The Geek’s Reading List – Week of March 5th 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) Google self-driving car strikes bus on California street
It had to happen: Google’s self-driving car has been involved in an accident for which it probably is at least partly responsible. There appears to be minor damage because the collision was at very low speed. That is, in fact, one thing which modern safety systems such as autobrake will help a lot: since the force of impact is proportional to the square of the velocity, hitting something at a lower speed is bound to cause much less damage to all.
“A self-driving car being tested by Google struck a public bus on a Silicon Valley street, a fender-bender that appears to be the first time one of the tech company’s vehicles caused a crash during testing. Google accepted at least some responsibility for the collision, which occurred on Valentine’s Day when one of the Lexus SUVs it has outfitted with sensors and cameras hit the side of the bus near the company’s headquarters in Mountain View, California. No one was injured, according to an accident report Google wrote and submitted to the California Department of Motor Vehicles. It was posted online Monday.”
2) An all-star team of former NASA/Tesla/Stanford engineers is building a promising VTOL electric aircraft
I enjoyed the quote from Musk that implies batteries only need to improve by 66% in order to make an electric airplane feasible. As is often the case, nobody bothers to state the facts: jet fuel has specific energy of about 13.8 kwhr/kg (https://wiki.xtronics.com/index.php/Energy_density) about 50x the energy density of the imaginary battery rechargeable lithium ion battery cited in the article. Not only that but a battery loses capacity with every charge and using them at peak current causes them to self-destruct, you’d need an even larger battery than the equivalent 50x the mass of jet fuel. It is hard to believe that actual aircraft designers, NASA, etc, lack the intelligence to create an airplane with 50x the fuel economy of current ones, especially since fuel is a major operating cost.
“A startup operating mostly in stealth mode for the past 6 years has been developing a very interesting battery-powered vertical take-off and landing (VTOL) aircraft, which could potentially be described as a “flying car”. Just over two years ago, some early prototypes were spotted at the company’s facility near Google’s X lab, now called the Moonshot factory, which sparked speculation that Google was financing the project. Not much was known about the company then, but we did some research after finding out that it went on a recent hiring spree and we are now bringing you the most up-to-date report on this promising project. Zee Aero was founded by Professor of Aeronautics and Astronautics at Stanford and former NASA Researcher at Ames Ilan Kroo. He recruited a surprising number of students and colleagues from both organisations to launch his startup, which looks more ready than ever to debut its aircraft.”
3) IBM job cuts: US tech giant begins mass-firing one third of workforce
This is still a rumor, but pretty widespread. The company is hiring in some areas, but if even half this figure would be devastating to morale, customer service, and engineering. Mass layoffs like this rarely cut only “dead wood” and even so the good people also leave because of the impact on morale. IBM is a company which has pretty much missed every major high tech trend since the PC, and it seems to be hitting the accelerator in its demise. As a reminder, tech companies rarely downsize to greatness.
“IBM has begun a widespread culling of its US workforce with an estimated one-third of staff facing the axe according to those affected by the strategic shake-up of the technology company. The job cuts, which are being described as “massive”, come following IBM’s announcement in January that it would be laying-off staff at its Global Technology Services (GTS) department in the US. Reports claim the axe has fallen on further departments as of Wednesday (2 March). The news began to trickle out from the Facebook group of employee watchdog, WatchingIBM, with members posting their accounts of IBM’s slash and burn policy. “I am a GTS Strategic Outsourcing casualty of the mass firing today. My manager told me it was big and widespread, and I’d be hearing from a lot of people that will also be notified today,” said one user.”
4) The Chevy Bolt Won’t Make a Dime for GM
With all the excitement over electric vehicles, it is noteworthy that none are manufactured at a profit despite massive subsidies. The important thing with EVs is that they sound like a good idea, provided you ignore the details about things like batteries. Eventually the whole thing will run its course, the subsidies will vanish, and people will make another movie about “who killed the electric car”.
