Designing a new funding structure for bootstrappers - <AUTHOR> https://earnestcapital.co/funding-for-bootstrappers/ <comment><USER2> I like it, except these two points:

1\. You're asking a "bootstrapper" to reimburse up to $5K in attorney fees (in addition to their own fees), while regular Delaware C-Corp startups can incorporate and raise pre-seed or seed up to a several millions without involving lawyers at all. Much more capital efficient.

2\. > _if we invest $100k with a 4x, or $400k Return Cap. The company pays back $100k, so there's $300k left to pay, then decides to raise a round. We base our conversion on the $300k remaining to be paid, not the $100k we invested._

While this might be fair, it looks like double-dipping, especially if you have a low cap. There should be an option to repay it from the new investment without conversion.

<comment><USER3> 1\. Good point. This is just some boilerplate from fundraising docs that basically means the legal costs of closing the deal are paid out of the investment money (not the founder's pocket). But could be clearer / we could drop it. Legal costs will be minimal.

2\. Yes, currently the way we have structured it if the company decides to raise a round of financing and as part of that they want to pay the entire Return Cap to us in full, that is fine.

<comment><USER4> I hate dealing with unexpected legal costs, especially when cash-strapped, as I had to when raising angel cash. Maybe I was naive, but sometimes people don't know how much it costs just to raise money (something that seems really standard) and that if you can't pay it, you can't close the deal. However taking it out of the funds given is a bit more fair at least, but make sure people are aware of it so they don't feel cheated.

I would imagine someone would want to have their own lawyer look over everything anyway for this stuff before signing anything, but anything you can do to reduce cost is good. It's so minor and a necessity at the start, but has the huge chance to set off the relationship and optics on a bad start.

It's like you are giving free consulting resources (your money though instead of time) for the chance to close a deal you want as the investor, keep the client happy and make it as lubricated a process as possible. Eat it so that it doesn't turn into something that feels like an early scam attempt that'll ruin the future of the relationship.

</comment></comment></comment><comment><USER4> Sounds interesting enough, as a bootstrapper who previously raised funds and hated the experience, I like this idea, but I guess the devil is in the details. I don't give a shit about the VC conversion stuff and as another commenter has said, this could just be a sly way to slip into regular style deals with all that upside, but at the same time, if I just need money to focus and I know how much and when I have to pay out, it's just basically a specialty loan, which seems intriguing. Not sure what happens if your business fails in this case however, I assume it'd be treated like a regular investment and they can't go after you personally as in a real loan, so the onus is on the investor to make sure they do their homework.

It seems fair to say if I take $100k I pay you back say 4x that, no other strings attached. We both get value out of it. Who wouldn't want to 4x their money with some careful investment? Seems like it could be more reliable then regular startup investing, albeit slower and less exciting, but at the same time, you get to actually enjoy helping people like you instead of trying to help them but also trying to fuck them because it's your job.

<comment><USER5> Everyone would want to 4x their money with some careful investment. However, who is willing to give up 4x that amount on a proper working business with some traction?

I'd assume they're not going to give these "loans" to high risk "hey I have a cool idea" businesses, but more to businesses where it's clear that investing $x adds $x * 3 revenue. Meaning the risk you're taking is likely not extremely high, more on the same level to private equity.

Those are massive returns for the investors. The only people willing to take money under these terms are really desperate.

<comment><USER6> Your point is valid but somewhat exaggerated.

There should be some companies somewhat in the middle of the two extremes you've laid out. Companies that are reaching product market fit but still have a high level of uncertainty.

Note, I'm not saying this structure will necessarily see huge demand. But I also don't believe the terms are completely out of reason.

<comment><USER3> Exactly. Like all forms of investment, it's not for every founder, every business at every stage. Our canonical example is a technical founder who has a full-time job or full-time consulting, built a product on the side with ~$3k MRR, a great potential a company and is faced with (1) go full-time now and eat through lots of savings to get it off the ground or (2) work on it nights and weekend for 18 months. Our proposition here is to provide capital and resources to compress 18 months of nights & weekends into 6 months of full- time work to get the company off the ground.

</comment></comment></comment></comment><comment><USER7> It seems the summary is that they will require them to be paid back through business profits as a result of it not aiming for VC-level returns. They also close the loophole of not showing much business profits on paper by defining profit as founder earnings. If your earnings from the company crosses a certain threshold, the investors tax your personal salary to get its return. What they are undecided on is whether they want to keep this forever, or until they actually get their capital + profit margin repaid.

I'm in their target market myself, so here's my two cents.

It's fair to offer some additional remuneration for a VC taking extra risk with ideas with smaller potentials, but this sounds a little draconian. It sounds a little like they're covering their bases (which is great!) but also putting themselves in a place where they might have to go after people's salaries, which is going to create a lot of resentment. It feels almost like an attempt to take something more risky, but try to do some legal finagling to push even more risk onto the founder just so that they can bring it down to regular VC-level risk for themselves.

It feels like almost by definition most all of the 'good' investment that they want to pursue will be able to make themselves eligible for normal VC funding by either no or little work, and the additional complexity and unknowns incurred by this untested agreement is more expensive than what a good company would accept. Because for much less work than that, they can go the traditional route. Since they're bootstrapping, they don't have the urgency of 'I have to find money in x weeks or the company goes bust' either.

<comment><USER8> > but also putting themselves in a place where they might have to go after > people's salaries,

Disagree. Part of the term is that both parties will agree to a minimum salary that is not subject to dividends. So if you and the investor would have to agree in advance that founder salary will be $100k.

This clause protects them in the case, the founder decides to unilaterally pay themselves a $500k salary, but go back to the VC and say, "sorry, we had no profit this year. no dividend for you"

<comment><USER3> Exactly. In this structure, founder can pay themselves whatever salary they want but any amount above an agreed cap is added into Founder Earnings and subject to dividend sharing.

</comment></comment></comment><comment><USER9> I really like this idea. A thought:

"If there's a hard stop on the investment, then Earnest and its team will no longer be invested in the success of the company."

This is shortsighted thinking. The stronger the companies are in your Alumni network, the stronger your Alumni network is- so if you are seeking to continue investing long term, it is always in your interest to build companies in your Alumni network, even if there isn't a direct cash return for doing so. The publicity benefit alone is well worth it (We were an early investor in XYZ!)

<comment><USER3> Fair point.

</comment></comment><comment><USER10> I'm not particularly interested in starting a start up so I've never looked this up, but are conventional small buisness loans impossible to get for an internet based buisness?

From a lay persons view it seems like handing out small buisness loans to internet companies has a higher chance of profit and less risk profile than other types of buisness.

To start a restaurant for example you need furniture, cooks, wait staff, need space, suppliers, etc. You can start up a SASS with a couple of computers, an AWS account, and a WeWork subscription. There is zero marginal cost, I would bet productivity per employee is very high compared to other industries, what am I missing?

<comment><USER11> Banks won't lend to startups in the UK, unless secured by assets just like a personal loan.

In the UK almost all bank lending is related to the housing market (I read a stat where it's ~ 95%).

Basically, the banks are extremely risk adverse and only care about rent seeking.

Even if you're in business and doing well, it's difficult to get a loan.

<comment><USER12> In the UK it's pretty easy to get a business overdraft. Although those will come with a personal guarantee from the director(s), they don't need to be secured by any assets.

<comment><USER11> Sure, but I wasn't talking about overdrafts.

</comment></comment></comment></comment><comment><USER13> Your funding mechanism seems compatible with cooperatives, which have no equity (but do have founders). For example, Stocksy ([https://www.stocksy.com/](https://www.stocksy.com/)) is a producer cooperative with members who are artists who make photos. The founders aren't the cooperative members, they were technologists who wanted to make a cooperative platform for artists to make stock photos.

In a cooperative case, the founders would be investing their time beyond draw under the same terms as a cash investor would. If/when the venture makes profits, the investment of time/money can be paid back though a percentage of revenue. Anyway, you may want to solicit feedback from members of the Platform Cooperative movement ([https://platform.coop/](https://platform.coop/)). They are actively searching for those who might have a compatible, patient capital funding mechanism.

</comment><comment><USER14> _There is no source of capital that is aligned with founders who want to build a healthy, sustainable, profitable business._

Positive cash flow is the best source of capital, IMHO. If you can't manage that, or you need extra capital to grow the business, what about turning to banks as a source of capital?

After my company (not a tech startup) hit the 5-year mark in the state corporations database, I started getting offers from banks, PayPal, and even Amazon, two or three times per week.

They don't want equity. They don't want a seat on the board. They don't want to tell me how to run my business. They just want the interest and a relationship that might lead to more business down the road.

<comment><USER15> And personal guarantees and a lein on your house.

<comment><USER14> There are always strings attached when money changes hands, whether it's a bank or an alternative funding vehicle such as Earnest Capital.

In its post, this statement stood out:

 _All of the terms or figures are subject to change. Any specific figures would change significantly depending on the stage of the business, founding team and current levels of traction._

Phrases like "terms subject to change" \+ subjective, easily discounted appraisals of things like "team" and "traction" are the types of venture BS that many bootstrappers want to get away from.

