Sorry, digital currencies aren’t actual currencies

It’s hard to go a month now without a post from me on cryptocurrencies. I dabbled into this market on July 1st when a client paid me in BitCoin, which worked out to $88.31 at the time of the exchange. Since then its price has increased at a much greater rate than the market in general.

Yesterday I moved it from my digital wallet to BlockFi, a crypto exchange, and it was worth $109.47. So over just one month, I made a 24% return. If I could do this for a whole year, the return would be 288% and it would be worth $254.33. It’s safe to say that there is no other asset that I own that would reap that sort of return.

I can’t see eleven months into the future. You will get a million different opinions about where BitCoin’s value will be going. What I can say is that it fluctuates a lot. Since yesterday, its value dropped to $103.71. Volatility comes with the digital currencies territory.

What doesn’t change that much is the value of the U.S. dollar on a given day. Right now there are innumerable news stories because inflation in the last twelve months has been running in the 5-6 percent range. But if I had planned to spend my BitCoin today on something tangible, I’d be paying 5.26% more for it than yesterday. So in a way my BitCoin inflation rate was 5.26% and this occurred over just one day. Wow! But no one seems to be holding BitCoin to the same inflation standard as the U.S. dollar.

Why is this? To paraphrase The Grinch Who Stole Christmas, I puzzled over this until my puzzler was sore. Both are currencies, right? Well, no. BitCoin, Ethereum, Dogecoin and the rest are not actual currencies. Just because someone slaps a label to it, doesn’t make it an actual currency.

Okay, it is a currency in the sense that you can trade it for things of value, like until recently a Tesla. Right now at least though you can’t buy most things in these “currencies”. In my case, I buy them in U.S. dollars. Given that you can’t buy much with them, they are only currencies in a very limited sense. If you really want to buy something with your BitCoins, you are probably going to sell it to someone who will give you a local currency like the U.S. dollar in exchange for it. That’s what I aim to do with my BitCoin. It will feel real when its value in U.S. dollars hits one of my accounts denominated in U.S. dollars. Until then, it’s funny money. But actually, it’s not money.

So the fundamental premise behind “digital currencies” is false, as except in some very limited cases you can’t use these as money. That could and maybe will change over time, but right now for most practical purposes, they’re not currencies. They are not money.

So what are they? Some call them assets. For me, calling them assets fails the smoke test too. An asset is something you own, and it amounts to something tangible and real. These assets are often denominated in shares, so in that sense they are somewhat virtual. As an ex federal employee, I’m still in its Thrift Savings Plan (TSP), their fancy name for 401K/IRA. I have, for example, 2686.0352 shares in the TSP C Fund, which is a basket of funds. It’s likely that some part of its current value of approximately $203,000 is invested in IBM, so I own part of that company along with lots of others. I can claim my share its capital gains and dividends, at least when I sell them — it’s a tax-advantaged account. I own some part of the buildings that IBM owns and the computers and equipment inside them and in its warehouses.

What can I say about the assets behind my BitCoin? Well, I can say there are no assets. That’s not to say it doesn’t have value. If I can convince someone else to buy my BitCoin and give me U.S. dollars, I can take and spend those U.S. dollars pretty much universally. There is no BitCoin headquarters to go to it the currency goes bankrupt. If it does, I’ve lost the value of my BitCoin. Its value lies merely in its perception.

The same is true with U.S. dollars, of course. Dollars are perceived to have value because the U.S. government stands behind them. You aren’t entitled to your share of the gold in Fort Knox if the U.S. government collapses, but we do know there is an institution, a lot of smart people, and the full faith and credit of the government supporting it. If my bank account is FDIC ensured and my bank goes belly up, the government will give me the value of my account in U.S dollars, up to $250,000.

If for some reason you have an incompetent government, then a currency can collapse too. Venezuela’s currency is just one of many recent examples. So I have plenty of incentive to keep the U.S. government functional. No wonder I obsess over whether certain radicals might succeed in doing away with our democracy and setting up an autocracy. If nothing else, the value of my U.S. dollars would get very iffy.

Those into “digital currencies” are placing faith in them too, mainly that they can’t be hacked or undermined. That’s pretty dubious to my way of thinking. One thing is clear is that they are subject to the laws of supply and demand. If demand ceases because they aren’t trusted, they become effectively worthless. Just like Venezuela’s currency.

These “digital currencies” are actually speculative assets where the asset is basically the successfully operation of an advanced computer algorithm (which spits out a “coin”) and the faith that blockchain-powered servers will be around to certify transactions in these assets. All of them share one fundamental weakness: they require the Internet. Some share another weakness: they depend on governments to allow their use. It’s hard to transact these “currencies” in China because for the most part its government won’t allow it.

Currencies facilitate the exchange of value. But they have one other important asset: they hold their value within a reasonable range of inflation over a long period of time. If they don’t, this money will move toward other currencies that do a better job of retaining their value. In short, they facilitate savings so that their value can be quickly and conveniently spent.

Digital currencies currently do not excel in either easily exchanging value or as a reliable source of savings. To my mind, this tells me they are not a currency.

So don’t treat them as such. With time, it’s likely the U.S. and other governments will create their own digital currencies. The blockchain technology that is the foundation of these “digital currencies” is something of value. It will be leveraged by other more stable entities like the U.S. government to more conveniently, securely, cheaply and transparently exchange value.

It’s hard for me to see a business case for “digital currencies” once governments start issuing their own.

Congratulations! Your blog’s been consumed by the commercial web

Five years ago I asked if blogging was dying. Five years later I think it’s safe to say that blogging is mostly dead.

I speak not just of this blog, which languishes in ever more obscure corners of the web, but pretty much any blog, at least blogs that are self-hosted. When this one started in 2002, blogging was a new thing. Now it’s beyond passe.

These days the biggest readers of my website appear to be robots. Probably eighty percent of the hits I track on StatCounter come from “Singapore” via the Huawei Cloud supposedly on Android devices all with 800×600 screens and no referrer links. They come in bursts about once an hour. They “read” obscure posts from a decade or more ago that I don’t even remember writing. So there’s obviously no human behind these hits and it’s unclear to me why these fake visitors are even hitting this blog at all. Most likely they are searching for security vulnerabilities.

