The clueless in pursuit of the impossible

Oscar Wilde famously defined fox-hunting as “the unspeakable in pursuit of the unbeatable”. Something like that always comes to mind at the moment when US and other law-enforcement bosses attack tech companies like Apple and Google for building serious encryption into their mobile products. As The Register puts it‘ “WHY can’t Silicon Valley create breakable non-breakable encryption? cry US politicians”.

Where do you begin when faced with such cluelessness? The Reg asked a few cryptographic experts:

There’s just one problem with the government’s idea as it stands: it’s impossible from a technology, business, and international standpoint. Not a single one of the cryptography and security experts El Reg spoke to at the show could see any way such a system would work.

“It’s impossible,” Bruce Schneier – the man who literally wrote the book(s) on modern encryption techniques – told The Reg. “I can’t create mathematics that works differently in the presence of a particular legal piece of paper. Math just doesn’t work that way.” As Schneier has explained many times, strong crypto requires a sound encryption algorithm, correct digital signature handling, a random number generator that can’t be fooled, and a working methodology to house all of these and that doesn’t allow mistakes. Get one thing wrong and the whole system breaks down.

Quite. What was it TH Huxley said about “the slaughter of a beautiful idea by an ugly fact”?

Our fragile, incomprehensible networked world

This morning’s Observer column:

At first sight, it looked like an April Fools’ story. The US Department of Justice is seeking to extradite a day-trader from Hounslow to stand trial on charges that he brought the US stock market briefly to its knees on 6 May 2010. Navinder Singh Sarao is accused of using a computerised share-trading program to manipulate the market for S&P 500 futures contracts on the Chicago Mercantile Exchange, thereby adding (so the prosecution alleges) to wider selling pressure that caused the Dow Jones industrial average to plunge briefly by 6% before bouncing back.

In that short interval, stocks in huge companies such as Procter & Gamble dropped by 25% and established companies such as General Electric and Accenture briefly traded as penny shares. The British courts, not to mention the rest of us, are invited to believe that this mayhem was caused by a 36-year-old geek in the bedroom of his parents neat semi-detached house under the Heathrow flight path.

There are, it seems to me, only two possible interpretations of this. One is that Mr Sarao is indeed responsible for the chaos. The other is that the US authorities have no real idea who is responsible, but need to make an example of somebody and Mr Sarao will do nicely. Either way, we are left with a really alarming conclusion, namely that we have constructed a world that is totally dependent on systems that are a) astonishingly fragile and unpredictable, and b) incomprehensible not only to the average citizen but to those who are supposed to regulate them…

Read on

YouTube’s first decade

YouTube-logo-full_color

YouTube turns ten this year. ArsTechnica has a nice post that reflects on its history and its significance.

Excerpt:

The site has become so indispensable that it feels like a basic part of the Internet itself rather than a service that lives on top of it. YouTube is just the place to put videos, and it’s used by everyone from individuals to billion-dollar companies. It’s obvious to say, but YouTube revolutionized Web video. It made video uploading and playback almost as easy as uploading a picture, handled all the bandwidth costs, and it allowed anyone to embed those videos onto other sites.

The scale of YouTube gets more breathtaking every year. It has a billion users in 61 languages, and 12 days of video are uploaded to the site every minute—that’s almost 50 years of video every day. The site just continues growing. The number of hours watched on YouTube is up 50 percent from last year.

It’s easy to forget YouTube almost didn’t make it. Survival for the site was a near-constant battle in the early days. The company not only fought the bandwidth monster, but it faced an army of lawyers from various media companies that all wanted to shut the video service down. But thanks to cash backing from Google, the site was able to fend off the lawyers. And by staying at the forefront of Web and server technology, YouTube managed to serve videos to the entire Internet without being bankrupted by bandwidth bills…

Great read. Recommended.

Running out of options

Fascinating piece in Slate.

