Apple Pay's flaws compared to the hypothetical crypto currency

[TPTB_need_war]

I wrote this blog comment on my former boss's blog yesterday and it disappeared (or maybe he hasn't approved the comment yet). He works for Apple and was recruited by Steve Jobs, so perhaps he didn't like this speculation on his blog (which I suppose I can understand but it is difficult to have a discussion if only one side of the formerly jovial discussion can be shared). I am trying to reconstruct this from memory. Unfortunately we had a brownout here and so although I had the comment loaded in the browser from when I had posted it, the page was reloaded when I started the computer after the brownout.

Since my understanding of Apple Pay is only conceptual from descriptions written about and since some of the protocol may be secret, please correct me if you find any error in my analysis below.

Flaws:

1. Because Apple Pay allows tokens to be turned off at the centralized database (e.g. if the mobile device containing the token is stolen), then unlike for a crypto currency, a full node payee (a.k.a. merchant) can't validate from the public key cryptography signature whether the transaction is valid. Instead the payee must wait for the latency of roundtrip query to the centralized database. For some microtransaction applications (e.g. pay-per-download streaming), the latency can result in delays for the user which kill usability. The payee can't just serve the paid for content while awaiting for the query response, because a DDoS attacker could exploit this.

Although the crypto currency transaction isn't confirmed when validated by the payee, then absent a Finney attack, the payee is nearly certain the payer can't double-spend if the payee is the first to announce the said transaction to the block chain and thus doesn't need to wait for confirmation. Note Satoshi's (Bitcoin's) design has some significant vulnerabilities which make instant transactions risky, but an improved design can remove these flaws and enable great scaling (please don't confuse this with Vtrash's Zerotime which can't scale).

2. Afaik Apple Pay can't pay to two or more payees in the same atomic transaction. This feature will be crucially important for a mass adoption use case I will not reveal now.

3. Apple Pay can't scale because it requires users change the way they pay with credit cards, i.e. it fights against significant engrained inertia. Adopters need a smart (and secure!) mobile device. They need to choose from competing technologies. The billions can't sign up instantly in a permissionless, decentralized mannner.

4. Although Apple Pay may decrease theft of credit card numbers (although perhaps hackers may hack the users' devices to get at the tokens or the centralized databases), afaik it does nothing to fix what is paradigmatically broken about credit cards. That is uneconomic fees for doing fractional penny microtransactions, difficult to become a merchant, certain types of commerce even more difficult to become a merchant, large corporations holding the world hostage, etc..

[TPTB_need_war]

Although sub-penny microtransactions are not economically feasible with credit cards nor current crypto-currencies because the fees are too high, these systems could in theory lower costs enough to lower fees to a percentage of the value of the transaction (assuming transaction values are not hidden with homomorphic encryption, because in which case the oligarchy centralization inherent in these system has an incentive to raise to fees to what the market will bear cutting out lower valued transactions).

Millions-of-transactions-per-second scalable instant transactions are not feasible in either centralized database systems such as Apple Pay nor in any “decentralized” crypto-currency yet devised.

Centralized database systems have (afaics insolubly) greater latency due to the requirement for a roundtrip network query on the centralized database because unlike for a crypto-currency full node, the transaction can't be verified autonomously by a merchant. Additionally centralized database systems don't scale network effects as well (meaning they can't be ubiquitous[1]), because being a single-point-of-control power vacuum that demands vested interest conflicts.

The state-of-the-art crypto-currencies are (not only are centralized due to economies-of-scale, yet also are) are incapable of scaling up instant transactions and remaining decentralized. I have an idea of how to solve this, but my white paper is not yet published. Some dubious designs (e.g. VanillaCoin's Zerotime) have been presented which rely on propagation and node voting, yet don't scale and are susceptible to Sybil attacks. Other designs (e.g. Dash's InstantX/Evolution masternodes and Bitshares' Delegated Proof-of-Stake) rely on the centralization of proof-of-stake which destroys the Nash equilibrium security in a power vacuum winner-take-all political economics. The hyped Lightning Networks (LN) proposes to centralize off-chain instant transactions in order to scale, but it places a huge “garbage collection” headroom load on the block size which exacerbates the insoluble Bitcoin scalepocalpyse it portends to solve! Also LN doesn't enable anyone to pay anyone spontaneously as they first need to enroll in time locked channel deposits on the block chain.

Microtransactions have been criticized for the cognitive load they place on the consumer and that consumers prefer to reason about “all-you-can-eat” subscriptions than the “nickel and diming” of microtransactions.

However there are use cases for microtransactions which can't be fulfilled with subscriptions nor existing alternatives such as advertising revenue. For example, advertising monetization just doesn't work well for indie content such as music and probably also not for games. Pharrell’s ‘Happy’ streamed 43 Million Times, yet earned less than $3,000 for the musician. The 8 Core Drivers in gamification includes “Epic Meaning & Calling”, “Empowerment of Creativity & Feedback”, “Ownership & Possession”, “Social Influence & Relatedness”, “Scarcity & Impatience”, and “Unpredictability & Curiosity” engender use cases such as for example rewarding indie musicians and developers a fraction of a penny for each stream play or a small payment for game paraphernalia. Smaller payment choices might monetize more of the users who value their time less. Subscriptions would be required with each musician or game, which would disincentivize the spur-of-moment impatience driver because of the cognitive load on choosing which of the unbounded quantity of choices to subscribe to. Or subscriptions would need to be centralized (acting a middle man between payers and payees) which then incurs the vested interest power vacuum scaling problem, as well as needing to register with FinCEN as a money services business which further limits scaling due to onerous KYC requirements.

