The Bitcoin Apocalypse Is Coming in Mid-November - <AUTHOR> http://blog.rongarret.info/2017/09/the-bitcoin-apocalypse-is-coming.html <comment><USER2> This author confuses a _hard fork_ for a _github fork_ :

> The bitcoin chain has been hard-forked at least five times, [1]

[1] [https://en.wikipedia.org/wiki/List_of_bitcoin_forks](https://en.wikipedia.org/wiki/List_of_bitcoin_forks)

Ouch! Those aren't hard forks— they are forks of the github repo!

In reality Bitcoin has only been hard-forked twice. Once, to fix the bug as described in BIP 50, and once for Bitcoin Cash.

Here's a better resource: [http://homepages.cs.ncl.ac.uk/patrick.mc- corry/atomically-tr...](http://homepages.cs.ncl.ac.uk/patrick.mc- corry/atomically-trading-roger.pdf)

<comment><USER3> A common mistake made by "self-appointed" bitcoin experts and IMHO a good indicator for more red flags.

> On one side are those who believe that Bitcoin is … money, currency, …. On > the other side are those who believe that it is a commodity, ….

That is the other red flag: Trying to construct two different exclusive camps. This goes along with not mentioning the Lightning Network (LN). Some people still don't see that LN could enable bitcoin to be both: A currency _and_ a commodity.

<comment><USER4> LN has been vaporware for a long time, and it's always 18 months before it's ready. Recently the developers openly admitted they don't know how to scale it beyond 10000+ channels, because they don't know how to solve distributed routing.

[https://www.reddit.com/r/btc/comments/719vis/lightning_dev_t...](https://www.reddit.com/r/btc/comments/719vis/lightning_dev_there_are_protocol_scaling_issues/)

[https://medium.com/@jonaldfyookball/mathematical-proof- that-...](https://medium.com/@jonaldfyookball/mathematical-proof-that-the- lightning-network-cannot-be-a-decentralized-bitcoin-scaling- solution-1b8147650800)

<comment><USER3> That is a very pessimistic view on the current state of LN. There are three independent open-source LN implementations [1, 2, 3] out there that are being worked on and already implement basic functionality. All three contribute to an document, called Basics Of The Lightning Network (BOLT) [4], which forms an open standard for LN.

I wouldn't call it vaporware. Yes, there are unsurprisingly open questions. But nothing which can't be solved.

1: [https://github.com/lightningnetwork/lnd](https://github.com/lightningnetwork/lnd) 2: [https://github.com/ACINQ/eclair](https://github.com/ACINQ/eclair) 3: [https://github.com/ElementsProject/lightning](https://github.com/ElementsProject/lightning) 4: [https://github.com/lightningnetwork/lightning- rfc](https://github.com/lightningnetwork/lightning-rfc)

<comment><USER4> In the broad terms, how do you even imagine LN to work? Let's say I want to buy a $3 coffee at some random Starbucks I'm walking by. Do we have to first open and fund the channel? How much will it all cost just for that one off purchase?

Give particular figures please, no vague nonsense I hear all the time.

As for these implementations, I will believe it when I see it. You didn't even try to address the particular issue I mentioned.

<comment><USER5> You could be transacting your coffee with any crypto that Starbucks supports, and which is compatible with the lightning network. Litecoin will work for this example.

So Starbucks ask you to pay via Litecoin, which is fine by you even though you don't have a Litecoin balance. Atomic swaps over lightning network funded by some bitcoin you own, converted to Litecoin, is how you'll pay for your coffee.

<comment><USER4> What if they only accept bitcoin? That's the case for most businesses accepting cryptocurrencies.

Both of you are suspiciously avoiding a direct and simple question. How does LN work on Bitcoin in this case?

</comment></comment></comment></comment></comment></comment></comment><comment><USER6> > I am fully cognizant of the perils of making bearish predictions about new > technology.

> But, to quote another well-worn and wholly unreliable aphorism, this time > it's different. It really is.

and

>... because the only other alternative is chaos, and probably the end of the whole Bitcoin experiment.

I'm very much a Bitcoin skeptic, but, I'm not sure this time is different, or that Bitcoin will die.

For the last 8 years, various sources have been predicting a Bitcoin collapse over and over again. It's still here, alive and well and quite high.

3 years ago: Business Week - Bitcoin Is Collapsing => [https://news.ycombinator.com/item?id=8893616](https://news.ycombinator.com/item?id=8893616)

4 years ago: latimes.com - Bitcoin virtual currency is on verge of collapse => [https://news.ycombinator.com/item?id=7306035](https://news.ycombinator.com/item?id=7306035)

6 years ago: theatlantic.com - The Bitcoin Economy Is Collapsing with No Sign of Recovery (2011) => [https://news.ycombinator.com/item?id=8431092](https://news.ycombinator.com/item?id=8431092)

6 years ago: Bitcoin & Gresham's Law - the economic inevitability of Collapse => [https://news.ycombinator.com/item?id=3623549](https://news.ycombinator.com/item?id=3623549)

<comment><USER7> In one sense, it's already dead.

In theory, Bitcoin is supposed to be a payment system, digital cash. But that seems to be pretty much dead. Consider the opinion of Fred Wilson, a big Bitcoin booster, who has stopped using it for payments: [http://avc.com/2017/08/store-of-value-vs-payment- system/](http://avc.com/2017/08/store-of-value-vs-payment-system/)

Merchant acceptance is actually in retreat: [http://www.businessinsider.com/merchants-arent-accepting- bit...](http://www.businessinsider.com/merchants-arent-accepting- bitcoin-2017-7)

It is still being used for speculation, of course. And for some crime. But the 2010 vision of a digital cash that replaces Western Union, Visa, etc? It certainly hasn't arrived, and it seems farther off than ever.

<comment><USER8> It was set to die by design.

Bitcoin has a predetermined graph of coin production with time that converges soon. In 2022, 90% of all bitcoins will be produced, and the ideal inflation will be lower than most fiat currencies.

But inevitably, people die, and the knowledge of their private key with them, removing bitcoins from circulation. The amount of bitcoin will therefore decrease impredictably

All in all, it will be as volatile as currently traded gold (which is not as good a long-term store of value as fiat money as a result), and slower to use in transactions (in November, the European Central Bank will launch SCT Inst, a SEPA mechanism that provides transactions in less than 15 seconds, which is better than Bitcoin's recommended 2 hours).

Beating the improvements of traditional systems will require new cryptocurrency designs.

<comment><USER9> > But inevitably, people die, and the knowledge of their private key with > them, removing bitcoins from circulation. The amount of bitcoin will > therefore decrease impredictably

Maybe a bit late, but you finally understood why Bitcoins get more valuable over time: their number grows slowly or maybe decreases, while the number of people wanting them increases.

That's why Bitcoin is the best Store Of Value ever devised.

<comment><USER10> Ok put your entire life savings in BC, i will put mine in the SP500. Lets see how things look in 40 years?

<comment><USER11> How has the SP500 compared to BC since its inception in 2009?

