Archive for May, 2011

Cryptocurrency race to the bottom?

Monday, May 30th, 2011

I don’t know a whole lot about , but from what I’ve heard (a) governments, unable to fight math, will soon crumble, or (b) Bitcoin is nothing more than a scam meant to enrich its inventor and early adopters and increase the gap between haves and have-nots, or (c) both.

I’d guess none of the above. If Bitcoin speculation, increased acceptance of Bitcoin for real goods, or both continue apace such that the Bitcoin phenom grows for a long period of time (all questionable), I predict that governments and any other entity with a large measure of control over how it can demand payment will launch their own cryptocurrencies, seeking endowments for themselves much as Bitcoin’s inventor and early adopters may have gained.

First a quick aside on the welfare and distributional effects of an endowment for cryptocurrency initiators, and Bitcoin’s in particular. It doesn’t matter all that much, at least :* with zero transaction costs (perhaps cryptocurrencies will get us closer to that ideal) resources will be put to their most efficient uses, regardless of initial distribution. Of course reality will diverge from perfect theory, but given gross inefficiencies that exist in the world today, it’s hard to say that whatever change could be engendered by Bitcoin taking off would certainly be worse. Regarding distributional effects (i.e., equality), it’s hard to see how at least in the short term potentially massive wealth for the Bitcoin inventor and early adopters changes much. It is doubtful these people are among the pre-Bitcoin megarich. Scam or not, I don’t see how Bitcoin distribution increases or decreases inequality significantly unless one expects Bitcoin to become the only currency in the world. I consider this highly unlikely.

Because, repeating close of first paragraph: once Bitcoin is considered as tested and important, any entity that can would be crazy to not seek a windfall for itself by initiating a new cryptocurrency with rules such that it can gain a significant fraction of the wealth embodied in the currency for itself, as the Bitcoin developer and early adopters supposedly have. A significantly powerful entity (i.e., a government) would be significantly tempted to initiate new cryptocurrencies regularly, just as the temptation holds to inflate traditional fiat currencies now. These entities, and many others besides, will also want to experiment with cryptocurrency rules (e.g., Bitcoin’s decreasing minting to a set limit, constant growth, other?).

I have no idea how any of this will play out. On one hand, what are the competitive pressures that will drive cryptocurrency evolution? Is it conceivable that network effects could result in only one cryptocurrency holding value, perhaps Bitcoin? On the other hand, if cryptocurrencies become economically important, they will surely have deep and far reaching effects, even if those don’t include the sudden collapse of governments and the rise of a Bitcoin oligarchy. It seems well worth thinking ahead about these effects from a variety of perspectives: one example.

Also recommended: Bitcoin, what took ye so long? on strands of thought preceding Bitcoin, by Nick Szabo. Indeed, go read everything Szabo has written.

I understand that emotions run high concerning Bitcoin. “Race to the bottom” in the title of this post is merely intended to provoke. The phrase is often abused. Feel free to disabuse me of any incorrect thoughts.

Oh, and feel free to send ฿ to 153ofsZ1PrnCnDGjvWAenRJc53TRhR9BzK.☻

Posted in Economics | 11 Comments »

Semantic ref|pingback for re-use notification

Sunday, May 15th, 2011

Going back probably all the way to 2003 (I can’t easily pinpoint, as obvious mail searches turn up lots of hand-wringing about structured data in/for web pages, something which persists to this day) people have suggested using something like trackback to notify that someone has [re]used a work, as encouraged under one of the Creative Commons licenses. Such notification could be helpful, as people often would like to know someone is using their work, and might provide much better coverage than finding out by happenstance or out-of-band (e.g., email) notification and not cost as much as crawling a large portion of the web and performing various medium-specific fuzzy matching algorithms on the web’s contents.

In 2006 (maybe 2005) Victor Stone implemented a re-use notification (and a bit more) protocol he called the Sample Pool API. Several audio remix sites (including ccMixter, for which Victor developed the API; side note: read his ccMixter memoir!), but it didn’t go beyond that, probably in part because it was tailored to a particular genre of sites, and another part because it wasn’t clear how to do correctly, generally, get adoption, sort out dependencies (see hand-wringing above), and resource/prioritize.