Centralization sucks because it stomps on the network effects of the free market.

...

Btw, proof-of-stake will never scale out user adoption, because it is a vested interest paradigm, and thus will be destroyed by its stake holders. No stake holder (in any context or business model) allows a competitor to profit. Only permissionless, decentralized systems scale.

[1] A prime example of this is how the oligarchy of credit card companies hasn't innovated internet payments and has strangled use cases, some of which are enumerated in this post.

Replacing Cryptonote rings with RingCT value hiding is probably incompatible with microtransactions-at-scale in all current block chain designs because (including Monero) they don't remain decentralized at-scale, but not that was Monero's focus any way:

Although sub-penny microtransactions are not economically feasible with credit cards nor current crypto-currencies because the fees are too high, these systems could in theory lower costs enough to lower fees to a percentage of the value of the transaction (assuming transaction values are not hidden with homomorphic encryption, because in which case the oligarchy centralization inherent in these system has an incentive to raise to fees to what the market will bear cutting out lower valued transactions).

...

Dunno if i grasp your intention at full spec, but microtransactions we´re never intented to be populating the mainchain --->  https://getmonero.org/design-goals/

Side-chains and daughter-chains (even if merged-mined) have very negative implications on security for the main chain.

Nevertheless, the core issues of scaling the design still need to be solved for the daughter chain, which no one has solved yet. Or you go off-chain, which has another set of insoluble issues.

So we might as well just say Monero isn't going to do anyone-to-anyone-spontaneously microtransactions-at-scale. Until I see a detailed technical refutation, I will assert that from my knowledge base on this area of expertise.

Edit: RingCT I presume is optional. So those who want to present the value of their transaction, so that an oligarchy could apply a lower fee (without destroying their ability to charge the highest fee the market will bear), would still work for users that chose not to hide the value of their microtransactions.

[TPTB_need_war]

Micro transactions is one thing that can be easily provided by a traditional centralized ledger provider that is funded by Monero.

Won't scale. I explained why if you had clicked my quote to read the rest of my post.

The first thing to understand here is that micro transactions by their very nature fall way below any AML/KNC regulatory requirements. Someone funding an account with say 10 USD, in order to pay for say 10,000 page views at 0.001 USD per page view is not the concern of financial regulators.

The merchants receiving the payouts do fall under AML/KYC. And any MSB has to register with FinCEN. Also criminals will structure their microtransactions across multiple anonymous user accounts to side-step limits, thus your point really does not apply.

This issue with micro transactions with the current fiat payment systems is not the actual micro transactions themselves but how do you fund the account in the first place

Yes. Credit cards can be incentivize massive fraud especially if they can pay themselves as merchants.

But the scaling problem of centralized ledgers is just as onerous an issue too.

, especially if anonymity is desired and this is done across international boundaries? As for the micro transaction provider themselves there is no reasonable reason for them to keep track of who sent 0.001 USD to whom. If they do not have a strict privacy policy then the market can find another provider. Filing millions of suspicious transaction reports for amounts under 0.01 USD each is not a valid reason and could easily land the provider who does this into serious legal trouble with the agency that was the target of such a denial of service attack.

Now you understand why a centralized ledger (and a centralized aggregator of funds) will never scale nor work in practice due to FinCEN requirements to avoid criminal structuring.

[TPTB_need_war]

I was reminded today of another problem with Android, is that there is no uniform way to push security updates out to older devices. Add that to inconsistent software across different hardware vendors. Nevertheless 84% of global consumers seem to prefer Android. Although (afair) the gross profit is closer to parity with iPhone, I will posit it is network effects that matter most going forward. More on that with Horace Dediu below.

I concurred that consumers which already have credit cards are not going to cognizantly switch to a CC. I stated I am not insinuating Apple Pay couldn't take this fiat driven payments market if it has no capable competitors and/or is so annointed by the key players. I also stated that I am talking about new markets that afaics haven't been tapped yet. It is not only the currently unbanked, but also the disenfranchised such as musicians stomped on by corporate fascism in the music industry. I believe these disenfranchised would like to own a share of the exchange token that is their ideological protest and ensuing victory. I believe there are features they need which can't be optimally done with a centralized variant such as Apple Pay. If Apple Pay is decentralized, then Apple can't monetize it. Apple can't have it both ways. Btw, the video game market is $100 billion and afaik we haven't even monetized yet the majority in the developing world who may be playing most.

Of course biting off a chunk of the mainstream payments market is $billions, but that is pocket change for Apple. They need something that scales much bigger if they are going to grow significantly beyond iPhone. As for my plans, even let's say a $100 million initial market will provide the minimum economy-of-scale to scaffold the ecosystem.

Horace Dediu who drank the Koolaid[1] that says Apple is different in some invincibly synergistic way than every other hi-tech company in the world and who based on that thus predicted 5 years ago that Apple would innovate around Android and in that intervening time Android has risen from single digit percentage market share to 84%. In my limited study over the past half-hour, Horace's model[2] appears to be that Apple is integrated where it matters most to maximizing value (even he makes the point I agree with which is advertising is the lowest ROI monetization model) while being open or modular enough (e.g. open to Apps) to avoid the disruption that Windows did to the Mac.