Twenty years ago we had longer attention spans. Blogs, particularly blogs like mine, are meant for people who want more than snippets. They want detail, context and maybe some sound analysis. Since then there’s been this revolution called social media, and we’ve nearly all succumbed to it. Its purpose is to suck us into aggregator websites where our “friends” hangout, so we never leave it. These sites like Facebook and Instagram are all about short bursts of text and photos, and generally emoji too. By keeping you in their enclave they also keep your eyes and brain away from places outside of their sites, except of course to links recommended by their algorithms, all of which are designed to give you more reasons not to leave their sites. They want to keep you comfortable and in a friendly space.

So we have this amazing World Wide Web but most of us won’t venture much beyond our social comfort sites. It’s like going from the Internet back into a walled garden like Compuserve and AOL … anyone remember them?

Blogging gave everyone (including me) a place to exchange our thoughts with the world at virtually no cost except time. When it was new, there was the thrill of the discovery of independent and thoughtful blogs. It got lots of hits back then, but the lure of social media proved too powerful.

It’s nice to know that some blogs are still highly trafficked and going, but these are well established and almost branded at this point. Many of these blogs have found homes inside of other websites. Barack Obama blogs on Medium.com, which maybe makes it a trending blogging site, if you can put up with article limits and ads (assuming you don’t want to pay to read). There is also substack.com, where the emphasis seems to be on monetizing your “extra” content behind paywalls. So it helps to have a following already before posting on Substack.

There are of course many other blogging sites, some of which have been around a long time including wordpress.com and blogger.com. Posting there has no guarantee that your content will be read. In most cases you don’t have to pay to post on these sites, although they might serve ads to your readers. In short, they are likely to make someone rich, just not you. But hey, the hosting is free!

Having my own blog allows me complete freedom of content, design and setting the rules. I don’t have to worry it will be abruptly shut down if someone doesn’t like my content, as I pay for the hosting. But unless I want to spend lots of time and money to find readers and influence influencers, it’s likely to keep languishing.

So it’s probably going to get shut down at some point, not that anyone other than me is likely to notice. I’ll probably move the whole thing to wordpress.com and let it live there in perpetuity as an archive. If I blog again, I’ll do it elsewhere under a blog aggregator and under a new alias. I probably won’t even tell my friends where it is. At least I won’t have to pay for hosting.

Blogging has scratched an itch, but its moment was an aught decade thing. So expect the blog to disappear by December 13, 2022, if it makes it that long. At that time it will turn twenty but if it makes it than long it’s pretty clear I will be celebrating its longevity all alone.

Give me a (reasonably) dumb home

As a partially retired software engineer, I’m all about the power of technology. I’m part of a group that’s succeeding in getting our city to create a municipal internet, for example. I want affordable fiber to the home! I want gigabit per second (or higher) upload and download speeds. At the same time, I want to keep my home as dumb as possible.

Admittedly, it’s an uphill struggle. For example, I’m guilty of having a Google account and using Facebook. Both companies are no doubt collecting reams of data about me. While I really loath Facebook, it’s hard to give up. I’ll lose contact with lots of people, mostly people I used to know. Yeah, they could email me, but they won’t. Since we moved in 2015 it’s a good bet I won’t see most of them in the flesh again anyway. Now in my sixties, a lot of them have moved elsewhere too, making the odds of a face-to-face meeting even less likely. To some extent these people have been supplanted by even more people in my new neighborhood. In general I don’t seek them out as friends. I let them “friend” me and sometimes I just decline the opportunity. What I can do in Facebook is refuse to click on any targeted ad. That’s my policy.

Our daughter got a protonmail.com email account. I’m considering it too. The company is based in Switzerland and stores nothing in the cloud. Even if they wanted to read your email, they can’t. So as a secure email solution, it’s likely the best out there, though a bit pricey, at least if you want to keep more than 500mb of email online.

But most of us give away our privacy, often inadvertently. A few years ago I visited an aunt to discover she had an Alexa smart speaker. It was very good at giving her music to listen to and weather reports. What it’s not good at is not listening to you. Unless you change some very obscure settings or explicitly turn its microphone off (which defeats the purpose of owning one), it’s recording anything its microphone can pick up. It’s supposedly all about making these personal digital assistants (PDAs) more useful to you, but it’s much more about Amazon trying to monetize what it knows about you. Both Google and Apple are doing the same thing with their PDAs.

Alas, if it were just PDAs you had to worry about. This stuff is everywhere, and pervasive. For example, your TV is likely “smart”. I bought a new one last year (Samsung) and it too is watching and listening. These features can supposedly be disabled, and Consumer Reports indicates how to do it. I tried to disable these features of my Samsung TV and I keep getting an error code when I try.

For a few years now I’ve been searching the web using DuckDuckGo. I actually think it’s a better search engine than Google, returning more relevant results. But it’s also built around privacy, so when I use it Google (supposedly) remains ignorant of my search queries. But there are times I can’t, or can’t easily not use Google search. For example, my tablet computer runs the Android operating system, so I can’t make a voice search without using Google’s search engine. I don’t think DuckDuckGo has a similar app, but it likely hasn’t perfected the voice recognition business, so even if one existed I’d probably have to type in search queries. And really, who knows what goes on inside the Android operating system anyhow. Google may be listening anyhow.

These days pretty much any device you install is suspect, and the company making it is likely making money monetizing what it knows about you. Many have invasive implications, not just for your privacy, but for society at large. Google bought Ring, which makes smart doorbells. These smart devices can help identify porch thieves stealing your packages, but they are also being networked with similar devices other neighbors have and potentially used by police. Again, it’s possible to disable these features, but they are on by default.