<comment><USER12> The SP500 has been growing consistently, has for quite a long time, and it's a bet on the future growth of the American economy. There will be ups and downs, but by enlarge, steady growth.

BTC has been on a wild ride, and could evaporate at any moment. I don't think it will, but it could, since there's no reason for anyone anywhere to own it.

There's no question the safer bet is S&P 500.

Now - in the range of outcomes, admittedly, the BTC owns the higher end of the spectrum - no doubt, there are possibilities where BTC completely outraces the S&P, however, it also owns the lower end of the spectrum of outcomes, where a lot of those outcomes are 0.

<comment><USER7> It surprises me to see this downvoted.

One fundamental of investing is that stocks represent an economically productive asset. In contrast, commodities just sit there. If I buy a chunk of a company, that company is working to become a bigger, more effective, more value-generating company. If I buy an ounce of gold, it stays an ounce of gold.

Index funds represent a broader bet still. Because they're composed of many things, volatility is lower and you're betting on whatever the common factors of the index are. So buying an SP500 index fund could easily be said to be a bet on the American economy.

And in many ways, Bitcoin is worse than gold. The historical value of gold is known. Bitcoin is new. Gold's floor price is set by the practical use value of it, both industrial and decorative. Bitcoin's floor price is that of bits. That is, zero. The gold market is broad, with producers and consumers all over the world, and open markets in many countries. Bitcoin is effectively controlled by a relatively small number of people and requires careful long- term cooperation of those people.

So it seems pretty obvious to me that Bitcoin is much higher risk. Which can mean higher reward. But as anybody who has shares in a failed startup knows, higher risk doesn't guarantee higher reward.

<comment><USER11> I beg to differ with regards to your valuation of Bitcoin. It, like gold, has a practical use value. It, also like gold, has a value attributed to it due to it's rarity. However, Bitcoin has an advantage over gold, in that it can be traded without having to be transported _at cost_. This is why so many people are bullish on it.

Oh, and so many people "who are in control of it" have too much of their own money invested into it to allow it to fail.

<comment><USER13> The advantage of gold over Bitcoin is that you can evaluate the non-"it's gold!" uses of gold and make a good guess of its floor value, what it'd be worth if people weren't hoarding it, and say something like "it might be 2-3x overpriced right now, but probably not more than 10x overpriced right now". So you can say, worst case, you probably won't lose more than half the money you put in gold, and almost certainly not _all_ of it.

What is the floor price of Bitcoin, once you eliminate all speculation/hoarding?

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER14> As a Bitcoin fan (and someone who owns a little), I think it's a pretty good article.

Some more tidbits of information from my perspective:

>The anti-2Xers argue that the NYA should not be binding because it was negotiated behind closed doors, and that a change of this magnitude needs to be more carefully considered before it is adopted.

No active developers were part of the NYA. Some in the NYA have said that they agreed because they believed Core was party to the NYA.

>But there is another school of thought, which is that Bitcoin is (or should be) a currency rather than a commodity, primarily a medium of exchange rather than a store of value. These are the folks who want you to be able to buy a cup of coffee at Starbucks with Bitcoins.

I don't think anyone, including Core, is against that (higher transaction throughput). But on-chain scaling alone can't get you very far, and it has large costs that need to be carefully considered. The (backward-compatible) Segwit capacity upgrade just happened, and it takes time for people to update their software to make the newer more-efficient transactions. (... If the consensus was that Bitcoin really was urgently hurting for transaction capacity, you'd expect people to be updating to Segwit transactions faster than they are now.) The idea that another capacity upgrade should be rushed so soon immediately after Segwit is kind of silly. The idea that it should be decided so soon behind closed doors by a few CEOs is sillier.

>The 2X advocates have refused, citing the NYA, and secure (at least apparently) in their belief that enough people will update their code that there will be no doubt that 2X is the One True Chain.

Let's be clear about the word "update": it means to switch their software to a fork that none of the active community Bitcoin developers contribute to and that none plan on contributing to. Many have said that if Bitcoin "fails" after the fork, they have no interest in contributing to the Segwit2x fork's software. (The big-blocker anti-segwit movement stalled work for years, politicized the Bitcoin space, and contributed to making many of the core devs be the target of harassment; imagining that unpaid volunteers are going to switch to working on a project made by the latest iteration of that is ... to call it wishful thinking seems too kind.)

<comment><USER15> A block size increase is in fact very _urgently_ needed. 99% of blocks are maxed out at ~4M weight DESPITE segwit, because segwit's adoption is too low (7%). Adoption isn't happening faster not because it's unneeded, but because of inertia among wallet developers. Consequently, full blocks and high fees have caused Bitcoin to lose many users to alts (LTC, ETH, ETC, DASH...) All this user loss and tx market loss has been happening over the last year, so we urgently need a block size increase, since we can't magically accelerate segwit's adoption rate.

I think you fail to envision how the dynamics will play out if Segwit2x wins. Core will simply merge the ~1k lines of code that make up the segwit2x features, and mostly everyone will be back to business running Bitcoin Core instead of BTC1, since the two code bases would be equivalent. That's it. No big war. No mass resignation of Core devs. No ceding the control of Bitcoin to "another group". Most Segwit2x supporters want a smooth "reintegration" scenario like that to take place. We don't want to "fire Core" or such nonsense you might read on r/Bitcoin.

Things would be a lot simpler if Core simply agreed to double the block size. That's all we want. A one-time block size increase, to give the blockchain some breathing room while we all continue to work on off-chain scaling (NimbleWimble, LN...) that we all already agree are the proper long-term solutions.

<comment><USER16> > 99% of blocks are maxed out at ~4M weight DESPITE segwit

Hasn't been true since July: [https://blockchain.info/charts/avg-block- size](https://blockchain.info/charts/avg-block-size)

> full blocks and high fees have caused Bitcoin to lose many users to alts > (LTC, ETH, ETC, DASH...)

What's the evidence for this? All my friends own btc and alts... but none of them transact in it. They own them only for investment purposes. I don't think anybody is using alts for their higher throughput.

<comment><USER15> « _Hasn 't been true_»

Yes it's true. I said WEIGHT not SIZE. A distinction few understand. Check the kWU column at [https://blockchain.info](https://blockchain.info) If a full node has built a 4Mweight/1MB block, it is full, because non-segwit txs have wasted the 4M weight quota and prevented the block from growing over 1MB. If segwit adoption stays low, blocks WON'T be able to grow much beyond 1MB.

In fact the problem is that the rate of adoption of segwit is too low compared to the rate of increased txs that Bitcoin needs to be able to support. Therefore blocks are going to continue to stay at or near the ~4M weight quota.

</comment></comment></comment></comment><comment><USER17> Opt-in replay protection was merged in a few days ago. [https://github.com/btc1/bitcoin/commit/a3c41256984bf11d95a56...](https://github.com/btc1/bitcoin/commit/a3c41256984bf11d95a560ae89c0fcbadfbe73dc)

In any case, if you believe Bitcoin's main value proposition is as a great store of value, then replay protection simply doesn't matter that much. You wouldn't be transacting enough to matter.

