to preliminary estimates, Toropkov believes that the cost of a 3D printed prosthetic human jaw would cost roughly 50 thousand rubles (US $650)—that’s roughly four times cheaper than existing prosthetics.”
6) Rothenberg Says Ad Blocking Is a War against Diversity and Freedom of Expression
This and a follow on rant (http://canmua.net/world/iab-ceo-continues-to-hammer-ad-blockers-349596.html) are reminiscent of the sorts of histrionics exhibited by the newspaper industry as it stared down the precipice. There are many problems with the online advertising industry: many ads are distracting, fraudulent, and serve up malware. Advertisers also spy on consumers and ignore things like “do not track”. Since the industry refuses to play nice, technology has emerged to make them. AdBlock-Plus may be the bad boy because of its paid “whitelist” but the technology is open source. I use uBlock which works better anyway. Until the online ad industry takes responsibility for its actions and takes remedial action to correct them the industry can rant all it wants.
“And this is why I hate the ad-block profiteers. Now, you may be aware of a kerfuffle that began about 10 days ago, when an unethical, immoral, mendacious coven of techie wannabes at a for-profit German company called AdBlock-Plus took to the digisphere to complain over and over that IAB had “disinvited” them to this convention. That, of course, is as much a lie as the others they routinely try to tell the world. We had never invited them in the first place. They registered for this event online. When we found out, we cancelled the registration and reversed their credit card billing. Why? For the simple reason that they are stealing from publishers, subverting freedom of the press, operating a business model predicated on censorship of content, and ultimately forcing consumers to pay more money for less – and less diverse – information.”
7) CEO confirms app hosting service will shut down at end of February
This is the inevitable fate of many cloud service providers. If you think about it, cloud services should be the ultimate commodity and today’s datacenter is cheaper to build than the one which was built 3 months ago. The industry will consolidate to a few players who won’t make money doing it. The real joke is on dotCloud’s customers who have a very short time pull their data off the (no doubt) overloaded servers and migrate their software to another platform. Suffice it to say, most likely the customer base was caught flatfooted and don’t even have contingency plans in place. If you use cloud services, everything should be backed up locally and you should be prepared to change providers at a moment’s notice.
“Platform-as-a-service upstart dotCloud will shut down next month after its parent Cloud Control filed for bankruptcy. Just a few hours ago, an email was sent to dotCloud users warning them that the service will end on February 29, along with a link to instructions on how to migrate their data. For those wondering if the message was legit – it is. “Yes, this is unfortunately correct,” Cloud Control CEO Philipp Strube told The Register as we went to press. dotCloud was bought by Cloud Control in 2014 from Docker, which wanted to focus on its containerization business. Docker began life as an internal open-source project at dotCloud – an early PaaS provider that changed its name to Docker, pivoted to developing Linux containers, and ejected its app-hosting cloud.”
8) How Zano Raised Millions on Kickstarter and Left Most Backers with Nothing
If not for the millions of dollars which were lost this would be an amusing story. The failure of an engineering project is not uncommon and I’d suggest that the odds are even worse when people are doing something which hasn’t been done before, especially if they don’t actually know what they are doing. Rather than hiring lawyers or forensic accountants who might have made them look bad, Kickstarter hired a journalist to figure out what happened. Needless to say there are many other projects going on at Kickstarter which will never see the light of day and there is no reason to believe that will change.
“Kickstarter tasked me, a freelance reporter, to find out why a highly funded crowdfunding campaign for a palm-sized drone flamed out in order to give backers the full story, and provide lessons for itself and others. My report follows. Kickstarter had an advance look, but wasn’t allowed to make changes. (Read this for the background on my commission, or skip to the very end of the article for a brief summary of my findings, some additional details and disclosures.)”
9) New finding may explain heat loss in fusion reactors
There has been a couple of interesting developments in the world of nuclear fusion lately. This new model for heat loss appears to be a big deal (though it is not clear whether it points to a solution) and there was also this new imaging technique http://futurism.com/new-imaging-technique-brings-nuclear-fusion-power-a-step-closer-to-reality/. Neither seems to represent a major breakthrough leading to near term fusion power but a few percent here and a few percent there and next thing you we’re at breakeven.