My rebuttal is that someone (and I might know him) will disrupt the iPhone by making an App a superior and consistent platform across all smartphones (solving Android's security update issue perhaps), thus taking away Apple's control and ability to charge higher prices for the essentially the same hardware as Samsumg. The battle is all on the software and do you understand then why I am concerned that Apple would ban my App? Luckily I don't really have to care that much because Android is winning and afaik Google doesn't care what an App does as long as it is not illegal, immoral, and isn't deleterious to their advertising revenue.

Any way, I am doing too much talking. I should be instead coding. Talk is cheap.

[1] https://soundcloud.com/drericjackson/ep-6-horace-dediu-on-ifwhen-the-iphone-will-be-disrupted (listen at 8:30min)

[2] https://soundcloud.com/drericjackson/ep-6-horace-dediu-on-ifwhen-the-iphone-will-be-disrupted (listen at 27min)

I had some more time to listen to remainder of that audio of Horace Dediu's and others' criticism of Clayton Christensen's theory of low end price disruption.

As I briefly mentioned before, I agree with him that the advertising monetization model is a low quality trolling mode and is not the future of the internet. The future of internet advertising is viral social network sharing due to the value users get from sharing, not from being paid to share. Users will make their money from creating, and thus sharing.

I agree that companies can create long-term niches via differentiation on style and quality— e.g. Mercedes Benz and Ferrari. And I agree that consumers will pay more for this, as long as it is within their means.

However, I argue that once the market size comprises a significant percentage of the world's population, network effects rule the outcome. The reason people chose Windows over Mac was not because of price, because they weren't able to run all their software on the Mac. And they became worried about being locked into a narrow range of hardware choices. Several times I considered buying a Mac, but I couldn't choose the display I wanted, the hard disk I wanted, and some of my software wouldn't be fully supported on the Mac even if did run more slowly and buggy in some software emulator. For example, Samsung has this curved screen smartphone that is the rage here in the Philippines among affluent women. How many years do I have to wait for a curved screen iPhone? The hardware choices that won't be available on iOS will continue to proliferate. The range of price points won't be available on iOS.

Eventually this will make it into software choices that won't run natively on iOS. This can be because they run on some platform that Apple bans from their App store because it threatens to abstract away the differentiation that Apple depends on to create the "reality distortion field" status symbol effect that drives iPhone sales.

Apple may do excellent integrated software and hardware, but they can't write all the software for a general purpose computing device. And thus as the quality of the Apps becomes consistent between Android and iOS, then network effects will dominate more the logic about consumer choices.

I am flummoxed that these Apple diehard analysts missed this. I have only studied this for one hour and I see what they ostensibly haven't figured out over the past years.

> OTOH the concepts surrounding the small payments issues
> are constantly being solved by existing ecosystems and
> really aren't a problem for them

When Apple or any other music streaming site offers ad-free free streaming of music and enables indie musicians to set their price-per-song for purchases, then you can make that claim.

Ditto for game gamification monetization.

And when everyone can pay, even if they don't have a credit card nor a bank account.

> Also, more and more ecosystems and app stores are going
> towards curation and away from pure openness. The inherent
> chaotic lack of appeal of anarchy is pushing this trend along
> with the need for security and less malware. How can an
> ecosystem survive otherwise?

Android is open to hardware vendors, not to malware Apps on the Playstore. Don't erroneously reject open source based on an issue that has nothing to do with open source.

The problem with Google and Apple controlling the App store is that vested interests can cause them to ban an App. One of the key features of what I want to do is eliminate that monopolistic control. Users should be able to choose from many App stores without a reduction in ease-of-use. Walled monopolies need to die within what is remaining of my career.

> There can't be a backdoor - it must not even exist.

Knock yourself out trying to convince the totalitarianism of bankrupt socialism.

> Some bugs, as we both know, are practically invisible to the knowledgeable eye.

I fixed one of those in your undocumented low-level algorithms for tiling the paper grain. I didn't know what the algorithm was doing but I recognized the structure of the loop and nailed it. I never forgot that one because I initially looked at that maze of 68000 assembly and thought I would never figure it out. And ended up only consuming some minutes, not even an hour.

Open source proponents argue this is precisely why open source excels at identifying and fixing bugs, because of the Linus rule, "given enough eyeballs, all bugs are shallow".

> The best way is to let people try to break your system
> and offer a reward. The reward goes up over time.

Open source proponents argue the better way is to open source so many corporations have a vested interest to invest in fixing bugs. Spread out your costs over a larger ecosystem, and thus reduce in house inertia that is not nimble. Increases degrees-of-freedom.

[TPTB_need_war]

> Android has a 2% uptake of their latest software revision,
> which iOS has somewhere near 90%. Yep, I'd say that's a flaw.

Agreed that the overriding flaw is the 90% centralized control is indicative of the lack of degrees-of-freedom in the iOS ecosystem, which will eventually rear its head as the network effects insideously eat away at the what iOS doesn't support. This has surely begun already as the relative market shares of Android and iOS have diverged significantly but it is likely still under the radar. It predict it will slam Apple some years from now just as did for the Mac and the bottom will fall out of the market share. Originally I thought I was writing these posts maybe because you would benefit from recognizing these trends early, but I am fairly convinced now that your best future lies with Apple because you appear to be very ideologically invested in Apple's business philosophy. I am ideologically invested in the power of network effects. I wasn't wrong for Windows and I don't expect to be wrong this time either.