Moreover, the post says they "primarily" want to extract dividends from the companies they invest in. What happens when those dividends dry up, or the company needs to make a choice between paying out dividends and using that money for some other important purpose? Salaries get docked?

<comment><USER3> Our structure is 100% aligned with the founder. If they founder(s) take profits, we get a share of that. If it makes more sense to reinvest profits or if there currently aren't profits, we don't get paid and we do our best to help the founders in any way we can. We definitely would not be trying to go after salaries to increase profits (nor would we even have any mechanism to do so... no board seat or equity control).

</comment></comment></comment></comment><comment><USER16> Always good to see more capital structures and options for both founders and investors. I think this case could really benefit from some concrete examples (numbers) of deal terms, and also scenarios in which bootstrappers would want to accept this kind of capital. The YC->VC model is well understood, but it's not clear when and why bootstrappers would want to raise money under these terms. (I note he's interested in hearing from a 500MRR company in the comments, is this the target market?)

</comment><comment><USER17> The big problem is at these numbers they'll still need to do a lot of vetting. And in the current revenue-loving funding climate people who'll seem good enough to them can probably get a better deal elsewhere (regardless of what happens down the road). Adverse selection is going to be a big problem.

</comment><comment><USER18> Would the amount to be repaid be at all contingent on when it is repaid? Or is it a fixed multiple, no matter when it's repaid?

</comment><comment><USER19> Important missing information for me: what is a reasonable founder salary cap?

</comment><comment><USER20> Rubbish, bootstrapping is about taking no funds in exchange for equity. You fund yourself with no obligations to anyone but yourself. The moment they started talking about equity in the business they lost me.</comment>


Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates - <AUTHOR> https://www.bloomberg.com/news/articles/2017-02-22/tesla-says-model-3-on-track-as-quarterly-loss-beats-estimates <comment><USER2> People who lose money shorting Tesla are losing their shirts for the same reason as those who shorted Amazon: cash flow + growth matters more than profitability, PE ratios, or EPS. Tesla's car business is cash flow positive but the quarterly losses are due to infrastructure investments. This is how finance can be more subtle than meets the eye.

Tesla's car business is very profitable:

 _Tesla also reported an automotive gross margin excluding SBC and ZEV credit (non-GAAP), of 22.2% in the quarter, up from 19.7% a year ago, but down from 25.0% in Q3..._

huge growth:

 _Looking at the future, Tesla said it expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year._

reinvesting operating profits into investments:

 _The company also expects to invest between $2 billion and $2.5 billion in capex ahead of the start of Model 3 production and continues "to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1. It also forecast that both Model 3 and solar roof launches are on track for the second half of the year._

This company is firing (no pun intended) on all cylinders

<comment><USER3> Shorting seems to often be about the short-term prospects of the stock.

Long term, Tesla looks like it will be a reasonable company. But will it justify its stock price?

Tesla is a $45B company right now. Toyota is $188B (4.1x more valuable), VW is $78B (1.7x), GM is $58B (1.3x), Ford is $51B (1.1x), Nissan is $42B (0.9x), Fiat Chrysler is $17B (0.4x), Honda is $58B (1.3x), BMW is $56B (1.2x), Daimler is $79B (1.8x), and Mazda is $9B (0.2x). Tesla, right now, is still risky. Toyota's profits are real. GM's profits are real. BMW's profits are real. Tesla's profits might be great in the future - and that risk means the potential profits are worth less than actual profits. So, given that there's a good amount of risk and it's going to be a while before those profits come rolling in, it seems like Tesla would have to be the next Toyota to justify a $45B price tag. Let's say that in 20 years it becomes the next VW or Daimler. Would that justify a $45B price tag today? Probably not. It wouldn't be a high return and the likelihood that Tesla is going to become the next VW or Daimler is low. That's not a dig at Tesla so much as realism. No matter how great you are, it's hard to become one of the top 3 companies in an industry.

You note Tesla's non-GAAP margins of 22.2%. "During the past 13 years, the highest Gross Margin of Honda Motor Co Ltd was 29.06%. The lowest was 22.39%. And the median was 25.58%." 22.2% isn't bad, but selling more vehicles will put downward pressure on that. Gross margin doesn't include things like R&D so spreading that over more sales won't impact gross margins. Can they drive down COGS? Maybe, but serving a less enthusiastic audience also bings costs and challenges. It's easy for Tesla to lean on the enthusiasm and good will of early-adopters right now.

But Tesla also faces existential threats. Musk has said that they should have full self-driving capabilities by the end of 2017. For some people, owning a car will still make sense, but for many getting on-demand transportation means not having to deal with car ownership. Car sharing rates are going to drop to the floor. A self-driving cab can easily handle the load of multiple people that might own cars today. Even if the self-driving cab has a margin of 40%, if you're only paying for 1/5th of the vehicle, well, 140% * 20% = 28%. Given that cars are a major expense for many people, being able to cut 70% off that expense will be attractive to many - and will mean that the demand for cars will become smaller.

Similarly, Tesla has opened up all its electric patents to competitors. Musk has said that making electric cars is easier than making internal combustion ones. So, if Musk shows that electric cars can be profitable, won't everyone else add a huge amount of competition? I mean, Tesla is really cool for opening up its patents to competitors, but that indicates to me that Tesla is more about pushing the human race forward than it is about making money.

Tesla is certainly a cool company. I love that they're pushing us forward - and in cool ways. I love that Teslas don't look ridiculous like a BMW i3. I love that the solar roof they announced is something my parents would be cool with because it looks normal. But I'm also kinda glad that they're doing this with money that isn't mine. Musk is on a mission and it's a cool one. Self- driving electric vehicles with solar power and all sorts of coolness. I think there's a decent chance Tesla will become profitable. But the bet at its current market valuation is that it will become the next Toyota. Nothing short of that would justify the valuation. Eventually, automobiles just don't have the economics or growth of software and the PE ratios are generally in the 6-10 range. I mean, if Tesla becomes as big as Toyota, it won't likely be able to become 10x as big as Toyota. I mean, Toyota sells around 10M automobiles annually. The top 15 auto makers sell around 73M. So, if Tesla becomes Toyota, there's not a lot of growth past that. And based on its current price, if it only becomes GM or Ford or BMW in the next decade, it will have seen basically no growth in its value.

What's the likelihood that Tesla is the next BMW? It's low. Not because Tesla isn't cool. Not because I don't want them to succeed. It's because it's hard to go from 100k niche cars per year to 2.3M. Even if you think the chance if 50% 10 years from now, that means you're saying there's a 50% chance that Tesla should be worth 20% more than it's worth now in 10 years time.

The world would be better if Tesla became the next BMW. We'd have a lot of lower-polluting vehicles on the road and other manufactures would follow Tesla. But I think it's very far from a sure thing and a lot of investors are pricing Tesla like it's a sure thing that Tesla will be the next Toyota. Tesla is so cool and they're pushing us toward a better world. They're making great strides. At the same time, looking at their current valuation, it's hard to see the upside. Maybe the vertical integration will be wonderful. Maybe people won't want self-driving cabs (though that seems unlikely). Maybe other manufacturers won't compete effectively with electrics. But that's a lot of "maybes" in the path of becoming one of the most valuable car companies out there. I hope they do it because I'll have a better world, but I wouldn't bet my money on it.

<comment><USER4> > Toyota's profits are real. GM's profits are real. BMW's profits are real. > Tesla's profits might be great in the future - and that risk means the > potential profits are worth less than actual profits.

You have this exactly backwards. For instance, you could have made the exact same argument about Walmart versus Amazon. What you're missing is that the investments that Tesla is making, which hurt short-term profitability, literally create new lines of business that power future revenue streams. The fact that car manufacturers are hoarding profits and failing to invest in the future is precisely why _they_ are overvalued.

<comment><USER5> You're still making a bet that Tesla will become a top 3 car company in the world. At the moment people there are people who think the price to risk is worth it. Some do not think it's worth it.

I would say there are better ways to make money than a 50 percent chance to make 20 percent more.

Also these predictions are 10+ years in the future. How often have people actually predicted that far from the future? Almost none. The only ones I can think of are bets on fragility: more downsides than upsides as time progresses.

<comment><USER6> Remember though that Tesla will no longer be just a car company. The battery market is huge and will only get bigger as utility scale projects boost demand (like the 80MW one in Southern California Tesla just installed), and if residential solar takes off, solar city stands to make a decent amount of money.

<comment><USER7> The larger the battery market becomes, the more competition it will attract. Tesla is certainly starting off with a nice lead, but it would be foolish to underestimate the capabilities of other players who might just not be interested enough in this market yet, and who'll -- for the moment -- happily have Tesla serve as a canary.

<comment><USER8> I'm not entirely sure if Tesla's battery tech is a sufficient differentiator.

Tesla is a slave to the Lithium Ion process of Panasonic. If a new chemistry breakthrough comes out tomorrow (ie: Redox Flow has huge potential in the utility space, even if it has little potential in the retail space)... Panasonic will be able to switch to the new chemistry but Tesla's battery tech is basically Lithium Ion only.

Tesla's battery technology is literally the battery electronics. Not the chemical cells. Tesla seems to employ chemical experts so that their battery- electronics can better predict the effects of the chemistry... but really... they're only putting together cells. Tesla doesn't make the 18650, Panasonic does. Tesla just puts a bunch of 18650 together, as well as have some sort of algorithm to make them charge / discharge at high efficiency.