<comment><USER18> You are right, I suppose because we don't trade gold much, it doesn't make sense to ensure that it's secure when we transfer it. We transfer it so infrequently, there's nothing to worry about...

For the opt-in replay protection, that is a proposal which requires people to update their software to protect themselves. That's unacceptable, many people are unlikely to even know that a fork happened. Replay protection needs to be automatic for un-upgraded nodes.

<comment><USER17> If you're transacting with an exchange or a merchant and accidentally send both coins (as a result of a replay attack) instead of one, they're going to give it back. It's not nearly the disaster this article makes it out to be.

The only case where this is a problem are business to consumer transactions and p2p txs both of which you rarely do, if ever if you use BTC as a store of value.

<comment><USER18> It's not that simple. Once a transaction gets confirmed on one chain, it's permanently able to be spent on the other. If, due to fees or other reasons, that transaction is not confirmed quickly, the merchant may not be able to return the funds.

Also, automated system may have no way of handling it if those automated systems are not upgraded. Which means a merchant could end up with thousands of payments that they have to manually fix. And, those merchants will be forced into adopting the new software to correct the issue, they will have no choice to o ignore it.

It FORCES every deployed system in the entire ecosystem to upgrade, even systems that don't consent to the change. That's absolutely unacceptable.

<comment><USER17> > Once a transaction gets confirmed on one chain, it's permanently able to be > spent on the other.

That's simply not true. If the utxo gets spent on the other chain, the two coins are permanently split.

> Also, automated system may have no way of handling it if those automated > systems are not upgraded. Which means a merchant could end up with thousands > of payments that they have to manually fix. And, those merchants will be > forced into adopting the new software to correct the issue, they will have > no choice to o ignore it.

And incur legal liability? Businesses will gladly do lots of manual work to avoid thousands of lawsuits.

Fact is, it's really only a problem for the businesses and even without _any_ replay protection, they can very easily split coins by using either post-split coinbase coins or any coins ever mixed with any post-split coinbase coins.

<comment><USER18> > And incur legal liability? Businesses will gladly do lots of manual work to > avoid thousands of lawsuits.

Pretty sure that forcing thousands of businesses to upgrade their systems to avoid defrauding users is grounds for a lawsuit itself.

Imagine if Google, Apple, and Microsoft teamed up to make an incompatible change to web browsers that broke all existing websites and exposed all of the users of those websites to risk of finical loss of the website admins did not perform an upgrade.

Who is liable? The admins who didn't even realize an upgrade was required, or Google, Microsoft, and Apple for creating the situation?

</comment></comment></comment></comment></comment></comment><comment><USER19> This is a good write-up. There is an insane amount of FUD surrounding Bitcoin, and not all of it is unfounded. I certainly hope that Bitcoin gets its act together, because the volatility makes driving adoption significantly harder than it would otherwise be.

It has been very interesting to see how he Ethereum has handled many of these same problems. I would be interested in seeing analysis about the impact to alternative crypto currencies such as Ethereum and Litecoin, if Bitcoin ends up blowing up over this.

<comment><USER20> I may not be as technical as the author but I truly believe Litecoin is the future. Charlie Lee is about the best face of a digital currency as possible. He's and ex-googler, MIT grad, with a clear vision and an outstanding team. Like VC's bet on people and not always ideas, he is the one to take us to the next step.

<comment><USER21> to be fair, part of the reason why there's so much drama with bitcoin is because it's biggest by market cap. when there's more at stake, people show their true intentions.

<comment><USER20> Very true, people often point out that Litecoin will suffer the same growing pains as Bitcoin as volume increases, and there is definitely an element of true to this. I trusted Gavin to help guide Bitcoin and since his departure I have not felt reassured of anyones true intentions in the Bitcoin community. With Litecoin, Charlie wanted it to be as fair as possible from the beginning. He refused to pre-mine the coin and repeatedly encourage critical thinking of coins in general and even advocated for Bitcoin above the coin he created!!! With the recent events in the Bitcoin community you can understand why people have flocked to Litecoin. His leadership is direct and highly visible.

</comment></comment></comment></comment><comment><USER22> Personally I'm of the opinion that Bitcoin is already "too big to fail": there are so many interested parties and stakeholders who want it to succeed that it will be kept alive through sheer will, despite internal politics.

<comment><USER23> So you think Chinese government cant afford to corner the mining hashes?

</comment></comment><comment><USER24> The main thesis of the article is outdated and now wrong - as someone pointed in its comments: [https://github.com/btc1/bitcoin/commit/a3c41256984bf11d95a56...](https://github.com/btc1/bitcoin/commit/a3c41256984bf11d95a560ae89c0fcbadfbe73dc) All the rest might be interesting to someone completely new to the subject - but it also contains many mistakes. One is confusing git forks of the source code with the blockchain forks. Another is his claim that "everyone agrees that the capacity of the Blockchain needs to be increased" \- bitcoin needs capacity increases - but it does not need to be on-chain - there are proposals like Lightning Network that would do that off-chain.

</comment><comment><USER25> Bitfinex allows you to bet on the outcome of this whole situation[1]:

> Bitfinex is introducing new CSTs that will allow traders to speculate on the > potential activation and mining of the Segwit2x consensus protocol. We are > designating these CSTs as BT1 (Incumbent Bitcoin Blockchain) and BT2 > (Bitcoin Segwit2x).

[1] [https://www.bitfinex.com/posts/221](https://www.bitfinex.com/posts/221)

<comment><USER26> Anyone who wants to invest there should read the T&C very carefully.

See also: [https://www.reddit.com/r/btc/comments/74mgka/why_bitfinexs_c...](https://www.reddit.com/r/btc/comments/74mgka/why_bitfinexs_chain_split_tokens_are_completely/)

</comment></comment><comment><USER27> The interesting thing is that unlike in July where the price crashed, this time the price is completely stable despite the fact that it's a much bigger clusterfuck. It seems like perhaps the "you can't bet against the apocalypse" rule is being applied.

<comment><USER28> > fact that it's a much bigger clusterfuck

Why is it that people so quickly jump to "markets be crazy" as an explanation rather than "perhaps I don't understand the situation and have been sold an exaggerated version by people who profit from clicks or chaos"?

<comment><USER29> Because it's more exciting / entertaining. Remember that for most people following these discussions is basically a hobby they do in their free time.

</comment></comment></comment><comment><USER30> Despite all the histrionics about 2X -- just read r/bitcoin -- nobody in the 2X movement is a bad actor, they're people who've come to some different conclusions about what needs to be done.

It's funny to think what an _actual_ bad actor could do to the platform. Every time I hear the cryptocurrency people crowing about the amazing un-censorable power of the technology I just smile.

</comment><comment><USER31> > ... no obvious way to tell which is the One True Chain.

One obvious way - whether you agree with it or not - is to use hashrate. It's quite unlikely that both chains will have a nearly-equal hashrate for a sustained period of time.