KitKat which was new when I bought my Samsung a year or so ago, is already at 73%. Jelly Bean which was my prior (and first) Android is at 95%.

Btw, the only copy of Windows I still run is XP SP2. My up-to-date desktop is running Linux (Mint Mate).

> exposes the innocent and unaware Android-using populace
> to malware and such horrible things ... People put their lives
> into their devices

I am all for high quality software and timely security updates. But past a certain level of basic needs met, this can be seen as a pita. If a user is really concerned, they can go buy a new Android and pass their old one down to a maid or family member. Which is precisely what happens, thus driving more Android market share. I was thrilled to upgrade because the hardware available for the same price had improved.

This reminds of the Monero CC lead developer who argued that non-anonymous CCs were risking the lives of dissidants.

Btw, a Jeeney crashed today and people were killed. I think we ought to get rid of Jeepneys and for that matter roads and have everyone transported in Apple flying cars that are all coordinated by a central command center in Cupertino. That diesel power plant at the new Apple campus will insure 100% up time, and then we just need to figure out how to allow Apple to take control of the quality of the entire internet so we can insure 100% up time of the internet connectivity between Cupertino and Davao. Oh and yes we will need Apple to be control of all natural disasters that could possibly disrupt that line. No worries because Apple has the competent engineers and requisite vertical integration.

[TPTB_need_war]

And why cryptocurrency scams need to be exposed. They shouldn't be "investment opportunities" - they need to be clean and at least partially altruistic.

https://www.sec.gov/investor/alerts/ia_virtualcurrencies.pdf (Issued Jan 4th 2016)

The authorities will always be able to track down the criminals because metadata is nearly impossible to perfectly obfuscate reliably. Analogous to cash where authorities didn't have a block chain but could still track down the criminals.

Thus I don't see any great harm with providing greater block chain obfuscation that didn't already exist with cash.

Users buy drugs with cash. What is the big change with Silk Road? I believe the main reason the government too down Silk Road so aggressively is because the DEEP STATE of our government does not want competition to its monopoly over money and drugs. They don't want a market with economies--of-scale to develop. They prefer small time drug pushers which they can control with their corrupt police and lie of War on Drugs. Former HUD undersecretary Catherine Austin Fitts explained how this underworld operates which she discovered when she used computerization to correlate statistics and patterns on low income housing. Gary Webb apparently "committed suicide" due to his investigative journalism on this topic.

Btw, my detailed post alleging some technical flaws in Apple Pay relative to a hypothetical crypto currency, seems to have disappeared from this blog. Out of respect, I will not repost it. I did think of another flaw:

"Apple Pay can't scale because it requires users change the way they pay with credit cards, i.e. it fights against significant engrained inertia. Adopters need a smart (and secure!) mobile device. They need to choose from competing technologies. The billions can't sign up instantly in a permissionless, decentralized mannner."

I am not at all happy about what is happening to the world right now. We are sinking into totalitarianism. The large companies do what ever they can do protect their fat profits by supporting corruption of the government where it suites. For example, Uber pushing for regulations that lock drivers into their 20% fee.

I am not against the good that a company can do. I understand that vary levels organization is required to accomplish varying goals. I understand some projects have higher minimum economies-of-scale.

But first of all, the scientists say there is a Maunder minimum coming 2030 (declining sun spot activity), with the cooling kicking off in earnest as soon as 2020. They recently correlated that it has predictable cycle. So I don't conflate the global ambient temperature with the pollution of the local environment. The former is a fake propaganda created by Al Gore to enable a global taxation corruption. The latter is real problem that each local community has to decide on. China defecates in their own backyard and uses substandard concrete construction which collapses; U.S.A. typically doesn't.

I could wholeheartedly support Apple's niche if I didn't have to fear that one day as an App creator I might be at odds with Apple's vested interests. And even then I would be at odds with getting my work out to the greatest number of poeple, which is why you guys hired me to help debug the Windows version.

I actually like refined art. I am sort of a perfectionist also. I rejected so many ideas for my new logo because they just weren't good enough for my standard.

I wish I had a really great idea for Apple, but the problem is they are such a huge company already, so they need huge wins now. That is much harder to do.

That being said, I am happy Apple is there to balance Google and I am hoping they find a way to be clever about the problem of network effects.

I'll surely keep my mind open.

https://en.wikipedia.org/wiki/Maunder_Minimum

Investigative journalist and former CBC News reporter Sharyl Attkisson explains in a TEDx talk why Wikipedia is propaganda for the powers-that-be.

