Speculation about Bitcoin’s future.

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Disclaimer: I’m not a market expert, or economist. I’m purely speculating.

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Bitcoin is at an interesting junction. It recently reached a new high after stabilising at around $4-$10/btc for most of last year.

I was involved in the initial rise and burst of 2011. I got a few bitcoins in hand (reasonably below that bubble of $30/btc). When it dropped, it dropped to something like $2-3/btc from $30.

It didn’t drop to zero, which to my mind, meant that bitcoin still had an inherent value besides the speculators who gamed the market. In other words, it’s value as a quick, boundary-less p2p cryptocurrency. After that crash, Bitcoin underwent lots of growing pains. Large exchanges got hacked (note: not bitcoin itself, only the exchanges), but yet it still survived and kept growing.

There are a few reasons why I think we are seeing the new rise in prices:

1) SatoshiDice. A gambling site.

You send bitcoins to a specific address. When it receives the transaction, it rolls a dice. Depending on the address, you bet below a certain number. If the rolled number is below the limit, you win returns. The higher the number, the lower the returns, and vice versa.

This is big. When it launched, it was off to a slow start, but slowly gained massive market share. It is responsible for more than 50% of bitcoin traffic. Watch the transactions here. It’s ridiculously easy to play.

2) Bitcoin reward per block halved end of 2012.

Here’s a handy guide on what it means. To explain in short: Bitcoin rewards miners who help verify the block-chain with bitcoins. This is how bitcoins come into the system. It started with 50btc. Over time, this decreases to stop run-away inflation (one of the ideologies of bitcoin). More than 50% of bitcoins are already in circulation. By 2140 all of it will be mined. End of 2012 it halved to 25, decreasing supply. With basic economics 101: if demand stays the same and the supply decreases, the price increases.

3) Big names starting support of BTC (Reddit/Mega).

Both Reddit and Mega subscriptions can be bought with bitcoins. It gives more credibility to the ecosystem and increases demand.

4) More real-world use.

Bitcoin has been synonymous with ‘illegal’ activity such as the Silk Road deep web drug exchange. It was used primarily online, and for purposes digital goods. It’s starting to interface more with the ‘real’ world. Stuff like small atm’s to turn dollars into bitcoins, and bitcoinin (‘amazon’ of bitcoin). In other words, you can be paid in bitcoins and shop with it. Namecheap is consdering bitcoin support also.

So, basically in the short term, demand has increased and supply has decreased. This will push the price up. Speculators will jump along with this trend as usual. I suspect in the near short term, it will drop again, but not to the previous low.

As for the long-term future, I’m hedging my money on its success.

The biggest hurdle I think is still it being a very difficult concept to understand. I mean, if people like Steven Levitt (author of Freakonomics) don’t understand it, then how are most people supposed to understand it? But, with much like new technology, people don’t have to understand, only need to be convinced of it’s use and trustworthiness. Few people understand how the internet works, but they still use it. Bitcoin still needs a killer service on top of it that allows people to use it without knowledge of stuff like using hashes as addresses, why you need to download a massive blockchain before you can start, etc. It’s going to be interesting marketing/user experience exercise!

Another interesting thing that will happen, sooner than later, is governments are going to try and clamp down on it. Unfortunately, stopping it completely will mean killing off the internet. Not possible. Governments can discourage it’s use, but it will still be used. In fact, if they do start using it, it will lead to a Barbara Streisand effect. It will only spur it’s usage on.

Bitcoin is still though in it’s infancy. The whole money supply is supposed to only be in circulation in 100+ years (although it’s logarithmic). The price of bitcoins into the future will only rise (even when governments clamp down). The current $30+-/btc won’t be highest it will get. The eventual ‘lowest’ point in the future will be higher than $30 (in current value). This is probably the most unsubstantiated part of the whole post, but it just seems inevitable.

Either way, it’s going to be an interesting ride. Given how far it’s come and matured in the past 2 years, the ride feels a lot more safer.

I won’t be surprised if it eventually hits upwards of $1000/btc in the next 5 years.

Your smart device of the future: the river

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After our Twin Tech Talk discussion on Phablets with @nieldlr, there was one idea that stuck with me. The basic gist: Instead of having separate devices for a phone/tablet/desktop/etc, you will only have one device, and then the screens will be “dumb” interfaces to your one device.

The first trend of this is already starting to happen: with Galaxy Note 2 being used as a PC replacement and the Ubuntu Phone turning into a thin client when docking. However, one of the form factors (ie a phone), is still the main device.

