Posts Tagged‘value’

The Longevity of Next Gen Consoles.

There’s an expectation upon purchasing a console that it will remain current for a decent length of time, ostensibly long enough so that you feel that you got your money’s worth whilst also not too long that the hardware starts to look dated in comparison to everything else that’s available. Violating either of these two constraints usually leads to some form of consumer backlash like it did when the Xbox360 debuted rather shortly after the original Xbox. With the next generation bearing down on us the question of how long this generation of consoles will last, and more importantly stay relevant, is a question that’s at the forefront of many people’s minds.

Durgano Block Diagram

 

Certainly from a purely specifications perspective the next generation of high performance consoles aren’t going to be among the fastest systems available for long. Both of them are sporting current gen CPUs and GPUs however it’s quite likely that their hardware will be superseded before they ever hit the retail shelves. AMD is currently gearing up to release their 8000 series GPUs sometime in the second quarter of this year. The CPUs are both based off AMD’s Jaguar micro-architecture and should be current for at least a year or so after their initial release, at least in terms of the AMD line, although with the release of Haswell from Intel scheduled for some time in the middle of this year means that even the CPUs will be somewhat outdated upon release. This is par for the course for any kind of IT hardware however so it shouldn’t come as much of a surprise that more powerful options will be available even before their initial release.

Indeed consoles have always had a hard time keeping up with PCs in terms of raw computing power although the lack of a consistent, highly optimizable platform is what keeps consoles in the game long after their hardware has become ancient. There does come a time however when the optimizations just aren’t sufficient and the games start to stagnant which is what led to the more noticeable forms of consolization that made their way into PC games. It’s interesting to note this as whilst the current generations of consoles have been wildly popular since their inception the problem of consolization wasn’t really apparent until many years afterwards, ostensibly when PC power started to heavily outstrip the current gen consoles’ abilities.

Crytek head honcho Cevat Yerli has gone on record saying that even the next gen consoles won’t be able to keep up with PCs when it comes to raw power. Now this isn’t a particularly novel observation in itself, any PC gamer would be able to tell you this, but bringing in the notion of price is an intriguing one. As far as we can tell the next generation of consoles will come out at around $600, maybe $800 if Sony/Microsoft don’t want to use them as loss leaders any more. Whilst they’re going to be theoretically outmatched by $2000 gaming beasts from day 1 it gets a lot more interesting if we start making comparisons to a similarly priced PC and the capabilities it will have. In that regard consoles actually offer quite a good value proposition for quite a while to come.

So out of curiosity I specced up a PC that was comparable to the next gen consoles and came out at around $950. At this end of the spectrum prices aren’t affected as much by Moore’s Law since they’re so cheap already and the only part that would likely see major depreciation would be the graphics card which came in at about $300. Still, taking the optimizations that can be made on consoles into account, the next gen consoles do represent pretty good value for the performance they will deliver on release and will continue to do so for at least 2~3 (1~2 iterations of Moore’s Law) years afterwards thanks to their low price point. Past then the current generation of CPUs and GPUs will perform well enough at the same price point in order to beat them in a price per dollar scenario.

In all honesty I hadn’t really thought of making a direct comparison at the same price point before and the results were quite surprising. The comparison is even more apt now thanks to the next generation coming with a x86 architecture underneath which essentially makes them cheap PCs. Sure they may never match up to the latest and greatest but they sure do provide some pretty good value. Whilst I didn’t think they’d have trouble selling these things this kind of comparison will make the decision to buy one of them that much easier, at least to people like me who are all about extracting the maximum value for their dollars spent.

Why You Shouldn’t Invest In BitCoins.

Much like my stance on Instagram I’ve seemingly been at odds with the BitCoin community ever since I penned my first post on it almost 2 years ago. The angst seems to stem primarily from the fact that I lumped it in with Ponzi schemes thanks to its early adopter favouritism and reliance on outside wealth injection. After the first crash however BitCoins started to show some stability and their intended function started to be their primary use. Indeed the amount of investment in the BitCoin ecosystem has sky-rocketed in the past year or so and this had led to a period of much more mild growth that was far more sustainable than its previous spikes were.

