... I was looking for clothes on a major retailer's web site. Scrolling down, I see a bunch of "sponsored links" at the bottom. For other stores.
For the same items I'm looking for.
For less.
Huh?
Tuesday, May 7, 2013
Thursday, May 2, 2013
A piece of history
Saw this on my g+ feed: CERN has re-posted the first web page ever (or at least the first one they put up for public consumption), 20 years after the fact. I'm not sure if it's under the original URL, but http://info.cern.ch/hypertext/WWW/TheProject.html sure looks like it could be. Anyone remember "hypertext"?
Like a lot of efforts in the early stages, much of the content is about the project itself. For example, there's a "Line Mode" browser:
In any case, it says something that CERN can bring back the original web page from the archives twenty years later, in all its textual glory, and it still works, and people really can see it, world-wide.
Like a lot of efforts in the early stages, much of the content is about the project itself. For example, there's a "Line Mode" browser:
The LineMode Browser is suitable for use on dumb terminals, requiring no control sequences except for carriage return and line feed."Dumb terminals"? "Control sequences"? "Carriage return"? What language are they speaking? (Of course, Lynx is still in business.)
In any case, it says something that CERN can bring back the original web page from the archives twenty years later, in all its textual glory, and it still works, and people really can see it, world-wide.
Sunday, April 14, 2013
Vires in numeris, or salsipuedes?
After the last few days, it's pretty clear there are some significant obstacles to Bitcoin becoming a widely-adopted currency. Recapping a bit:
(Vires in numeris, Latin for strength in numbers, is Bitcoin's semiofficial motto. Salsipuedes is informal Spanish for "Get out if you can.")
- Its exchange rate against reserve currencies is extremely volatile.
- It is fairly illiquid. I've watched several Bitcoin exchanges now. I've seen significantly slow servers, extremely thin order books, huge spreads and significant price differences across exchanges (arbitrage, anyone?). This is simply not a mature market by any stretch.
- There does not appear to be very much of a pure Bitcoin economy. For the most part, a price quoted in Bitcoin is actually a price in some reserve currency converted at the going rate, and quite likely the seller is going to turn around and convert the proceeds to a reserve currency at the next opportunity.
- While the Bitcoin protocol appears reasonably secure, there are plenty of other ways to lose Bitcoins, and once they're gone, they're gone.
- While Bitcoin aims to be a decentralized currency free from the influence of banks and governments, most Bitcoins are held by one of a small number of accounts.
- Right now The Man does not seem particularly interested in trying to control Bitcoin use. That could change.
- Bitcoin's deflationary model, under which the money supply will never be more than about twice what it is now, has drawn considerable fire from economists.
- Bitcoin is far from the first attempt at establishing a private currency, or an internet currency (anyone remember Flooze, or Beenz?). It may well be the first, or one of the first, with its particular technical characteristics, but it's not clear at all that that buys anything. Private currencies as a whole do not have a great track record.
And yet ...
A currency works if enough people want it to work. If a solid cadre of core Bitcoin users arises (or has already arisen), doing its business entirely or almost entirely in Bitcoin, then (as the Economist's Free Exchange blogger points out) they would not need to care much how many dollars a Bitcoin was or wasn't worth. In the ideal case, it becomes more and more convenient for someone who accepts Bitcoin in payment to turn around and use it directly for something else of value, rather than exchanging it, the economy grows and we're off.
The acid test is whether there can be stable Bitcoin prices, that is, whether someone offering an item for X Bitcoins today will be offering the same item for X Bitcoins tomorrow, and roughly X next week, and next month. This would allow people to save or invest Bitcoin like an ordinary currency. This probably still requires stable exchange rates with reserve currencies. If Bitcoin appreciates, that X Bitcoin price starts to look expensive and buyers will be strongly tempted to buy from someone who takes dollars or Euros. Likewise, if Bitcoin depreciates, sellers will be strongly tempted to raise the Bitcoin price, lest outsiders take advantage of the low prices.
To make all this work, we need some combination of
A currency works if enough people want it to work. If a solid cadre of core Bitcoin users arises (or has already arisen), doing its business entirely or almost entirely in Bitcoin, then (as the Economist's Free Exchange blogger points out) they would not need to care much how many dollars a Bitcoin was or wasn't worth. In the ideal case, it becomes more and more convenient for someone who accepts Bitcoin in payment to turn around and use it directly for something else of value, rather than exchanging it, the economy grows and we're off.
The acid test is whether there can be stable Bitcoin prices, that is, whether someone offering an item for X Bitcoins today will be offering the same item for X Bitcoins tomorrow, and roughly X next week, and next month. This would allow people to save or invest Bitcoin like an ordinary currency. This probably still requires stable exchange rates with reserve currencies. If Bitcoin appreciates, that X Bitcoin price starts to look expensive and buyers will be strongly tempted to buy from someone who takes dollars or Euros. Likewise, if Bitcoin depreciates, sellers will be strongly tempted to raise the Bitcoin price, lest outsiders take advantage of the low prices.