For Ford, selling cars is now ancillary. A car is just a vehicle for monetizing information about you, or at least that’s its long term goal. Ford hopes to make $20B a year from this by 2030. It’s recording where you are going, when, where you stopped and no doubt is feeding that information to other systems willing to pay for it. Most cars these days integrate with voice assistants like Alexa too. Most of these smart devices you bought are doing similar things, so it’s likely the real profit from selling you a device comes long afterward when over years it sells or provides the information to third parties.

It’s becoming impossible not to buy smart devices so in some sense you can’t escape these invasions of your privacy. It’s becoming impossible to live without a cell phone, and dumb cell phones are pretty hard to get. The same is true with cars and most appliances. The trend is only going to get worse. The only real solution is legislation. Maximum privacy should be the default, not the other way around. It should be hard to make these devices share data.

I am trying to figure out where my boundary is. I feel I’ve strayed too far off the privacy path. Even if I can get back on it, companies already have reams of data about me, and it’s equally burdensome to get them to remove their data about you, if it’s possible at all. There’s really no way to know for sure if they’ve done this.

Aside from privacy, all this technology is contributing greatly to polarizing our society. In addition to targeted ads and predictive behavior, it’s also putting us in information silos, making it hard for us to hear perspectives outside our bubbles. Keeping us in our bubbles seems to be much more profitable to corporations, and much more useful for politicians. These behaviors simply make us more predictable to them, and the more predictable we are, the easier we are to influence and control. Much of this is being championed by Republicans, supposedly the “pro-freedom” political party.

So I’ll do my best to maintain my privacy, but it will be an uphill struggle. As I integrate more technology into my life, I now weigh the privacy implications carefully. For example, I’m considering a home security system, but I need devices that won’t place everything in a public cloud. They are getting hard to find.

Part of the solutions is staying no-tech if you can. Rather than tell Google’s assistant to create an appointment on a certain date and time, enter it into a calendar on your refrigerator, if that works, or at least use third-party calendar software and type it in yourself. Rather than tell Alexa to add something to your shopping list, make your shopping list out with pencil and paper. This still works for us.

Simply be conscious of what you are doing when you make these choices. In many cases, what you are giving up greatly exceeds the value of whatever services they provide.

Give me a mask, please

So after months of waiting, I get my first covid-19 shot tomorrow.

I’d like to say it was easy, but it was just the opposite. I did discover that if you are determined enough, it is possible. It just meant some compromises. In my case, it meant compromising my sleep. I’m still on the waiting list for the Massachusetts mass vaccination sites, but there are a limited number of CVS drug stores where you can get the shot. The problem is if you go to their website to book an appointment, it will always say there are no appointments available. But from friends and neighbors I learned that they open up new appointments between 3 AM and 3:30 AM. It’s not all CVS stores.

Here’s where it helps to be an older male. Our prostates will naturally wake us up in the middle of the night anyhow. Of course at 3 AM while awake, you are not generally able to focus on a task more complicated than emptying your bladder. But with my tablet computer while sitting on the john, I could scan the list of CVS sites provided by the state. Since my wife has two co-morbidity symptoms, she had priority. After fifteen minutes of trial and error I found a CVS in Chicopee and got her an appointment there. The next night I tried again for myself with no luck. But the third night was the charm. Tomorrow at 11 AM I expect to get the first dose of the Moderno vaccine at this same CVS in Chicopee, about a half hour drive in Hampden County. Welcome to our modern world.

But it may be the beginning of the end of this madness. Just today the Centers for Disease Control and Prevention said that traveling is fine two weeks after your second shot. I doubt I’ll be on the first plane to Hawaii, but maybe the second one. Living in Hampshire County is fine but at this point I … want … out … of … here!

But I have the feeling that we’re still quite far from the end of this. You would think after three waves of covid-19 people might have learned something from it all. But, no, we’re Americans, which means huge portions of us are either too desperately poor to do much about it or, most likely, figure they are immortal. It’s often the young people that are the most reckless, so of course they flocked to Miami Beach and rubbed a lot of shoulders, and now a fourth wave is building across the country, which seems to be affecting younger people more this time. The stupid compounds on the stupid. About a fourth of the country says they won’t get a shot. If they’re serious, that means we can kiss the idea of herd immunity goodbye … and that’s the very reason a lot of these people were out maskless in the first place … supposedly to bring about herd immunity!

It sure appears they’d like to get there via unnecessary deaths than through vaccinations. That’s because at least some of them are anti-vaxxers, which essentially means they refuse to believe in science. Others are convinced tiny microchips from Bill Gates are in the serum, so the government can track us or make us communist or something. It all doesn’t make any sense, but to these people the very fact that it doesn’t make any logical sense means they are probably right. America: the land where freedom means you have the right to be as stupid as you want and where civic virtues does not extend to doing your part to keep preventable illnesses from spreading.

Indeed, the evidence is pretty widespread that American is rapidly dumbing down. Sixty years ago we were anxious to down sugar cubes to avoid polio. Vaccine exemptions were not a thing; parents could go to jail if they didn’t get their kids vaccinated. Sixty years ago science was cool and patriotic. We looked up to scientists. Now we don’t accept any science that conflicts with our biases and political philosophies. The only good thing from all this vaccine hesitancy is that those with this trait are self-selecting themselves to be wiped out. Darwin would be amazed that people would choose their own natural selection.

Well, not all of us. I’m the product of a nurse and an engineer. My Dad was left-brained to the max, my Mom spent a lot of time scrubbing with disinfectants and tracking our vaccinations to make sure we survived to adulthood. It naturally rubbed off on me and my siblings. The mere idea of not following the recommendations of medical professionals and scientists was not only absurd, but was obvious lunacy. We knew medicine was not an exact science and were comfortable with advice evolving at covid-19 was better understood. The virus continues to evolve, making it likely that we’ll be getting annual booster shots, at least.

Unsurprisingly, the virus unfolded largely the way the experts predicted. Trump scoffed at the idea of a half million Americans dead of covid-19. We passed the milestone and have hardly tallied the last casualty. We endured more than a year of stupid leadership by stupid people. Unsurprisingly, about the time we got rid of the last president, things started to improve in a meaningful way. After four years of doing pretty much everything completely counterproductively, we have a government determined to work with nature and reality rather than deny it.