Wikipedia is obscuring the new science:

http://www.washingtontimes.com/news/2015/jul/12/mini-ice-age-likely-from-2030-to-2040-european-sci/

https://www.armstrongeconomics.com/world-news/maunder-minimum-petri-dish-of-political-change/

Mark it not just that. Any rational person who studies the evidence about AGW can't but help conclude it is junk science. I am extremely surprised that you have been hoodwinked. Is it because you don't follow the scientific method and thus don't have the necessary rational skepticism.

https://www.google.com/search?q=site%3Aesr.ibiblio.org+global+warming

https://www.google.com/search?q=site%3Aarmstrongeconomics.com+global+warming

The main analyst I followed was Eric S. Raymond, the 160 IQ genius who wrote the manuals on open source and who apparently advised or approved of Google's long range plan to disrupt the iPhone so as to make sure no one would have a monopoly to filter Google's ads nor limit the rate of adoption of mobile devices and thus the internet. His prediction that Google would surpass iOS's market share and eventually relegate iPhone to single-digit global share has been consistently correct on trajectory and now finally is complete. In a couple or few years comes the next stage of total collapse of iOS market share due to network effects which I expounded in prior comments. This was never a prediction about a peak in Apple's sales or revenues, although those will follow down later if the collapse in market share due to network effects comes as predicted. Sorry to be so negative but walled gardens and centralized command centers are antithetical to promoting maximum network effects. It just seems to be a cultural mental block that Apple folks can't seem to admit and thus they are destined to repeat the same mistake over and over again. I read that is the definition of insanity. I just don't understand it. How can such intelligent people be so blind.

If Apple doesn't open up iOS so anyone can design, manufacture and sell an iOS device, then afaics they can't avoid the network effects collapse on the horizon. But doing that will remove the status symbol and controlled attributes reason that people buy the iPhone, which would also collapse iOS. In addition, Apple banning Apps such as crypto-currency wallets, porn, gambling, etc., means there will network effects accruing to Android that eventually break the dam in a waterfall collapse of iOS market share as Armstrong explains is how all natural things collapse.

The nominal level of Apple's and iOS App developer's sales are not the relevant data point. When imbalances accumulate, they do so in a way that they can be ignored or wished away for those who want to cover their eyes and ears. While fighting for those highest integration profits, Apple is also setting up their long-term collapse by conceding the network effect. Perhaps they could do both...

Perhaps Apple could open source iOS but keep some proprietary aspects such as Siri that it could maintain the value of its brand.

And lose the dogmatic curation. Don't allow malware, but do create a "Immoral Category" which users have to sign off acknowledging that Apple has not curated such Apps for their ethics and potential risks, outside of being technological malware.

Mark I am so happy to read that you are symphonically or symphoniously applying your creative juices and knowledge.

I started digesting the Bentonite clay (your tip) and also Oregano oil, and in only two days so far I see a significant improvement! Hope it sustains. Apparently the Oregano oil is effective in vitro against MRSA, fungal infections (as effective as anti-fungal medicines and more effective against resistant strains), bacterial infections, Giardia, rashes, etc..

Seems I am feeling good enough to sketch again. I sketched a music and game theme. We'll render that metallic. The social network name will be in the Dope Jam font.

I remember you and John Derry constantly jamming on new art experiments, effects, and Painter brushes. I remember the day you introduced me to one of the band members from Crosby, Stills, and Nash. You were a rockstar programmer, mathematician, and artist to me and on that day I realized they were rockstars to you.

I hope the world can be filled with creative and learning fun for everyone; not all this dark stuff floating around these days.

[TPTB_need_war]

My take on hacking Mark is that it is a good thing, just like viruses and cancer are a good thing, because nature requires these things in order for us to improve and remain resilient. So we must view hacking as a natural force that keeps us on our toes when designing secure systems and thus we design better systems that are more reliable. I accept nature for what it is. We do our best to be in harmony with nature (perhaps that comes from my smidgen of Cherokee genes, not my German, Celtic, and French ancestry). Tom's wit is still alive in my vivid memories.

Hey did you see that Shawn Grunberger from Fractal's Tech Support went on to create Bandcamp. I spontaneously took the initiative during the short time span I was at Fractal to be a liaison between our developers and Tech Support. I suggested to (and encouraged) Shawn he seemed to have the ability to become a programmer. I think he had mentioned the idea for Bandcamp to me in 1995. I tried to contact them about collaborating but wasn't able to get a reply. Since that I discovered they had completely shut down their effort to stream songs for free over an API a la SoundCloud. So I suppose they have homed in on the iTunes model + band paraphernalia. I have a different idea

Oh yes I entirely agree that crypto currency in its current incarnation is going no where in terms of adoption by the masses. The use case is nefarious. However I think perhaps I have identified a mass adoption use case which can't be done with Apple Pay, but it requires a different block chain design which can do instant microtransactions. I am not going to mention it in a blog post. Note I am aware that microtransactions typically don't have a use case, because users prefer subscriptions than nickel-and-diming. But there is a case where subscriptions can't work. Also the unbanked billions are another big factor, but those who said uᴉoɔʇᴉq could help them were totally out of their minds. Yet I see a use case that does.