To make all this work, we need some combination of
- Stable exchange rates with reserve currencies
- Significant ecosystems of items available only in Bitcoin
- Enough people with a strong determination to use Bitcoin no matter what, regardless of the financial consequences
My feeling, personally, is that the odds are stacked pretty heavily against this, but I've been wrong many times before.
(Vires in numeris, Latin for strength in numbers, is Bitcoin's semiofficial motto. Salsipuedes is informal Spanish for "Get out if you can.")
Saturday, April 13, 2013
A note on Bitcoin foreign exchange
Bitcoin has been extremely volatile of late. That doesn't speak well for its potential as a currency, but the Economist's Free Exchange blogger makes a good point: Volatility is only a problem to the extent you have to exchange with other currencies. If the virtual nation of Bitcoinia can transact its business in pure Bitcoin, then it matters much less how many dollars people think a Bitcoin is worth. Even so, the examples of volatility cited in that article, as much as 20% in a matter of weeks, are far, far below what Bitcoin has experienced over the past month or so.
Right now we don't seem very close to such a scenario. There don't seem to be a lot of places where goods or services are priced purely in Bitcoin. Rather, the real price is in some reserve currency and the Bitcoin price is based on the going rate. For at least some period of time, transacting in Bitcoin will generally involve converting to and from reserve currencies. Bitcoin foreign exchange, if you will.
That's a bit of a problem. To use one of the several existing Bitcoin exchanges, you have to provide an account in conventional currency, subject to conventional banking regulations and so forth, which is pretty much the opposite of what Bitcoin is supposed to accomplish. Besides that, having a single point of failure that can bog down or fall over at any point (and is more likely to just when the need for it is most urgent), seems silly. Finally, I've seen complaints that exchanges can tend to charge fairly heavy transaction or withdrawal fees, which Bitcoin is supposed to eliminate. Can we do better?
It shouldn't be a problem to track bids, offers and trades in a distributed manner. Bitcoin already does much the same with its blockchain, and there are various flavors of distributed hash table running around. I'm sure someone could come up with something.
The bigger problem, I think, is escrow, since this is all supposed to be pseudonymous. Suppose I call myself Mr. Blue and I own a Bitcoin wallet. Ms. Green is willing to give me $X for one of my Bitcoins. We can both make sure the world knows this without going through a central exchange.
But how do we actually settle the trade? I need to give Ms. Green one Bitcoin. Bitcoin makes that easy. I initiate a transfer and few minutes to an hour later the Bitcoin world agrees that that Bitcoin is hers (or, more precisely, is now in the wallet whose identity she gave). Ms. Green then disappears and I'm one Bitcoin poorer.
To make this work, Ms. Green needs to put $X in a safe place. At that point, the dollars are no longer hers, but neither are they mine. When the Bitcoin transfer settles, and only then, I get access to the dollars and transfer them to my account.
What we need, then, is is a way of moving currency from one conventional bank account to another, securely, anonymously and cheaply, without having to trust any particular third party.
I don't know if that's technically feasible or not, but if it is, it's not clear why we would need a virtual currency.
Right now we don't seem very close to such a scenario. There don't seem to be a lot of places where goods or services are priced purely in Bitcoin. Rather, the real price is in some reserve currency and the Bitcoin price is based on the going rate. For at least some period of time, transacting in Bitcoin will generally involve converting to and from reserve currencies. Bitcoin foreign exchange, if you will.
That's a bit of a problem. To use one of the several existing Bitcoin exchanges, you have to provide an account in conventional currency, subject to conventional banking regulations and so forth, which is pretty much the opposite of what Bitcoin is supposed to accomplish. Besides that, having a single point of failure that can bog down or fall over at any point (and is more likely to just when the need for it is most urgent), seems silly. Finally, I've seen complaints that exchanges can tend to charge fairly heavy transaction or withdrawal fees, which Bitcoin is supposed to eliminate. Can we do better?
It shouldn't be a problem to track bids, offers and trades in a distributed manner. Bitcoin already does much the same with its blockchain, and there are various flavors of distributed hash table running around. I'm sure someone could come up with something.
The bigger problem, I think, is escrow, since this is all supposed to be pseudonymous. Suppose I call myself Mr. Blue and I own a Bitcoin wallet. Ms. Green is willing to give me $X for one of my Bitcoins. We can both make sure the world knows this without going through a central exchange.