“To be sure, automakers across the board have been reluctant to produce all-battery electric cars for very good reasons. Batteries have far shorter lifespans than the electric motors they power, so BEVs have hidden replacement costs that consumers may or may not be willing to pay. Consider as well that no major automaker except Nissan produces its own EV batteries, meaning that money leaves the automaker with each EV built, and with each cycle of battery replacement. Finally, nobody yet knows how to price aging EV batteries, rendering opaque the rationale for user ownership and the economics of used BEVs.”
5) SSD reliability in the real world: Google’s experience
This report caused some excitement among HDD bulls, of which there are probably only a handful left. I predict the laptop market will be almost 100% SSDs within about 18 months because the devices are superior in nearly all respects. This article suggests otherwise but it is worth noting that it refers to rather antique SSDs operating in a much more benign environment than experienced by a laptop SSD or HDD. Data centers do not get dropped, subject to temperature extremes, etc, which can be very hard on HDDs.
“Two standout conclusions from the study. First, that MLC drives are as reliable as the more costly SLC “enterprise” drives. This mirrors hard drive experience, where consumer SATA drives have been found to be as reliable as expensive SAS and Fibre Channel drives. One of the major reasons that “enterprise” SSDs are more expensive is due to greater over-provisioning. SSDs are over-provisioned for two main reasons: to allow for ample bad block replacement caused by flash wearout; and, to ensure that garbage collection does not cause write slowdowns. The paper’s second major conclusion, that age, not use, correlates with increasing error rates, means that over-provisioning for fear of flash wearout is not needed. None of the drives in the study came anywhere near their write limits, even the 3,000 writes specified for the MLC drives.”
6) Samsung ships the world’s highest capacity SSD, with 15TB of storage
Samsung announced this product a number of months ago and now it is shipping. It ain’t cheap: pricing is probably in the range of $5,000, and it won’t work in most laptops – even if it is small enough to fit. Nonetheless, it shows what is possible with SSDs. After all, it wasn’t that long ago that 1GB USB keys were a novelty and now you can buy a 64GB device for less than $50.
“Samsung Electronics announced Wednesday that it is now shipping the industry’s highest-capacity solid-state drive (SSD), the 15.36TB PM1633a. Samsung revealed it was working on the drive last August, saying it would use the same form factor as for a laptop computer: 2.5-in. The 2.5-in SSD is based on a 12Gbps Serial Attached SCSI (SAS) interface for use in enterprise storage systems. The PM1633a has blazing fast performance, with random read and write speeds of up to 200,000 and 32,000 I/Os per second (IOPS), respectively. It delivers sequential read and write speeds of up to 1200MBps, the company said. A typical SATA SSD can peak at about 550MBps.”
7) Oculus Founder: Rift will come to Mac if Apple “ever releases a good computer”
This story was a hoot because it lets a big secret out of the bag: Apple computers may be nifty, they may be white, and they are expensive, but they are definitely not state of the art. Thanks to my friend Duncan Stewart for this item.
“It’s been almost a year now since Oculus announced that the consumer version of the Rift virtual reality headset would only support Windows PCs at launch—a turnaround from development kits that worked fine on Mac and Linux boxes. Now, according to Oculus co-founder Palmer Luckey, it “is up to Apple” to change that state of affairs. Specifically, “if they ever release a good computer, we will do it,” he told Shacknews recently.”
8) UK government launches initiative against online adblocking, compares it to piracy
For the most part politicians talking about technology is simply a demonstration of their appalling ignorance on the matter. Here is an excellent example where the “culture secretary” comes across as a barely verbal drooling idiot whose knowledge of the Internet comes mostly from briefing papers and not hands on use. Ads are increasingly distracting, disruptive, fraudulent, and often convey malware. The reason this is so is that the advertising industry disavows any responsibility for the garbage they are pushing onto consumers’ computers. The good news is that ad blockers are open source so there is nothing any government can do to help advertisers defraud consumers – try as they might.