It was for that reason that I held my tongue on the latest round of price volatility as I assumed it was just the market recovering from the shock of the Pirateat40 scheme unravelling. That particular incident had all the makings of another price crash but it was obvious that whilst there was a great deal of value lost it wasn’t enough to make a lasting impression on the economy and it soon recovered back to a healthy percentage of its previous value. The last month however has started to show some worrying trends that hark back to the speculative bubble.

BitCoin Price Chart

If you zoom in on either of those 2 ramps the gradients are frighteningly similar although the price jump is from $15 to $25 rather than $3 to $10. Whilst the value jump might not be as severe as it was before (~66% rather than 300%) it’s still cause for some concern due to the time frame that it has happened in. When the value jumps up this fast it encourages people to keep their BitCoins rather than using them and attracts those who are looking to make a return. This puts even more upward pressure on the price which eventually leads to the kind of value crash that happened back in 2011.

Others would disagree with me however, saying that its actually a great time to invest in BitCoins. The reasons Anzaldi gives for wanting you to invest in BitCoins however don’t make a whole lot of sense as he doesn’t believe this round of growth is unsustainable (and even admits that the only other thing that gives this kind of ROI are all scams) and that the reward halving coupled with the deployment of ASIC chips are what are behind this stratospheric, real growth. The fact of the matter is that neither of these really has any influence over the current market rate for BitCoins, it all comes down to what people are willing to pay for them.

Prior to the lead up of the previous crash BitCoins had already experienced some pretty crazy growth, going from prices measured in cents to dollars in the space of a couple months. This immediately led to a flood of people entering the market who were seeking fast returns and had no intention of using BitCoins for their intended purpose. This current round of growth feels eerily familiar to back then and with people seeing rapid growth its highly likely that those same speculators will come back. It’s those speculators that are driving the price of BitCoins up not the factors that Anzaldi claims. If they were the price would have begun this current upward trend back in November (it did go up, but not like this and stablized shortly after) and the introduction of ASICs is far more likely to flood the market with more coins as hardware investors look to recoup some of their investments, rather than holding onto them for the long haul.

This kind of wild volatility isn’t helping BitCoins intended use as an universal currency that was free of any central agency. If this growth spurt leads to a new stable equilibrium then no harm, no foul but it really does look like history repeating itself. I’m hopeful that the market is smart enough to realise this and not get caught up in a buy and hold spree however as they’ve managed to do that in the past. As long as we remember that it’s BitCoin’s worth is derived from its liquidity and not its  value then these kinds of knife edge situations can be avoided.

BitInstant, BitCoin Market Corrections and Cryptocurrency’s Future.

There seems to be a prevailing idea that the price of BitCoins is somehow intrinsically linked to the overall confidence in the use of the nascent cryptocurrency. If you’ve read any of my previous articles on BitCoin you’ll know that I strongly believe that that isn’t the case and indeed a rising price is usually a signal of speculative investors gaming the market to turn a quick profit more than it being an indication of market confidence. Indeed I was most bullish on the idea of BitCoin when its price  stop fluctuating which meant it was far less risky for people to use it as a wealth transfer vehicle, especially for those who are taking the risk of using them in their business.

Now I’ll be completely honest here, when I saw the first stirrings of an upward tick in BitCoin’s price I wasn’t too worried that it would lead to a speculative bubble. Sure it was dangerously close to the same ramp up just a year previous but I felt that the higher transaction volume, larger amount of wealth contained in the BitCoin network and hopefully the market’s long term memory would ensure that any growth in the price was purely organic and sustainable. Of course this discounted external actors with larger amounts of capital working to skew the market in order to turn a profit but I felt that the speculators had had their fun last year and had moved onto other, more lucrative endeavours.