Go smaller, just create a processing unit with a link to the internet (perhaps with a sim card as well). Short of doing invasive surgery, just keep in on your body (a wristband, in your wallet, wherever). The ideal though is for it to be embedded somewhere, potentially using your body as an energy source.

For lack of a better word, let’s call it the “river” (a name that got stuck in my head).

Then. Any screen/interface connects with the river and becomes an interface to it. These devices will thus be responsible for only keeping the screen powered and making sure data can be streamed between it and the river.

A few use-cases:

It’s a board meeting and everyone has rivers attached to them. There’s a presentation that works through a “dumb” tablet. You realise you have a key point of information that can add to the discussion, but it’s on your dropbox. When you grab the tablet, you login with your biometrics, it recognizes your river and immediately changes to connecting with yours. You login with dropbox and show it to the board.

You are at a music festival and you have a smartphone form factor connected to your river. Because it’s always sunny, it’s difficult to see what’s on the screen. This device purposefully makes it clearer, so you can Instagram/Vine to your heart’s content. However, as with all smartphones at festivals, the battery just doesn’t last. It dies. However, you brought along another dumb phone with a smaller screen and lower quality (think old Nokia’s). It can basically call and message. Now you are still connected, by simply swopping out (ie, just “touching” and “logging in” with the new phone). No need to pull our your sim card.

You are at a train station in a new country. You only brought your phone with. However, you realise, you need information to get to that art museum. You are kinda lost. You walk up to a large public screen and connect your river to it. You are now presented with a much larger screen to view maps with and get extra information such as walking time, etc.

You are at home, catching up on your articles you saved on Pocket. You see someone posted an awesome HD documentary. When you are close to home, all your other devices in your home automatically connects with your river. You simply turn on the TV and it plays this HD documentary in all its beautiful goodness.

You decide to go rock-climbing. At the start of the climb you stumble and break your watch. The next day you buy a new version (or just 3D-print one) and reconnect it to your river. You remember you bought a new pack of designer software watch-faces last week, so you simply slap a new one on (a la Pebble).

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As you can see, there’s plenty of use-cases where it’s useful to switch between form factors, without having to own expensive independent forms. The dumb devices will be cheaper, and once you go out of range, it automatically deactivates. It’s basically impossible for someone to steal your river.

Will this inevitably happen? I suspect so. I suspect before we get embedded devices, it will initially go the way of the smartphone as “main source” such as we are seeing with Ubuntu phone. As another example of how something like this is already happening: look at the Pebble. The Pebble is simply an extra interface to your phone that’s sitting idly in your pocket.

Hipsterism, Connection and Identity

I love Grimes. Her album, Visions, is one my favourites of 2012. She recently put up a tumblr post detailing her top songs of 2012 which included pop hits such as Carly Rae Jepsen’s Call Me Maybe (<3) and Psy’s Gangnam Style. Being the epitome of ‘weird’ and ‘arty’ and ‘hipster’, she received lots of flack. See the Forbes post on it (thanks @rianvdm for sharing it).

I’m fully behind her. Although I have a very eclectic music taste, I really love my pop bangers such as Call Me Maybe (<3). I listen to music primarily because of well… the music. In the past I’ve dealt with people who’ve run up to me (a friend) and shouted: “Simon, Black Keys is going to be on the new Twilight movie soundtrack! No!” I simply don’t care. In the very least, now more people can discover how awesome they are. Now, I’ve even seen tweets (after the Grammys) from people saying: “Remember when the Black Keys was cool?” Yes. They still are. Their old albums didn’t suddenly disappear. Their new album is spectacular. What’s the problem?

So it got me thinking. Why is there this backlash towards artists becoming mainstream? Why when they get big, the ‘hipsters’ all go ‘BOOO!’?

I think it boils down much deeper than the music itself. While ‘hipsters’ do sometimes have a sense of elitism and superiority over their taste of music (“I understand and appreciate more nuances than the usual 4-bar 3-chord songs”), I think the distaste towards popularity actually has to do with connection and identity. Let me try and explain:

If you are human, you crave connection and understanding from people. Primarily we do this through language. It’s pretty decent, but we have to adopt similar vocabulary to convey what we think means the same things.

Art, or appreciation of certain expressions, does something similar. I make an emotional connection to a painting (for example). If someone else gets it, we immediately form a bond/connection. The emotional response is “proxied” through the art to another individual. We can connect on levels that language doesn’t allow us to. It is intangible, but meaningful.