Tesla is completely dependent on Panasonic's chemistry. The speed at which LG was able to build a "Silicon-Lithium Ion" battery pack of GM's Bolt only demonstrates how "easy" the battery-pack problem is.

</comment></comment></comment></comment></comment></comment></comment><comment><USER9> People get upset by the 'superhero' status of Elon Musk. Nerds everywhere worship the guy, buy his cars, watch his SpaceX launches.

But honestly, let him _have_ it, I say. He's earning it. He's taking huge risks and succeeding where others weren't willing to try.

<comment><USER10> Elon Musk's businesses have benefited from billions in federal and state government subsidies and low-interest loan programs over the years.

He's taking huge risks because other people are footing the bill.

<comment><USER11> And the legacy energy companies are still raking billions in subsidies every year, even before you get to things that aren't counted that way. And the industrial farmers are still subsidized to grow various things.

And FedEx has a huge implicit subsidy via road maintenance. And Walmart, via various welfare policies. And insurance companies heavily benefit from various government policies.

I can think of these all day.

</comment></comment></comment><comment><USER12> Is it just me reading too much financial news or does "beats estimates" sound like it was better than estimates?

Loss was 69 cents vs 53 cents expected.

Revenues beat estimates, though.

<comment><USER13> They beat loss estimates because they spent $500m [0] on capex instead of $1000m [1].

Not sure if I buy "got better deals from suppliers" story, but it would be awesome if it was true. Most likely they've hit delays with suppliers.

[0] Q4 2016 update from shareholder letter on [http://ir.tesla.com/](http://ir.tesla.com/)

[1] [http://www.businessinsider.com/tesla-capex-goal- means-1-bill...](http://www.businessinsider.com/tesla-capex-goal- means-1-billion-of-spending-in-q4-2016-10)

<comment><USER14> I don't understand why capital expenditure is viewed as a loss. You spend $1mil on infrastructure, afterwards you have $1mil of infrastructure (which now should start earning you money) instead of $1mil of cash. H ow is that a loss?

<comment><USER15> > How is that a loss?

It isn't. If you look at their 8-K, it shows that like 99% of publicly traded companies, cap-ex does not show up on the P&L statement.

</comment></comment></comment></comment><comment><USER16> It's fun to read Mark Spiegel's twitter feed. I've never seen someone so desperately try to force a theory. I wonder why some people want to see Tesla fail so badly.

<comment><USER17> I can sorta understand how he got there. Historically, making a car company is very, very hard. It's a tough industry to crack into. So when you see a startup car company with a hugely inflated stock that has a (based on historical data) very low chance of success, it makes a lot of sense to bet against it. But as it succeeds, you have to keep doubling down on the idea that it can't possibly deliver on it's promises and will fall on it's face eventually. At some point he slipped from making a reasonable bet to frothing at the mouth a bit.

<comment><USER18> The market can stay irrational longer than you can stay solvent. -Keynes

</comment></comment></comment><comment><USER19> The reason so many people think Tesla is expensive is because some are valuing the company relative to Ford and GM, but others are looking at Tesla Energy and valuing the company not just in automotive but in GE's business, and even in Exxon's business.

GM + GE + Exxon = $765 billion

Tesla at $45 billion is still just 6% of that market. There's a lot of uncertainty there, so only a small slice of that $765 billion is getting priced into Tesla's stock, but it's enough to make the people comparing to Ford wonder what the heck is going on.

<comment><USER15> Why do you believe GE is relevant here? GE is a conglomerate that has major businesses like aviation and healthcare that are wholly unreleated to Tesla Energy. For 2016, those made up $9.2B of GE's $17.6B industrial segment profit, so over 50%.

</comment></comment><comment><USER20> From their letter (link to below if you want to read)

> Later this year, we expect to finalize locations for Gigafactories 3, 4 and > possibly 5 (Gigafactory 2 is the Tesla solar plant in New York).

Should be an exciting conference call. (5:30pm EST)

[http://files.shareholder.com/downloads/ABEA-4CW8X0/394401180...](http://files.shareholder.com/downloads/ABEA-4CW8X0/3944011801x0x929284/22C29259-6C19-41AC-9CAB-899D148F323D/TSLA_Update_Letter_2016-4Q.pdf)

<comment><USER21> Gigafactory 3: Europe

Gigafactory 4: Asia

Gigafactory 5: Where? Another one in the US?

<comment><USER22> Australia. Please.

We have the land, we have the lithium, we have the sunshine and we have a massive car market - 1.2 million cars sold in 2016.

We also have a good automotive manufacturing base... about to go into idle mode. Aussie federal and state governments have been very willing to support local manufacturing, and I'm sure they'd love to hear from Tesla.

<comment><USER21> I was going to suggest Australia as a possible contender for the 5th factory however while we have some supportive state governments we also have an incredibly _unsupportive_ federal government that is hostile to electric vehicles and renewable energy and storage. And I think that's obvious to anyone looking on from outside. So while this current federal government is in power it's one more opportunity we're going to miss (and be left behind on).

<comment><USER14> We also have an absolute ton of solar power on very cheap land, and our power grid is in a death spiral to the point where going off-grid is going to be a clear financial win in the next 10 years. By the time a new factory is up and running, this is gonna be a really good market for battery storage.

</comment></comment></comment></comment></comment><comment><USER23> For a negative look at the results: [http://www.zerohedge.com/news/2017-02-22/tesla-beats-it- burn...](http://www.zerohedge.com/news/2017-02-22/tesla-beats-it-burns- record-1-billion-cash-flow-delivers-10-fewer-cars)

</comment><comment><USER24> It seems the financial side of a company have to make a guess at position they expect to be in when they report to the shareholders. So long as they beat the estimates then everyone is happy. The guess does have to be with enough forward movement to show the company is worth investing into. It's all a bit of a tightrope to get it right enough the money stays in play so the company can continue doing what they want to do.

</comment><comment><USER25> I hope Model 3 can beat the Bolt in range. That would be a nice surprise. I wouldn't say it's _necessary_ , but the Bolt has already gotten a lot of press, with some even saying it's what's making EVs "mainstream", even though they're only selling like hundreds of them at a time right now, and that probably won't change anytime soon considering GM _loses_ $9,000 for each unit sold. Plus, I hear all the time how the dealerships try to dissuade people from buying a Bolt and turn them towards buying an ICE car instead.

I also hope Musk reconsiders his strategy of not making much cheaper EVs "because everyone will pay to be driven by an autonomous vehicle soon".

I think he's way overestimating how soon that will happen. I don't think most people, even in the U.S., where a "Tesla Network" may actually be viable, let alone in the rest of the world, will do that by 2025, if not 2030. That leaves a _lot_ of wasted opportunities for Tesla to become a "market leader" in EVs - or rather to _maintain_ its EV leadership in the market.

By 2025, there will definitely be EVs from Renault and others that cost less than $20,000 and have 200-mile ranges. At half the price of a Model 3, those cars are going to gain a lot of market share, fast, even if Tesla's numbers continue to grow as well.

I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000. That would be a nice price-point for an EV by 2020. But I think Tesla needs to go down to $15,000 or at least 18,000 by 2025, as well, _even_ if for that price point and by that moment in time, those cars can't be "Level 5" \- although if Model 3 will have that hardware, I think so will the $15,000-18,000 car by 2025 (it will probably need to be more like 2023, and announced in 2021, though, as a lot of EVs will start to come out in 2021-2022).

<comment><USER26> _" GM loses $9,000 for each unit sold."_

I'd be careful with figures like this. It's possible they are investing with the idea to ramp up production and get to profitability with scale, or with predicted reductions in battery price. It's also possible that the way CAFE rules calculate an average over a manufacturers entire fleet mean that by taking a loss in one place they can earn or save money in another.

<comment><USER27> Right, its important to calculate profit/loss differently from 'marginal profit' or the money made by each unit over cost of manufacture. Sell enough units, you can cover the fixed (development) costs. Sell too few, and you can claim "They lost money on every unit" which is sort-of correct.

</comment></comment></comment><comment><USER28> The trade I'm interesting is simultaneously shorting Tesla and Daimler.

Sceptics emphasise the difference between Tesla's market cap (£40 bn) vs its current sales (75,000) and profits (close to -$1bn). I can imagine a state of the world where they grow dramatically and justify this price tag, but in that case I see serious problems for Daimler.

Similarly, if Daimler flatlines and doesn't see a crash in sales of Mercedez, I'm seriously pessimistic about Tesla.

</comment><comment><USER29> Looks like the stock is down 2.4% from yesterday. Folks are taking a closer look at the numbers.

 _One analyst specifically took aim at the fourth quarter results, calling out the beat as "phantom" given the exclusion of the SolarCity acquisition from consensus estimates._[1]

[1][http://www.zerohedge.com/news/2017-02-23/market-sours- teslas...](http://www.zerohedge.com/news/2017-02-23/market-sours-teslas- phantom-beat-stock-slides)

</comment><comment><USER30> Was about to buy near expiry put options for a very cheap price...I'll be staying away from TSLA and looking at macroeconomic trends instead.