Looks like I was wrong.

As you can see from the above graph the BitCoin price took a turn for the volatile side around the middle of July. Since then there’s been several spikes in trading volume most of which have coincided with a jump in the price. Whilst there appears to be islands of stability that last about a week it never lasted long before another trading bout would push the price upwards. This culminated in a peak price of about $14 late last week quickly followed by a swift downward correction in price with it stabilizing around the $10 mark. As I’ve said before this kind of price volatility is very much at odds with BitCoin being a proper currency and it’s unfortunate to see history repeating itself here again.

Interestingly though the correction in price may actually be due to dwindling confidence, but not in the BitCoin idea itself. The first lawsuit involving BitCoins and the failed wallet service Bitcoinica was lodged just days prior to the value taking a swift nose dive. This was most likely exacerbated by people attempting to cash out at the current peak as you can see the transaction volume on that day was several times higher than the average for the preceding couple of months. Bitcoinica, unfortunately, isn’t the only story of BitCoin based services that have endured failure and this could have very easily shaken the market enough to attempt to dump out early to avoid losing all their value.

The underlying cause to much of the volatility that the BitCoin market experiences is the relatively small amount of value that it captures. Whilst as a whole the BitCoin market is valued at some $97 million (total number of BitCoins in existence multiplied by current price) the total transaction volume on any given day usually only averages $800,000. That’s incredibly open to manipulation and showcases just how crazy those peak trading days, the ones where the value changing hands is on the order of 3 times the average, really are.

Now I don’t pretend to have a solution to this but a new startup called BitInstant might have the right idea when it comes to injecting more value into the market and hence (hopefully) reducing its volatility.

BitInstant is a clever little idea using prepaid MasterCard debit cards which are then backed with either real US currency or BitCoins. The cards can be recharged either by traditional means or by using a BitCoin address that’s printed on the back of the card. They make this even easier by also including a QR code on the back which would enable users to transfer BitCoins between them using things like BitCoin enabled apps on their smart phones. The details on it are still being finalized but this has the potential to take BitCoins from their current niche operations to a much larger scale and hopefully with that bring a lot more stability to the BitCoin price.

BitCoin purists will probably detest the cards since they will require some level of formal identification for them to be able to use it, thus eliminating the benefits of anonymity, but I don’t believe BitInstant’s product is aimed at them. Indeed it seems to be more of a way to make BitCoin function more like a traditional currency as currently it really is only for the technical elite or those who have a need to transfer funds in a completely untraceable manner. Giving people a physical card they can use anywhere will go a long way to making BitCoins much more palatable for the masses, something that all the current BitCoin services I feel have failed to do.

BitInstant is just one piece in the larger puzzle though and realistically its going to take many, many BitCoin enabled services to make it viable as a currency. Good news is that appears to be happening with BitInstant being just the latest contender to throw their hat into the BitCoin ring. Hopefully this means that the peaks and troughs in BitCoin’s trading price will soon be a lot more tame and then I’ll stop harping on about how BitCoin’s price is the last thing we should be thinking about if we’re serious about it being a currency.

Bitcoin’s Worth: Liquidity, Volatility and (Least of All) Value.

In the short time that Bitcoin has existed the amount of press, controversy and debate that it’s managed to stir up has been quite staggering. Back at its inception many jumped on it as a way to make a few bucks on the side without having to actively participate in anything but it soon quickly grew from there into a stable little economy that had a mix of both wealth seekers and believers in the idea. The start of this year saw Bitcoin undergo a massive meteoric rise to fame, drawing the critical eye of economists and arm chair financials like myself. The speculative bubble soon burst sending millions of imaginary worth into the digital ether and the confidence in the currency was shaken. Still I saw this as a Bitcoin coming of age as if it could survive this it could potentially become the currency everyone was hoping it to be, once it had some stability.