This is exactly the case with music as well. If you meet someone with your intense love of that one b-side of Radiohead or Beck’s early slacker-blues albums, you form a connection that transcends what language can provide. “You like Lewis (Mistreated) as well?! No way. Me too!”

If it is only you and handful of people that “get it”, that appreciates this new and unknown artist, you form a deep and intimate connection (regardless of emotional connotation to the song). When it suddenly pierces into mainstream too many people have connections to this song/band. The sense of intimate understanding and connection is diluted and lost. Now that everyone “gets it”, an individual has lost the connection to the few people who understood them. And so, the “hipster” goes to the next new artist to find people to connect with in ways which language can not. If everyone likes the same things, it doesn’t become something to connect with. “Oh you like Gangnam Style? What’s new? You drink water? Big deal.”

To create the law of “Hipster Connection”: The more obscure and deeper down the rabbit hole of music you go, the deeper and more intimate connections between individuals become.

At the turn of 21st century, music became less an art form controlled by labels and radio and one everyone could do and share. This allowed it to flourish. Expression went past shared cultural trends such as Grunge in the 90’s, to smaller and more intimate shared identities (witch house trend, chillwave trend, etc).

In this light, I reckon: Hipsters, do your thing. I don’t want ascribe ways in which you want to connect with people, but for the better, I advise to not tie your identity too much to music (or anything else for that matter).

So, to end off: Has anyone heard this track by a new artist called “Casually Here”, called “Settle”? He only has like 74 likes on his FB page and 2700 listens. It’s awesome.

Slack Resources and “Data Moulding” as business model.

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Max Levchin’s DLD Keynote was rather elucidating.

It got me thinking a lot about various possibilities in terms of using data and tech to exploit business opportunities.

To reiterate and sum up that post:

Slack resources, such as black cabs (Uber) and apartments (AirBNB) are being utilized digitally through a centralized process.

“Consider the cab calling experience vs Über. When dialing up a cab, you are managing your own spot in the queue. If you hang up in anger, you go back to the end. If you stay on, listening to the on-call tune, you may be an infinite loop, as there is no feedback! 

And even if you are willing to pay a hundred times more than everyone else waiting ahead of you in line to speak to dispatch, you never get to express that demand. The data exists in an analog-only format, and it moves at analog-only speeds.

With Uber, the queue can be managed centrally (because the information is converted to a digital format at the edge) with nearly complete transparency to you — you know when the resources you want become available, you know how long you have to wait for them, and most importantly, you are generally assured through feedback that you have not been forgotten or ignored.”

In other words, centralized processing of data gathered from analog systems.

The most exciting part of his post however is right at the end. Through the use of cheap digital sensors, much better inferences can be made about individuals and thus cater to them. As an example (expanding from Max’s): I’m a 23 year old male student at University. By most definitions, I’m supposed to have a more risky profile in terms of car insurance.

But if, they can infer that I actually don’t drive like the rest of my peers, my insurance can go down. What if there were sensors that measured that? Google can infer it to some extent because I have location share on. What if this model of me can be improved if I have a body sensor that shows I’m not drinking and driving? My insurance will go down even more.

The idea of pay-as-much-as-you-use is not new, however in the newly “cheap digital sensor” age, it becomes more lucrative. With data, offerings can be moulded to fit a profile and it be combined with other data.

I like to compare it to micro-payments vs subscription-based games. To some users, they’ll get more value from subscription-based games, because they have time (as a resource) to get enough value out of the hours in the day to play it. While, someone who plays casually and just wants to spend 2-3 hours a week on it, will find subscription-based games as perhaps expensive. In other words, the business model doesn’t cover their profile. The micro-payments model means that users can pay what they want, on their terms. This can mean that there will be a lot of people, who simply pays nothing (or very little). This is fine, because the model can be easily moulded to fit their profile. The people that however, use it a lot (does a lot of micro-payments), makes up for the rest who “free-load”. It’s the simple pareto principle: 20% of people make up 80% of the revenue. This has been shown to be the case on the app store for example. The guy that ends up spending “more” than he would’ve if it was subscription-based is also happy, because each transaction is a mutually satisfying exchange. They get to enjoy it more, because they “paid” more.

Sensor-based profile ‘moulding’ is going to be a better business model for companies and it’s going to be a benefit for the users. And that’s not even taking into account that the more data (network effects) you have, the greater the competitive advantage (pricing more precisely).

The question whether people would want this constant monitoring for better and cheaper services is another debate on its own. Perhaps privacy will be afforded as a premium?

Do you think it is that straight-forward? What effect does this have on marketing? Is it a more difficult value proposition to accept for people (ie they are more comfortable paying a set price, instead of being ‘moulded’ even thought it is more)?