But how do we actually settle the trade? I need to give Ms. Green one Bitcoin. Bitcoin makes that easy. I initiate a transfer and few minutes to an hour later the Bitcoin world agrees that that Bitcoin is hers (or, more precisely, is now in the wallet whose identity she gave). Ms. Green then disappears and I'm one Bitcoin poorer.
To make this work, Ms. Green needs to put $X in a safe place. At that point, the dollars are no longer hers, but neither are they mine. When the Bitcoin transfer settles, and only then, I get access to the dollars and transfer them to my account.
What we need, then, is is a way of moving currency from one conventional bank account to another, securely, anonymously and cheaply, without having to trust any particular third party.
I don't know if that's technically feasible or not, but if it is, it's not clear why we would need a virtual currency.
Thursday, April 11, 2013
Dollars accepted here
Having grown tired of waiting for MtGox to update, I had a look at Bitfloor [which folded not long after I wrote this]. Its order book seems to work considerably better. From that, it looks like the Bitcoin market is moving again, which does not come as a great surprise.
Then I had a look at Bitcoin Store, where you can use your Bitcoin to buy goodies like digital cameras, memory and other such. Prices are quoted in dollars and Bitcoin. The Bitcoin price is simply the dollar price converted at the going rate from MtGox. That is, if Bitcoin moves against the dollar, it's the Bitcoin price that changes. The dollar price stays the same.
While it's perfectly legitimate for Bitcoin Store to say that it's accepting Bitcoin, and it is taking on some risk in the doing so, if it's pricing in dollars, it's effectively accepting dollars.
Then I had a look at Bitcoin Store, where you can use your Bitcoin to buy goodies like digital cameras, memory and other such. Prices are quoted in dollars and Bitcoin. The Bitcoin price is simply the dollar price converted at the going rate from MtGox. That is, if Bitcoin moves against the dollar, it's the Bitcoin price that changes. The dollar price stays the same.
While it's perfectly legitimate for Bitcoin Store to say that it's accepting Bitcoin, and it is taking on some risk in the doing so, if it's pricing in dollars, it's effectively accepting dollars.
Bitcoin -- aftermath
At this writing, Bitcoin's price appears to have stabilized to around $170, but realistically who knows what will happen next? I spent entirely too much time today watching the action, or at least what of it I could watch. Bitcoincharts.com, which gathers market data from the various exchanges, was down for much of the day, apparently due to overload. MtGox, the major exchange for Bitcoin, was running slow all day and printing all over the place. $120 one minute, $180 the next. It was hard to tell what was going on, which must have been extremely frustrating if you wanted to buy or sell (Disclosure: I have no position in Bitcoin, nor do I plan to take one).
The price chart, which is like none I've ever seen, sheds a little light on what was going on. Up to about noon (this and all times UTC) on the 10th, BTC is continuing its steady climb. It then starts to break back downwards. This looks like a normal correction for a while. Dropping back from 260 to 240 or 220 after a tremendous run-up doesn't seem unreasonable. When the price drops below 210, though, things start to go haywire.
BTC starts to oscillate rapidly between a steadily dropping floor price and a series of higher levels, first 210, then 200, 180 and eventually 150. One possibility is that someone is trying to support it by putting out a bid of, say, 200, but when that order is filled, the next highest bid is considerably lower (and dropping) and it fills before the next bid of 200 goes out. After a while of this, a bid of 200 starts to look too expensive to maintain, so the bid goes down to 180, etc.
One thing to keep in mind is that volume here is quite thin. Even when MtGox got back on its feet, trades were on the order of a dozen or so Bitcoin, and sometimes as small as a single Bitcoin (or smaller; Bitcoins can be subdivided very finely). It's not out of the question that some of the higher-level trades were someone putting out a high asking price from one account and then filling it from a second account whenever their sell order was the only one showing. I'm not claiming this is what happened, but such things can happen in thin markets.
Overall volume for the 10th was around 200,000, or about one Bitcoin changing hands every second. This volume is about 2% of the total pool of 10 million Bitcoin currently in circulation (but bear in mind the same Bitcoin can change hands multiple times in a day). This looks to be about three times average volume. Turning over on the order of a percent on an average day is not unusual. It's the total float that's smallish. If Bitcoin were a stock, it would be considered small-cap (it was briefly into mid-cap territory at today's peak).
Back to the chart: Between about 6 and 8 pm, it would be fair to say that the price of Bitcoin was not well defined. I couldn't bring up the order book on MtGox, but when there's that much fluctuation in a price, with the trade price jumping multiple percentage points from trade to trade, the bid/ask spread is effectively quite large. Large spreads mean that a market maker should be able to make good money by buying at the low end and selling at the high end. Again, it's not clear that anyone actually was doing that, but the opportunity was there on paper.