Yeah I remember the math guy we had at Fractal who was trying to push us to use wavelets. As for autodidact education, I am a prime example. Due to topsy-turvy family situation, my education was highly neglected until 9th grade when my dad enrolled me in Ecole Classique. Before that I was in inner-city public schools in Baton Rouge and New Orleans (a different school and neighborhood every year). My sister and I were the only non-African Americans in one of the schools and we learned how to make spit balls all day. Then my college education was cut short by complete lack of family presence. My point is I've learned more since the invention of the internet, than I learned in school (note I am not racists, my kids are half-filipino). Yet I regret not having a few more years of math, as this handicapped me later on (e.g. I am lacking the number theoretic abstract math for crypto). I was attaining a 4.0 when I was there (both high school and university). I was preparing to teach myself higher maths while also teaching my daughter starting from algebra in my mid-40s, but then I got sick and my kids are with their mother by now. Any way, I think I can make a contribution in spite of this. Btw, I love math. I took Calculus at junior college when I was a senior in high school. I am confident I could have started much earlier in my early teens if I had the right situation in childhood. My mother said I was the only kid she knew who took apart his toys and built new toys from the parts. This started before age 5. I read a Radio Shack book on microprocessors when I was 13 (after reading dozens of volumes of the Hardy Boy series and Arthur C. Clarke's books as those were the only books made available to me), and I instantly new how to program a computer from the logic gates up to machine code. I am embarrassed though that I am handicapped in higher math. Maybe I'll still have time to rectify that, but I think right at the moment there is a more urgent priority to work on. I have enjoyed your blog posts that include any math or algorithms. The intricacies of the geometric art side of your interests seems to grab me less so. That is the unique skill you have to be so smart on the analytical side, yet also so inspired in the details of art (including images and music). I really love music though, although what ever minute musical talent I may have had from growing up in the Jazz town, I seem to have lost it for the most part (perhaps it is lurking and I need an improvising Jazz band around to inspire me). I did briefly play the violin in my youth. The other competition for my free time is my love of sports, so I think the music interest got crowded out by more pure love of algorithms and GUIs, plus full-time sports. It is interesting to me how we humans are different and unique. Cross-sectional shared interests bring us together to collaborate.

I think collaboration is the future economics of the Knowledge Age. Well so does every one else who are creating social networks, or do they really

Well I (and millions of others) share your disgust over our privacy and data being owned by corporations. That is why I am preparing to attempt to do something about this. There are others working on decentralized social networks, such as Diaspora which apparently near Beta so many years after it was $200,000 crowdfunded. But I just don't think those attempts have the chops to make it work and popular. The devil is in the details on both the software and the marketing, as I am sure you would agree.

Mark I agree with all of that, especially the social motivation and creative bandwidth fostered by in-person communication; or at least some VOIP verbal, but lacks in-person sketches, 3D gestures, body language, etc. We are social creatures. I have to reach out over discussion forums for social feedback, which is not ideal for a close-knit productive lab due to the lower S/N ratio, lack of economies-of-scale of working with same people (imagine any new person comes along and wants the entire three year history re-summarized!) on top of the Mythical Man Month concept.

However my initial experience with 99designs.com is I am instantly connected with designers all over the world and instantly collaborating on logo design. This ostensibly has some value, albeit some trade-offs.

Ostensibly a contrast from your Painter days and now, is your work was more visible in a way that was associated with you. I presume you are working on very interesting projects and getting motivational feedback in-house. We can wonder.

Yeah the age of specialization is actually a combinatorial permutation (explosion) of potential network effects. Metcalf and/or Reed's Law scaling perhaps. Exciting! I hope to be back to helping build that expressway and get off the slow boat.

P.S. I made the mistake of isolating myself. Chronic Fatigue Syndrome (CFS) makes it impossible to be highly productive, i.e. weaving in math research. I struggled past years to keep my forehead off the keyboard. Rectifying both.

I can imagine the working environment at Apple is loaded with smart and interesting people and projects. I agree there is no way that one person can simulate those economies-of-scale entirely with virtual interaction (at least in our fields), although the gap has probably closed significantly since the 1990s when I tried to do it prematurely.

My guess is that your position at Apple enables you to work on very esoteric high tech imagery related algorithms, psychometrics, etc. that other companies would have the same incentive to invest or focus in. Would Facebook need your research?

But what about all the indie gamers, musicians, and graphic artists. Do they have all the creation software they need or is the field still wide open? I am not close enough to those art and music studio production details to know. I am interesting in helping the indie artists and developers on the framework, distribution and monetization side. Think Facebook apps on steriods.

For all that I admire about Steve and his accomplishments, I believe there is a yin and yang between closed and open source.

I would guess (while lacking the data) that the extent to which the very successful Painter did not achieve the orders-of-magnitude greater usership level of for example the iPhone is ostensibly due to target demographics and has nothing to do with the choice of between open and closed. And it apparently requires 1000s of employees to achieve a Facebook. Any bets on whether a social network could scale to a billion users with less then two dozen in-house employees?

Android is doing very well with global market share. Not everyone wants to create natural media arts on their computer. Though I observe apparently the number of indie artists and creative people is increasing in this globally networked computer a.k.a. knowledge age.

It seems often good enough chaotic openness scales faster than refined perfectionist control. I note that is fundamentally because the speed-of-light is finite thus there can't exist a global ordering because a top-down observer can't process all the partial orders on earth in real-time. Local orderings annealing faster to opportunities. If the speed-of-light were not finite, past and future (spacetime) would collapse into an infinitesimal nothing for the Lorentz factor would be unity for an relative velocity between inertial frames.

There is apparently a market for both. As I remember back in the day, Windows was more open than the Mac in terms of interopting with any third party hardware. Seems the pattern may be repeating.

Btw, I remember looking at your patents a couple or few years ago relating to afair to screen displays or rendering algorithms. And from that I had deduced approximately what you had been working on relative to products and features that Apple had released. But I have forgotten the details now. I am not stalking you, lol. I had seen a news article that lead me to a patent that had afair Steve and your name listed on it. Or maybe my vague recollection is incorrect.