Keen to hear your thoughts.

Twin Tech Talk #1: Asteroid Mining and Phablets

Here’s the next (first) episode of Twin Tech Talk. We discuss Asteroid Mining and Phablets.

To get around the audio issues, we put in some headphones. Unbeknownst to me, it usurped my laptop’s mic. So at times, my voice is a bit soft. Will be fixed in the next episode!

We added a cheesy 80’s sitcom intro as well. Other than that. Enjoy!

P.S. For the people who want the audio, we are looking into making it available as podcasts soon.

Incredible short movie/documentary: Lift (and public spaces).

Stumbled upon this documentary today on Reddit. A guy plops himself in a London tower block, filming and interacting with the people. It’s 25min long and comes highly recommended!

It’s incredible in so many ways! It all feels so claustrophobic and dreary, but gives such an incredible insight into these people’s lives. I’ve always been fascinated with public spaces: how they enable (or disable) interaction. Him, being there opened up interaction within the lift (not just between him and the people), but also people with each other.

The people themselves are so interesting. From the smiling guy who goes to town to see if he can pull a girl, to the quiet guy telling his depressing story about his parents.

There’s just so many conflicting emotions this short brings about. You feel sad. Sad that people seem to live past each other (Lily going to the dance and no one came), and sad that life can sometimes take a massive toll. But it also makes me happy. Happy to see good samaritans sharing their food, seeing a multicultural society live in tolerance, and how we all have stories to share.

This is a made-up term. (However in Afrikaans, it means “without”). So, in a strange way, it fits. We are empty and lesser without the people we share the world with.

A similar short-film with the same themes is “Maybe”. Also, definitely worth a watch!

Which brings to my final point, and back to my interest in public spaces. It’s clear that having this guy in the lift helped people, even to just get things off their chest. Without hiring someone to do it, why not create a humanlike face (robot) that just listens? Or even further? One with rudimentary AI to keep asking questions and be polite? How would you design a lift that enables people to just start talking? Have a topic of the day on the top of the door?

Anyway. Was just a really really fascinating experience watching both these short movies. 

Fractal Life. Foursquare and the Night Sky.

My previous post was a reshare from infinity-imagined that showed how similar the cities we build mimic fundamental building blocks in our biology such as neurons and their connections.

Foursquare just posted a map of their previous 500 million check-ins, lighting up the world with small dots.

However, what is interesting compared to traditional photos of the world at night, the roads that connect us are ‘brighter’. While the traditional photos lack general clarity, you can also see that roads aren’t as defined.

Here’s one. (via Dark Sky At Night)

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and another from NASA (2012).

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Now. The one from Foursquare. Of course. These are not lights, but simply check-ins at  locations. This will of course mirror the light spectrum as this is where people will be.

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As you can, it adds clarity to the arteries (roads) that connect us. This makes sense. Along roads are small towns, petrol stations and stops that will ‘shine brighter’ although it won’t necessarily be as bright compared to a light-map.

It just makes the networks we create more and more look like the neurons in our brains.

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It’s just so fascinating! It seems individual parts (humans on earth vs neurons in a brain) in a complex system eventually conform to the same seemingly chaotic (but orderly) states. I can start rambling on the spiritual importance of everyone on Earth actually being more connected that we think, but it is Friday. I think it’s time for a beer: Have to reclaim my mayorship at my local bar!

Twin Tech Talk Pilot - Kickstarter in 2012 and the Potential of the Ouya.

So, my twin brother and his girlfriend is currently on an adventure in Taiwan.

So in an effort to stay in touch and continue our tech talks, we decided to film it. We use Google Hangout, but record ourselves. As with a pilot, there are some errors. My sound is a bit soft (gets louder 1-2min in), but this will be fixed for episode 1!

The idea is that we each choose a topic that the other don’t know about and then we discuss it!

For the pilot (episode 0), we discuss Kickstarter and the Ouya. Coincidentally it was rather both related to gaming (pssh, twins right?).

So. There you have it. The pilot is out.

We thought of having two topics each, but it seems it might end up taking too long. I think staying under 30min for each episode is more preferable.

For a start, it’s going to happen sporadically. We are going to try and do one at least bi-weekly. I’m on the left, Niel is on the right.

Find us on Twitter: @nieldlr, @simondlr.

What do you think about it? Does it work? Anything we can do to perhaps make it more unique (besides just being a tech talk show)? What do you think of Kickstarter’s 2012 stats and the Ouya (and android gaming consoles)?