Timing earnings without informational edge, it's gambling.

<comment><USER30> Update: Seeing the TSLA tank yesterday, I decided I will never self doubt myself again and resume gambling.</comment></comment>


Citigroup fined $7m after legit transactions mistaken for test data for 15 years - <AUTHOR> http://www.theregister.co.uk/2016/07/13/coding_error_costs_citigroup_7m <comment><USER2> Synopsis: _SEC sends clear message to tech people in finance: shut the fuck up if you find something, silently fix it, and sweep the remaining crumbs under the rug, or else your company will be fined millions._

<comment><USER3> If they did that and the SEC found out, they probably wouldn't stop at just fining you. Which is probably what Citigroup guessed and why, after realising the extent of the issue, they reported it fully within a month

<comment><USER4> Indeed, Martha Stewart is a prime example of how NOT to deal with the SEC. Turns out she wasn't guilty of insider trading, but she still went to jail for lying to the SEC about the trades in the first place. They take that very seriously.

<comment><USER5> This particular example seems to reinforce the argument for _saying nothing at all_.

<comment><USER6> Directors of companies have legal responsibilities to provide these reports to the government. So instead of the company getting a fine for making a mistake even though you tried to comply, now you are personally choosing not to fulfil your legal obligations as a director. Smart move.

<comment><USER7> > Directors of companies have legal responsibilities to provide these reports > to the government.

What if you don't tell the directors, but just fix the problem you have discovered? Is everyone off the hook then, or does that also amount to breaking the law (in some country)?

<comment><USER8> Why you're in Operations or Technology in large financial companies, you're confronted with 'could do better' issues all of the time. All of the time. The more issues the greater the legacy of the system you're working on, as in this case, functionality has been altered from the original vanilla system (here, alphanumeric field type replacing a numerical feed type, the the documentation not being updated/references/or probably in an unreferenced document documenting the original system).

Spotting these things is a _fantastic_ way for a VP to get on the fast-track to Director. And it is fantastic, as a Director, to have people on your team actively looking for holes.

Why?

Because Operational Control is a #1 strategic target for all banks. $7million is nothing. At an extremely senior level this is evidence that a culture of transparency and compliance exists in the company, and ammo the next time the SEC or FED express a 'concern'. At a low level it is a Director or VP demonstrating to their boss that they understand the strategic direction, and that under their watch nothing big is going to blow up, nothing $7billion big; something $7million big is nothing, they know their boss knows this and will get a thank you for it being raised.

So you tell the directors. You make a nice PPT and include it in 'initiatives' when a senior visitor comes to visit and gets a de-brief on your department. You make sure it's carefully and clearly explained, so they can explain it to their boss in a nice, pro-active, continuous improvement kind of manner.

A bank which does not operate like this, in the post 2008 era of regulatory punishment for purgery, is an organisation with a very short future.

Source: Work in Operations and Technology in large banks.

<comment><USER9> > nothing $7billion big; something $7million big is nothing, they know their > boss knows this and will get a thank you for it being raised.

Further, this was obviously discussed with the boss before it was raised.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER10> $7m is pocket change for Citigroup.

No wonder the big banks keep shitting the bed. There's never any real consequences for their fuckups.

<comment><USER11> This is the sort of comment why people vote for Trump.

They made a mistake, a programming mistake no less, something many people here have done.

Then fully admitted it when they found out.

Yet this is them being evil?

No wonder people vote against the left.

<comment><USER12> The other thing is with a company the size of citigroup (250,000 employees), it is statically impossible not to have:

\- incompetent and/or careless employees and managers

\- dishonnest employees

\- computer bugs, glitches, clerical errors

If you take down a large corporation every time you find any of these, there will be no corporation left within a year. Just small companies that were statistically lucky to have neither of those that particular year.

Name me a program, any program (other than Hello World) where no bug has never been found!

<comment><USER13> They had this bug for more than a decade. They should have systems in place to look for these things.

People make mistakes, but these mistakes should be caught before they get into production. And the ones that still make it into production should be hunted.

<comment><USER12> Should we discuss about all the 15 years old bugs that are found in Windows, Linux and MacOS which are well into production (and many of them critical bugs that affect the core of the product)? Has a software company ever been fined or held liable for bugs in its products? In fact too often, bug fixes are paid updates.

Financial companies are held to extraordinary standards, and in my opinion it's a game they cannot win.

<comment><USER14> This is not a minor bug, this is a bug that caused data to be misrepresented. If you want to compare it to OS bugs, then you need to look at silent data corruption: how many data corruption bugs have gone undetected in operating systems for 15 years?

<comment><USER15> The notorious (and still disputed) HFS+ bit-rot issues?

</comment></comment></comment></comment></comment></comment></comment><comment><USER16> They didn't lose anything, they were FINED $7m for submitting incorrect reports. With the number of mergers that they have gone through it's not surprising they have trouble with company wide reporting.

<comment><USER17> This is the gist of it:

"But in 1998, the company started using alphanumeric branch codes as it expanded its business. Among them were the codes 10B, 10C and so on, which the system treated as being within the excluded range, and so their transactions were removed from any reports sent to the SEC."

<comment><USER16> The original title stated said "Citi lost $7m after legit transactions mistaken for test data". That was what the Register used too, but it's very misleading.

</comment></comment></comment><comment><USER18> I think the most impressive part is that apparently the same system and code had been running for 15 years as the number of transactions reported on had increased exponentially

<comment><USER19> I think it's the bad kind of impressive, one where ATMs still run COBOL.

<comment><USER20> The bad kind of impressive would be getting running ATMs on NodeJS.

 _ducks_

<comment><USER21> May I introduce you to the "Lamassu Bitcoin ATM"?

</comment></comment></comment></comment><comment><USER22> Part of responsibility here is on SEC too IMO. When designing that "blueprint" format and data exchange protocols, they didn't implement mechanisms to verify correctness and completeness of data received.

</comment><comment><USER23> Important to note that they only left these transactions out of report data sent to the SEC. It's not like they were not honoring the transactions or that some people were missing money.

<comment><USER24> But if those trades included insider trading or market manipulation then they were hidden from the regulators' investigations.

Barings was brought down by trades in a special "error account" 88888 that was excluded from (different) reporting.

</comment></comment><comment><USER25> I have done bluesheet reporting code for another large bank and it is one of the most tedious things you can ever do in software. It's a report of all the trades that the bank does and the SEC can come back and ask for historical data at any point of time. So there's a huge database with feeds coming in from multiple trading systems. Usually these feeds have to be enriched with the right account numbers and so on. This needs lookups to other reference data systems, which frequently are changing because of changing regulations, growing businesses etc. I am not surprised this bug remained undetected for more than 15 years. The guys who coded this initially are probably long gone and nobody did knowledge transition of the fact that some account ranges are not test accounts, even though they look like test accounts.

</comment><comment><USER26> Totally unrelated, but I am not surprised. I once logged into my Citi credit card account and was granted access to another user's account. Certain places were off limits but I was able to view a lot of details. Pretty scary! I never heard back after reporting the issue.

<comment><USER27> Did you collect proper snapshot? Did you report it to the right official authorities?

<comment><USER26> I did grab a few screens and contacted the only available "support" link I could find easily on their site, but after a few weeks with no response I eventually deleted the files.

</comment></comment></comment><comment><USER28> This makes me feel more comfortable with the reality that some broken code I wrote a long time ago might still be running somewhere... :)

</comment><comment><USER29> Seems to be something like "089" < x < "100", should never use "range" to handle string ids.

<comment><USER30> There's probably a comment above it

      // XXX: too general, revisit when we have more than 100 branches

<comment><USER31> Should have written TODO

<comment><USER32> I've seen the XXX suffix in the CPython source code - what does it mean compared to TODO?

<comment><USER33> I would assume searchability. A non-case-sensitive non-regex search of a codebase could yet false positives for things like "autoDot"

</comment></comment></comment></comment></comment><comment><USER34> I suspect the bugs like this come about because of a patch not because of the original development. Devs and dev teams tend to get sloppy after the first push and budgets tend to shrink dramatically.

One time I found a bug that was running for a few years and the result of it was the company was under reporting by millions of dollars per quarter (the running total was near to $100mm, and im sure it crossed it after my contract ended).

This was VERY well tested software in the beginning (one of the best test suites i've seen actually) and audited up to high heaven. The problem started when the patches rolled in and those, are not tested anywhere near as much.

</comment><comment><USER35> //Try this in your console.

function should_not_exclude_10B_10C(x) { if ("089" < x < "100") { console.log('excluding ' \+ x + ' in report.') } else { console.log(x + ' is normal.') } }

should_not_exclude_10B_10C("10B")

should_not_exclude_10B_10C("10C")

<comment><USER36> Actually, no: ascii 10B>100\. The bug above is that you can't do chained inequalities like that in Javascript. Try: should_not_exclude_10B_10C("200")

<comment><USER35> B > 0 assumption is broken in their code. Read Page 4, footnote no.4: [https://www.sec.gov/litigation/admin/2016/34-78291.pdf](https://www.sec.gov/litigation/admin/2016/34-78291.pdf) This was not caused by Ascii confusion...