I am not going to claim the Theory of the Firm should die tomorrow an Apple's (and other large corporation's) economies-of-scale which enable them to pool talent will disintegrate. But I do think there is a gradual transformation underway that will undermine the Theory of the Firm. I wrote about that an essay which I think I may have linked on your blog in the past. I believe I wrote this in late 2012 or early 2013 so my understanding may be more refined now:

http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html

Apology for rambling on.

Steve Jobs had that talent for identifying the sweet spots in marketing and feature sets. He was also a perfectionist. Do you know I was thinking of exactly what Steve Jobs created for the iPhone last time I was in the USA in 2006. I was thinking someone who combined a mobile phone and a handheld tablet computer, would create a revolution. I hadn't dug into the point where I would have invented swiping, but I think it is in my nature to conceive of necessities of invention that naturally follow from a problem space. You too Mark. And so too others at the top of this field.

Hope I can get to work on something exciting again. It is has been too long I been in the desert (figuratively).

Right now I need a logo that depicts collaboration with the 6 letter name I have chosen. Imagery and art! I was really drawn to contact Fractal seek a job because of the amazing artwork in your print ads for Painter version 1.3. I contacted Fractal with a cold call. They put me through to Tom. Biggest mistake you and Tom every made, lol. Btw, I did help guide Priscilla Shih on how to be very good at finding bugs. I saw myself more as a facilitator when I was there, than as the productivity leader. I was trying to be clever and create leverage.

Word!

I had to deepen my specialization because some facets of my generalism was missing the mark due to lacking knowledge of essential details. So concur there is skill for knowing what you don't know and separately when you need to know.

Up until now, I did not have an idea for a project that justified the scale of working in a team. I lack updated experience on teaming with other developers. And I lack scale and don't know who will help me scale yet. Joining a startup would be easier, but who is doing something I believe in. I have invested a lot already in my current project idea. If I only had infinite extra time to become aware of all the other startups and make a rational assessment of my opportunity cost.

The logo design so far is a collaboration of my sketches and the logo designer's ideas. Probably could be improved. You may find the mintees.com Tshirt artwork for sale site interesting. I am trying to buy the Wario design there. To me it resembles a Saddam Hussein, Popeye Brutus variant of Mario.

[vuduchyld]

Great analysis...but you forgot one thing.  MUTHAFUCK Apple, their closed systems, their proprietary approach to making you buy everything from only them for any of their overrated devices, and everything about those asshats.

[TPTB_need_war]

MUTHAFUCK Apple...

But it would be best to have a viable competitor to Android, lest we fall into another potential monopoly. Not all of Android is open sourced.

[TPTB_need_war]

Paypal shenanigans

http://venturebeat.com/2013/08/14/glassup-raised-100k-on-indiegogo-but-paypal-is-refusing-to-pay-up/

The problem faced by repudiable payment systems.

Paypal, like all transaction-intermediaries, are required to provide fraud protection. They sometimes freeze accounts, and also there are sometimes misinterpretations and odd statements made. They long ago unfroze those assets, just like they did for Notch at Minecraft.

This is the benefit of credit cards: fraud protection and monitoring. They will need to do less of it when transactions are secured. In the meanwhile I'm glad, for one, that they do it.

Paypal locked my account because I sold some Bitcoin for Paypal on localbitcoins and that person apparently was using a stolen Paypal account, so then Paypal reversed the payment so I lost $600. But not only did I lose $600, but Paypal locked my account which is already verified and which has many years of many transactions with no fraud.

If crowdfunding was with a non-repudiable payment such as Bitcoin, then the contributor can't later claim they didn't understand that the payment is non-repudiable and thus their only recourse to a broken contract is in the correct venue of a court-of-law. In this case, the repudiable payment is incompatible with what is being paid for. This is one of many examples where crypto-currency is superior to credit cards.

Now we have an example of Indiegogo ostensibly knowingly aiding an ostensibly illegal unregistered investment security being sold to non-accredited USA investors, and I conjecture they are hesitating to cancel the campaign because of the ostensibly huge risk of chargebacks if they taint the prior $151,300 in contributions.

[TPTB_need_war]

Nobody wants to use any of this shit, Bitcoin included.

Not entirely true. I used Bitcoin to receive funding/donations/loans and mostly not for HODLing. This was cross-border without hardly any fees and no need to know the identity of whom I was dealing with. We bypassed the bank wire tsuris.

Many have used Bitcoin to do "anonymous" activities.

Sorry I think you are wrong here smooth. Bitcoin has a use case for large value transfers. This is why I think Monero may have more value than people realize now.

Stores that accept Bitcoin usually do so via payment processors and auto-dump it. Accepting Bitcoin via payment processors is like an affiliate program for them; they don't care about the currency at all, it is just about traffic.

Agreed, but note they don't accept the other altcoins because the other altcoins don't provide that traffic (free advertising) boost and the altcoins aren't liquid enough to hedge to fiat they want to be paid in.

It just all doesn't serve any purpose that any sane mainstream person would care about, outside of a SHTF scenario.

Disagree. It is just that the use case is a fairly small % of the population. No one has yet focused on the masses use case. As you know, I am focused on that with my non-existent vaporware.

Trying design after design in a futile effort to chase "adoption" is churning investors to pay developer salaries. Bitshares investors are among the biggest suckers, since they paid (and I guess continue to pay, although I don't follow it closely) the Larimers to develop something which serves little to no purpose as decentralized crypto but can now be used as a vehicle to be paid again by banks for "blockchain".