“With the rise of users employing adblocking technology in the last 18 months, the conflict between online publishers and users has been mostly left as a problem for the market to resolve organically. However today the UK’s culture secretary John Whittingdale has announced that the British government intends to e ‘do something’ on the issue, describing the practice as a ‘modern day protection racket’, and comparing it to piracy.”
9) Coolest Cooler Not So Cool as Project Runs Short of Cash
Shocker! Yet another Kickstarter project has burned through its money and may not be able to deliver promised products to its “supporters”. As a general rule, giving money to start-up companies is a good way to lose it, and more so when you have no say in the outcome (one benefit of crowdfunding, for the start-up at least, is that you don’t sell ownership, just promises). There is virtually no oversight to crowdfunding and nobody, including the crowdfunding middleman, has any incentive to change that. The best thing to do is save your money or burn it: the outcome will be the same in most cases.
“In a backer update emailed to supporters yesterday, the second most funded Kickstarter campaign delivered some disturbing news. In brief, Coolest Cooler has ran out of cash. … Grepper explained that while the campaign raised well over $13 million (from 62,642 backers), after Kickstarter got their cut, transactional fees, development, people and operations dropped the cash down to $7.4 million. This amount is not sufficient to complete manufacturing and shipping to the thousands of backers who remain Cooler-less.”
10) Exclusive: the Raspberry Pi was turned down for funding by the UK government
The Raspberry Pi Model 3 was released this week to considerable excitement among the hobbyist and maker community. To those who are not aware, Raspberry Pi is a series of low cost (in the case of the Pi 3, US $35) which are powerful computers the size of a credit card. They tend to be in short supply because the company shifted assembly from China to the UK and have trouble keeping up with demand. (They initially could not find a UK company capable of producing the board). Long story short, the UK government declined to support the project – even though it now takes credit for the most successful computer ever designed in the UK.
“”It has left me very sceptical about any government attempt to do industrial support,” Upton continued, “because it is always going to have gatekeepers. And the gatekeepers are always going to have a bias towards things that already exist.” Despite a lack of pre-existing demand for the Pi, a market for it appeared quickly: “We sold 4.5 million Pi 1s in three years, and 3 million Pi 2s in one year.” The tiny, cheap computers have been an enormous hit with hobbyists and educators around the world and even off-world; two armour-clad Pi PCs are currently assisting Tim Peake in his experiments in space.”
11) New defence trade controls threaten academic freedom and the economy
In what seems to be a theme, if this article is to be believed the Australian government has made doing any form of R&D a high risk behavior. If true, and if the government is stupid enough to prosecute people under this law, academics will flee the country to a less hostile environment. Like Russia.
“The DTCA introduces a permit regime for any “intangible supply” (especially electronic communication) of new ideas in DSGL areas. Researchers and innovators who communicate any new idea overseas without permission face ten years in prison and A$400,000 fines. In other words, if you deal in new ideas in any of these areas, and you do not apply for a DoD permit, you are putting yourself at serious legal risk. The DSGL is clearly difficult to maintain. For example, it refers to integrated circuits running at 40 MHz or above, which were state of the art around 25 years ago. Recently Daniel Mathews pointed out that the DSGL controls encryption using only 512 bits, also long obsolete.”
12) AAA: 75% Of Drivers Say They Wouldn’t Feel Safe In An Autonomous Vehicle
One always has to take survey results with a large grain of salt. I suspect AAA members are more representative of an older demographic, many of whom will be dead before a commercially available self-driving car hits the road. Ironically, older drivers will probably benefit most from the technology because it will extend their ability to drive for quite a few years.
“A future where we’re all tooling around in self-driving cars with our feet up on the dash, hands behind the head, relaxing at the wheel is still far away. But while technology companies and car manufacturers alike are rushing to test their own autonomous vehicles, the average American driver doesn’t feel quite comfortable with the idea of riding in a driverless car just yet, according to the results of a recent AAA survey. AAA’s survey of 1,800 drivers found that 75% of drivers say they wouldn’t feel safe in a driverless vehicle. But it’s worth noting that 60% said they would like access to some kind of self-driving feature, like self-parking, lane departure warnings, adaptive cruise control, and other options the next time they buy a new car.”