<comment> TD-Linux That's probably a bad idea - miners target profits. There was a lot of oscillation in hashrate when BCH split - and it had a lot less support. It briefly exceeded Bitcoin's hashrate. [http://fork.lol/pow/hashrate](http://fork.lol/pow/hashrate)

</comment></comment><comment><USER32> I disagree with this logic. Plenty of people said that SegWit was going to cause issues and it didn't. If Bitcoin fails it will be from external market pressures, not internal politics.

<comment><USER33> SegWit was an upgrade though, this is more like a coup.

SegWit2x is basically the mining faction stealing the network away from the Core development group, forcing everyone in Bitcoin to switch software if they still want their transactions confirmed.

Not that I really disagree with them - as _something_ needed to happen, as demand (whether real or manufactured) has led to 100% full blocks for months, resulting in long transaction delays and high fees, and the rise of competing currencies, fracturing the market.

We will see if one side backs down before the HF, but due to both incredibly entrenched positions I think we are going over the edge.

I think that 2X will destroy a lot of confidence in Bitcoin, as it proves that the network can be stolen away to change the rules, and would be managed by a much smaller dev group.

Though, the Bitcoin network can survive as a zombie forever with just a couple miners and zero devs. So it may not 'fail' in that sense, just become very stable.

<comment><USER34> The "mining faction" is just carrying out the governance model described in Satoshi's Bitcoin paper:

"The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one- vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it."

[https://bitcoin.org/bitcoin.pdf](https://bitcoin.org/bitcoin.pdf)

Just because one group of devs calls themselves the arbitrators of all things Bitcoin doesn't make it so.

<comment><USER35> Obviously, this refers to how automated 'decisions' are made by the software, and does not mean that hash power gives you weight in social decisions in the real world. More importantly, there are two levels of decision making that people tend to conflate.

Hash power is relevant to 'regular' forks, as the longest chain _that follows the rules_ will be followed. However hash power is not relevant for deciding what those rules are. That is done by full nodes, whether miners or not, and doesn't depend on costly work or anything else. Nodes that don't agree on the rules just stop talking to each other, and the network splits.

Then, the final decision about which network and chain trades as "BTC" is made by ordinary real world consensus, probably mainly among exchanges, wallets, and users in general.

Edit: Changed 'soft fork' to 'regular fork' because a soft fork is a protocol change. POW chain-following doesn't even rise to that level.

<comment><USER34> I actually have a lot of sympathy with this point of view. But there's a counterargument: if one fork has much greater hash power than another, then the minority is vulnerable to 51% attack from a fraction of the majority. So it's not like we can just ignore mining power, unless we make a fork that changes the hash function.

For Bitcoin, the difficulty adjustment would also need to be sped up, to keep the minority chain from being very slow for a while.

<comment><USER35> This is all true. The way I think about it is this would be just like any other 51% attack, except that the motivation is specifically to compete by killing the former network. But game theoretically, it's still an attack, not a valid way to achieve consensus. So, as you say, the correct response is for the original network to hard fork.

To be clear, I'm not saying 2X is itself an attack (IMO, awfully close to crossing the line, though). I'm assuming that in your scenario, some mining faction is spending part of its compute on running 2X, and part on explicitly 51% attacking the original network.

</comment></comment></comment></comment></comment></comment><comment><USER36> the dumb money isnt even all in yet, so how can it be coming to an end? stuff like pension funds, mutual funds, there isnt even a bitcoin etc yet. Until this happens it will rise even more.

<comment><USER37> Pension funds will not even consider Bitcoin until it becomes much more stable. Pensions are an _obligation_ and therefore demand much lower risk -- if a 5% change in value in a single day is not considered newsworthy there is no way pensions will make that investment.

What makes you think the end cannot come before pensions and mutual funds start investing? What if panic selling triggers a deep loss in value, which then triggers miners to shut down as the mining reward falls below the energy cost; if enough miners shut down, someone could pull off a double-spending attack, and when people see that it will further reduce their confidence in the system. The result could be that confidence in Bitcoin never recovers.

Or Bitcoin could just be a fad that slows unwinds and fades away, and twenty years from now we'll all be laughing about it over drinks. I can think of a few other technologies that were "definitely going to take over" and are barely remembered today...

<comment><USER38> I don't understand quantitative finance, but I had the impression portfolio theory can find a place for any amount of volatility. If the volatility is very great or it's correlated with the rest of your portfolio, then your appetite may be small, but high returns may make it still worth buying some. Is that wrong? I also have the impression that bitcoin's volatility has been relatively uncorrelated with other asset classes, so that'd be a plus. (Maybe I'm wrong about that too.)

<comment><USER39> No, you're right. For portfolios It's all about the covariance matrix. Having said that, there is probably still the more banal reality of pensions or institutional funds actually needing a portfolio manager to go out and buy bitcoin, which probably would be a publicitly/legal nightmare if done poorly, or if the first person to do it gets burned.

<comment><USER40> On the other hand, if one pension starts a trend, there might be big benefits to being first in. How do does one fit such outcomes into the volatility calculation...

</comment></comment></comment></comment></comment><comment><USER41> Folks, I give you the disruptive infinitely scalable technology the likes of which the world has never seen. It will bring down the entrenched losers like Visa and cash-based economy.

Just hold on tight, let's see if it can survive protocol upgrades and get more than 4 transactions a second.

</comment><comment><USER42> The article correctly notices that the market was more worried around the time of the BCH fork, but misses some of the reasons why. The BCH was a more credible threat to the value proposition of Bitcoin because the market could be convinced it was like a dividend to the BTC chain, the market cap of the latter was clearly at risk.

The design of B2X is based on getting every user of Bitcoin to switch software before November. If commerce continues on the legacy chain, the value proposition falls in its entirety. B2X has no replay protection to speak of and no emergency difficulty adjustment is possible. The market correctly reflects the probability that B2X will replace BTC. Feel free to bet on it should you disagree, Bitfinex offers futures trading on BTC/B2X.

</comment><comment><USER43> Interesting article, but doesn't explain why the situation is anything close to an apocalypse.

My only piece of advice is that while it's fine to take money off the table before such events, pay very close attention to what is going on and NEVER PANIC SELL. Anyone who has done so before (myself included) has regreted it.

Bitcoin has been pronounced dead many times before and yet is very well alive.

</comment><comment><USER44> There are Segwit2x and Core futures, as well as shorts with high leverage. If the author is so confident of the coming apocalypse, he stands to make an absurd amount of money if he's right (or lose if wrong).

He should put his money where his mouth is (but of course he probably won't).

</comment><comment><USER45> With estimates of a majority of hash power being from Chinese miners, I wonder how the recent change in attitude by the Chinese government will affect the outcome of this battle.

I haven't been keeping up lately, but I would guess that whichever camp the Chinese miners were in is going to lose, since Chinese mining itself may be headed for rapid decline.

</comment><comment><USER46> "Disclaimer: I am not an expert in Bitcoin" -> close tab.