Well I agree when they have no adoption and no viable plan to attain it. Bitcoin investors shouldn't pay for adoption until the adoption is already there.

That is my plan.

[TPTB_need_war]

I agree with this logic that says that where there is no pricing power then there is a Tragedy-of-the-Commons. I differ or call out distinction on the proportionalities and thus the Anti-fragility of vested interests which are small enough to attain more resilience to disruption. I'd agree with retort is that if its too small, then it can be disrupted by one with greater economies-of-scale. Its all about the correct balance for the market. The devil is in the details. I wildly ponder that Apple has its fingers in too many businesses that potentially compete with its own ecosystems, e.g. iTunes, Apple Music, Apple Pay, and the Appstore. IMO, that makes it more vulnerable, but as you say disruptions are long-tailed distributions.

"1. The fecklessness of laissez-faire. Apple is famous for its closed hardware system, the PC is famous for open standards and competition. You would have thought we would all prefer an open system, but it can become chaotic. For example, Apple was able to build such an amazing iPhone because it owned both the software and hardware. This is another example of the famous Railway Privatization Problem in the UK which was designed to introduce competition but ended in chaos. A closed system is often associated with higher prices, but economies of scale can actually work to the advantage of a more monopolized market. Apple is gradually developing economies of scale no competitor can touch, what we are increasingly seeing today is a world in which Apple and its competitors sell their products at about the same price, but because Apple has economy of scale advantages it can offer a much higher quality product than its competitors. The biggest danger of a monopolized market is excessive prices, market prices settle at what consumers are willing to pay, whereas in a competitive market prices are supposed to converge on what it costs to produce. Lenin argued that free markets degenerate into monopolies earning excessive profits, but his collective ownership solution failed miserably. The trendy new theory on the block is Chinese State Capitalism which prevents companies from making excessive profits and abusing the market either by heavy handed regulation or state ownership."

"Steve Jobs imagined Apple as an efficient hive of bees minding their own business, he didn’t want a herd of group thinking sheep following each other round the field. The sheep herd’s failure to specialize, to mind one’s own business, creates both muddled thinking and wasteful duplication. I don't think Steve Jobs really mastered this kind of analysis because he emphasised a culture of secrecy and unquestioned authority in order to build the hive rather than a culture of expert debate, but he we surely quite a example to us all. What has all this to do with economics and politics? What we are saying here is that rational expectations and freedom of choice doesn’t work, the fundament capitalist idea that market price is the best measure of utility and competition is the best way to deliver it, is nonsense. The market price is just the sheep herds wavering opinion, and the stupidity of the herd derives from competitive duplication. In the same way democracy also fails.

These three arguments taken from the Apple-Microsoft example are insights into the wider debate swirling around the world today between the American and the Chinese economic models. Yet I am not suggesting authoritarian Apple should be boycotted in favour of democratic Windows/Linux. Wisdom, not ideology, should guide our purchasing."

[TPTB_need_war]

2. One of the most important goals I want to achieve for JAMBOX is that apps can be written in a language that can be loaded over the network and JIT compiled and run instantly on the mobile device or computer. The entire point is to replace the web browser with a better app engine and to abstract away the native APIs for iOS and Android, so that people can write apps once and have them run every where without any installation procedure. In short, the WWW on steriods.

Right about now, your latest generation Octacore ARM-based device has roughly ⅓ the CPU performance of the Intel i7 3770 with much lower power consumption and price. As ChromeOS and Android fulfill more of the apps that people want to do, with less tsuris for the n00b user, there is less reason to buy a computer with Windows or Mac OS X. High-end users increasingly opt for OS X because it is Unix-based. But the more salient point is that even OS X is being eaten from below by entirely open source options such as Android and ChromeOS which are popular amongst the masses. Even Intel is being eaten by below by ARM and China.

But there is a problem which is a huge market opportunity which I am attempting to tackle. Users will increasingly want to have compatibility and seamless use of the same apps and/or data both on a small mobile screen (e.g. smartphone and tablets) and when plugging that device or a mini PC into a larger monitor with a Bluetooth keyboard and mouse. But Android apps don't work that well at such large screen sizes and with a mouse, installing Linux on an Android device breaks the security model of Android and/or is slow plus kludgy, and ChromeOS apps are not so numerous yet  as well being disunified with Android apps. There are others attempting to do a better ChromeOS, but not unifying mobile and desktop.

There are other problems I'd like to solve such as the tsuris of installing Android apps (installing shouldn't be necessary!), managing cloud backup differently for each app, etc..

Also no one has built a decentralize protocol for social networking interoption between these apps.

Btw, the hardware advance of ARM is impressive. For example, arguably the best high-end mini PC available is the Intel NUC which at $500 with 16GB RAM and 250GB SSD, it has roughly ⅓ the CPU performance of the Intel i7 3770.

But for < $100, an ARM Rockchip RK3368 has roughly ⅕ the CPU performance of the Intel i7 3770. And the RK3399 is coming Q2 2016 which will have roughly ⅓ the CPU performance of the Intel i7 3770. For $150, the Intel Atom with Windows 10 has roughly ⅙ the CPU performance of the Intel i7 3770. Even DIY kits with 8" screens are coming.