13) No coal: Solar, wind, gas dominate new US generating capacity in 2016
You have to credit the alternative energy industry because they are able to publish things like this. It is not exactly false, but it’s exactly true either. For example “new generating capacity” means different things for solar or wind than gas. If you install 1MW of solar power, you are maybe going to realize maybe 20% of that. In contrast, a 1MW gas turbine is going to produce 1MW, except during occasional repair cycles. After all the subsidies and other incentives (like being able to sell all the power you want at a multiple of retail price) solar and wind is responsible for less than 10% of power production https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1. The greatest impact on CO2 emissions has happened from the decline of coal and rise of natural gas, due mainly to the low cost of natural gas thanks to technology like fracking.
“Part of the boom in renewables came because the tax incentives for their installation were in danger of expiring, so utilities rushed to get projects through the pipeline ahead of the end of the year. (The incentives have since been extended in the most recent budget deal.) This led to a phenomenal boom in solar, with 9.5GW of capacity expected to come online—more than the past three years combined. Last year saw 8.4GW of distributed solar installed in the US (compared to 3.1GW of utility scale); given the continued slide in solar panel prices, that figure is likely to grow as well. Thus, the actual solar capacity installed next year may be double the EIA’s estimates.”
14) Forty Big Banks Test Blockchain-Based Bond Trading System
Blockchain is the underlying technology of Bitcoin, but you can have Blockchain without Bitcoin and many different types of Blockchain are possible. The hope among banks is to ensure secure transactions with rapid clearing, which could significantly reduce their costs.
“Forty of the world’s biggest banks, including HSBC and Citi, have tested a system for trading fixed income using the technology that underpins bitcoin, fintech company R3 CEV said on Thursday. The banks are part of a consortium of 42 major lenders, brought together last year by New York-based R3 CEV to work on ways blockchain technology could be used in financial markets – the first time so many have collaborated on using such systems. A blockchain is a huge, decentralised ledger of transactions that can be used to secure and validate any exchange of data, including real assets, such as commodities or currencies. Bitcoin’s blockchain was the first, but others have since been built that offer additional features and can be programmed. That means the technology can enable so-called smart contracts: agreements that are automatically executed when pre-determined conditions are met.”
15) Bitcoin’s nightmare scenario has come to pass
There are a variety of explanations within the Bitcoin community for why this is happening, including a cabal of Bitcoin miners who have taken control of the system. Either way, an unregulated financial system such as Bitcoin is bound to collapse.
“Over the last year and a half a number of prominent voices in the Bitcoin community have been warning that the system needed to make fundamental changes to its core software code to avoid being overwhelmed by the continued growth of Bitcoin transactions. There was strong disagreement within the community, however, about how to solve this problem, or if the problem would ever materialize. This week the dire predictions came to pass, as the network reached its capacity, causing transactions around the world to be massively delayed, and in some cases to fail completely. The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out.”
16) IBM sues Groupon over 1990s patents related to Prodigy
As IBM struggles for relevancy they have devolved into a patent troll. It is worth noting that, once upon a time, IBM actually produced leading edge technologies. Now it seems it wants to shake down companies with flimsy “do it with a computer” type patents.
“IBM is pushing big Internet companies to pay patent licensing fees in part because IBM invented the Prodigy service, a precursor to the modern Web. Yesterday, Big Blue filed a lawsuit (PDF) against Groupon, saying the company has infringed four IBM patents, including patents 5,796,967 and 7,072,849. Each of those relates to the Prodigy service. IBM inventors working on Prodigy “developed novel methods for presenting applications and advertisements,” and “the technological innovations embodied in these patents are fundamental to the efficient communication of Internet content,” according to the company. The Prodigy patents were filed in 1993 and 1996, but they have “priority dates” stretching back to 1988. That’s because they’re based on “divisional” and “continuation” patent applications, which were abandoned but first filed in that year.”