What is clear is that if you were trying to trade Bitcoin during that interval, there was a sizable risk that you would end up with a price far off of what you were aiming for. This is a classic hallmark of a market crash, which, in any reasonable analysis, is what we had today. Not a healthy correction. A full-on crash. There's not really anything else you can legitimately call a 50%+ price drop in a few hours with a huge spread for most of the duration.
After about 8 the spread narrowed down to more normal levels. When the price crossed back above 150, it settled into a longer-scale damped oscillation (which appears actually to have started around the time the price dropped below 210 and the short-scale fluctuations began to grow). Again, this is not something that one usually sees in heavily traded instruments, but it seems to have died down now.
I should mention that MtGox claims that its market has been manipulated by DDOS attacks, in particular that hackers have been swamping the exchange so that legitimate traders can't get through, causing said traders to panic and sell at low prices. The hackers then back off, goes the theory, to let the price recover so they can sell high.
This seems a little implausible to me. Even if it's true, it's not particularly reassuring. I would not rest easily if I knew that a small group of hackers could cause my bank account to lose, say, 10% of its value whenever they liked. It seems more likely, though, that under circumstances like today's the exchange will get much more web traffic in general, since people want to see what's going on, and at the same time the spread will widen because the price is moving quickly and the market is small and not particularly liquid. But I don't have their server logs. It's quite possible that Bitcoin is trading erratically for perfectly good financial reasons, and MtGox is getting DDOSed.
[Update: MtGox is now saying that, while they're nearly always under DDOS attack, today's problems were the result of there being more legitimate traders than the system can handle. That seems more plausible. It's not clear how many trades MtGox can handle per second. As far as I can tell it's not a large number, but I can imagine any number of reasons the system might melt down anyway.]
[Another note: It's also possible that some of the funny-looking price action is due to lag in MtGox's servers. If the price is dropping steadily but the ticker is printing old trades interleaved with more recent ones that might explain some of the small-scale jitter in the chart. I can't quite come up with a scenario of that sort that would explain the particular pattern on the chart, but I find the general idea that the technical characteristics of the servers can have their own effects on the reported price action pretty plausible. MtGox seems to be saying basically that.]
[And finally (I hope): Watching the order book on Bitfloor, it's pretty clear what was happening. Someone (or ones) was sitting on the ask at (say) 120, either trying to support the price, or just trying to get out at the best price they could. Meanwhile, the bid kept dropping. Most of the time, someone would go ahead and sell at the low bid price. Every so often, someone would go ahead and take the higher price, either deliberately or by mistake. When that dried up, the ask moved down. That looks adequate to explain the short-term fluctuations without appealing to technical glitches. The sinusoidal movement towards 160 or so is a different matter.]
So far, I've been describing price action as for any random stock or commodity, but let's consider what this means for Bitcoin as a currency. Suppose I were to offer you a Bitcoin certificate of deposit. You give me 100 Bitcoin today, and 90 days from now I give you back 101 Bitcoin. That's just over 4% annual return, compounded, not too bad these days. Personally, I wouldn't touch such a thing with a 10-foot pole. I have no idea what 100 Bitcoin will be worth 90 days from now. Maybe $100, maybe $100,000. Who knows?
That's a problem for a currency. Stability is good for a currency. Falling by half in short order is not, obviously, but neither is doubling in short order. Why should I pay for anything in Bitcoin if everyone believes that Bitcoin is going to be worth twice as much in a week? Bitcoin's price was a problem on the way up, not just on the way down. Deflation -- which is built in to Bitcoin's fundamental model -- is every bit as troublesome as inflation, and in some ways more so.
Neither inflation nor deflation, though, is nearly as big a problem as volatility. When the British pound dropped from 2.8 Deutschmarks to 2.4, about a 15% drop, the Conservative party's poll numbers plummeted and did not recover for over a decade. Though there were other factors, of course, "Black Wednesday", when the government's efforts to prop up the pound failed, is widely considered to be one of the major ones.
By contrast, Bitcoin has settled down to the point where it has been bouncing back and forth in a window of 150-180, about 16%, and still a third or more off its high, while I've been writing this post.
Bitcoin may yet become a stable currency. The boom and bust of the Dutch tulip mania wasn't the end of tulip farming as a business. Today's gyrations may not be the end of Bitcoin as a unit of exchange, but if Bitcoin wants to become a serious currency, as opposed to a means of speculation, the recent run-up and general volatility are not how it will happen.
The price chart, which is like none I've ever seen, sheds a little light on what was going on. Up to about noon (this and all times UTC) on the 10th, BTC is continuing its steady climb. It then starts to break back downwards. This looks like a normal correction for a while. Dropping back from 260 to 240 or 220 after a tremendous run-up doesn't seem unreasonable. When the price drops below 210, though, things start to go haywire.