Since then it appears that the Bitcoin market had hit the bottom of the bursting bubble, tapping out around the US$2 range. It’s since then recovered a little more to be around the US$4 range which, whilst still not being the dizzying heights we saw back in June, is still quite respectable and lot higher than it’s value in years past. What’s truly interesting however is Bitcoin’s transaction volume over the past couple months, it’s actually remained quite high:

Looking at that graph you can draw the conclusion that whilst the value of a Bitcoin has dropped significantly it’s actually still seeing quite a lot of use as a transactional currency. The trading volumes of some of the days in recent months dwarfs that of the speculative bubble and yet the Bitcoin price has remained somewhat steady. This graph would then indicate that the speculators which drove the bubble to it’s crazy highs have well and truly left the market and the majority of currency conversions are from people actively using it as a commodity rather than an investment.

This was one of the biggest challenges facing Bitcoin: it’s liquidity with other currencies. Whilst it’s all well and good to think that we could do all our transactions in this new medium the fact is we can’t and thus Bitcoin’s utility is directly linked with our ability to exchange it for real world currencies. Indeed Ars Technica gives a good view on how Bitcoin’s could market itself as a better wire transfer service and this new found liquidity definitely plays a part in making such an idea come into reality. There is one nagging problem however and that’s the underlying volatility of a commodity with such a small trade volume.

The chart above would lead you to believe that the Bitcoin price had been relatively stable for the past 2 months but that’s just a function of how the graph is presented. Instead of showing the daily average price and transaction volume over the past year if we instead take hourly price and transaction volumes we see a very different picture:

What we can see here is just how volatile the value of the price really is. Whilst it’s nothing compare to the speculative bubble you can still see that transaction volumes on the order of 20K to 40K can swing the price of a Bitcoin considerably, on the order of US$1 or more. Granted there does appear to be periods of low transaction volume with steady growth (between the 17th of November and 1st of December) but the only time that Bitcoin enjoys true value stability is when the transaction volumes are below 10K per hour, and that’s got to change if Bitcoin can be considered as a stable currency. Right now anyone with $120,000 could swing the market one way or another, which is chump change for almost any investment firm.

The takeaway from all this then is that whilst Bitcoin has definitely taken a step forward in terms of liquidity it’s still far too volatile to be considered as a good transactional currency. Whilst I believe the actual value of a Bitcoin is largely irrelevant what does matter is how stable it’s value is over a long period of time. Right now Bitcoin still has the same inherent instability that allowed speculators to create the huge bubble back in June and until it manages to stabilize itself I can’t see getting past the technical novel stage. Whether it’s capable of doing this I can’t comment on as whilst it’s a technically elegant solution economically the challenges it faces are quite large and I’m not sure they have a simple solution.

Working Yourself Out of a Job.

One of the most common bits of career advice that I’ve been given is that you have to make yourself valuable to the company or organisation your working for. The thinking goes that if you’re valuable then it’s more likely that you’ll get a promotion and much less likely that you’ll face the chop if things start going south. It’s a good little nugget of advice however I find that many people get the idea of what constitutes value completely wrong, to the point of thinking that they’re valuable when in fact they’re being anything but. I found this to be especially true in the field of IT, especially in the areas that tend to be more insular and less socially apt.

Most often the idea of being valuable goes hand in hand with the idea of being irreplaceable. Usually this happens when someone either designs some system or process that does what is required of it but for all intents and purposes is a black box for anyone but the original creator. This person, although it can be multiple people, now feels safe in their job as since they’re the only one who knows how it works (and how to fix it when it breaks) and this gives them the feeling of being valuable to their company. For a short time they are but in the long term they’re being extremely detrimental, both to themselves and who they work for.