</comment></comment></comment><comment><USER37> I've never understood how these fines are meant to benefit anyone. If no one is affected, then why is there a fine? Who is this money going to for damages to be repaid?

Also, why are you not allowed to use real data for testing purposes?

<comment><USER38> The SEC was not impressed and said in a statement announcing the fine that the "failure to discover the coding error and to produce the missing data for many years potentially impacted numerous Commission investigations."

</comment></comment><comment><USER39> what were these transactions for?

<comment><USER40> There is mention of trading data which suggests to me that it might be to do with traders employed by Citigroup ie staff members whose job it is to use a block of the bank's money or outside investor's money to buy and sell shares, commodities and pretty much anything where they believe they can buy and sell to turn a profit.

</comment></comment><comment><USER41> Yawn. This company died eight years ago.</comment>


B.B. King's legendary 'Lucille' guitar going up for auction - <AUTHOR> https://www.foxnews.com/entertainment/bb-king-guitar-lucille-auction <comment><USER2> I'd like to buy some guitars from my favorite players one day. I wonder if the person who ends up buying Lucille will actually play it. I hope they do!

<comment><USER3> Unlikely it will exist outside a humidity controlled box, unless hung on a lobby wall. Your cheap 1970s pawn shop guitar has better mojo for playing anyway. People want to see his wear marks, not yours.

</comment></comment><comment><AUTHOR> Wouldn't that make a great conversation piece?

I bet it'll cost a fortune. $100k seems cheap.

<comment><USER2> I guess it's $100k due to the fact that it's not the original Lucille he saved from that fire.</comment></comment>


How Times Square Works - <AUTHOR> http://gizmodo.com/how-times-square-works-1582269710?curator=MediaREDEF <comment><USER2> Times Square generates 11% of NYC's economic output? 385k jobs? I find these numbers difficult to believe.

<comment><USER3> "a little over half of which are in that bright sliver of Midtown, while the other half are strewn across the country supporting Times Square operations from designing the content on the signs to keeping the power plants that power them on line."

<comment><USER4> Except that those power plants power the entire city, not just Times Square, so counting all their employees as part of Times Square's contribution to the economy isn't accurate. A single 50-story office building probably draws more power than all the LEDs in Times Square - for lighting, cooling, ventilation, elevators, computer and electronic equipment, etc.

<comment><USER5> They aren't LEDs

</comment></comment></comment></comment><comment><USER6> I've developed control software for LED panels of the kind you see in Times Square a few years back. While that was for a different manufacturer, the hardware and control techniques aren't much different. The article makes it sound a lot more high-tech than it really is. They are interesting devices, especially when you get into strange shapes, but it's basically irrelevant how big your display is. The resolution matters, as well as the refresh speed. That's where the basic challenges lie.

</comment><comment><USER7> There was a proposal a couple of years ago to allow giant advertising signs somewhere in the most blighted part of Market St, San Francisco. I saw a talk by one of the proponents (who just _happened_ to own one of the buildings there), and he assured us that giant flashing signs would turn Market St into a Times Square or Piccadilly Circus. I was skeptical, but hey, I guess it couldn't hurt.

<comment><USER8> I have a friend who lived in an apartment in Melbourne - before and (briefly) after they put up a giant animated billboard next door.

[https://www.flickr.com/photos/avlxyz/13840260364/](https://www.flickr.com/photos/avlxyz/13840260364/)

It looks OK during the day, but it's hard to adequately convey how incredibly bright this thing is at night, or how incredibly annoying it is to not be able to simply look out the window without high-contrast animated advertising right in your face. It doesn't help that they generally only run a few ads in a loop, over and over again. These things make housing anywhere around them a LOT less liveable.

He moved out.

<comment><USER9> I had a similar experience staying at a high-rise hotel in Tokyo.

My whole room flashed up every 2 seconds as the adverts scrolled over, similar to when a police car with lights on drives by your window.

You'd definitely want to invest in some very good shutters.

</comment></comment></comment><comment><USER10> Here are some real time views (that might be showing) some of those LED screens. In case you are not familiar with Times Square.

[http://www.earthcam.com/usa/newyork/timessquare/?cam=tstwo_h...](http://www.earthcam.com/usa/newyork/timessquare/?cam=tstwo_hd)

[http://www.earthcam.com/usa/newyork/timessquare/?cam=tsrobo3](http://www.earthcam.com/usa/newyork/timessquare/?cam=tsrobo3)

[http://www.earthcam.com/usa/newyork/timessquare/?cam=tsstree...](http://www.earthcam.com/usa/newyork/timessquare/?cam=tsstreet)

[http://www.earthcam.com/usa/newyork/timessquare/?cam=tsrobo1](http://www.earthcam.com/usa/newyork/timessquare/?cam=tsrobo1)

The first link seems to point to one of those screens a lot of time, but you may end up see a bunch of tourist instead depending on where it's pointing...

</comment><comment><USER11> what a garish nightmare. yuck.

<comment><USER12> It is and it isn't. It's such a horrible display of capitalism, advertising, and excess. But at the same time it's really neat technology and it makes for a pretty unique atmosphere. However, "Garish nightmare" is how I would describe the elmos and dora mascots running around.</comment></comment>


[Opensource] Looking for contributors carbonium.io/app - <AUTHOR> Hey, we are building an open source web tool for design and prototyping and looking for the contributes (developers, designers, content publishers...).
The goal is to build an open platform for designers and developers.
We already have rich design capabilities and you can also write a code for the prototypes in the embedded editor.
You can see current state here http://carbonium.io/app
The source code is here https://github.com/CarbonDesigns/carbon-ui
The project is written on typescript, es6, canvas, c# on the backend. <comment><USER2> If it meets the guidelines, this might make a good 'Show HN'. Show HN guidelines: [https://news.ycombinator.com/showhn.html](https://news.ycombinator.com/showhn.html)

<comment><AUTHOR> Thanks, just posted there as well</comment></comment>


Revolutionary gel is five times stronger than steel - <AUTHOR> http://edition.cnn.com/2017/06/13/tech/hydrogel-steel-japan/index.html <comment><USER2> To bad it's from CNN, i have to do to much fact checking .

</comment><comment><USER3> Is it really the gel or the fiber-glass in the gel?</comment>


It's sinking in that Sun is gone - <AUTHOR> http://utcc.utoronto.ca/~cks/space/blog/solaris/SunDown <comment><USER2> Ahhh, I still have fond memories of the Sun Ultra Enterprise server we ran back in the late 90s.

The computer so fast (for its day) that it came with it's own spoiler (e.g. a separate bit of snap-on plastic for its top fan ducting). It was affectionately known around the lab as the "Purple Monster".

I won't miss Solaris's "pkg-add" installer though--what a kludge.

<voice actor="Phil Hartman" role="Bill McNeil" show="News Radio"> Good times...good times. </voice>

</comment><comment><USER3> Yeah I find myself wincing a little every time I go to a page on Sun's website and that Oracle logo pops up in the corner where the Sun logo was.

</comment><comment><USER4> Sun actually discontinued their UNIX workstations a couple of years ago. Ironically, I believe IBM was the very last vendor of real UNIX workstations.

IBM has since discontinued its last workstations. You can still buy a tower server and stick a Matrox card in it, but that's as close as it gets.

<comment><USER5> > I believe IBM was the very last vendor of real UNIX workstations.

How about Apple?

<comment><USER6> I guess it depends on how you define Unix. While Apple provides both software and hardware, and is a certified Unix (I still haven't met anyone who actually cares about this), there are a lot of older Unix admins who think CDE and X constitutes a Unix workstation, for right or wrong.

A pity Sun was so acquisition happy as Apple might have been interested in buying the server part of the company - older versions of OS X had partial ZFS support, and there's still pretty good support for dtrace. Buying the server- only part could have been a good play if Apple decided to re-enter the server market (ask Apple staff about OS X server - the company doesn't want to pursue the server market right now).

<comment><USER7> Yeah, the lack of CDE and X (and the addition of Quartz and Aqua) definitely make a Mac feel like a different sort of thing than "a UNIX workstation".

Though on the other hand, were I the "Spirit of UNIX", I'd prefer CDE (and to some degree, X) _not_ to be thought of as my defining characteristics... :)

</comment></comment></comment></comment><comment><USER8> The Five Stages of Oracle buying Sun (with apologies to the Joy of Tech):

<http://bens.me.uk/oracle-buys-sun>

</comment><comment><USER9> After almost 20 years, I still miss the happy ritual of inserting all of the documentation for your new Sun workstation into the zillion folders.

Hell, I still have "borrowed" copies of the PostScript Blue and Red books from my NeWS/HyperNeWS days.

<sob>

<comment><USER10> Missing NeWS... That one is a really bad sign ;-)

On the other hand, it would be a beautiful idea were it not built upon PostScript.

<comment><USER9> Well, I still remember the demo I used to do for people - draw a "broken" window in the graphical editor and copy this shape and paste it to be the shape of an existing terminal window and have everything work.

OK not very practical but very very cool.

</comment></comment></comment><comment><USER11> I read the title as "It's sinking in that THE Sun is gone." Oops.

On a related note, in college we programmed SPARC Assembly on some Sun workstations. Those days will be missed. Sort of.

</comment><comment><USER12> I hugged my sparc box after reading this. _sniff_

<comment><USER10> I can't wait until I get home to hug mine...