BTC starts to oscillate rapidly between a steadily dropping floor price and a series of higher levels, first 210, then 200, 180 and eventually 150. One possibility is that someone is trying to support it by putting out a bid of, say, 200, but when that order is filled, the next highest bid is considerably lower (and dropping) and it fills before the next bid of 200 goes out. After a while of this, a bid of 200 starts to look too expensive to maintain, so the bid goes down to 180, etc.
One thing to keep in mind is that volume here is quite thin. Even when MtGox got back on its feet, trades were on the order of a dozen or so Bitcoin, and sometimes as small as a single Bitcoin (or smaller; Bitcoins can be subdivided very finely). It's not out of the question that some of the higher-level trades were someone putting out a high asking price from one account and then filling it from a second account whenever their sell order was the only one showing. I'm not claiming this is what happened, but such things can happen in thin markets.
Overall volume for the 10th was around 200,000, or about one Bitcoin changing hands every second. This volume is about 2% of the total pool of 10 million Bitcoin currently in circulation (but bear in mind the same Bitcoin can change hands multiple times in a day). This looks to be about three times average volume. Turning over on the order of a percent on an average day is not unusual. It's the total float that's smallish. If Bitcoin were a stock, it would be considered small-cap (it was briefly into mid-cap territory at today's peak).
Back to the chart: Between about 6 and 8 pm, it would be fair to say that the price of Bitcoin was not well defined. I couldn't bring up the order book on MtGox, but when there's that much fluctuation in a price, with the trade price jumping multiple percentage points from trade to trade, the bid/ask spread is effectively quite large. Large spreads mean that a market maker should be able to make good money by buying at the low end and selling at the high end. Again, it's not clear that anyone actually was doing that, but the opportunity was there on paper.
What is clear is that if you were trying to trade Bitcoin during that interval, there was a sizable risk that you would end up with a price far off of what you were aiming for. This is a classic hallmark of a market crash, which, in any reasonable analysis, is what we had today. Not a healthy correction. A full-on crash. There's not really anything else you can legitimately call a 50%+ price drop in a few hours with a huge spread for most of the duration.
After about 8 the spread narrowed down to more normal levels. When the price crossed back above 150, it settled into a longer-scale damped oscillation (which appears actually to have started around the time the price dropped below 210 and the short-scale fluctuations began to grow). Again, this is not something that one usually sees in heavily traded instruments, but it seems to have died down now.
I should mention that MtGox claims that its market has been manipulated by DDOS attacks, in particular that hackers have been swamping the exchange so that legitimate traders can't get through, causing said traders to panic and sell at low prices. The hackers then back off, goes the theory, to let the price recover so they can sell high.
This seems a little implausible to me. Even if it's true, it's not particularly reassuring. I would not rest easily if I knew that a small group of hackers could cause my bank account to lose, say, 10% of its value whenever they liked. It seems more likely, though, that under circumstances like today's the exchange will get much more web traffic in general, since people want to see what's going on, and at the same time the spread will widen because the price is moving quickly and the market is small and not particularly liquid. But I don't have their server logs. It's quite possible that Bitcoin is trading erratically for perfectly good financial reasons, and MtGox is getting DDOSed.
[Update: MtGox is now saying that, while they're nearly always under DDOS attack, today's problems were the result of there being more legitimate traders than the system can handle. That seems more plausible. It's not clear how many trades MtGox can handle per second. As far as I can tell it's not a large number, but I can imagine any number of reasons the system might melt down anyway.]
[Another note: It's also possible that some of the funny-looking price action is due to lag in MtGox's servers. If the price is dropping steadily but the ticker is printing old trades interleaved with more recent ones that might explain some of the small-scale jitter in the chart. I can't quite come up with a scenario of that sort that would explain the particular pattern on the chart, but I find the general idea that the technical characteristics of the servers can have their own effects on the reported price action pretty plausible. MtGox seems to be saying basically that.]
[And finally (I hope): Watching the order book on Bitfloor, it's pretty clear what was happening. Someone (or ones) was sitting on the ask at (say) 120, either trying to support the price, or just trying to get out at the best price they could. Meanwhile, the bid kept dropping. Most of the time, someone would go ahead and sell at the low bid price. Every so often, someone would go ahead and take the higher price, either deliberately or by mistake. When that dried up, the ask moved down. That looks adequate to explain the short-term fluctuations without appealing to technical glitches. The sinusoidal movement towards 160 or so is a different matter.]
So far, I've been describing price action as for any random stock or commodity, but let's consider what this means for Bitcoin as a currency. Suppose I were to offer you a Bitcoin certificate of deposit. You give me 100 Bitcoin today, and 90 days from now I give you back 101 Bitcoin. That's just over 4% annual return, compounded, not too bad these days. Personally, I wouldn't touch such a thing with a 10-foot pole. I have no idea what 100 Bitcoin will be worth 90 days from now. Maybe $100, maybe $100,000. Who knows?