</comment><comment><USER23> Bitcoin doesn't have a real world use case, the fees is too high and it's too slow 10 mins

I just went to steemit blog network, now my grandma can use a blockchain</comment>


Ask HN: LinkedIn, are they heading the wrong way? - <AUTHOR>

Like most people here, and around the world, I use LinkedIn. I've been visiting their site more than usual recently due to the endorsements I've been receiving.
Okay, so, the endorsements.. Some that I have received come from people that can really judge me on these skills. But the majority are coming from people that I've never even worked with. In my opinion, LinkedIn took the wrong approach by adding a suggest endorsement box. It's making LinkedIn less serious in my opinion.
Even though they probably won't even see this thread, I'd suggest they redesign the whole site, make it more up to date. Improve usability. Make it less cluttered.
But my biggest suggestion to them, remove the endorsement box. It sucks. If you really want to be really big, offer a nice project collaboration system within LinkedIn. Everyone I work with is on there. Everyone from every company in fact. So LinkedIn, why don;t you become a nice modern CRM/Project Management platform with a beautiful new design. I know, there are 3rd party tools that can offer project management, but it'd be much nicer to have 1 standard system that everyone works with.
And seriously, scrap the endorsements.
I'm interested to see what other HN'ers think of this. Maybe I'm just becoming a grumpy 24 year old git. <comment><USER3> I like to make some fun out of this "endoresements" thing whenever it pops up with the grid of people, by just running this script:

javascript:setInterval(function() {$('.endorse-all-btn').click()}, 1000)

you don't even need to open Web Inspector/Firebug for that - just post it into URL.

This will keep endorsing hell out of everything for everyone.

Be careful though if you have nervous people amongst your connections - <USER2> managed to annoy one of directors of the company I worked for using this.

</comment><comment><USER4> People only endorse you because they want to be endorsed themselves. I've used LinkedIn for a while now, especially over the past couple of months as I am now actively looking for work, and this is one of the more useless features they've added.

</comment><comment><USER5> I feel like each time I get an endorsement from someone who I haven't worked with or can't properly judge my skill, they really are just giving an endorsement so that I will endorse a skill of theirs.

</comment><comment><USER6> LinkedIn endorsement = Zero value

</comment><comment><USER7> Yes.</comment>


Hackers Make the First-Ever Ransomware for Smart Thermostats - <AUTHOR> https://motherboard.vice.com/read/internet-of-things-ransomware-smart-thermostat <comment><USER2> Pfft... disconnect the thermostat and take it back to the store and get a new one. If their security is so asinine that it can be hacked with ransomware, they should damn well cover it under warranty. 1 bitcoin indeed. Put your old mercury switch back in place until you have the time to go and replace it. At least with your thermostat, you're not losing all your work...

...and it's simple to disconnect and reconnect yourself with 2 or 3 wires. In fact, I'd wager with a single wire and a little (and I do mean only a little) know how and a copy of the factory firmware you can recover it using the exact same process as you unbrick a router in just a few minutes.

Though, you should probably close the other holes in your network first. Chances are, if your thermostat has been hacked, they're in your network and it's only a matter of time before your computers suffer the same treatment.

<comment><USER3> > ...and it's simple to disconnect and reconnect yourself with 2 or 3 wires.

This "sort of" works for now, depending on where you live, what season, whether or not you keep junked tech, etc. But it strikes me, not only as dismissive and condescending, but also particularly short-sighted.

I can imagine, 20 or 30 years ago, someone saying something similar about a car: "a bug in your ECU is keeping your car from starting? That's your problem for having bought a car running off of a computer!" Fast-forward to today. It simply isn't possible to buy a car without an ECU.

The thing is, the changes that brought ECUs to cars are exactly the kinds of changes that are bringing computers into thermostats. In a surprisingly short amount of time, we're going to be living in a world where it simply isn't possible for most people to find a thermostat without a computer.

When people feel their agency and autonomy is being compromised with new technology, a common sentiment to echo in the tech world is "if you don't like it, don't use it". But the plain fact of the matter is that in many cases, IoT being an emergent but prototypical example, non-participation simply isn't an option.

<comment><USER4> Consumers don't choose a thermostat the same way they choose a vehicle. If you design a thermostat with bad code that becomes non functional your brand isn't irrevocably tarnished for decades. GM still doesn't sell many passenger cars with diesel engines and the consensus on its cylinder deactivation tech is that it's better than 4-6-8 but hard on rings.

</comment></comment></comment><comment><USER5> I don't think there is much to say here that hasn't already been said about IoT security - like many commentors mentioned before, we're going to be going through a very rough period for some time where IoT devices just aren't up to par with expected security procedures, and consumer awareness campaigns will be necessary to educate less savvy consumers about the potential dangers of IoT devices at the moment.

In particular, start ups trying to capitalized on IoT in niche products will need excess scrutiny in order to ensure they're not trying to run fly-by-night operations just to make a quick buck. Chinese IoT knock-offs will also need to be monitored carefully as well.

What's most frightening to me on something like this is even tech-savvy users are fairly screwed as your ability to interact with the device and try to remove or clear the ransomware manually will be restricted by the same methods meant to prevent you from tampering with the device in the first place. This likely can leave people without any recourse to ranson scenarios like the thermostat being hijacked, and the end-user will have no option except to remove the device.

Hopefully either a consumer or business alliance crops up with suggested practices for IoT devices, including remediation methods for these very scenarios. I think it's preposterous for companies to assume that their devices will never be compromised, and if they're going to lock down the devices, they need to provide a guaranteed way to reset the device; a bit of set up work certainly beats paying to make sure your fridge still works tomorrow. With IoT creeping out as the next "must include" feature for manufacturers, this sort of consumer protection is going to be essential.

<comment><USER6> _I don 't think there is much to say here that hasn't already been said about IoT security - like many commentors mentioned before, we're going to be going through a very rough period for some time where IoT devices just aren't up to par with expected security procedures, and consumer awareness campaigns will be necessary to educate less savvy consumers about the potential dangers of IoT devices at the moment._

I _suppose_ I can see some potential future value to devices like thermostats, that directly control "large" resources like natural gas (by "large", I mean relative to what other resources a household consumes). Smarter controls at the household level could provide substantial energy savings in the aggregate.

However, the pessimist in me says "why does anyone really need appliances connected to the internet?". So you're trading off some potential future value to reduce overall energy use by better optimizing your own consumption in the present. You're also exposing yourself to faulty equipment that might also pose security risks. Do these thermostats have some sort of hardware kill switch that prevents software from doing clearly stupid things, like shutting off entirely or setting the heat to a maximum setting?

Finally, there was this gem in the article that I did not remember hearing about:

 _Munro, who last year found that a Samsung smart fridge leaked Gmail passwords_

What exactly is the purpose of a "smart fridge", why does it need Gmail passwords, etc.

<comment><USER7> > However, the pessimist in me says "why does anyone really need appliances > connected to the internet?".

I think it's important to answer this without any of the qualifications you write after it. No one needs it. It's not even necessarily about how secure it is; if you're paying extra for these features you're just throwing your money away in the name of gadgetism.

You really don't need to fill in that they're unsafe or made with crap components. The truth is that no one would have a need of a perfectly made one.