At least some Americans are waking up from their dogmatic stupors. Vaccination rates are rising and the number of people saying they will never get a vaccination is declining. I’m quite confident Bill Gates won’t be controlling me via a tiny microchip after my vaccination tomorrow.

The second shot is scheduled for May 1, which means on May 15 I’m largely out of covid-19 jail. I still won’t be able to do everything. There is maybe a ten percent chance I can still acquire the disease, but it won’t hospitalize me or kill me. It’s possible one of the variants could sneak in somehow. As I said, there is no guarantee. There are simply improving probabilities that it can be avoided or its impact lessened if acquired. I’ll probably still wear a mask a lot of the time I am in public. We may start eating in restaurants again, but we’ll keep the masks on until the food is served and put them on shortly afterward.

I’ve come to appreciate the value of the low-tech mask. If Americans had brains, they would use this opportunity to use masks routinely during the cold and flu season. The flu largely didn’t happen this year, thanks to all the masking. While I was aware a lot of illness was transmitted in the air, I can now clearly see the link and the virtues of wearing masks. It’s no longer that big a deal.

I just wish most Americans could embrace the idea that rather than limiting freedom, using masks allows freedom not just for you, but for everyone else too.

Is Google trying to kill YouTube?

If you watch YouTube (as I do regularly) you’ve likely noticed a few changes. Specifically, you should be noticing a lot more ads. To me, the limited ads were one of its attractions, aside from the breadth of information you can find on the site.

Like many YouTubers I think, I have a short attention span. YouTube has catered to me, giving me lots of videos of ten minutes or less in length about really unique topics that interests me, often by very creative content creators. The site has to make money so it was acceptable to have to deal with an introductory ad, which I could usually skip after five seconds or so.

As you probably have noticed, the ads now tend to be longer (usually fifteen seconds) and it’s getting harder to skip the ads. Also, ads are now getting stacked. Sometimes you have to sit through two ads, fifteen seconds each, to watch a video that is usually ten minutes or less. Already I was getting an itchy finger. At least YouTube warned me how many lead ads I was going to get and if I found the video of marginal interest, I hit the back button and watched something else instead.

Now of course many videos somewhere around the ten-minute mark interrupt the video, usually in the middle of the sentence, to serve you more ads, generally one or two more fifteen-second ads. It’s just grating and spoils the whole experience. If the video is long enough, you’ll get another set of ads. In short, YouTube is becoming a lot like commercial TV, just inserting ads in a less elegant and more jarring manner. This is making me (and I’m sure lots of others) rethink just how much I want to watch YouTube anyhow. So I’m starting to look at alternatives or going cold turkey.

Content creators will usually hit the checkbox to show these ads, because they want more revenue from their content. Particularly with the pandemic and the shrinking economy, ad rates are down, so to make up the difference content creators are generally happy to tell YouTube to insert more ads. This is particularly true of the more popular content creators I follow. If you are getting hundreds of thousands of views for every video you create, and your subscriber list just keeps growing, why not milk them for all they’re worth? This has been true of people like Graham Stephan that I’ve been following. I notice I’m watching fewer of his videos now that he is filling them with ads.

It’s obvious to me that YouTube wants you to subscribe to YouTube Premium instead. Like other subscription services like Netflix, you can do away with these ads, in Google’s case for $11.99 a month. They share some of this money with content creators, but the skinny seems to be this revenue is less generous than what you can get from ads, or at least what you could get from ads before YouTube started bloating them with before video and mid video ads. If true, content creators should be leery about relying on this revenue because YouTube will get the lion’s share.

One of the reasons I am not also a content creator on YouTube is because they have a monopoly. They set the rules and can change it whenever they want to. Some strike it rich, but the revenue stream probably always feels problematic. Like Google’s search engine, you really never know when YouTube will change its algorithm, so suddenly you may be losing subscribers and views and there’s no clear way to regain them. As a profit making company, of course Google’s going to try to squeeze as much profit as possible, from viewers and content creators. And if you don’t like it, well, maybe get a site on Vimeo, pay its hosting bill and hope for the best. Good luck in getting people to follow you there.

It’s a game I don’t want to get into, so I won’t. But because of all these monetary changes, YouTube is also becoming a less interesting platform. For me, the hassle level just isn’t worth it. It’s easier to search the web for the content I need, even with the web ads and crap there too, than get it in a more leisurely and personal way from YouTube.

Or there could be a darker motive. Maybe Google has run the numbers and it has the long-range goal of killing YouTube. It must be bleeding viewers like me with limited patience for all the ads it is serving, who also are either too cheap or simply don’t find the service compelling enough to spend $11.99 a month for. It must cost a fortune for Google to host all that content in real time. Hosting centers don’t come cheap with all that technology to serve it all instantly and deal with the huge volume of content it gets. Whether that’s their plan or not, I suspect it’s where YouTube is going to end up. I’m increasingly doubtful it will be around five years from now. We will have simply moved on to some service that costs less and is less hassle. Clearly, Google is not interested in fulfilling either of these missions anymore.

As for content creators, by throwing ads into their videos I suspect that they are generating short-term profit but long-term loss of subscribers and income. I understand their greed and I understand Google’s greed. But this platform just doesn’t work anymore and I think greediness on both sides is going to be its undoing. It’s feeling like a house of cards that’s about to collapse.

I may be one of the first to leave and help bring it down.

On Easter, praise Jesus for the Internet!

As you sit at home twiddling your thumbs, imagine how much worse all this social isolation would be without the Internet. There’s not much you can count on these days, but if you at least have a high-speed Internet connection, social isolation and boredom shouldn’t be among them.

It is likely that the Internet will only become more vital in the months and years ahead. That’s because contrary to what you might hope, most of aren’t going anywhere. Those of us who can work from home are going to keep doing so, and many will never return to the office.

“The office” may be one of the casualties of this crisis. If you make it into the office at all, it will probably be to a cubicle of the day. The new normal for white collar people will be what many of us were doing before all this started: working from home. We’ll be using VPNs (virtual private networks) to securely work remotely.