“A long-standing discrepancy between predictions and observed results in test reactors has been called “the great unsolved problem” in understanding the turbulence that leads to a loss of heat in fusion reactors. Solving this discrepancy is critical for predicting the performance of new fusion reactors such as the huge international collaborative project called ITER, under construction in France. Now, researchers at MIT’s Plasma Science and Fusion Center, in collaboration with others at the University of California at San Diego, General Atomics, and the Princeton Plasma Physics Laboratory, say that they have found the key. In a result so surprising that the researchers themselves found it hard to believe their own results at first, it turns out that interactions between turbulence at the tiniest scale, that of electrons, and turbulence at a scale 60 times larger, that of ions, can account for the mysterious mismatch between theory and experimental results.”
10) Internet of Things security is so bad, there’s a search engine for sleeping kids
I’ve written about the security lapses of IoT products in the past. It is worth reiterating that companies like Google and Apple end up with security problems so it is scarcely surprising that much smaller companies, or even consumer products companies, have many more. As spooky as having an open baby monitor might be, it is pretty likely many other products such as IoT security cameras, alarm systems, locks, etc., are no more secure. And then there is the prospect your IoT toys go off line because the manufacturer decided to pull the plug on the cloud services which make it all work.
“Shodan, a search engine for the Internet of Things (IoT), recently launched a new section that lets users easily browse vulnerable webcams. The feed includes images of marijuana plantations, back rooms of banks, children, kitchens, living rooms, garages, front gardens, back gardens, ski slopes, swimming pools, colleges and schools, laboratories, and cash register cameras in retail stores, according to Dan Tentler, a security researcher who has spent several years investigating webcam security. “It’s all over the place,” he told Ars Technica UK. “Practically everything you can think of.””
11) Nest Thermostat Goes From ‘Internet Of Things’ Darling To Cautionary Tale
Nest has had its share of problems in the past, including people complaining their Nest thermostats were consuming tens of gigabytes of broadband traffic. It seems pretty clear the folks behind Nest focused on aesthetics rather than functionality as reflected by the numerous problems their customers have faced. What never seems to get mentioned is that actual thermostat companies like Honeywell make WiFi thermostats, and, unlike Nest, they don’t seem to have all kinds of problems with them.
“Back when the Nest thermostat was announced in 2011, it was met with waves of gushing adoration from an utterly uncritical technology press. Much of that gushing was certainly warranted; Nest was founded by Tony Fadell and Matt Rogers, both former Apple engineers, who indisputably designed an absolutely gorgeous device after decades of treating the thermostat as an afterthought. But the company also leaned heavily on the same media acupressure techniques Apple historically relies on to generate a sound wall of hype potentially untethered from real life. Courtesy of marketing and design, Nest slowly but surely became the poster child for the connected home. Over the last year or so however things have changed, and while now Alphabet-owned Nest remains an internet of things darling, the unintended timbre of the message being sent is decidedly different. For example, Nick Bilton recently wrote a piece in the New York Times noting how a glitch in the second generation of the supposedly “smart” product drained the device battery, resulting in numerous customers being unable to heat their homes just as a cold snap hit the country.”
12) What a ball pen tells us about China’s manufacturing weakness
Producing something from other people’s parts is different from making those parts. This is an example of the backwardness of Chinese manufacturing but there are counter examples such the ESP8266, a Chinese Internet of Things component which is taking the maker community by storm. China has been investing in foreign technology companies such as Western Digital and was even rumored to have tried to buy Micron. Clearly the leadership is trying to move upmarket with respect to the technology value chain.
“Premier Li Keqiang recently made a shocking revelation about the industrial capabilities of China on national television: despite the fact that the country is widely known as the “world’s factory” and produces everything from iPhones, aircraft carriers, high-speed railways to spacecraft, until now there is not a single manufacturer in China that is able to produce the tiny rotating ball fitted to the tip of a ball pen that disperses ink as you write. Each of these tiny metal balls has to be imported by Chinese pen manufacturers from overseas suppliers. Many TV viewers in the mainland were deeply shocked and saddened by this revelation, as they had all been under the impression that China is already a world-class industrial power.”
13) Starry Internet Is Aereo Founder Chet Kanojia’s Latest Salvo In The War On ISPs
Many countries outside of North America regulate broadband as any other utility. Unfortunately, incompetent and corrupt regulation means that North American consumers are gouged for substandard service. A goodly part of the reason for this is that most broadband is wired and there are all kinds of barriers limit the ability to run wires. Wireless is a different story since it can be quickly deployed at modest cost, though regulatory infrastructure also limits competition. It is not clear to me whether the spectrum being used is available, and if so whether same incompetent regulators who screwed things up will let this proceed. Regardless, the business is due for disruption.