That's a problem for a currency. Stability is good for a currency. Falling by half in short order is not, obviously, but neither is doubling in short order. Why should I pay for anything in Bitcoin if everyone believes that Bitcoin is going to be worth twice as much in a week? Bitcoin's price was a problem on the way up, not just on the way down. Deflation -- which is built in to Bitcoin's fundamental model -- is every bit as troublesome as inflation, and in some ways more so.
Neither inflation nor deflation, though, is nearly as big a problem as volatility. When the British pound dropped from 2.8 Deutschmarks to 2.4, about a 15% drop, the Conservative party's poll numbers plummeted and did not recover for over a decade. Though there were other factors, of course, "Black Wednesday", when the government's efforts to prop up the pound failed, is widely considered to be one of the major ones.
By contrast, Bitcoin has settled down to the point where it has been bouncing back and forth in a window of 150-180, about 16%, and still a third or more off its high, while I've been writing this post.
Bitcoin may yet become a stable currency. The boom and bust of the Dutch tulip mania wasn't the end of tulip farming as a business. Today's gyrations may not be the end of Bitcoin as a unit of exchange, but if Bitcoin wants to become a serious currency, as opposed to a means of speculation, the recent run-up and general volatility are not how it will happen.
Monday, April 8, 2013
Two more comments on wild and wooly markets
- Intrade and Bitcoin are two entirely different markets, with little in common beyond operating on the web and more or less separately from the more conventional financial markets. I don't mean to imply anything more than that by mentioning them in the same post.
- Much of the recent excitement about Bitcoin has been due to its value increasing sharply lately. Its value, that is, in dollars. Just sayin'.
Saturday, April 6, 2013
Markets on the wild and wooly internet
Two data points, which I'm not going to try to analyze in detail just yet:
- The market for Bitcoin, which proposes to be an online, anonymous currency, has been on a tear lately, doubling in the last month (at this writing), more than quintupling in the last two and increasing tenfold in the last four months. Good news if you bought or received Bitcoin four months ago, scary news if you bought yesterday. The word "bubble" has been cropping up more and more lately, along with the usual explanations why it's not a bubble.
- Intrade, the online betting market which attempts to use the wisdom of crowds to predict events like elections and scientific discoveries, is closed while it tries to sort out some kind of financial irregularity and return to solvency. The statements on the company's website are optimistic, and they may be right, but such things in general don't have a good record.
The whole point of markets like Bitcoin and Intrade is that they are not (as) subject to the regulations and restrictions of the conventional markets. But that cuts both ways.
Thursday, March 28, 2013
The infinite scrollbar
It's somewhat annoying when sites decide to show, say, the first 20 items of a list on a web page and to get more you have to find the "next" button. It's nicer to bring up a list you can scroll through. As you scroll, the size and location of the scroll bar will tell you how much you've got left.
Except when it won't. Some sites -- particularly social sites, it seems -- will give you a scrolling list, but when you get near the bottom, they hit the server and bring in more items. Suddenly your scroll bar gets smaller and the space below it grows. After a while you realize that no matter how much farther you scroll, there will still be some left. But by then you're hooked. Just one more page ...
Technically, it's not a bad call. Browsers can handle pretty big scrolling lists these days, but they probably wouldn't deal well with the full list of, say, hundreds of thousands or millions. Bringing items in on demand is a nice compromise. Chances are the human doing the scrolling will grow bored long before the browser's memory limits are seriously tested, and if not it can always throw out items from the top that are now well out of sight. Score one for AJAX.
Psychologically it's pretty clever, too. The nice large scrollbar at the beginning says "Come on in! Just a little bit to look at here. Won't take too long." As noted, by the time you see what's really going on, you're drawn in.
Overall, I'm not sure I have a strong feeling about this style of widget. I guess the convenience outweighs the subtle feeling I've been played. But not by a lot.
Except when it won't. Some sites -- particularly social sites, it seems -- will give you a scrolling list, but when you get near the bottom, they hit the server and bring in more items. Suddenly your scroll bar gets smaller and the space below it grows. After a while you realize that no matter how much farther you scroll, there will still be some left. But by then you're hooked. Just one more page ...
Technically, it's not a bad call. Browsers can handle pretty big scrolling lists these days, but they probably wouldn't deal well with the full list of, say, hundreds of thousands or millions. Bringing items in on demand is a nice compromise. Chances are the human doing the scrolling will grow bored long before the browser's memory limits are seriously tested, and if not it can always throw out items from the top that are now well out of sight. Score one for AJAX.
