Algorithmic-driven markets and the future

This morning’s Observer column:

‘When a true genius appears,” wrote Jonathan Swift, “you can know him by this sign: that all the dunces are in a confederacy against him.” We need to update this for our age: whenever a really new technology arrives, you can tell it by the fact that most right-thinking people think it’s a scam.

Thus, to the average person the idea of a “cryptocurrency” like Bitcoin seems daft. I mean to say: a “currency” that was invented by a geek; is not backed by any bank or government; has no central authority; and operates on the basis of a public ledger that is secured by arcane cryptography. It has to be a scam, doesn’t it? Well, actually it doesn’t – but it would take more space than is available here to explain why. The point is that most people can’t see the point of cryptocurrencies, which, paradoxically, is why they are interesting.

On the other hand, most people – non-geeks as well as geeks – can see the point of Uber, the cab-hailing service that is causing such turmoil on the other side of the Channel (and occasionally over here too). You download an app to your smartphone. When you need a cab you launch the app and it shows you on a map where the nearest available cars are, and you hail the nearest one. Within three to five minutes it shows up. And when you arrive at your destination, you don’t pay the driver: the fare is charged to your credit card. QED.

Compared with currencies, therefore, Uber seems pretty comprehensible…

Read on

Backdoors won’t work. Just ask the TSA. (Or the NSC)

skeleton_key

Very nice openDemocracy piece by my colleague Julian Huppert on why putting backdoors in encryption systems is a very bad idea:

This was demonstrated recently with a security disaster involving the US Transport Security Administration. They want to be able to search through people’s luggage, if they think there is contraband inside. But sometimes people quite reasonably want to lock their luggage, so that people cannot just take things from it. So a system was created with TSA approved locks, so that TSA officials can unlock them using a master key. In theory, no one else can, so your luggage is safe.

You might ask: what if someone got hold of these master keys? But the TSA had an even bigger disaster to come. In a piece in the Washington Post praising their work, someone foolishly posed with a set of master keys. The photo was of a high enough resolution that people can now 3D print copies, and use them to open any TSA approved lock. The backdoor is wide open, and security breached.

This fate can happen to any backdoor system, and probably will. That is why the US National Security Council has been quite clear in their draft options paper.

The relevant excerpt from the NSC ‘Options’ paper reads: “the Administration will not seek legislation that compels providers to design their products to enable government access to encrypted information”.

Two things are interesting about this. The first is how useful it is to have a mundane, everyday illustration of an important idea. We have been telling people for ages that backdoors in encryption software is a bad idea, but this gets nowhere with non-geeks because they have no personal experience to which that proposition can be related. But they know about suitcase locks.

This reminds me of all the years I wasted trying to persuade lay audiences about the importance of open source software. My argument was that software that affects our lives should never be impenetrable or unalterable ‘black boxes’ — the the “freedom to tinker” was vital. This argument got precisely nowhere.

And then, one day, I suddenly understood why: my audiences had never written a line of software. It was an entirely alien concept to them. So the next time I gave the talk I brought a copy of my favourite recipe book with me. Before starting, I asked who in the audience cooked or baked? Every hand went up. So then I turned to a particular recipe that had 300ml of double cream as one ingredient. “Now”, I said, “double cream if not good for a guy like me, so I’d like to replace it with creme fraiche. But imagine that we lived in a world where, if I wanted to do that, I would have to write to the authoress to seek her permission, and perhaps to pay a fee. What would you think of that?” And of course they all said that it would be nuts. “Well then”, was the payoff line, “now you understand why open source software is important.”

The second thought raised by Julian’s post is that while the UK government is unlikely to pay much attention to the geek view of the absurdity of backdoors in encryption systems, it’s much more likely to pay attention to the considered view of the US National Security Agency.

A confederacy of dunces

NYT editorial neatly sums up the Republican candidates.

It felt at times as if the speakers were no longer living in a fact-based world where actions have consequences, programs take money and money has to come from somewhere. Where basic laws — like physics and the Constitution — constrain wishes. Where Congress and the public, allies and enemies, markets and militaries don’t just do what you want them to, just because you say they will.

Start with immigration, and the idea that any president could or should engineer the mass expulsion of 11 million unauthorized immigrants. Not one candidate said that a 21st-century trail of tears, deploying railroad cars, federal troops and police dogs on a continental scale, cannot happen and would be morally obscene. Ben Carson said, “If anybody knows how to do that, that I would be willing to listen.” They accepted the need to “control our borders” with a 2,000-mile fence. Even Senator Marco Rubio of Florida, once an immigration moderate, endorsed the fence. Mr. Carson actually suggested two fences, for double security, with a road in between. Do these people have to be sent to the Rio Grande Valley to see how ludicrous a border fence — over mountains, vast deserts, remote valleys and private property — would be? And it won’t solve the problem they are railing against, which doesn’t exist anyway. Illegal immigration has fallen essentially to zero.

On foreign affairs, there was a lot of talk about not talking with bad people. Senator Ted Cruz of Texas said his first act would be to tear up the Iran deal, throwing the nuclear race back to the ayatollahs and rupturing global alliances — but making a point! Carly Fiorina said: “What I would do, immediately, is begin rebuilding the Sixth Fleet, I would begin rebuilding the missile defense program in Poland, I would conduct regular, aggressive military exercises in the Baltic States. I’d probably send a few thousand more troops into Germany. Vladimir Putin would get the message.”

We get the message, and it’s scary.

Porsche goes electric

Porsche_E

I saw a guy the other day in a Tesla S and was puzzled, because in the past I’ve known him to be a Porsche driver. People who own 911s in particular are notoriously reluctant to change — which is why they tend to be such good customers for dealers. On the other hand, propelling oneself around via a series of controlled explosions — no matter how well-engineered the engine is — is clearly a daft idea in the long run. Electric vehicles are the future. Which, of course, is what Porsche have figured out all by themselves — as the New York Times reports this morning:

On Monday, at the Frankfurt Auto Show in Germany, Porsche unveiled its all-electric Mission E concept car. A four-door, four-seat luxury performance sedan with futuristic 911 design cues, Mission E will be the first all-electric model Porsche will offer to the public.

Porsche, a German brand, maintains that the vehicle, though it is a concept car, is firmly based in reality and is expected to arrive in showrooms within five years. At the same time, it provides a window into the future of all-electric cars — more range, faster charging and more speed.

With a debut alongside the latest iteration of the classic 911, the Mission E is meant to convey the message that performance and efficiency are not mutually exclusive.

And, for those who really will miss the growl of the 911 engine, I’m sure Porsche can rig up an audio system that produces the same noise electronically.