Our social life will evolve to what is already happening: Zoom meetings. This platform seems to be emerging as the go-to online meeting platform. Here on our hill of 55+ people, our association paid for a Zoom account. It sounds silly since we all live in the same neighborhood, but it’s a very socially active neighborhood. Many of these meetings are now virtual. Meeting in person in groups is probably at least a year away.

The ramifications of all this are still being sorted out. We can see one of them today: your Easter service if you are attending one is virtual. Our country was moving in a more secular direction already; this COVID-19 crisis will do more to accelerate it. After a while you may forget why you went to church at all. You can save a lot of money if you don’t have to tithe to your church, and since it can’t provide much in the way of spiritual services, what use is it?

It looks though that in our crazy, upside down world you can at least count on the Internet. Not that it isn’t under stress. Where I live, the only provider is Comcast. With everyone home all the time, and with neighborhoods sharing bandwidth over the same coaxial cable, latency issues are happening from time to time. Sometimes when we stream we get the dreaded hourglass. I’ve looked into this. We were getting 35 megabits per second, but are paying for “up to” 800 megabits per second. Sometimes Comcast can’t do better than 4% of the speed we are paying for.

It will be a wake up call to some that the Internet is not now just a nice-to-have thing, but an absolute necessity, and that we pay way too much for it. For a couple of years I have been trying to persuade our city to create a municipal network to compete with Comcast. The effort has been going great. We were all set to select a vendor to study the viability and costs of the network, then COVID-19 struck. It’s on hold, but I’m betting when our mayor and city council have a chance to catch their breaths, they will prioritize it over a lot of other things going on; indeed, it may be crucial to our city’s recovery from this. Ten years from now, if you are not getting Internet from your local government, you may be thinking you are living in the dark ages. In short, I don’t think Comcast stock is a good buy for the long term.

Most haven’t studied the history of the Internet, so we tend to take it for granted. While there is nothing miraculous about the Internet, the story of how it was created is indeed amazing. It’s the story of the success of long term investment, the sort of thing we rarely do in government anymore. Basically, we threw money at the Defense Advanced Research Projects Agency in the 1960s (then known as ARPA) to try to get military installations and educational institutions to be able to communicate electronically.

The genius behind it was a core group of radical thinkers (something you don’t associate with our Defense Department) that the network should be super reliable. By creating a public packet-switching network using open protocols, we created a super fault-tolerant network. If it breaks down at all, it’s in local neighborhoods like mine where the pipes provided by a single provider aren’t sufficient to meet the demand of the traffic that streams across it.

Imagine how socially isolated you would actually be if there were no Internet. You would be limited to telephone calls, probably from a landline. Since you could not afford long distance, it would be mostly to people on your local exchanges: one at a time, no conference calls. Imagine searching for work without the Internet. You would not be able to go out and knock on employers’ doors in the midst of a pandemic. You would be limited to local want ads in the paper, but even so what jobs that are available would largely be work from home jobs while the pandemic rages. Without the Internet, finding jobs at all is pretty much impossible.

The Internet provides a robust platform for information and knowledge exchange about pretty much anything, any time, and on demand. It just works. The Internet made much of my career possible and continues to provide me with income even in retirement. Now I help clients with their IT problems over the Internet, and have since 2006. I never leave home to work; it’s all done virtually. Most of my clients are from overseas. Without the Internet I would have never had their business. Yesterday, I was charging a client $60/hour to work on a site they are upgrading. Going to the office means going upstairs. That’s my office now and since I retired in 2014 it’s been my only office.

We’ll get through this in time. It’s going to be painful to get through it too. But if you think you are in pain now, imagine what life would be without the Internet. If nothing else, it can keep you fending off boredom pretty much indefinitely. If you are wise, you can use the Internet in this downtime to train for that next career, and emerge a winner in what is likely to be a new, more socially isolating age.

A car in its (Prius) Prime

So in case you were wondering, in late March I bought a Toyota Prius Prime. It was one of three models I had narrowed down as a viable choice. It was a pragmatic choice. I wanted a car that did not exist yet, which had to be fully electric but which I could conveniently recharge in the time it takes to fill a tank with gas. So it was either make a pragmatic choice or keep the 2005 Honda Civic Hybrid going for a few more years hoping the market would mature. My Honda Civic went to my daughter in Virginia. She is carless no more.

When you go nearly fifteen years between buying cars, you tend to be more than a bit wowed by the changes in car technology. I bought a 2018 Prius Prime Advanced because there were dealer incentives to unload them and I could get a tax credit for it. With the tax credit, the net cost will be around $23,000.

Toyota Prius Prime

I both love and loathe my new Prius Prime. I don’t like its style. The Prius shape is created to be super aerodynamic but its profile is also super unsexy. The Prius has become the Volkswagen Beetle of the 21st century: ugly but super useful. It is also everywhere because a lot of people like me have figured it out that while it’s not a SUV, it’s an extremely reliable and exceptionally fuel efficient car. It seats four, not five because the hybrid battery needed to be placed somewhere so they put it between the two back seats. The back of the car is actually a hatchback, but there is so much mechanical stuff inside that they had to compromise on trunk space. With the rear seats down you can haul some stuff. But it’s not really a pragmatic family car. Even with just my wife and me, when we take it on vacations we’ll have to pack a bit light.

My Prius also loves to nag me. It’s hardly alone. Most new cars do the same thing. Nonetheless, I’ve started to call it Nanny, because it’s a nanny car. It’s just trying to keep me safe. It would be hard to kill myself in this car because it wouldn’t let me. It’s constantly chirping and beeping to warn me of this and that. If you even just switch lanes without signaling, it will start chirping.

But then again, it’s an amazing car. It would get 50mpg if it were in hybrid mode, but it’s rarely in hybrid mode. 80% of the miles driven so far have been in purely electric mode. This is because most of my driving is local, and it has a purely electric range of about 30 miles or so. Last time I checked I was getting 189 mpg. Three months later, I still have about half a tank of gas. It does have a carbon footprint, but only a tiny one. Its electricity comes largely from our house’s solar panels. If we need anything extra from the grid, we pay for clean wind power. When the engine does turn on, the synergy drive tries to use the hybrid’s battery when possible and recharges it when brakes are applied or going downhill.