Psychologically it's pretty clever, too. The nice large scrollbar at the beginning says "Come on in! Just a little bit to look at here. Won't take too long." As noted, by the time you see what's really going on, you're drawn in.
Overall, I'm not sure I have a strong feeling about this style of widget. I guess the convenience outweighs the subtle feeling I've been played. But not by a lot.
Film studios ... not dead yet.
A few years ago I ran a series of posts (starting with this one) questioning a 60 Minutes piece on online video piracy. My take was that 60 Minutes was parroting the MPAA's stand on piracy at the time without critically examining it as one might expect from an investigative news program.
I stand by that.
In one segment, director Steven Soderbergh doubted whether films like The Matrix could be made any more, since piracy was putting the studios out of business and keeping them from financing original works from outsiders. At the time of that interview, Avatar was on its way to grossing an all-time record 2.8 billion dollars on a budget of $237 million. Granted, James Cameron is not exactly a hollywood outsider (more on that below), but if the studios aren't financing new faces, it doesn't appear to be for lack of money. Six of the top ten highest-grossing films have been made since that interview, and ten of the top twenty. Comcast (owners of Universal) has nearly tripled its stock price. Disney, Time-Warner and Viacom (owner of Paramount) have approximately doubled.
Overal box-office grosses have been basically flat since that interview, which would indeed be bad news for studios, if that were the only way that they made money. But it isn't. Video on demand and DVD/Blu-ray releases, with much lower overhead than the box office, have been a standard part of movie releases since before that interview was done.
Home video numbers seem harder to come by than box office grosses, but there's no doubt that, however much illegal copying may be going on, there's plenty of legal rental going on as well. It doesn't look like the ability to copy bits online is hurting the film industry any more than the ability to copy them on videotape did.
In fact, the folks at South by Southwest seem to think that video on demand is actually helping get original films from outsiders made and seen. The title of the panel, How I Learned To Stop Worrying and Love VOD, is itself instructive.
Nor do I think anyone seriously sees this as a triumph of the brave heroes at the MPAA against the evil pirates. Rather, the industry has adjusted to the new technology and figured out how to make money off of it. Which is their job.
I am not my IP address
It appears that the major ISPs have decided to launch an "education campaign" about copyright violation. If their filters determine someone using your IP address is uploading copyrighted content, you will get a series of increasingly firm warnings telling you that you may be breaking the law. And, as some have pointed out, to let you know that your ISP is watching what you're doing and to leave a nice, visible paper trail saying "you were warned".
I say "copyrighted content", but in practice that probably means video, .mp3 files and such. I doubt that they're trying to catch people uploading the text of The Hunger Games or whatever, even though that's just as copyrighted as, say, Thrift Shop.
Before going on, I suppose this is a good opportunity to repeat the disclaimer: I don't speak for my employer. I speak for myself, at least on a good day. Let's throw in the "I am not a lawyer" spiel while we're at it.
On the one hand, I'm not horrified by this. It certainly seems like a better approach than previous attempts to crack down. The ISPs certainly have some right to do such things. Your agreement with your ISP is a private contract. As much as we value free speech as a principle, when you're paying a private company to convey your speech, they get some say. Restrictions imposed by your ISP are not laws of congress. Not to say that there shouldn't be some sort of protection, but any first-amendment case would have to be aimed at the laws regulating ISPs, not at the ISPs themselves. Outside the US, your mileage may vary ... hmm ... how do you say "your mileage may vary" outside the US?
Likewise, the studios and record labels have a right to protect their copyrights (that is, the copyrights they acquired from the people who actually created the content). Whatever we may think of studios, record labels, publishers and such, there is a legitimate business to be done in financing, publicizing and selecting content. The question is whether it's done well or badly, ethically or not-so-ethically, and in what cases it makes sense for the creator to take on that role personally or hire it out.
That said, I'm leery of the basic approach of tying activity to an IP address. In a typical household, any of several people may be using a given address, and the person paying for the service is generally not going to be aware of what every person in the household is doing at all times.
Neither is it safe to assume that the only people using the IP address in question are living in the house to which the IP address is assigned. There are plenty of insecure wifi routers out there. For that matter, there are plenty of deliberately insecure routers out there. Is a coffee shop with free wifi also liable for whatever its guests choose to upload?
Nor is it that hard for someone uploading copyrighted material to disguise that fact, or plausibly deny it -- and it's a good bet that someone who makes a habit of distributing copyrighted material illegally would positively enjoy confounding The Man.
In short, it looks very easy to get false positives (someone notified of suspicious uploading when it's not their fault) and false negatives (someone up to no good going unnoticed). If the idea is to "stop piracy", it's unlikely to work any better than previous attempts. On the other hand, if the idea is to remind people that copyrighted material is protected by law, or start a discussion between the person legally on the hook for the internet bill and the rest of the people using it, that could probably work.