Their negative impacts on the company are pretty obvious. A system or process that relies on a specific person in order to keep it functioning has a major single point of failure. Whilst the system is working and that person is available everything seems fine, but take the unfortunate notion of them getting hit by a bus (commonly referred to as the bus factor). How long would it take an outside person to deconstruct the system or process in order to be able to understand it to the same level that they did? That amount of time is usually quite high, especially if this kind of behavior is allowed to continue unchecked for years. Thus these people who thought they were invaluable to their place of work are really quite harmful, but not just to their place of work.

Making yourself irreplaceable like this however is extremely toxic to your future career prospects. If you’re the most important cog then it’s far less likely that your superiors will want to promote you, why would they want to take you away from a critical process that you’re the expert on? Quite often people mistake getting looked over for a position as their value not being properly recognized when in fact it’s that same “value” they created which keeps them firmly rooted in their place. This also usually goes hand in hand with a lack of skill development meaning that the skills that were once valuable (like in the creation of said system or process) are now no longer so highly sought after, making them an undesirable candidate on the open market.

This is exactly why I’m always working myself out of a job, which I’ve actually done once before. Back when I was working at the Australian Maritime Safety Authority I was hired with a specific purpose. A year later I had designed, implemented and fully documented the system that they wanted to the point where they couldn’t find any more work for me to do. Since I was a contractor I was under no impressions that I would have a job at the end of it and sought employment elsewhere before my contract finished. In the end they did find additional work for me to do, but I had already signed on to my new engagement. It might seem like a bad career move to make yourself redundant, but if you’re a skilled individual there will always be more work available and the reference from the place you left will speak volumes to your worth.

It all comes down to the misguided notions of value that people tend to hold and the idea that being replaceable somehow diminishes your own value. Realistically given enough time and resources anyone is replaceable so it is far better to assume that your job could be done by someone else than believing you’re immune to being usurped. Personally I find the idea to be quite liberating as it has led me to pursue many different avenues with which to improve myself in order to differentiate myself from the crowd. If I had simply made myself irreplacable I’d probably still be working at the same place I was 7 years ago, and that’s not a thought I relish.

Poisoning The Well That Once Sustained You.

A company is always reliant on its customers, they’re the sole reason that they continue to exist. For small companies customers are even more critical as losing one for them is far more likely to cause problems than when a larger company loses one of theirs. Many recent start ups have hinged on their early adopters not only being closely tied to the product so that they form a shadow PR department but also many of them hobbyist developers, providing additional value to their platform at little to no cost to them. Probably the most successful example of this is Twitter who’s openness with their API fostered the creation of many features (retweets, @ replies, # tags) that they had just never seen before. It seems however that they think the community has gone far enough, and they’re willing to take it from here.

It was about two weeks ago when Twitter updated their terms of service and guidelines for using their API. The most telling part about this was the section that focused on Twitter clients where they explicitly stated that developers should no longer focus on making new clients, and should focus on other verticals:

The gist of what Sarver said is this; Twitter won’t be asking anyone to shut down just as long as they stick within the required api limits. New apps can be built but it doesn’t recommend doing so as it’s ‘not good long term business’. When asked why it wasn’t good long term business, Sarver said because “that is the core area we investing in. There are much bigger, better opportunities within the ecosystem”

Sarver insists this isn’t Twitter putting the hammer down on developers but rather just “trying to be as transparent as possible and give the guidance that partners and developers have been asking for.”

To be honest with you they do have a point. If you take a look at the usage breakdown by client type you’ll notice that 43% of Twitter’s usage comes from non official apps, and diving into that shows that the vast majority of  unofficial clients don’t drive that much traffic with 4 apps claiming the lion’s share of Twitter traffic. A developer looking to create a new client would be running up against a heavy bit of inertia trying to differentiate themselves from the pack of “Other Apps” that make up the 24% of Twitter’s unofficial app usage, but that doesn’t mean someone might not be capable of actually doing it. Hell the official client wasn’t even developed by Twitter in the first place, they just bought the most popular one and made it free for everyone to use.