<comment><USER8> Well nobody has a need for 99% of the crap in our lives. You don't need a car, you don't need a TV, you don't need a computer.

But it sure as hell is nice to have all of those things.

I find it funny that in an article about how manufacturers are locking down their devices to only the features that the consumer needs (effectively having the manufacturer tell you what you need), you are going around telling others what they need.

</comment></comment></comment></comment><comment><USER9> An observation on the example threat model the researcher presented. I don't think ransomware to unlock your thermostat is too lucrative.

I think the real home threat model is foothold: sitting quietly on your network and chipping away at the rest of your network, sipping from your fileserver, opening more ports on your router, etc.

<comment><USER5> Could you elaborate why you think it wouldn't be lucrative? With normal computer/phone/tablet ransomware, the thought process is largely "do I mind losing my files/pictures?" \- reinstalls and HDD replacements are usually an option, and victims have time to mull over it, unless given a time limit by the ransomware.

With an IoT ransomware, vital appliances or controllers can be overtaken and potentially disrupt the victim's day to day activities. (Fridge is put into vacation mode if not paid in 24 hours, thermostat cranks the heat or AC until paid). These have very immediate and often costly real world consequences that cannot be mitigated short of removing the IoT device, and the immediacy can force a payment decision much faster than other ransomware.

I guess I don't see how you reason that it's less lucrative when the immediacy seems like it would prompt more payments.

<comment><USER9> In the case of a $100 thermostat, knowing it's infected, I'd throw it away and buy another brand, unless I knew how to wipe and secure it. It's two screws and few wires. Why would I pay even a $1 to someone who might or might not get off my network?

In the case of a $2000 fridge, it's more persuasive. I might respond by revoking its network privs and paying for a service call to wipe and reset to factory. Again, I'm not going to trust the bad guy to get off my network.

In both cases, the bad guy has shown bad intent, means, and opportunity. I'm not trusting him after a payoff.

<comment><USER5> I understand your position here but you are familiar with ransomware scams it seems and also at least tech savvy enough to know you can restrict network access. However I do not feel you are representative of most homeowners who would be in the same situation, and my evidence by example is that ransomware is exceptionally profitable despite how well known the malware is and many reports and instructions on your options to respond are.

Basically while I agree with your assessment on how to respond I think the fact that ransomware is stilk so profitable means that you are the exception in this case. I posit that the same persons who reluctantly pay ransoms for their phones/tablets/desktops/laptops would be all the more quick to pay if not paying meant an additional heating or electric bill on top of it. I don't know if utilities would be sympathetic to victims but I am not confident they would be.

No, rationally there is no guarantee that payment unlocks the device or removes the attacker, but part of the attack is intending to induce an irrational state- it's likely why early ransomware pretended to be DMCA claims or FBI warnings.

(Please forgive spelling errors as I am on a tablet)

</comment></comment></comment></comment><comment><USER10> We really just need education and prevention on the hardware side.

Just like sex... if you don't absolutely know where something has come from or has been before, DON'T STICK IT INSIDE OF YOU (...without protection).

Consumers: If it's an sd card, a usb-stick/flash drive...whatever, don't put it inside of your hardware. Especially critical hardware such as a thermostat.

Hardware creators: Don't build slots, or at least exposed slots, for sd cards/usb drives, etc. on hardware such as thermostats, cameras, etc. I know the sales team told you the customer wants to put an image of their cat as the background of their thermostat, "it's the killer feature". Just say NO. There is absolutely no reason to do that using hardware. Build an online portal where users can upload images and then check them yourself before offering them as background choices.

<comment><USER11> > _There is absolutely no reason to do that using hardware. Build an online > portal where users can upload images and then check them yourself before > offering them as background choices._

Doesn't that just move the threat surface? Now instead of having to convince end users to put something on a USB stick, you have to try a password dump against your interface.

<comment><USER12> Right. In practical terms the online portal tacked on at the last minute is likely much less secure than the hardware tacked on.

Although both ideas are nightmares for security.</comment></comment></comment>


NReduce Demo Day on Now - <AUTHOR> http://www.nreduce.com/d/1

<comment><AUTHOR> You can visit nreduce.com/d to meet all the teams. Here is the intro to all the teams : <https://vimeo.com/50698479>

</comment><comment><USER2> I participated in this just now. Gotta say it was a really interesting experience, talking your mind around what you're trying to make, and all the different possibilities around it. Also the guys running it are really friendly. Totally recommend signing up if you haven't given it a try.

</comment><comment><USER3> I will be part of the nreduce batch starting today with Red Quintal [1]! We're 96 startups and counting!

1: <http://www.redquintal.com>

</comment><comment><USER4> This links to one particular startup's landing page. The main demo day page is at <http://www.nreduce.com/d/>.</comment>


Show HN: Unibox, the people-centric email client released on the Mac App Store - <AUTHOR> http://www.uniboxapp.com

<comment><USER2> Looks quite nice, but I'm not going to try it without a free trial.

Changing email clients is a major chore, and I suspect that there's a good chance I might return to my boring old mail client after the initial delight of the new client wears off... With those odds, paying $10 for software that I probably won't end up using is not appealing.

Also, I feel that the word "beautiful" should be banished from app marketing copy. There are many things in this world that are beautiful, but I hope my threshold for beauty never gets so low that a grid view of email attachments would qualify -- that sounds like a state of mental disorder, experiencing Stendhal syndrome when faced with a GUI.

<comment><USER3> I've been wondering this for a while - is there a viable business model for email clients? Charging a small one-off fee isn't sustainable really. At the same time charging a subscription (like SaaS) is unheard of for email clients. Email services on the other hand - a different matter. But even with Google Apps - $50 a year for an email service is really cheap, compared to any other SaaS out there. Wonder why that is, when email is so crucial to every company?

<comment><USER4> If you consider playing the consumer lottery and hoping you get purchased a viable strategy, then sure!

</comment></comment></comment><comment><USER5> Hacker News comments are incredibly depressing sometimes. This costs less than I spend on lunch most days, and looks like a lot of love and attention has gone into creating it. So first off, congratulations on shipping it. Secondly, I've just bought it – I'll take it for a spin and let you know how I get on.

<comment><USER6> it actually costs so much more, because of how critical email, and past stored emails are to any professional's life. Can I transparently try it out, leaving me current email client in place? If not, that's too much risk right there, risk of loosing access to past emails is quite the cost.

<comment><USER5> Are you still using POP?

</comment></comment></comment><comment><USER7> Is email still people-centric? Looking at the 25 latest messages of my inbox, only 8 are from _real_ persons. The rest comprises 5 newsletters and 12 notifications.

Close friends I contact via SMS mostly, and other friends I contact maybe twice every 6 months.

Maybe my email usage is unusual, I don't know. Still, Unibox's market is a niche. Good luck to them though. It's always interesting to see new approaches towards a medium as old as email.

<comment> k-mcgrady What do you for business? My use for email is communicating with clients (all real people :).

<comment><USER8> if I look at my raw mailstream his case might be correct, I aggressively use filtering so most of what makes it to my inbox is actually mail.