At 7.32pm on March 27, Dama Mattioli, a reporter on the *Wall Street Journal, tweeted thus:

“Intel is in talks to buy Altera. Deal would be largest in Intel’s history. Scoop w/ @danacimilluca coming to http://WSJ.com $ALTR”

Seth Stevenson of Slate recounts what happened next:

Quicker than any human seemingly could have done it, someone—or rather something—bought $110,530 worth of cheap options on Altera, a company that makes digital circuits.* Over the next several minutes and until the end of the day, as humans digested Mattioli’s takeover rumor at human speed, Altera’s stock price rose. When all was said and done, those cheap options had resulted in a $2.4 million profit. Speculation immediately centered on the idea that an automated program (a “bot”) had scanned the tweet, interpreted its meaning, and instantly bought those options based on an algorithm. The robot had read the tweet and made a killing on it before anyone knew what was going on.

In fact a Reuters report found that the trade in question was made a full 19 seconds before the tweet appeared. In a way, though, that only makes the story even more interesting. The WSJ has a policy of putting news on its own newswire before it goes on Twitter and it turns out that the trades occurred a mere second after news of the possible deal appeared on Dow Jones Newswires, and before Altera’s shares were halted.

Yep. A second.

Which means — or at any rate suggests — that an algorithm ‘read’ the news headline and acted to buy short-term options on Altera shares. Which is yet another pointer to what it happening to stock exchanges.

Arrogance, arrogance, dear boy. That’s the tech business for you

Intelligent filtering and insightful curation are rare arts. But Quartz is very good at them, which is why I read its daily dispatches the moment they arrive in my inbox.

I particularly like the Saturday edition, which comes with an elegant mini-essay by one of the editors.

Here is today’s, written by Leo Mirani:

For a decade, it seemed like the technology industry was going to usher in a newer, friendlier form of capitalism. The CEOs wore t-shirts and hoodies. Their staff had spare time to improve the world. They said they wouldn’t be evil. For a while, web users believed them.

But things have been shifting. This week, the European Union formally accused Google of abusing its dominant position in search. In India, Facebook is facing an uprising against Mark Zuckerberg’s internet.org, meant to give first-time users a taste of the internet for free. Uber is under criminal investigation in the Netherlands. Apple was last week met with underwhelming reviews for its watch.

Why? The uniting factor is arrogance. Google, with over 90% of the search market in Europe, blatantly favored its own services. Of the 500 million people who’ve used internet.org, first-time internet users make up only 1.4%, and Indians saw that this was less about connecting the poor than consolidating Facebook’s dominance. Apple decided to make the watch without any notion of what it might actually be used for—except maybe as a notifications device. No wonder even people who wanted to like it had a hard time recommending it.

The ultimate symbol of that arrogance, of course, is tech company valuations. The latest example is Slack, a one-year-old chat tool for businesses, whose funding round this week prompted cries of disbelief. “Is Slack Really Worth $2.8 Billion?” asked the New York Times (paywall). “It is, because people say it is,” said the CEO.

Of course he’s right, in a sense: Markets, not tech company founders, determine what their companies are worth. But when founders conflate market value with true value, they start to think they can do no wrong. That’s where their downfall begins.

The concierge economy

I’ve written about this before, but Anand Giridharadas is a very astute observer of it. In this NYT OpEd piece he recollects how, for the Indian affluent classes, everything was done by “sending your man” to do it.

The culture of send-your-man was jarring to me, having grown up in an America where even rather privileged people did many things for themselves, including things easily outsourced. They drove themselves and their children around, went to the supermarket themselves, contested their own parking tickets in person. While living in India, I remember seeing a photograph of a United States Supreme Court justice driving himself into work and thinking to myself: No lowly municipal judge in India would do that.

But as India’s economy has begun to surge and the country to modernize, send-your-man culture has foundered. As new possibilities open to those who might have been peons, the tiresome complaint at rich-people parties in New Delhi and Mumbai is how hard it is to find a servant. Well, they should come to America, because that, evidently, is where all the servants have gone.