“Conceived by Aereo founder Chet Kanojia, Starry looks to handle every aspect of broadband service using millimeter wave technology. This means that your broadband service, up to 1GB speeds, will be delivered to your home wirelessly. “It costs the cable guys around $2,500 per home to deal with the construction costs of laying down cable,” said Kanojia on a phone call, setting the scene for his next big unveil. “And beyond cost, there are regulatory hurdles that slow down the process.” “We can deliver faster broadband with no regulatory wait time and it will cost us only $25 per home.” Kanojia won’t disclose pricing but says that the service will offer various tiers based on speed (up to 1GB up and down) and that it will be “orders of magnitude cheaper” than current broadband providers like Comcast and Time Warner Cable.”
14) How a DIY Network Plans to Subvert Time Warner Cable’s NYC Internet Monopoly
This is another, albeit amateur approach to dealing with the morass which is North American broadband. There are inherent limitations to using a mesh network to access remote servers and this sort of approach would work best when a lot of people are using it in a small area (except for the aforementioned limitations of a mesh). I doubt it’ll ever amount to much, but you never know.
“In a warehouse basement in Brooklyn’s Red Hook neighborhood late last year, a handful of self-taught network engineers gathered to casually discuss how they might make Time Warner Cable irrelevant in their lives. Toppling—or at least subverting—a telecom monopoly is the dream of many an American, who are fed up with bait-and-switch advertising campaigns, arbitrary data caps, attacks on net neutrality, overzealous political lobbying, lackluster customer service, and passive-aggressive service cancellation experiences that are a common experience of simply being a broadband internet customer these days. The folks at NYC Mesh are actually doing something about it.”
15) Google’s WiFi for Indian Train Stations Launches At Mumbai Central Railway Station Tomorrow
One of the challenges facing the likes of Google and Facebook is that a lot of people don’t have Internet access. Satellites, balloons, or drones are not the answer for a number of reasons but old style technology like wired, wireless, and Wi-Fi are. Rail lines are great places to lay fiber due to the rights of way and the fact the areas are already clear. You just dig a trench and drop the fiber in and cover the hole. Railways go wherever there is industry and even a lot of places there are not so you can cover a lot of a country quickly and deployment of Wi-Fi in stations is relatively cheap and effective. Plus, unlike low earth orbit satellites, balloons, or drones, it works.
“Google’s long-anticipated Wi-Fi for railway stations in India is slowly going operational starting tomorrow. As was announced late last September, Mumbai Central railway station will be the first location at which Google will provide high-speed internet access. The program, part of Google’s Access & Energy Team, is in partnership with Indian state-owned company RailTel. RailTel has built a network of fiber-optic lines along most major rail tracks across the country, which Google will be using to support Wireless Access Points at train stations. Initially, the partnership aims to provide access points at 100 train stations across India, with plans to grow to 400 stations nationwide. RailTel’s fiber-optic infrastructure covers over 26,000 miles of railway track, and the company plans on growing that to cover 33,000 miles of track.”
16) The FCC Wants You To Choose Your Own Cable Box
Cable or satellite set top box rentals are an amazing scam. You pay a pile of money to rent a pretty low tech device, and better yet they are among the few tech products that actually go up in price over time. It’s the same gimmick telephone companies used for decades: in order to “protect their network” consumers paid thousands of dollars over decades for phones which cost a few dollars to make. There is no reason for that system to persist however we can expect a heck of a political storm if the regulators decide to move ahead with this decision.
““It’s time to unlock the set-top box market — let’s let innovators create, and then let consumers choose,” he said, comparing the forced rental of set-top boxes to decades past, when households had to lease their telephones from operators. According to the FCC, 99 percent of pay-TV customers rent set-top boxes from their providers. And unlike computers, TVs, and mobile phones, the cost of cable boxes to consumers has increased, averaging $231 every year. Wheeler’s proposal wouldn’t set a government standard for delivering TV and internet programming; instead it would set rules forcing providers to pass along channel line-ups and the content itself to the creators of competing devices and software.”