</comment></comment><comment><USER13> I was a huge fan of SunOS, I loved my Sun 3/60s and my 4/110. Even though I hate Solaris with a burning passion, I am sad for Sun.

<comment><USER10> OpenSolaris is actually good. You should try it.

<comment><USER13> Yeah, the lack of GNU tools is what really annoys me most about Solaris. The Solaris kernel (and assorted kickass technologies like dtrace and ZFS) with a GNU userland sounds pretty great, but there is some FUD surrounding its future and roadmap.</comment></comment></comment>


World first as wind turbine upgraded with high temperature superconductor - <AUTHOR> https://www.chemistryworld.com/news/world-first-as-wind-turbine-upgraded-with-high-temperature-superconductor/3009780.article <comment><AUTHOR> Slightly OT, regarding high-temperature superconductivity: this article [1] reports on an interesting effect that appears in some materials that are showing HTS. A theoretical scientist is quoted there with " _We probably won't understand why the superconducting temperature in cuprates is high until we understand the strange-metal phase out of which the superconductivity emerges_ ". A new approach seems welcome, as it felt like progress on HTS had stalled (imo). It _might_ finally help us to get closer to room temperature superconductors... :)

[1] [https://www.quantamagazine.org/universal-quantum- phenomenon-...](https://www.quantamagazine.org/universal-quantum-phenomenon- found-in-superconductors-20181119/)

<comment><USER3> You might find the recent work on graphene superlattices [1] interesting; the video goes into a bit into what cuprates are doing and how the graphene approach might explain some of that space.

[1] [https://news.ycombinator.com/item?id=18514085](https://news.ycombinator.com/item?id=18514085)

</comment></comment><comment><USER4> It is interesting to see that it is apparently viable - enough to not be a novelty/joke. Given materials one upgrade a stationary bicycle generator to use superconductors. Unless it became both much cheaper and much higher temperature there would be basically no reason to do so but you could. Megawatt Turbines should certainly be able to sustain it but I wonder how the math works out in terms of both performance and balance sheets.

</comment><comment><USER5> Would be interesting to see the actual cost differential in this vs permanent magnets.

They don't go into details about the cost of fabricating the HTS, but gadolinium is less than half the cost (in oxide form) of neodymium according to the article, and it uses 1/1000th the amount.

<comment><USER6> I think it's just a publicity stunt. There is no way that this wind turbine will be more profitable than a normal one given the pretty crazy cooling requirements. Also I don't really understand why they chose that kind of superconductor that apparently has to be cooled to -240 when there are other superconductors that need to be cooled to _just_ 150K...

<comment><USER7> Wait, are they saying 33 Kelvin is high temperature when it comes to super conductors?

<comment><USER8> Traditionally (or at least when I was at University ~20 years ago) anything above 30 Kelvin is considered a high temperature super conductor.

<comment><USER6> Not really, I think that now superconductors that can be cooled down by _just_ liquid nitrogen are considered high temperature. That's 77k.

</comment></comment></comment></comment></comment><comment><USER9> Is this the same tape that is making fusion more feasible?

[https://www.psfc.mit.edu/research/topics/sparc](https://www.psfc.mit.edu/research/topics/sparc)

<comment><USER10> Yes. It's currently being used by Tokamak Energy:

[https://www.youtube.com/watch?v=gel3jV0Oifs](https://www.youtube.com/watch?v=gel3jV0Oifs)

</comment></comment><comment><USER11> How does the efficiency of this design compare to standard conductor turbines, especially with the added energy cost of cooling?

<comment><USER12> I suspect that those are the sorts of question this first installation is supposed to answer. They'll certainly have models for efficiency, cost, lifetime, maintenance, etc. but they remain models and field-testing the reality is absolutely the step they appear to be taking here. This was alluded to in the article itself, where they described the cooling unit as previously untested in the relatively dirty conditions under which a wind-generator operates, as opposed the previous applications of the cooler operating in hospitals and clean lab environments.

</comment></comment><comment><USER13> In July there was a excellent IEEE article [1] on the potential and the difficulties of superconducting turbines. This project (Ecoswing) is mentioned there, although it seems they switched from YBCO to GdBaCuO.

[1] [https://spectrum.ieee.org/green-tech/wind/the-troubled- quest...](https://spectrum.ieee.org/green-tech/wind/the-troubled-quest-for- the-superconducting-wind-turbine)

</comment><comment><USER14> Does the refrigerator still need helium? Getting rid of helium might be a bigger deal than just raising the temperature.

Edit: Thanks for the comments. Adding a note: As I understand it, in some of these materials, the transition temperature decreases when the material is in a strong magnetic field, so there's a limit to how strong a magnet can be made, and further cooling may be needed to deliver sufficient field for an application. Still, I'm excited, and hoping that the "grail" of helium free refrigeration is achieved soon, due to the tricky issue of world helium supply.

<comment><USER15> I found this other document that has some information I think about this project at the end [1], which says it's conduction cooled by the cold heads. So perhaps it doesn't use either LN or liquid helium.

1\. [https://indico.cern.ch/event/588810/contributions/2477331/at...](https://indico.cern.ch/event/588810/contributions/2477331/attachments/1413568/2163143/WAMHTS-2_THEVA_2017-02-16_final.pdf)

<comment><USER16> What does "conduction cooled with cold heads" mean?

<comment><USER17> "Cold head" means the cold end of a cryocooler. "Conduction cooled with cold heads" means that the superconductor is in direct thermal contact with the cold end, rather than through some more complicated arrangement.

</comment></comment></comment></comment><comment><USER18> I'd be interested in a comparison of the cost and efficiency of this type of generator versus using an induction generator. Induction generators don't need magnets either.

I'm also wondering what type of generator they built. Is the superconductor in the rotor or the stator? Does it carry a DC current and, if so, is it operated in persistent mode? Or does it carry an AC current like an induction generator's rotor would?

<comment><USER19> It's a PMM, so it's in the rotor, and a PMM is much more efficient and smaller than a simple induction generator. By factor 10 I would guess.

Those types (usually built by Bombardier) generate AC, but convert intermediately to DC.

<comment><USER18> I wonder if superconducting induction machines would be a useful research direction. They would be strange, since the flux through any particular loop of superconductor would be a constant.

</comment></comment></comment><comment><USER20> I'd be interested in the failure modes of this, especially when the cooling malfunctions suddenly (or along with a failing temperature sensor).

<comment><USER21> All the energy in the superconductors magnetic field is suddenly released into heat, which will make it get hot and boil off all the helium it's sitting in.

The generator will then have no magnetic field, so generate no power, and start to spin faster and faster.

Hopefully there are some breaks to stop it before this happens:

[https://www.youtube.com/watch?v=N6SuCut91WY](https://www.youtube.com/watch?v=N6SuCut91WY)

<comment><USER16> Looks like the turbine blades are variable probably pitch[1], so that would have to fail as well.

1\. [https://ecoswing.eu/project](https://ecoswing.eu/project)

</comment></comment></comment><comment><USER22> Would be awesome to fit air liquifiers there as well to replenish the coolant. After all, it's a bunch of pumps and radiators.

</comment><comment><USER23> Its taken 30 years for high-temperature superconductivity to have a significant impact in the real world!

<comment><USER24> Fabricating them has proven to be very challenging.

A bit like with solar cells with high efficiency. Labs create them, but fabricating it in useful volumes is also hugely challenging.

Or, if you like, GUIs, which were demonstrated in 1967 but didn't come into great use until about 20 years later.

</comment></comment><comment><USER25> Would this make sense in a Tesla Semi Truck? Cheaper lighter, electric motors are essentially the same as generators in reverse.

<comment><USER26> This starts getting viable only now on a turbine scale of several Megawatts, with a very continuous workload. Scale this down to a car delivering an average of just a few kW that is driven maybe an hour or two per day and you'll lose all that efficiency to just cooling down the motor to -240•C and keeping it there.

<comment><USER27> I assume that's why GP was talking about Tesla trucks. If a truck has two drivers it can be used for nearly a whole day - assuming the batteries could keep up.

<comment><USER25> Yes or even a Road Train with say 3 drivers on board for 24 hour use, big shortage of drivers in US apparantly. Road train must be more feasible now, software should be able to easily steer multiple trailers with independent steering ,forward in same path as cab and for reversing which would be tricky without such.

</comment></comment></comment></comment><comment><USER28> "They require substantial quantities of rare earth metals, however, which are expensive and are mostly mined in just one country – China – which has led to worries over security of supply."

<comment><USER29> There are other potential sources in the world, but they will not be explored until there is a clear financial benefit to exploring them. That will most likely not happen until something goes wrong with the supply in China.

<comment><USER30> China only has 1/3rd of the worlds extractable deposits. Rare earth minerals is the typical "China Bad" scare story. They reduced the amount they sold because they wanted it themselves to value-add making electronics/renewables and being the vast majority of world supply it got them a better price.

Much like many other countries on earth do. OPEC even has multiple annual meetings where they all decide to collude on restricting oil supply.

If the rest of the world was truly worried they'd subsidise the industry, as it stands most countries throw away all their rare earths in tailing dams as mining byproduct because it's not worthwhile to extract it.

