Researchers find that one person likely drove Bitcoin from $150 to $1,000

The bottom line is simple: if Bitcoin wants to be taken seriously it probably shouldn’t be this easy or legal to manipulate the markets. While decentralization is supposed to replace regulation it’s clear that there is still a way to go before it can be truly taken seriously.

Source: Researchers find that one person likely drove Bitcoin from $150 to $1,000 | TechCrunch

Economics Has a Math Problem

Their overview stated that machine learning techniques emphasized causality less than traditional economic statistical techniques, or what’s usually known as econometrics. In other words, machine learning is more about forecasting than about understanding the effects of policy.

That would make the techniques less interesting to many economists, who are usually more concerned about giving policy recommendations than in making forecasts.

Source: Economics Has a Math Problem – Bloomberg View

Tesla Battery Economics: On the Path to Disruption

At the utility scale, it may actually be even more disruptive. Tesla appears to be selling the utility scale models at < $250 / kwh. Multiple utility studies suggest that such a price should replace natural gas peakers and drive gigantic grid-level deployments.

Source: Tesla Battery Economics: On the Path to Disruption | Ramez Naam

Tentative Conclusion: The battery is right on the verge of being cost effective to buy across most of the US for day/night arbitrage. And it’s even more valuable if outages come at a high economic cost.

The iPod effect: how near limitless storage made content worthless

As faster bandwidth and bigger storage have become the norm, we’ve become used to the idea of a cornucopia of content. But in the absence of tough decisions about what media to bring with us, we’re losing our appreciation of its value altogether. Without clear opportunity cost, all digital content is becoming worthless.

via The iPod effect: how near limitless storage made content worthless | Media Network | The Guardian.

Weaknesses – Bitcoin

An attacker that controls more than 50% of the network’s computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:

  • Reverse transactions that he sends while he’s in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
  • Prevent some or all transactions from gaining any confirmations
  • Prevent some or all other miners from mining any valid blocks

via Weaknesses – Bitcoin.

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

China’s State Press Calls for ‘Building a de-Americanized World’

It’s not a new refrain: Back in March 2009, China’s central bank governor, Zhou Xiaochuan, also called for the creation of a new reserve currency, albeit in less heated language. The world needs a new “super-sovereign reserve currency” to replace the current reliance on the dollar, Zhou wrote in a paper published on the People’s Bank of China’s website (Zhou still heads the bank). The goal, he wrote, is to “create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run.”

via China’s State Press Calls for ‘Building a de-Americanized World’ – Businessweek.

Targeted Advertising Considered Harmful

What happens, though, if sellers try to reduce the load that advertising carries, by “efficiently” targeting some users and not others? As a member of the audience, the more likely it is that the ad you’re seeing is custom-targeted to you, the less information the advertiser is able to convey. With good enough targeting, you could be the one poor loser who they’re trying to stick with the last obsolete unit in the warehouse.

via Targeted Advertising Considered Harmful.

Today, though, we have different norms and technologies around security. A .EXE in email will get quarantined, filtered, or buried under layers of warnings.

The same thing is happening with privacy problems. Browser developers are steadily closing the bugs that make creepy tracking possible. And yes, that makes some advertising techniques obsolete, the same way that corporate virus checkers killed off the animated .EXE Christmas card business.

But if you want to send customers a holiday greeting, you still can. And after the web fixes its privacy bugs, you’ll still be able to advertise. It will just work better.

What Does It Really Matter If Companies Are Tracking Us Online?

Sometimes, that will mean exploiting people who are not of a particular class, say upcharging men for flowers if a computer recognizes that that he’s looking for flowers the day after his anniversary. But other times there could be troubling equity concerns. For example, Calo points to the work of NYU professor Oren Bar-Gill who has shown how companies can use complexity in credit-card contracts, mortgages, and cell-phone contracts to “hinder or distort competition and impose outsized burden on the least sophisticated consumers.” Calo says such price-discrimination tactics, applied en masse online, could “lead to regressive distribution effects,” also known as preying on the vulnerable.

via What Does It Really Matter If Companies Are Tracking Us Online? – Rebecca J. Rosen – The Atlantic.

From the paper, Digital Market Manipulation

A new theory of digital market manipulation reveals the limits of consumer protection law and exposes concrete economic and privacy harms that regulators will be hard-pressed to ignore. This Article thus both meaningfully advances the behavioral law and economics literature and harnesses that literature to explore and address an impending sea change in the way firms use data to persuade.

The Locust Economy

Once locusts acquire an informed kind of market mobility through better discovery mechanisms, they can range over a much larger area of wheat fields or restaurants. You can continuously derive savings at the expense of other economic actors wheat farmers or restaurant owners.

via The Locust Economy.

To take coffee shops as an example, an unending supply of idealistic wannabe cafe owners enters the sector every year, operates at a loss for a few years, and exits. The result is that even under normal business conditions, without swarming locust consumers, this is a loss-making business with an extinction rate of around 90% at the 5 year point in the US. Starbucks has the scale to be profitable and resilient. Locust coffee drinkers happily drink the excellent, loss-making coffee from small, local Jeffersonian coffee shops and callously retreat to Starbucks or DIY homebrew if the prices go up.

Starbucks survives, coffee drinking grasshoppers survive, small coffee shops go in and out of business.

BSA Study Demonstrates Open Source’s Economic Advantage

So what this all boils down to is that the fundamental premise of the latest BSA study – that licensed proprietary software is better in many ways than pirated copies – actually applies to open source software even more strongly, with the added virtues that the software is free to try, to use and to modify. That means the potential economic impact of free software is also even greater than that offered by both licensed and unlicensed proprietary software. It’s yet another reason for governments around the world to promote the use of open source in their countries by everyone at every level.

via BSA Study Demonstrates Open Source’s Economic Advantage – Open Enterprise.