</comment></comment></comment><comment><USER9> I love it in principle. I actually dove in and purchased it since I've wanted for so long an email client built around people.

I have a few criticism after actually using it (admittedly for only a few minutes here):

* The lack of an "Inbox" is disconcerting. It actually really is important to me to just see a list of emails in my inbox, most recent on top, with unread messages marked as such.

* People centric is great, but conversation centric is equally important. Apple Mail and Gmail get high marks on organizing emails by conversation thread, but both I found lacking in their organization by person. This app has the opposite problem: It's great for viewing emails by person, but that's like the ONLY feature. I really strongly dislike how it munges together different conversation threads under a person, which at the same time _excludes_ other emails from other people that were part of that thread.

Maybe they'll add these features later but for now I'll probably slink back to Apple Mail and maybe keep an eye on it.

YMMV

<comment><USER10> > I really strongly dislike how it munges together different conversation > threads under a person, which at the same time excludes other emails from > other people that were part of that thread.

That's what the thread view is for. Simply click the small icon next to a message's subject (the one with the number of emails in a thread) and you'll all of the referenced messages.

<comment><USER9> Thanks that's actually a helpful tip.

It doesn't _quite_ solve the whole problem for me, which is that:

* I like to scan conversation threads (of all conversations I'm having presently, not just those involving a single person) -- it's one of the primary ways I look at my mail.

* I find having all of the messages munged together from different conversations I'm involved in with a person to be disconcerting ESPECIALLY since those messages lack the context from other people involved in the context. It's visual cacophony to me. Contrast this with Apple Mail VIPs: When I click on a VIP, I see all of the _conversations_ I'm involved in with that person, not the individual _messages_.

That's just me and my brain. I could of course just be an anomaly.

</comment></comment></comment><comment><USER11> Wow, the autodetect is pretty amazing. I'm using Fastmail with my own domain but it correctly knew which servers to use. I always thought that email clients just look at the domain and if it's gmail.com, yahoo.com, it uses those settings, but it sounds like this is checking MX records? Any insight into how it's able to do this (never seen another client be able to)?

<comment><USER12> Mozilla describes a canonical way to detect settings [1]:

1) Use the global ISPDB, e.g. [https://live.mozillamessaging.com/autoconfig/v1.1/$DOMAIN](https://live.mozillamessaging.com/autoconfig/v1.1/$DOMAIN), e.g [https://live.mozillamessaging.com/autoconfig/v1.1/gmail.com](https://live.mozillamessaging.com/autoconfig/v1.1/gmail.com) and extract the information

2) Try to use the provider specific db [http://autoconfig.example.com/mail/config-v1.1.xml?emailaddr...](http://firstname.lastname@example.com)

3) Fallback to [http://example.com/.well- known/autoconfig/mail/config-v1.1.x...](http://example.com/.well- known/autoconfig/mail/config-v1.1.xml)

It also utilizes MX records and not only the domain.

[1] [https://developer.mozilla.org/en- US/docs/Mozilla/Thunderbird...](https://developer.mozilla.org/en- US/docs/Mozilla/Thunderbird/Autoconfiguration?redirectlocale=en- US&redirectslug=Thunderbird%2FAutoconfiguration)

</comment></comment><comment><USER5> First impressions are very good. It's extremely smooth and responsive, the experience when replying to an email is excellent, and it feels an awful lot lighter than Mail. The people paradigm in the sidebar didn't take a lot of getting used to though it'll take a fair bit more use before I can decide whether I prefer it. At the moment it feels to me like there's another sidebar missing, one that would take me directly into conversations.

Only drawbacks I've found so far: search seems to make it go a bit sluggish and it's not that easy to actually find what you're after. I seem to have sent it into some kind of spin by hitting the sync button which brought up this error:

An error occured while syncing account [redacted] (2001):

Could not parse command

Overall though, I'm liking it and I'll give it a go as my primary email client for a while to see if it can replace Mail for me.

<comment><USER5> Oh, and I can't work out how to star/flag a message.

</comment></comment><comment><USER13> I've been looking for a replacement for Sparrow ever since they got acquired. All of the ones I've tried were very "choppy" compared to how smooth Sparrow is. I hope they offer a demo so I can try it out.

<comment><USER14> If the creators are reading this, maybe they could meet you half-way and do a demo video of the app in action.

<comment><USER15> That would be pretty awesome. Nearly as good as a trial.

</comment></comment></comment><comment><USER3> Full disclosure: I'm at a YC startup working on a people-centric email service at Post.fm

Great to finally see some people adopting a similar approach to us, however the real trick is figuring out the balance between threads and people. Simply grouping emails by people doesn't work for most professionals who often have threads with multiple people. This is one problem that's taken us years to solve - and only now we finally have an algo that gets the right balance I believe.

Interesting fact - Post.fm used to be called unipost.com, so unibox is a very interesting name :)

</comment><comment><USER16> I will never understand the persistent fetish to make E-Mail more like Instant Messaging. Sure, if you only send emails that are a couple of sentences this might make sense. But that's not what people use email for. That's what they use one of the bazillion IM services for. And the IM GUI vocabulary breaks down very quickly for real world email use.

The abstract root of the problem with "let's reinvent email clients" to me is this: There are things that I want to do in email and things I do not want to do in email. The "attachments reinvented" (really?) is such an example: Sure, you could show all the attachments for one person in one place. But when would I use that? In most cases what I want to do is move data out of email and get them where they are useful. Gluing them closer to the emails solves no problem for me.

I get that this is all social and everything, so as somebody who mostly uses email for work, I'm not the target audience. But either you mostly work stuff with emails (then this fails on a number of fronts), or you do mostly social... no wait, you don't do mostly social with emails. That's the problem. And that's why most email clients are not very satisfying for one particular use - because serving multiple uses at the same time simply is a dirty business.

Sorry to fall into the typical HN snark here, but that's how I feel: It does look nice, but so could a thunderbird theme.

Footnotes:

\- "Sent with Unibox", really?

\- No overview window (at least none shown - do I have to click through the people sidebar to find a recent email if I'm not sure what I'm searching for?)

\- mentioning "Exchange" \- be very careful here, saying that you support Exchange sets a very specific set of expectations that I'm pretty sure you cannot meet. In any case, you're probably inviting in customers that you don't want and it could cost you a lot of time and money to deal with them.

<comment><USER17> > Sure, you could show all the attachments for one person in one place. But > when would I use that?

People often remind me that they sent me some file a few weeks ago. This happens to me pretty frequently, a few times a month. Right now that turns into a spelunking session (although mu4e helps a lot) but if I could just see all the attachments from that person in reverse chronological order it would make it much easier for me to find things.

For what it's worth, features like this would be hugely helpful to me in my work.

<comment><AUTHOR> Unibox has this: [http://www.uniboxapp.com/faq/attachments/list](http://www.uniboxapp.com/faq/attachments/list)

<comment><USER17> Yeah... that's why we brought it up...

</comment></comment></comment></comment><comment><USER11> Nice to see email clients who are supporting IMAP again and not just Gmail.