Behind all this is the issue in the title: to what extent can an IP address be identified with a person? A reasonable analog in the real world is the distinction between a car's license plate and a person's driver's license. A license plate is associated with a person, and that person bears some legal responsibility for what happens with that car, but if you loan your car to a good friend and that friend gets pulled over for speeding, the points go on the friend's license, not yours.
If the friend runs a red light and gets caught by a camera, though, you'll get the notice, as registrant of the car. What happens next is a bit unclear, particularly if your maybe-not-so-good friend doesn't feel inclined to step up.
The ISP case seems more like the camera case than the pulled-over case. Just as (generally) only the car can be positively identified, only the IP address, and not the person, can be positively identified [that is, the numeric address is known for sure ... there are ways, at least in theory, to spoof addresses in the sense that the packets sent to and from that address aren't going where the system thinks they're going]. Again, if the idea is to educate people about copyright law and remind them that yes, companies take this seriously and, by the way, we can see what you're doing with your IP connection, that's probably OK. But if it comes down to fining and arresting people, the IP address involved had better be just one piece of evidence in a stronger case.
Not that that's much comfort if you have to hire a lawyer anyway.
I say "copyrighted content", but in practice that probably means video, .mp3 files and such. I doubt that they're trying to catch people uploading the text of The Hunger Games or whatever, even though that's just as copyrighted as, say, Thrift Shop.
Before going on, I suppose this is a good opportunity to repeat the disclaimer: I don't speak for my employer. I speak for myself, at least on a good day. Let's throw in the "I am not a lawyer" spiel while we're at it.
On the one hand, I'm not horrified by this. It certainly seems like a better approach than previous attempts to crack down. The ISPs certainly have some right to do such things. Your agreement with your ISP is a private contract. As much as we value free speech as a principle, when you're paying a private company to convey your speech, they get some say. Restrictions imposed by your ISP are not laws of congress. Not to say that there shouldn't be some sort of protection, but any first-amendment case would have to be aimed at the laws regulating ISPs, not at the ISPs themselves. Outside the US, your mileage may vary ... hmm ... how do you say "your mileage may vary" outside the US?
Likewise, the studios and record labels have a right to protect their copyrights (that is, the copyrights they acquired from the people who actually created the content). Whatever we may think of studios, record labels, publishers and such, there is a legitimate business to be done in financing, publicizing and selecting content. The question is whether it's done well or badly, ethically or not-so-ethically, and in what cases it makes sense for the creator to take on that role personally or hire it out.
That said, I'm leery of the basic approach of tying activity to an IP address. In a typical household, any of several people may be using a given address, and the person paying for the service is generally not going to be aware of what every person in the household is doing at all times.
Neither is it safe to assume that the only people using the IP address in question are living in the house to which the IP address is assigned. There are plenty of insecure wifi routers out there. For that matter, there are plenty of deliberately insecure routers out there. Is a coffee shop with free wifi also liable for whatever its guests choose to upload?
Nor is it that hard for someone uploading copyrighted material to disguise that fact, or plausibly deny it -- and it's a good bet that someone who makes a habit of distributing copyrighted material illegally would positively enjoy confounding The Man.
In short, it looks very easy to get false positives (someone notified of suspicious uploading when it's not their fault) and false negatives (someone up to no good going unnoticed). If the idea is to "stop piracy", it's unlikely to work any better than previous attempts. On the other hand, if the idea is to remind people that copyrighted material is protected by law, or start a discussion between the person legally on the hook for the internet bill and the rest of the people using it, that could probably work.
Behind all this is the issue in the title: to what extent can an IP address be identified with a person? A reasonable analog in the real world is the distinction between a car's license plate and a person's driver's license. A license plate is associated with a person, and that person bears some legal responsibility for what happens with that car, but if you loan your car to a good friend and that friend gets pulled over for speeding, the points go on the friend's license, not yours.
If the friend runs a red light and gets caught by a camera, though, you'll get the notice, as registrant of the car. What happens next is a bit unclear, particularly if your maybe-not-so-good friend doesn't feel inclined to step up.
The ISP case seems more like the camera case than the pulled-over case. Just as (generally) only the car can be positively identified, only the IP address, and not the person, can be positively identified [that is, the numeric address is known for sure ... there are ways, at least in theory, to spoof addresses in the sense that the packets sent to and from that address aren't going where the system thinks they're going]. Again, if the idea is to educate people about copyright law and remind them that yes, companies take this seriously and, by the way, we can see what you're doing with your IP connection, that's probably OK. But if it comes down to fining and arresting people, the IP address involved had better be just one piece of evidence in a stronger case.
Not that that's much comfort if you have to hire a lawyer anyway.
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