With more than fifteen years to perfect the Prius, Toyota has refined a totally practical car if you can live with its few deficiencies. The car feels entirely solid. There is no play in the steering wheel yet it turns smartly and easily. When in EV (electric vehicle) mode, it’s amazingly zippy because it’s being accelerated by an electric motor. In EV mode I can pass pretty much anything on the road without the car hardly trying, and silently because there is no engine running.

Even when the engine comes on though, it’s amazingly quiet. Only when accelerating with the engine on does it make much in the way of noise. The navigation system always tells me where I am going. While it doesn’t work with Android Auto or Apple CarPlay, its navigation system is functional if a bit baffling. The user interface needs a good reengineering.

What I miss about my old Honda Civic is its simplicity. I miss putting a key in the ignition. Also, my Prius can at times be a bit baffling to drive. With only a thick set of user manuals, learning comes slowly. The cruise control uses a separate lever in an odd location. But it’s an adaptive cruise control, which I love, love, love! Figuring out how to adopt it so I had a tighter following distance though was not intuitive. The heads up display on the Advanced model that I have is very convenient.

Some things you don’t have to think much about, like automatic emergency breaking and blind spot detection. It just happens. Doubtless in time it will become old hat, but right now I still struggle with basic things. It is nice to have built in Bluetooth so I can listen to podcasts when I cruise.

Being a plugin, it wants to be plugged in, so getting out of the garage is now a longer process because it has to be unplugged and the cords stowed away. Ditto with arriving home. But I have none of the range anxiety I had driving the Chevy Bolt, which I otherwise really liked and would have bought. I just couldn’t live with stopping for an hour or more to recharge every 250 miles or so when traveling long distances. Pragmatism ruled the day.

And that’s what you get with the Prius Prime: an excellently engineered vehicle that’s super efficient and super reliable and will basically run forever at minimal cost. I really don’t think there is a better value on the market. It was a logical choice and it’s a choice I get happier with over time. I have never felt so safe or have been more impressed with a car, despite its shortcomings. Having owned many Toyotas over the years, I know I can count on Toyota. For the deeply pragmatic type like me that wants great value, efficiency and minimal environment impact, it’s an exceptional value.

The downside of search engines

It’s no secret that my blog’s hits are way down compared to five or ten years ago. Trying to figure out why this is has been hard, and hasn’t been aided by my general apathy. There are days when my hits are in the single digits.

I recently saw a one-day spike of 97 page views, which turned out to be one person skimming lots of my pages. With 2038 posts and content going back to December 2002, you would think that I’d be getting a lot of traffic because I have a ton of content. But I’m not. Most of my stuff is being ignored because search engines don’t see it as relevant anymore.

At least that’s what I’ve learned in my latest research into the issue. Crazily, this site would probably get a lot more hits if it were a lot smaller. What would be left would be mostly my most accessed pages, i.e. the “relevant” ones. Merely keeping the old blog posts around, or posts that are very dated or rarely read, is apparently keeping many people from finding my site in the first place.

It wasn’t always that way, but over the years search engines (and Google in particular) have been concentrating ruthlessly on relevancy. If they don’t see your content as relevant, then for all practical purposes it will sit forever at the bottom of their search index. So if you are on the web because you enjoy encountering serendipitous content, well, a search engine can’t help you. In fact, it will get in your way. Even worse, there’s no easy way to discover serendipitous or random content. In their holy and obsessive quest to highlight only relevant content, I think search engines actually become less useful.

The exact process search engines use to determine relevancy is not known, but the general outlines are understood. If your content is newsy, i.e. topical, i.e. recent, it will rank higher. This is because in most cases people are searching for answers to a problem, so what’s current is more likely to be relevant than older stuff. The more sites that link to your content, the more relevant they think it is. It’s the 21st century equivalent of being popular by popular people saying they like you. Curiously, the algorithms search engines use are smart enough to figure out fake popularity. If you have a campaign to convince other sites to link to your site if you link to their sites, search engines will notice this stuff, and assume you are trying to game the system.

Yet Search Engine Optimization (SEO) is all about gaming the system, i.e. convincing search engines that your content is relevant. The SEO industry is huge, with lots of shysters out there offering to boost your site’s search engine ranking. While the broad outlines of getting better search ranking are pretty well known, no one can say for certain if a given strategy will work. Moreover, search engines are constantly tweaking their algorithms on the quest for even more relevant search results.

The result of all this is that site owners become like hamsters on a wheel, engaging in what is often a fruitless effort to boost their search ranking. Of course, organizations and companies that can afford to do so can achieve some success. It’s like lobbyists buying political influence in Washington: your site too can be more widely read, if you bring the right amount of bread or hire people with enough expertise in the SEO field. Or you can pay sites like Google directly to highlight your site using their Adwords program.

And there are plenty of people making careers out of this stuff. They pore over their daily Google Analytics reports. They attend SEO conferences. They watch YouTube videos on line on how to boost their search rankings. The tradeoff though is either time or money, and since how you spend your time effectively is money, it’s largely the same thing. You can probably boost your site’s traffic if you are willing to spend the time on it, or hire people to spend the time on it on your behalf.

So in trying to be helpful, search engines are creating an unequal playing field, providing increasingly tailored search results and giving a bias to those with time and money. It gets ridiculous sometimes. Google learns so much about you from your Google account and previous searches that it returns results that are perhaps too skewed toward your biases, making you miss important stuff like perhaps actual fact-based news. I wrote about this recently when I compared Google’s search to DuckDuckGo’s search. I found DuckDuckGo’s search results a whole lot better than Google’s because I was outside of Google’s filter bubble.

Even DuckDuckGo though is still on a quest for relevant search results. It has no serendipitous search capabilities either. Perhaps some search engine will find some niche market in returning serendipitous content. Then maybe my search rankings and site traffic will go back to the good old days.