<comment><USER31> In contrast to the common expectation and statements in this article - <USER2> turbines are already not using the rare earth magnet design.

Study: Substitution strategies for reducing the use of rare earths in wind turbines [1]

>According to our estimations about 23% of the global installed capacity in 2015 is based on wind turbines using [permanent magnet] technology. The remaining 77% are using conventional electromagnets generators based on magnetic steel and copper windings, both of them posing no issues about the security of material supply.

[1] [https://www.sciencedirect.com/science/article/pii/S030142071...](https://www.sciencedirect.com/science/article/pii/S0301420717300077)

<comment><USER32> PM rotor generators have several disadvantages: they're heavy; magnetic flux fades in time, moreso under heat; inability to control the rotor's magnetic flux; probably expensive as well.

<comment><USER19> Mostly true, just not the price. A simple stator generator is about half the price of a PMM, and at least half the value.

<comment><USER31> In table 3* the study summarizes 4 categories of generator.

      Low speed Permanent Magnet     PMSG
      Low speed Excited Synchronous  EESG
      Mid to High speed Geared PM    PMSG
      High speed Geared Induction    DFIG

All these types are currently competitive in large wind turbine installations, with high PM content designs getting selected in quite a minority of cases, despite modest efficiency and maintenance bonuses, even at the current top end of generator scale ~8MW.

To get beyond 10MW generators advantages of PM are desired but are also lumbered by relative heaviness besides the price of rare earths. Superconducting Magnets do seem like the way upward then, if reliable 'super- cooling' can be achieved.

[*] [https://www.sciencedirect.com/science/article/pii/S030142071...](https://www.sciencedirect.com/science/article/pii/S0301420717300077#t0015)

</comment></comment></comment></comment></comment></comment></comment><comment><USER33> You could probably pack an array of several smaller diameter dynamos within the housing of the base. Only issue is the belt/chain drive down the shaft so if one jams the others can still work.

<comment><USER15> I don't think the size of the thing is really an issue - they can always make bigger turbines. Smaller and lighter for the same power is definitely a plus, but not the big advantage the article is talking about. The real advantage of this is not having to use a tonne of rare-earth magnet and instead using only kilograms of rare earth material in the superconducting version.

<comment><USER34> The lighter the material the larger they can make using less materials. On site installation and other related things also become easier.</comment></comment></comment>


SnoozeTil – Make emails go away until you're ready for them - <AUTHOR> http://snoozetil.com/

<comment><USER2> Thanks for posting this. Explanation is here: [http://blog.jgc.org/2013/03/an- itch-i-scratched-snoozetil.ht...](http://blog.jgc.org/2013/03/an-itch-i- scratched-snoozetil.html)</comment>


Why Does the Linux Desktop So Lack Proprietary Apps? - <AUTHOR> http://www.datamation.com/open-source/why-does-the-linux-desktop-so-lack-proprietary-apps-1.html <comment><USER2> Because open source is the juggernaut, bitch. It's hard to outmatch a swarm of coders doing it for kicks.

It's true that the library and packaging loadout in Linux tends to be always in flux, and certainly not stable from distro to distro, making proprietary application development on the Linux platform difficult (except for niche markets like high-end modeling and rendering software; a typical Office desktop will probably never take hold on Linux if it's proprietary). But what that really means is that open source apps are the only thing which can keep pace with an open source platform. And once there's a critical mass of app developers working in a niche, open source apps rapidly come up to speed with the proprietary world.

The other day I was messing around with recording my voice. I was doing some voices from _Portal 2_ , and found that the post-production effects I needed to make my voice sound like Rick the Adventure Sphere (specifically, an equalizer to make it sound tinny and an Auto-Tune-like vocoder to make it sound "computery") were all available in the Arch AUR and I could do everything right from my Linux desktop with Audacity. That wasn't possible a year ago. I would've needed an expensive tool and hoped it worked in Wine or else used a VM to achieve this.</comment>


Really, try the brisket - <AUTHOR> http://news.harvard.edu/gazette/story/2015/05/really-try-the-brisket/?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=05.07.2015%20(1) <comment><USER2> Different link about the same thing is currently at the top of the front page:

[https://news.ycombinator.com/item?id=9517707](https://news.ycombinator.com/item?id=9517707)</comment>


Nude pics as IOU: a new, risky online loan among Chinese university students - <AUTHOR> http://en.people.cn/n3/2016/0614/c90000-9071896.html <comment><USER4> This is just the first step towards something else. But they need a first step that is not too scary. Once you get used to it then it goes to the next step and so on until complete slavery. Not middle age type slavery but psychological slavery where nothing belongs to you anymore, not even your self. So you will do whatever you are told, since you otherwise have no concept of possibly having other resources to survive. Frog in the boiling water approach. And of course the debt will pass on to your family, etc...

<comment><USER5> > Not middle age type slavery but psychological slavery where nothing belongs > to you anymore, not even your self

Could one argue that almost all individuals who use the modern day internet ("Internet 2.0") with their identity and privacy unknowingly jeopardized are subject to this same psychological slavery?

I think your comment spills over onto the rest of us, regardless of debt, after the Snowden disclosures. We are all frogs in the same pot of boiling water. There are some resources we have (such as end-to-end encryption), but for the most part, similar leverage is held over most of us.

</comment></comment><comment><USER6> How do you prove that the pictures have been deleted once the loan is repaid? Seems like the borrower is exposed to blackmail.

<comment><USER7> I think there can be multiple solutions (and maybe the blockchain can help in that).

For example, the image is processed in the browser. The platform/lender only get the nude with the face blurred. The <code/script> to un-blur is available in a bitcoin/ethereum transaction/contract; and the borrower can stop it if he pays on time.

But for now, they are exposed to blackmail.

ps: it's interesting how the blockchain can come in handy for all these shady uses; and we still struggle to find one legitimate use case for it.

<comment><USER8> You're semi-joking, but blockchains _could_ solve this problem cleanly: releasing secret information unless payment is made. In this case, it's a subcase of time-lock crypto ([http://www.gwern.net/Self- decrypting%20files](http://www.gwern.net/Self-decrypting%20files)) and like time-lock crypto in general, can in theory be solved by 'witness encryption'.

Witness crypto lets you create an encrypted file whose decryption key is _X_ Bitcoin blocks (specifically, their SHA hashes which are the PoW); after _X_ blocks have been created after a particular block ID, the file can be decrypted. So that's general time-lock crypto, for public broadcast. The witness could be extended to include the transactions: decrypted iff _X_ blocks pass with <_Y_ bitcoins sent to address _Z_. The _Y_ is the loan, and the address _Z_ is the blackmail counterparty. To render the blackmail file permanently undecryptable, one simply sends _Y_ bitcoins to _Z_ before _X_ blocks pass - that is, repaying the loan on time.

Who sets up the file? It could be a third party, who only needs to do a one- time setup & broadcast rather than permanently storing keys & needing to be trusted indefinitely. Alternately, you could imagine applying even more crypto magic: homomorphic encryption in which a CNN verifies the presence of nudity and facial recognition with the borrower. (Witness crypto is currently in the 'magic' realm but homomorphic NNs are surprisingly feasible: [https://arxiv.org/abs/1412.6181](https://arxiv.org/abs/1412.6181) ). Then the borrower provides the data, the NN runs over it, verifies it is blackmail, the witness crypto-encoded file gets released, and now you have a public secure blackmail system with no trusted third parties.

As always, if crypto isn't solving your problems, you aren't using enough of it. :)

<comment><USER9> Note that the security level of this by design is no more than the proof-of- work cost of N blocks, if you pay back the loan N blocks before the deadline. Proof: If the required key is X bitcoin blocks with no transaction to lender, and you pay it back after X - N blocks, the lender need only mine N blocks, starting from the Xth, to obtain the key (X blocks). They can do this at any time.

Therefore, to obtain "acceptable" security, one should probably pay back the loan long enough before the deadline that the economic cost of mining N wasted blocks outstrips the value of the blackmail material itself.

(Not considered: the economic calculation probably changes if one entity is giving out multiple such loans, and can therefore mine "fake" witnesses for multiple encrypted materials at once?)

<comment><USER7> Seems like a good use of Bitcoin PoW. The current hash rate will cost hundreds of millions of dollars to setup.

</comment></comment></comment></comment></comment><comment><USER10> It's super creepy and the interest rates are outrageous; but you have to give it to them, public shaming as a collateral is good "outside the box" thinking.

<comment><USER11> But ... what are they being shamed for? I don't think I'd want anyone to have naked photos of me, but there's a gigantic difference between a picture of me engaging in "shameful" behaviour, and simply a naked photo of me that's been used for collateral ... isn't there?

<comment><USER12> The shame bit is a cultural difference, so it wouldn't have quite the same impact. Not that it wouldn't be uncomfortable.

I mean, you get this loan for education. Then you get sick or something and can't pay it back. Suddenly they are threatening to send that same picture to your parents and your workplace with the note that it is your penalty for not paying your student loans on time.

And the truth is that I could explain it to my mother. My brother? Yeah, that's going to be an awkward conversation but I'd get over it. A discussion on this with a male boss (I'm female)? Yeah, that's going to be uncomfortable for some time.