17) Ten arrested in Netherlands over bitcoin money-laundering allegations
When you work for a large bank you have to take anti-money laundering courses. The great thing about those courses is they tell you all about the systems in place to spot money laundering. Long story short, if you launder money don’t deposit “large sums of money” into bank accounts unless you are dealing with a Swiss bank (http://www.thestar.com/business/2015/02/18/swiss-prosecutors-search-hsbc-office-in-massive-money-laundering-probe.html) or other financial institution that has systems in place to ensure the money is good and properly hidden from authorities. It doesn’t matter if you use Bitcoin or diamonds: if you are going to launder money do it right.
“Dutch police have arrested 10 people in the Netherlands as part of an international investigation into money-laundering through sales of the shadowy virtual currency bitcoin, prosecutors said on Wednesday. Fifteen places were raided Tuesday in eight Dutch towns as part of the investigation, during which luxury cars, cash and the ingredients to make ecstasy were seized. “Bank accounts and bitcoin accounts were also seized thanks to help from the United States, Australia, Morocco and Lithuania,” the Dutch prosecution service said in a statement. The alarm had been raised by banks which had seen “large sums of money” being deposited before being immediately withdrawn at cashpoints. The amount of money involved was not revealed.”
18) 566PB Produced in Just One Day by All WW New Video Surveillance Cameras Installed in 2015
This is the sort of headline which pushes believers in a resurgence in Hard Disk sales into hysterics. Unfortunately, it is very misleading: video surveillance systems typically record over a full hard drive. In other words, if the disk keeps 30 days of recordings its starts over again on day 31 meaning there is a 30 day history. So, more likely than not, that 566PB is closer to 47PB, and that doesn’t take into account the fact a lot of systems are on reduced frame rates, only record when motion is detected, and so on. The good news for HDD bulls is that video surveillance is one of the areas HDDs have a major advantage in because they are cheap and don’t wear out. The bad news is that the much larger client computer (i.e. PC) market is poised for collapse as 256GB SSD pricing approaches $50 later this year.
“In 2013 IHS Inc. announced the rise of HD video surveillance was leading to an astonishing 413PB of data a day produced by newly installed video surveillance cameras. Now, the proliferation of higher and higher resolution cameras means that the data deluge continues to increase. 566PB was the amount of data produced in just one day by all the new video surveillance cameras installed worldwide in 2015.”
19) The myth of the ISIS encrypted messaging app
The original story was used as both justification for why encryption should be illegal (I rather doubt that would stop terrorists in their tracks) or used as an example as to why making encryption illegal would not work. It turns out the whole thing was, like so much news today, made up and never verified. Regardless, unbreakable security is the sort of thing the Hardy Boys could pull off so all that criminalizing it will do is open secrets to spies for their fun and profit.
“Despite widespread media reports to the contrary, an app created for Islamic State militants to send private encrypted messages does not exist, a Daily Dot investigation found. On Jan. 12, Defense One reported that the Islamic State allegedly built a new Android app called Alrawi for exchanging encrypted messages, based on claims from self-proclaimed online counterterrorism outfit Ghost Security Group (GSG). The claim was quickly reprinted by Newsweek, Fortune, TechCrunch, and the Times of India—the largest English-language newspaper in the world—among many others. However, it seems as though hype and fear, rather than concrete evidence of a genuine tool for orchestrating terrorists attacks, played the primary role in propagating word of its existence.”
20) Ban internet anonymity – says US Homeland Security official
It is remarkable that public security officials are allowed to jabber on like this. What cop believes search warrants are necessary, what military intelligence officer believes torture should be out of bounds? Of course police and security people don’t believe in privacy: that’s why so many laws exist to protect people from things like unreasonable search. The scary thing is that people believe this nonsense, even when we have documented proof (from Snowden) that NSA operatives were using information to snoop on ex’s and so on. At the end of the day, George Orwell was an optimist.
“Writing in French policy magazine FIC Observatoire, Barnett somewhat predictably relies on the existence of child abuse images to explain why everyone in the world should be easily monitored. He tells a story about how a Romanian man offered to share sexually explicit images of his daughter with an American man over email. The unnamed email provider uncovered this exchange and forwarded the IP address of the Romanian to the European authorities and a few days later the man was arrested. Job well done. Before we have an opportunity to celebrate, however, Barnett jumps straight to terrorism. “How much of the potential jihadists’ data should intelligence agencies or law enforcement be able to examine to protect citizenry from terrorist attack?”, he poses. The answer, of course, is everything.”