17) With a bullet to the head from Samsung, 3D TV is now deader than ever
3D TV was a big deal when it came out but the technology is rarely mentioned nowadays as manufacturers are focused on things like 4K (higher resolution). Samsung is a major TV manufacturer and, as the article suggests, while not all vendors have discontinued 3D, the industry has moved on. Now if we could only get them to kill 3D movies …
“If you’re among the few who actually don 3D glasses to watch movies at home, you’re not gonna like this. If you’re everyone else, you probably couldn’t care less. 3D, once hailed as a breakthrough new feature on TVs and propelled into mainstream consciousness by the blue aliens of “Avatar” and the efforts of ESPN and DirecTV, has been waning in popularity for years. Now it has absorbed that most telling of deathblows from the biggest gun in the TV hardware business. A source at Samsung, who asked to remain anonymous, has confirmed to CNET that none of its 2016 US TV models will support 3D.”
18) Should you fear your USB cable?
When I designed PCs all sorts of tests were done to make sure it was nearly impossible to destroy your PC. As the article suggests it is the PC’s responsibility not to be damaged by a bad cable no matter how bad the cable. While you don’t want to buy a bad cable, if your PC smokes because of a bad cable it speaks more to the quality of the PC than anything else.
“Aren’t laptops designed to protect against damage like this? Dell says their laptops are. Jason Lee, the company’s lead engineer on XPS notebooks, says that not only are Dell’s USB ports protected against voltage drops and short circuits, but they will also automatically restart themselves as soon as they cool down. No need to restart your computer. And HP’s Atkinson says such protections aren’t just limited to Dell; they’re standard practice for the computer industry. “With everything I’ve ever seen — and we’ve been shipping USB-A since 1997 — if there’s a short circuit, the port just shuts off. That’s existed forever.” Atkinson points out that even with previous versions of USB, a cable could get damaged, and the industry adopted overcurrent and overvoltage protection circuits to keep the computers safe. Today, “If you threw molten metal into the connector itself, it’d essentially just shut down,” he says.”
19) Third of global firms now hit by cybercrime: Survey
Surveys like this are often marketing collateral for sellers of security products but it is worth a read. Hacks are getting more sophisticated and damages are increasingly financial as various fraudulent schemes are costing companies and their customers lots of money.
“Economic crime is on the rise, with cybercrime affecting almost a third of global businesses, according to the latest survey by audit firm PwC. In the last two years, 36 percent of organizations surveyed experienced economic crime, the Global Economic Crime Survey revealed on Thursday. The most common forms of economic crime were asset misappropriation, cybercrime, and bribery or corruption. The rate of economic crime rose in Africa, Western Europe and the Middle East, while 14 percent of total respondents said they had lost more than $1 million as a result of crime in the last two years.”
20) Disruptive advanced nuclear design is in pre-licensing design review
I figure that 100 years from now historians will puzzle over why nuclear power wasn’t used more broadly. After all, failures in antique designs govern current policies which make it extremely time consuming and expensive to commission a new reactor. Modern reactor designs are inherently safe, meaning they shut themselves down in the event of failure. The major concerns are disposal of waste and someone getting access to nuclear materials. I have no idea whether this design is as good as it says it is, but I doubt that matters. People prefer the fantasy of solar power over safe, cost effective, nuclear.
“Terrestrial Energy is developing a next-generation nuclear reactor based on its Integral Molten Salt Reactor (IMSR) technology. The IMSR represents true innovation in safety, cost and functionality. It will offer safe and reliable power solutions for electricity production, both on- and off-grid, and also energy for industrial process heat generation. These together extend the applicability of nuclear energy far beyond its current footprint. With this profile, the IMSR is capable of driving the rapid global decarbonization of the primary energy system by displacing fossil fuel combustion across a broad front. It is complementary to renewable power sources and ideal for distributed power systems on existing grids. Using an innovative design and proven Molten Salt Reactor technology, the IMSR can be brought to global markets in the 2020s. Terrestrial Energy is currently developing its IMSR commercial demonstration power plant for deployment in Canada.”