Twitter isn’t alone in annoying its loyal developer following. HTC recently debuted one of their new handsets, the Thunderbolt.  Like many HTC devices its expected that there will be a healthy hacking scene around the new device, usually centered on th xda-developers board. Their site has really proved to be invaluable to the HTC brand and I know I stuck with my HTC branded phones for much longer than I would have otherwise thanks to the hard work these guys put in. However this particular handset is by far one of the most locked down on the market, requiring all ROMs to be signed with a secret key. Sure they’ve come up against similar things in the past but this latest offering seems to be a step above what they normally put in, signalling this a shot across the bow of those who would seek to run custom firmware on their new HTC.

In both cases these companies had solid core products that the community was able to extend upon which provided immense amounts of value that came at zero cost to them. Whilst I can’t attribute all the success to the community it’s safe to say that the staggering growth that these companies experienced was catalyzed by the community they created. To suddenly push aside those who helped you reach the success you achieved seems rather arrogant but unfortunately it’s probably to be expected. Twitter is simply trying to grab back some of the control of their platform so they can monetize it since they’re still struggling to make decent revenues despite their huge user base. HTC is more than likely facing pressure from carriers to make their handsets more secure, even if that comes at the cost of annoying their loyal developer community.

Still in both these situations I feel like there would have been a better way to achieve the goals they sought without poisoning the well that once sustained them. Twitter could easily pull a Facebook maneuver and make all advertising come through them directly, which they could do via their own in house system or by simply buying a company like Ad.ly. HTC’s problem is a little more complex but I still can’t understand why the usual line of “if you unlock/flash/hack it, you’re warranty’s void” wasn’t enough for them. I’m not about to say that these moves signal the down fall of either company but it’s definitely not doing them any favors.

Unlocking the Hidden Value in your Technology.

Most of the time when you’re buying the latest widget you’re buying it with a purpose already in mind for it. I know the majority of the things I’ve bought were initially bought to fill a need (like the server this web page is coming to you from, it was a testbed for all sorts of wonderful things) and then are left at that. But what about that hidden little bit of value that’s inside pretty much every tech purchase these days, can we essentially get more for money we’ve already spent?

With technology moving at such a rapid pace these days pretty much every gadget you can think of has what amounts to a small computer inside it. A great example of this would be your stock standard iPod, whilst Apple is always coy about what is actually under the hood in these devices a little searching brings up this list which shows that the majority of them run on a re-branded Samsung ARM processor. While this might not mean anything to anybody a couple intrepid hackers took it upon themselves to port the world’s most popular free operating system, Linux, onto this device. Whilst this at first might seem like an exercise in futility a quick glance at their applications page shows many homebrew applications that have been developed for this platform.

This is not the only occurrence of something being used way outside its original purpose. Way back in 2005 Sony released the Playstation Portable, an amazing piece of hardware that was basically a Playstation 1 console made portable. Thanks to my working in retail at the time I had one in my pocket the day it was released, but it wasn’t until a couple years later that I discovered the huge hacking scene that was behind this device. I then discovered that I could run emulators, media streaming programs (I was able to wow my housemates by streaming media over WiFi to my PSP), homebrew games and so much more. Sure, I was running the risk of completely destroying the device in the process but the additional value I got out of it was worth the risk. Well, it was out of warranty anyway 😉

This kind of value-add is something I now seek in pretty much all of my technology purchases. Recently I bought myself a Sony Xperia X1 mobile, but not before hitting up my favourite HTC hacking site, XDA-Developers. A quick look at their Xperia section shows all sorts of wonderful things you can do with this handset. One of the most amazing things you can do is run Google’s Android platform on this handset, something which sealed the deal on the phone instantly. It’s things like this that help me justify such huge tech purchases (that and the fact that my work paid for the mobile 😉 ).

So I encourage you, look around your room and see if there’s anything there that you wouldn’t mind tinkering with and have a look around on the Internet to see what can be done. I’m sure you’ll be pleasantly surprised.