<comment><USER11> So if someone installed a hidden camera in your house, and tried to exhort you for money with videos of you showering, is that the same thing? If not, where's the difference?

<comment><USER12> Nope. Pre-acceptance of the terms and conditions is different from being victimized, assuming you mean that I didn't know about the videos in your example.

In both cases I can somewhat make the embarrassment minimal by just being upfront with folks.

In the case of debt, however, the reason for the pictures is because I didn't pay the debt. It doesn't matter if it was preventable or accidental, i'm still the guilty party. Not only do you have the photos, but you have outsiders knowing your financial affairs. Nothing can be done if you don't have money.

In your example, someone had to install that camera without permission then come forward to try to get money. I could call the police. I could forewarn folks about getting such an email. I have options. Not only that, but people are more likely to see that I've been victimized in some respect.

Granted, I'm not for the naked photo bribery method of collecting debt, but it still is different situations.

<comment><USER11> So the shame here comes from having defaulted on the debt, with the nudity being proof of that, rather than anything to do with the nudity per-se?

<comment><USER12> In a way, yes. In a way, it is punishment for not paying.

To be fair, though, in some cultures the shame really is with the nakedness. To a lesser extent, that extends to different regions of the US or different sorts of families.

Edit: Some of the reaction with the nudity - for a supervisor at work - <USER2> that if I was the supervisor getting that picture, I'd never forget the look of them naked. Whatever I did see. And so I imagine it is about the same for other people.

</comment></comment></comment></comment></comment></comment></comment><comment><USER13> Got to say: I can't really think of a better way to solve trust problems in a peer-to-peer lending platform between strangers. You could use monetary collateral but if people could do that they wouldn't need to borrow in the first place.

Other options include legal contracts but then again, the kinds of people who accept these loans wouldn't be approved for a regular loan and hence suing them is unlikely to be cost effective. That really only leaves the threat of violence and most small time lenders aren't going to have the resources to do that.

Still, I am surprised that anyone would agree to do this. The deal to me seems incredibly one-sided since you're still having to trust that the other person will go through with the loan -after- you give them the collateral - <USER3> that's a huge risk in my opinion. The protocol here could be improved by using an escrow agent but once again that does not completely eliminate trust.

Information is sometimes more liquid than cash ...

<comment><USER14> > Got to say: I can't really think of a better way to solve trust problems in > a peer-to-peer lending platform between strangers.

You've got to consider the people who just don't care about nude pics being sent to work mates/friends/relatives. Free money for them? Yes please.

Hell, for the right price I'll do it. Especially if it's just a straight up nude instead of something compromising or whatnot.

<comment><USER13> I think the biggest problem is photoshop. I can't imagine many people wanting that to happen to them.

</comment></comment></comment><comment><USER15> That was basically the premise of s02e06 of "Nathan For You", but he let them choose an embarrassing / incriminating pic.

[https://vimeo.com/104358402](https://vimeo.com/104358402)

</comment><comment><USER13> I just registered nakedloans.io. Feel free to be prudes but I'm going to take this business idea to market and help reduce some of the friction in the peer- to-peer loan market.

If anyone wants to team up please leave a reply with some contact details.

<comment><USER16> The problem is that it's pretty seriously predicated on you caring about your naked pictures getting out in the world, which a lot (a majority, even?) of people in the USA and Europe do not. I know that if I could get money with the only collateral if I don't pay being that naked pictures get on the internet then I'd use that as an excuse to make money with my body without having to be sexually attractive.

<comment><USER5> Also there are some laws in the USA, such as the relatively new "revenge porn" laws that may have clauses that protect borrowers in the event that they can't pay up.

Credit where it's due though: "nakedloans.io" is a domain that could be pivoted to other purposes should this one fail.

</comment></comment></comment><comment><USER17> A good incentive to learn Photoshop, I suppose.

<comment><USER18> I wonder if this "hack" can be automated completely. Input a bikini pic and output a fake nude with some magical content aware fill that can stitch boobs on.

It should be good enough to fool the loaner but leave you with a clothed original for plausible deniability to debunk your nudes later.

<comment><USER19> They could just require a particular pose within the next 30 seconds to avoid it.

<comment><USER13> I like this. Very low tech way to solve the problem and at least raises the cost to an attacker.

</comment></comment></comment></comment><comment><USER20> While this might be a messed up concept (bordering something you'd see on Black Mirror), I feel like this is something that can be made safer with technology.

You could create a middle service (say with Stripe integration), lenders and borrowers could register, lenders loan the money to borrowers, and borrowers have their images stored by this middle service (the lenders themselves don't see the images).

If the loan is paid off, the image is deleted forever (maybe with a sort of credit rating built in....so the next time you need a loan, maybe you'd not need an image upto a certain amount).

If not, the image is posed online on the service's website.

(goes without saying, this would be available only for those above 18, etc. following all possible laws)

My personal take is: I understand this is basically physiological blackmail, but how does releasing the images help the lender? (as in, the lender probably won't receive the money anyway - once the image is released).

<comment><USER7> > but how does releasing the images help the lender? (as in, the lender > probably won't receive the money anyway - once the image is released).

It prevents other borrowers from doing the same. The people that have their nudes released are a done deal and the lenders know it. But if they don't do that, the whole concept is off.

<comment><USER21> The big huge hole in this entire scheme is that there are clearly a good number of people who are ok with having their nudes available online. I mean, just look at the Internet.

How does this service avoid having a Suicide Girl sign up and then immediately bolt with the money?

<comment><USER7> I think they evaluate the prospect through his facebook/social network to figure out his a "legit" fund receiver.

</comment></comment></comment></comment><comment><USER22> Surely someone will open a business to be your pretend friends and family?

</comment><comment><USER23> I mean sure thats shady as fuck. But in find the idea brilliant in a way.

</comment><comment><USER24> Does China have something similar to a credit score? Or is this intended for people who would normally be denied after a background check of some sort?

<comment><USER25> They'll soon have both a financial credit score and a "social credit" score:

[http://foreignpolicy.com/2014/05/08/why-there-are-no- credit-...](http://foreignpolicy.com/2014/05/08/why-there-are-no-credit- scores-in-china/)

[https://techcrunch.com/2015/01/27/data-from-alibabas-e- comme...](https://techcrunch.com/2015/01/27/data-from-alibabas-e-commerce- sites-is-now-powering-a-credit-scoring-service/)

[http://www.bbc.com/news/world-asia- china-34592186](http://www.bbc.com/news/world-asia-china-34592186)

</comment></comment><comment><USER26> If a blurry faced pic alone can be used to verify that the person who receives the money is the same as the person in the pic, then probably other people can identify the person from the blurry faced pic. That at least partially defeats the purpose of blurring the face.

The best approach I can think of is to use an in person meeting, with trusted hardware that allows the borrower to show the lender the nude pic briefly. The borrower needs to prove to the lender that a contract exists that would reveal the decryption key if he or she doesn't pay on time.

Without an in person meeting, there would need to be a trusted third party that controls the whole process, vouches for the identity of the person in the nude pic, etc. --- Otherwise the scheme is just based on exclusivity of access to anyone's nudity as collateral. It could be anyone's nude image.

</comment><comment><USER27> That works as long as people are bothered about seeing someone nude...

</comment><comment><USER28> So, tit for tat?!

That aside... So, does that mean once your picture is released, you don't need to pay back? If so, I see some people would probably get rich :/

<comment><USER29> It's called porn industry.

</comment></comment><comment><USER30> This just goes to show the incredible power people who are willing to loan money have in a society that depends on and expects people to borrow it.

</comment><comment><USER31> Interesting that this scheme is aimed at university students and not (for instance) senior citizens that need short term loans. But I'm sure it's just about the money:)

</comment><comment><USER32> To clarify: this is just female students?

<comment><USER33> The article mentions both males and females take their pictures.

<comment><USER34> However the article just provides examples of women.

</comment></comment></comment><comment><USER35> Get rich quick scheme for nudists...

</comment><comment><USER36> Those interest rates, my God...

</comment><comment><USER37> This is so Black Mirror.

</comment><comment><USER38> I shudder to think what a CDO of these IOUs would look like.

</comment><comment><USER39> What a great time to be a nudist.

Although im sure they would make you agree/state that your not a nudist.

</comment><comment><USER40> Connection refused (USA)

</comment><comment><USER41> Reminds me of that scene from US House Of Cards..

</comment><comment><USER42> This is good for bitcoin.

<comment><USER43> Could we please leave the memes and jokes to Reddit

<comment><USER42> I'm actually serious, I can imagine a bitcoin loan market here.

<comment><USER33> Is that so the loan shark can be even more shielded thanks to the pseudonymity? They require family information from the student. A pseudonymous coin is not going to change anything.

<comment><USER42> Quite the opposite: the pseudonymous coin changes everything.

We already know that Bitcoin's pseudonymity is good enough to avoid persecution (dark markets, ransomware, etc)

Now it can be also used by loan sharks to make these loans which are highly illegal in most western countries.

<comment><USER13> That's exactly what I was thinking when I posted it to /r/btc. This actually does have legitimate applications and the idea of using information as collateral can also be applied to other problems (most I can think of are illegal but there you go ...)</comment></comment></comment></comment></comment></comment>