One of the steps to returning to those good old days for me though might be to move the old and unsearched content to a new domain, say occams-razor-archive.info, or just purge it never to be seen again. I’d have to be careful not to actually link to a new archive site though, because that too could lower my site’s search rankings. And I’d have to disguise this blog into something it is not, and spend a lot of time tweaking it so that search engines will pay more attention to it. Probably the best way to increase my page hits would be to start a completely new blog, and fine tune it with punchy short paragraphs, post of no more than 500 words (so viewers don’t lose interest), always using an active voice and creating post titles that are carefully researched to get high interest.

I doubt I will do that. That takes a lot of energy I don’t have. Frankly, I sort of resent the search engine system we are forced to use. I disagree with the way it doesn’t rank the breadth of my content as important, when it should. There’s nothing I can really do about it though other than join this game, which doesn’t interest me. So this blog is likely to rank lower and seem less relevant in the years ahead.

But you can help me fight back. If you like what you read, then bookmark my site and come back to it regularly. Add it to your feed. Tell your friends, “Hey, I found this neat little site on the web!” Use the handy form on the sidebar (or off the menu if using a mobile device) to get emails when I make a new post. Show Google that you value longer and serendipitous content like my site. Maybe in time they will learn that in chasing the holy grail of relevancy, they are effectively hiding a lot of hidden gems across the web.

Invest in innovation, not exploitation

America is a supposedly country that rewards innovation. The trouble is, a lot of this innovation is really exploitation. I looked into this briefly a few posts back when I looked at Lyft and Uber’s “innovation”. The only really innovative part about these ride services is their app. They’re both cheaper and generally faster than taking a taxi. So much for the innovation part. The rest of it is pure exploitation, mostly of its drivers who get cash up front that doesn’t begin to pay a living wage, particularly if you consider the wear and tear on their cars.

These days much of what passes for innovation in our economy is finding newer and cleverer ways to exploit people, who are generally among the most vulnerable among us. Granted, this may be as American as apple pie. We bought Manhattan from the Indians for the price of some trinkets. These days, the exploitation is less overt. But even if you don’t use Lyft or Uber, you don’t have to look far to see examples.

At the macro level, large companies that pollute exploit us all. Their cost of business is discounted by using our air and rivers as a sewer, and we pay the price. Tens of thousands of Americans die from air pollution every year, and the Trump administration is doing its best to make sure more of us will die. Generally though it’s the poor and vulnerable that get exploited. This is our innovation economy at work.

Perhaps you saw John Oliver’s recent show on mobile home investing. This is exactly the sort of “innovation” that I wish we could outlaw. By definition, if you live in a mobile home you don’t make a whole lot of money. You might own your mobile home but in most cases these homes are not truly mobile. And if you wanted to pack up your mobile home and move it elsewhere, you probably can’t afford to do so. In most cases your mobile home sits on a lot that you rent. There are plenty of investor groups buying these properties and regularly jacking up rents, knowing they have a captive audience. Some say this is a great way to earn “passive income”. What you are really doing of course is exploiting the least among us. In many cases these people are skipping medications or food to pay these rent increases. Some abandon their property, which is repossessed and resold to the next exploited victim.

I’m not prone to anger but these sorts of schemes make me positively irate. They should be outlawed. There are all sorts of ways we pick the pockets of the poor among us: pay day loans with incredibly usurious interest rates, lotteries that take their money but rarely pay off, casinos with a similar idea, higher prices for substandard food because supermarkets won’t serve their communities and of course the traditional: substandard public schools that are grossly underfunded because wealthier school districts won’t share their wealth. If that’s not enough, we shame them for taking food stamps or trying to compete for the vanishingly small market of affordable housing.

Most of us though don’t distinguish between companies that make money via exploitation versus innovation. That’s because it requires research, thinking and our capitalist system sees nothing wrong with exploitation. Look at some of the recent IPOs. How many of these are really driving innovation? Lyft went IPO, but Uber was first to this market. Lyft’s app is not noticeably better than Uber’s. Both depend on exploiting drivers and frequently change their payment terms to drivers to increase their revenues at drivers’ expense. Both are working hard on autonomous car technology. They can’t wait to boot their drivers altogether because they’ve run the numbers and maintaining a fleet of autonomous cars is way cheaper than even exploiting their drivers.

Some companies are both exploitative and innovative. How should I feel about owning Amazon stock, which I probably do somewhere in a mutual fund or ETF in my portfolio? Most of Amazon’s model has been exploitative: they’ve undercut competitors by sustaining losses funded by investors until competitors are out of business. I can see the problem locally with so many vacant storefronts. These customers are using Amazon instead.

Amazon was shamed enough by Bernie Sanders so that they raised their wages to $15/hour, which is good, but it’s barely a floor for a survivable wage. Meanwhile, they are finding other ways to “innovate”, most recently by creating their own air fleet that innovates by screwing their pilots. But other parts of Amazon are truly innovative. Amazon Web Services was a completely new idea that Amazon figured out and which fundamentally changed computing, dramatically lowering computing costs, increasing uptime for connected systems and spurring all sorts of innovation in information technology. Its web services are now the most profitable part of Amazon’s business. It’s proven extremely profitable for Google and Microsoft too, who have pockets deep enough to compete in this market.

Ideally I would not own any stock in companies that are exploitative. But like most of you I suspect, I don’t own any stock directly. Instead, I own mutual funds, ETFs and bonds. Mutual funds and EFTs are collections of ownership in lots of stocks. I could own a commercial bond for a specific company, but even here most of these are amalgamations of lots of bonds funds. There’s no easy way to invest in pure innovation, and hard to avoid investing in exploitative companies.

It’s not entirely impossible, however. You can invest in “green” funds and there are some socially active funds that avoid investments in arguably “evil” countries, which include Israel, which is effectively an apartheid state. Kiplinger has some suggestions for this kind of investing. But it’s not easy and in some cases impossible.

For example, if your company does not allow you to invest your 401K in funds like these, you have no options and may pay a penalty for doing investing outside of your 401K, particularly if your employer makes matching contributions to your 401K.