I’ve had in mind to blog about re-use notification for years (maybe I already have, and forgot), but right now I’m spurred to by skimming Henry Story and Andrei Sambra’s Friending on the Social Web, which is largely about semantic notifications. Like them, I need to understand what the OStatus stack has to say about this. And I need to read their paper closely.

Ignorance thusly stated, I want to proclaim the value of refback. When one follows a link, one’s user agent (browser) often will send with the request for the linked page (or other resource) the referrer (the page with the link one just followed). In some cases, a list of pages linking to one’s resources that might be re-used can be rather valuable if one wants to bother manually looking at referrers for evidence of re-use. For example, Flickr provides a daily report on referrers to one’s photo pages. I look at this report for my account occasionally and have manually populated a set of my re-used photos largely by this method. This is why I recently noted that the (super exciting) MediaGoblin project needs excellent reporting.

Some re-use discovery via refback could be automated. My server (and not just my server, contrary to Friending on the Social Web; could be outsourced via javascript a la Google Analytics and Piwik) could crawl the referrer and look for structured data indicating re-use at the referrer (e.g., my page or a resource on it is subject or object of relevant assertions, e.g., dc:source) and automatically track re-uses discovered thusly.

A pingback would tell my server (or service I have delegated to) affirmatively about some re-use. This would be valuable, but requires more from the referring site than merely publishing some structured data. Hopefully re-use pingback could build upon the structured data that would be utilized by re-use refback and web agents generally.

After doing more reading, I think my plan to to file the appropriate feature requests for MediaGoblin, which seems the ideal software to finally progress these ideas. A solution also has obvious utility for oft-mooted [open] data/education/science scenarios.

Posted in Creative Commons, Microformats, Open Services, Semantic Web | 1 Comment »

DRM as a competitive threat to free software?

Wednesday, May 4th, 2011

A Day Against DRM post. I posted another at Creative Commons.

Critiques of Digital Restrictions Management fall into about 10 categories:

  1. DRM causes various product defects
  2. DRM usurps people’s control of devices they own
  3. DRM discourages tinkering and understanding technology
  4. DRM discourages sharing
  5. DRM curtails various freedoms people would otherwise enjoy
  6. DRM encourages hostile behavior toward consumers
  7. DRM encourages monopoly
  8. DRM is technical voodoo
  9. DRM is business voodoo
  10. DRM presages more forms of attempted control, each with additional properties similar to those above, increasing the probability of a dystopian future.

Eventually I may link the above bullets to the relevant posts on DRM I’ve made over the years.

Defective By Design, a project of the Free Software Foundation, coordinates the Day Against DRM and various other anti-DRM actions. It is pretty clear that several of the problems with DRM listed above, particularly 2-5, are inimical to the FSF’s values. I sometimes think the linkage to core values of software freedom could be made stronger in anti-DRM campaigns, but these are not easily packaged messages. I also think there’s usually a missed opportunity in anti-DRM campaigns to present free software (and maybe free culture) as the only systemic alternative to creeping anti-freedom technologies such as DRM.

I began writing a post for Day Against DRM because I wanted to pose a question concerning DRM’s competitive threat to free software: how significant is it in today’s circumstances, and how significant in theory?

In today’s circumstances, the use of DRM that does not support free software platforms by popular media services (currently Netflix is probably most significant; DVDs with DRM have always been a problem) seems like a major barrier to more people using free software.

In theory, it isn’t clear to me that DRM must be a competitive threat to free software adoption (though it would remain a threat to software freedom and nearby). If a mostly free software platform were popular enough, DRM implementations will follow — most obviously Android.

However, I would also hope the dominance of free software would create conditions in which DRM is less pertinent. I would love to see enumerated and explored the current and in-theory competitive threats to free software posed by DRM, and vice versa.

Posted in Creative Commons, DRM, Economics, Free Speech, Intellectual Protectionism, Open Source | 2 Comments »