</comment><comment><USER14> Love this concept of niche email clients:

1\. Unibox based around contacts

2\. Mail Pilot based around to-do lists

<comment><USER3> 3\. ZenDesk based around customer support 4\. Close.io based around sales leads

Indeed it seems like the one-size-fits-all email client of today won't be around for long.

</comment></comment><comment><USER18> Nice job! Although a lot of my emails are not people-centric, but topic/project/event-centric. Unifying them into categories by people would make it harder for me to keep track of the content.

Would be nice if topic-centric could be added.

</comment><comment><USER19> There sure are a lot of custom mail apps, is the paying market for mail apps really that large? I just use Gmail in the desktop browser and on android and it seems sufficient.

<comment><USER20> Not everyone is using Gmail.

</comment></comment><comment><USER21> I wonder how multi-person conversations are handled - but I cannot try it. Mac App Store seriously needs demo versions support.

<comment><USER22> or you can e-mail them to request screenshots of this feature.

</comment></comment><comment><USER23> Great, so what guarantee do I have that this app doesn't end up like Sparrow?

<comment><USER14> You'll just have to live your life on the edge like that.

</comment></comment><comment><USER15> I've been ripped off before with subpar HTML5 apps wrapped in a native app. If that's not you, I'm willing to bite the bullet and pay $10 bucks.

<comment><AUTHOR> Unibox is a fully native OSX app, webviews are only used for rendering the HTML email content.

<comment><USER15> Thanks for the update. I'll consider giving it a shot.</comment></comment></comment>


The case against the Kindle as a low end tablet disruption - <AUTHOR> http://www.asymco.com/2011/09/30/the-case-against-the-kindle-as-a-low-end-tablet-disruption

<comment><USER2> > _"Disruption requires asymmetry but it also requires the ability to go up a > trajectory of improvement along the basis of performance that a majority of > users demand"_

The premise upon which this depends requires construing the Fire as Amazon's ground zero entry into the segment and dogmatic acceptance of the standard narrative in which the market segment for tablets or slates did not exist prior to the introduction of touchscreen devices in the form of Apple's iPad.

But neither is the case, just as smartphones were available for years before the introduction of the iPhone, likewise, the Fire is an extension of Amazon's well established product line - an extension which given the naming convention Amazon has employed (Kindle -> Fire), one may reasonably suspect has been on the drawing board for quite some time.

Another way to look at the potential for disruption which the Fire may hold is to consider it as an extension of the disruption Android caused in the smartphone market; i.e. making touchscreen smartphones ubiquitous commodity devices. Indeed, Amazon's agenda with the Fire (and Kindle) is more analogous to Google's with Android than to Apple's for the iPad.

</comment><comment><USER3> > "The iPhone is also a subsidized product and it seems very successful. How > come it won? The answer is in details."

One of the other relevant details is that any subsidies that are provided are done so by the wireless carriers, not Apple. Apple gets paid in full for each iOS device sold, either by the carrier (iPhones), or by the customer direct (the other iOS devices). By being immediately profitable on each iOS device, Apple has no "subsidy variables" to factor into its profitability -v- product lifecycle calculations.

</comment><comment><USER4> Most articles I've read on this subject state that the new tablet will be sold at cost - a few dollars, not cost - $50. Which of these estimates is most likely correct?

<comment><USER5> Estimate says Amazon will be making a $50 profit: [http://www.eetimes.com/electronics-news/4228505/Kindle- Fire-...](http://www.eetimes.com/electronics-news/4228505/Kindle-Fire- profitable-at-estimated--150-BoM)

Estimate from iSuppli (yes, the infamous iSuppli) claiming loss: [http://www.isuppli.com/Teardowns/News/Pages/Amazon-Sells- Kin...](http://www.isuppli.com/Teardowns/News/Pages/Amazon-Sells-Kindle-Fire- at-Low-Profit-Margin-to-Promote-Online-Merchandize-Sales.aspx)

Make of that what you will.

</comment></comment><comment><USER6> Let's see how long that price is sustainable. There's no point to buy Kindle and not to buy any books, so subsidied Kindle will earn money to Amazon. But not so with Fire, you can (and there will literaly be millions and millions of cheapskates who will do exactly that) buy it and not buy anything from Amazaon after that. So I predict that Fire will be Amazons Bing.

<comment><USER7> Moreover, Google (through Motorola) will soon make an as-good-or-better tablet at the same price point as the Fire. The Fire is a direct threat to Google's tablet ambitions, and Google has much more cash with which to subsidize tablets. In addition, Google has a monetization strategy (ads + content) which is better than Amazon's (content). Heck, even search ads alone is probably better than Amazon's content model. Amazon's ad. monetization is weak because they don't have a search engine nor a real locality ad. platform.

<comment><USER7> However, one way in which Amazon can make a ton of money on the Kindle Fire is to use their Silk browser _to replace ads in search results and web pages_ on Fire devices. They can do this because Silk is effectively a rewriting proxy. Customers may stick with Silk anyway because the pages will load more quickly. There will be backlash, but Amazon may decide to do this anyway. Obviously, they would only replace a small percentage of the ads so as not to be cut off. Alternatively, they can use Silk data to better target Fire ads. to users outside of the browser, or with interstitials.

<comment><USER8>
         They can do this because Silk is effectively a
         rewriting proxy.

Technically they can, but it is probably illegal. And Google may not come after individuals that are using ad-blockers, or after shitty motels that are doing this, but you can bet your ass they'll sue Amazon and probably win too.

And it isn't only Google that Amazon should worry about in such a case -- if I'm a webmaster and the ads for which I'm getting paid for are going to get replaced by Amazon, I would be pretty pissed and I would probably block all Silk-related requests.

         Customers may stick with Silk anyway because
         the pages will load more quickly

I somehow really doubt that Silk will translate in a faster user experience. Of course, marketing does wonders.

<comment><USER7> Agreed, ad. replacement may be derivative-work liability for Amazon; I don't think the case-law is clear.

But they don't have to directly replace ads. in order to monetize ads well. Because they have all of a user's browsing history with Silk, they can target ads. as well, or possibly better than, Google. Perhaps they show ads. at the bottom of the screen, or in the screen saver, or while web-pages are loading, or with location-based pop ups for coupons for a store just down the street, whatever.

In this respect the Fire is a direct attack on Google, and Amazon probably _has_ to take this step in order to be able to subsidize this tablet as much as Google will be able subsidize their tablets. For this reason I wouldn't be surprised if Google soon cuts Amazon off from Android by making more of the OS closed source, and breaking app. compatiblity. If this occurs, expect Amazon to make a bid for Palm.

</comment></comment></comment></comment></comment><comment><USER9> I'd choose an iPod Touch or an iPad 1 over a Kindle Fire any day.

<comment><USER9> The Kindle Fire really has nothing going for it except for the large screen and the price.

<comment><USER10> I'd say it certainly appeals to people who can see the advantages of a small tablet computer but don't want to put down $600 on an iPad 2.

<comment><USER9> You can get a new/refurbished iPad 1 starting from $200</comment></comment></comment></comment>