Which is why in the end what you can do is limited, unless we had a progressive Congress that changed investment laws. At a minimum they could require companies offering 401Ks to provide options for employees who want to invest in funds that are innovative but not exploitative.

I am overdue for a talk about this with my financial adviser. Frankly, I wasn’t thinking much about this until my recent trip on Lyft. Much of our portfolio has moved with retirement from 401Ks to IRAs. These could be shifted toward funds that reward innovation and socially progressive. Fortunately, I have a call with him tomorrow.

The gig economy model is exploitative and unsustainable

I took my first Lyft ride the other day. I am pleased to say that the technology worked great! I picked up my luggage at baggage claim at Bradley International near Hartford, opened my Lyft app and within two minutes a driver was flagging me down and I was on my way home. I arrived home forty-five minutes later and just $55 poorer, but compared with taking a taxi I doubtlessly saved a bundle. In addition, my driver turned out to work part time for United Technologies configuring cloud services on Microsoft Azure for their customers. So we had lots to chat about and the drive went quickly. He fills his free hours driving people mostly to and from the airport and seemed happy to be a Lyft driver.

Until recently my daughter depended on Lyft and Uber to get around. She gave up her car a few years ago, convinced she didn’t need one in Washington’s far suburbs. If she needed to go somewhere, she’d either walk or use one of these services. Nonetheless, she snapped up the free car I offered her: my old 2005 Honda Civic Hybrid (now replaced by a Toyota Prius Prime). That was my reason for flying: I drove the car to Virginia to give it to her and took a United Airlines flight back. While normally my wife would pick me up at the airport, she recently had a knee replacement and couldn’t do it. So I experimented with Lyft, which I heard was the less evil of the two services. More to the point, it didn’t look like taking a taxi at Bradley was an option anymore. I didn’t see any I could flag down in Arrivals.

So it was a great experience until I thought about the model of Lyft and Uber in general. A lot of their drivers have too and have figured out that they are being exploited. Lyft and Uber are hardly alone using this model. In our new gig economy, the trick seems to be to create companies that find unique ways to exploit workers by making them not realize they are being exploited. In the case of Lyft and Uber, the first thing to do it not to label them employees. They are “independent contractors” who set their own hours and get paid fixed rates. One advantage to being a Lyft or Uber driver compared with being a Supershuttle driver is that they don’t have to rent a van from the company and probably aren’t working sixteen hours a day to keep paying Supershuttle’s franchise and leasing fees.

But they are getting ripped off. In the case of Lyft, they recently reduced payments to their “independent contractors”, which did not make them happy but did probably help lessen Lyft’s losses. Lyft went IPO last week but it’s bleeding money. Nonetheless, they aren’t too worried. Amazon used this strategy very profitably until their competition was either destroyed or bought out. Lyft is hoping for the same sort of success at this game. Its new shareholders don’t seem convinced yet as you can buy Lyft shares well below the $72/share price set at their launch.

These new companies exploit shamelessly and fight dirty. Customers tend to look the other way, basically because they don’t understand what’s going on. If you can save 30% or more with a Lyft ride compared to taking a taxi, you see a good deal plus in many cases they are faster and more convenient than a taxi. It’s clear to me though that these savings come principally from these “independent contractors”.

Taxi drivers are often independent contractors too. They usually aren’t employees. But they are regulated. Taxi commissions typically oversee these services and set rates that allow taxi drivers to earn a decent wage. In some cases they own their taxi, in some cases the taxi company owns them. But it’s a model that’s been working quite well because cities and towns have decided to make it work for both drivers and passengers.

Uber and Lyft decided to be disruptive, which was to just ignore these taxi commissions and brand their services as something other than what it is: a taxi service. The big difference is that their cars aren’t painted with the taxi company’s colors. You hop into one of these cars and hope that your driver won’t drive sexually assault you.

Doing background investigations on “independent contractors” of course raises costs. Hopefully both Lyft and Uber are at least doing cursory background investigations before offering contracts to these “independent contractors”. It’s more convenient to ignore these issues until it becomes too big a problem, and then hope to manage them.

But the real ones being exploited are not customers, but drivers. Basically they become drivers to get some quick cash to pay a few bills. What’s harder to see is the costs on their vehicles and how it eventually affects their bottom line. A car that was driven 10,000 miles a year that is now driven 30,000 miles a year will wear out more quickly and require more frequent maintenance. Neither Lyft nor Uber will pay for these expenses. You are supposed to figure that out as part of your business model, along with other things like withholding money for taxes and social security and Medicare, including the employer’s share. All these expenses plus the quick depreciation and higher maintenance costs on your car means that for most drivers, your effective wage per hour is below the minimum wage and you get all the hassles and costs of maintaining your car and paying taxes too.

These companies are prominent examples of this trend but they are hardly alone. Employers basically don’t want to employ: it’s costly, limits their ability to move quickly to market conditions and requires a lot of hassle. Amazon reluctantly raised wages for its warehouse workers to $15/hour, but it still hires lots of “independent contractors” who work for much less. Even my driver’s erstwhile day employer, United Technologies, is trying him out at part time wages and substandard benefits. He works from home and has to wait two more months before he is allowed to actually come into the office.

I don’t think this gig economy is sustainable. It endures until these “independent contractors” say enough and demand a fairer deal, which is hard to do if you have no union hall. Hopefully they will get a decent deal, but that will raises costs overall and make their whole business model less profitable.

But maybe it won’t matter. Like Amazon they hope that they will have gotten rid of the competition by then by hanging on as long as possible. This success though depends on cutting competition off at the kneecaps and exploiting people as long as possible. In the case of Lyft and Uber, so far it’s been decimating taxi companies. If ultimately it doesn’t work, they go out of business, leaving of course their “independent contractors” hanging.

In the case of Uber and Lyft, it’s clear this will happen eventually anyhow. The plan is to introduce fleets of automated cars as soon as the technology matures. And these “independent contractors” will be left holding the bag with cars with high mileage, lots of costs and no job.