Uber’s chauffeurs and couriers, Instacart’s grocery deliverers, Handy’s home cleaners, Zeel’s on-demand masseurs, Seamless’s bicycle warriors of takeout, Alfred’s butlers, Amazon Home Services’ electricians and plumbers — all of this is the slick, mobile-enabled, venture-capital-backed servitude of our time. As Lauren Smiley wrote in the online magazine Matter recently, “In the new world of on-demand everything, you’re either pampered, isolated royalty — or you’re a 21st-century servant.” Now in America, too, you can have yourself a man.

It’s a very good, insightful essay. For example:

Is technological innovation the handmaiden of progress? People tend to use the two concepts interchangeably. But it’s possible that we live in a peculiar age that, in America at least, is innovation-rich and progress-poor. Just as we came to learn that democracy and liberalism don’t necessarily go together, that there can be illiberal democracies (Argentina, Iraq), perhaps we are starting to discover something we might call regressive innovation.

This isn’t, on its own, dispiriting. It just means that innovation, like democracy, is without content. Democracy doesn’t automatically safeguard women and minorities. Those are layers we have to add. Likewise, perhaps, innovation doesn’t necessarily make the world flat, free and equal. It just gives us new ways of achieving the aims, good and bad, that have motivated us forever.

Batteries not excluded

This morning’s Observer column:

Many years ago, in 1999 to be exact, Andy Grove, who was then chairman of the giant chip-maker Intel, famously predicted: “Companies that are not internet companies in five years’ time won’t be companies at all.” He was widely ridiculed for this assertion, mostly because his critics didn’t understand what he was getting at. All he was saying was that the internet, which in 1999 was still regarded by much of the world as exotic, would one day be regarded as a utility, like mains electricity.

Grove was right. What he omitted to say, however, was that the net would never be as important as electricity. This fact appears to have escaped the notice of some folks in the computing business; it certainly escapes many of those who breathlessly report its doings. But it’s obvious the moment you think about it. If we had to choose between the internet or access to electrical power, which one would we go for? No contest.

What we have come to accept as civilised life depends utterly on secure supplies of electricity. We would miss the net, of course, and large chunks of our technical infrastructure depend on its continuance, but we could get by without it. Take away electricity, however, and our modern machine, including the net, stops…

Read on

The process, not the product, matters

Almost all the (mostly feverish) discussion about Apple focusses on its astonishing mastery of product design. But this week’s Monday Note by Jean-Louis Gasseé has made me reflect on what is actually the most remarkable aspect of the company, namely the fact that it has mastered what must be the most complex, large-scale, precision manufacturing process in industrial history.

In his Note, Jean-Louis leans heavily not only on Greg Koenig’s fascinating analysis of the process by which the iWatch is being made, but also on Koenig’s observation that

“Apple is the world’s foremost manufacturer of goods. At one time, this statement had to be caged and qualified with modifiers such as “consumer goods” or “electronic goods,” but last quarter, Apple shipped a Boeing 787’s weight worth of iPhones every 24 hours. When we add the rest of the product line to the mix, it becomes clear that Apple’s supply chain is one of the largest scale production organizations in the world.”

When you think of it in those terms, it’s clear that in our obsession with the beauty of Apple designs we may have been missing the really big picture, which is that the company has been building a production system that could eventually yield astonishing benefits and change the way every tech manufacturer operates.

We’ve been here before, by the way. When the Japanese first began making cars, they were ridiculed by Western manufacturers — for good reasons. They were clunky, ugly and they rusted early. But the Japanese were good at learning from mistakes. They also sussed that if they were to make really good cars, they had to reinvent the process by which cars were made. From this came the Toyota ‘Lean Machine’ production process, which is now how all cars, everywhere, are made.

So the process is often more important than the product. This was also the point made by Steven weber years ago, in his splendid book about open source software. It’s a distinctive way of making incredibly complex products. In fact, it may ultimately be the only way of making really secure software.

Gasseé’s conclusion from his meditations is that it would now be foolish to discount rumours that Apple is planning to manufacture cars. I agree.